I want to know if a LO, who works for a BROKER, have his own business? In particular, can he have his own home inspection business? He would like to have this business since he can make money and he enjoys this line of work. Please be detailed in what he can and cannot do. He is guessing that he CAN have the business as long as he does NOT mention the LO job.
2007-07-23 11:31:26 · 4 answers · asked by vmgalvez 1 in Business & Finance ➔ Renting & Real Estate
Actually he is W2 worker for Broker.
2007-07-23 11:47:26 · update #1
well - at worst it sounds like a conflict of interst - but not a violation.
good luck
2007-07-23 11:36:17 · answer #1 · answered by Blue October 6 · 0⤊ 0⤋
First, RESPA does not dictate what you are describing here. RESPA is the legal procedures lenders must follow on a SPECIFIC real estate transaction.
Now, can your Loan Officer have a home inspection business? He absolutely can. There is no law that says he cannot have a home inspection business, regardless of what he does for a living.
However, there is a catch:
It is a conflict of interest, for anyone in that office, to refer a client to the LO's company, without fully disclosing to the client that it is owned by the LO.
No person, in their right mind, that is doing a loan with that brokerage, would also use the home inspection service. I can tell you that no Realtor would allow it. The reason behind it, is that the Brokerage and/or the LO has something to gain by a client receiving a favorable inspection report.
If it is discovered, then the broker, and the LO is setting themselves up for a HUGE liablity, if they hide the relationship from the client, and could possibly lose their licenses.
PS: There are tons of Realtors who are married to mortgage brokers and refer business over...however, we are required to inform our clients of the relationship.
2007-07-23 11:58:36 · answer #2 · answered by Expert8675309 7 · 0⤊ 0⤋
If he "works for" a broker then he most likely is on a 1099 and doesn't own the brokerage he works for then yes he can have an affiliated business arrangement as long as it is fully disclosed.
2007-07-23 11:43:04 · answer #3 · answered by Etta P 4 · 0⤊ 0⤋
He is in no violation of RESPA with being a loan officer and having his own home inspection business.
The only thing he needs to do is to disclose such fact if he does an inspection on a property on which he is also doing a home loan.
There is no conflict of interest here, if proper disclosures are made.
2007-07-23 11:36:18 · answer #4 · answered by acermill 7 · 1⤊ 0⤋