Mortgage loan officer cannot do his own loan for a property that he is going to buy?

Question

Someone just told me that a mortgage loan officer cannot do his/her own loan for a property that he/she is going to buy. The reason is that the agent might exagerate information to qualify for the loan (Conflict of interest). Is this true?? In other word, this mortgage loan officer has to hire someone else to process this loan

Answer 1

Not true here in So. Cal. I acted as Realtor and loan officer for my own properties. The only thing we have to do is disclose to all parties involved that we are Realtors and/or are acting as the loan representative. We do it all the time and it saves on fees. I have actually applied my commission as a reduction in price and/or to pay for costs....

Answer 2

The loan officer, first of all isn't an officer. That is just a title. They are a go between and the lending institution. It is the institution that sets the policy of do's and don'ts. A loan application is made up of several documents. One of these is a mortgage appraisal. This is done by an outside source to determine a homes value. The for sale unit is compared to other homes that have recently sold. The appraisal information including the comparison is passed to an underwriter. It is the underwriters responsibility to look at the entire loan package and make sure that all documents have been put together, appraisal, survey, title search, insurance, tax information, income verification and whatever else is required by the lending institution and make a recommendation for approval or disapproval.
It would be very hard for one person to falsely influence the mortgage process.

Answer 3

The answer to this question varies by the Lender. This is NOT a RESPA violation unless you plan to rip yourself off. Some lenders don't have an issue with it and if you're doing your own loan it will have to go Full Income Documentation. Otherwise, you can have another Loan Officer in your office do the loan for you and you may be able to go stated or another documentation type. However, it's NEVER a good idea to write your own loan. It will raise too many eyebrows and your loan will be Audited for certain.

Answer 4

Well it's so interesting to see all these mixed replies. Kind of difficult to help make up your mind isn't it...

I am a mortgage originator. Think about it... IF a mortgage loan officer exagerates information about his own loan what's to stop him from doing it for everyone else that he does a loan for. Just wouldn't make sense. Then they're be the most corrupt department you could think of. So yes, they can do their own loans. Well this is the case in South Africa and the UK.

IF you're interested in more information regarding home loans and mortgage lending in South Africa check out the SA Loans site below.

Answer 5

Not sure of the exact legalities. When you get a primary residence mortgage, you are signing and stating that it is such. The lender will have certain remedies under the terms of mortgage (read before you sign). If you really have the intent of moving in and having that as your primary residence - go for it. If you are just trying to save a couple bucks, you are violating the contract (which is a legally binding document once signed) and can be held accountable to the agreement set forth within. Do the right thing! Joe...

Answer 6

It is true....conflict of interest! And...a RESPA violation. Last thing you want is to raise red flags with your future lender! You've gotta know someone in the biz you trust to write the 1003 in their name? If I know loan officers there's one just waiting for your business! ;)

Answer 7

it is true.
i just did a loan for a couple of guys in my office.