How does a mortgage broker differ from a real estate agent or real estate broker?

A mortgage broker arranges financing and never lends money; a real estate agent or broker arranges the property side of the transaction. Per the Consumer Financial Protection Bureau, a mortgage broker does not lend money but finds different lenders or mortgage loans for borrowers, who pay the broker a loan-specific fee. Real estate brokerage is licensed under state real estate law, and brokerage-only activity is exempt from state mortgage loan originator licensing unless the individual is compensated directly or indirectly by a lender, mortgage broker, or other loan originator.

A real estate agent (salesperson) helps clients buy, sell, and lease property under a broker's supervision. A real estate broker can do that and also act as a mortgage broker, because Business and Professions Code 10131(d) covers negotiating loans secured by real property. A broker who handles residential mortgage loans must also hold a mortgage loan originator endorsement. A broker who arranges only loans made by finance lenders is instead licensed under the state's finance lending law.

A Florida mortgage broker is an entity licensed under Chapter 494 that conducts loan origination activities through one or more licensed loan originators; it arranges financing but does not buy or sell property. A real estate agent or broker represents buyers and sellers in property transactions and is licensed through the state's real estate regulator, not the Office of Financial Regulation. One person can hold both credentials; in December 2022 the Federal Housing Administration confirmed an individual may serve as both real estate agent and mortgage originator on FHA-insured sales.

A real estate agent or broker helps clients buy and sell property, while a mortgage broker solicits, processes, places, or negotiates mortgage loans for others. New York law treats a real estate broker as a mortgage broker only if he or she accepts a fee for mortgage-brokering services. Holding both roles is allowed: guidance from December 2022 permits one person to serve as both real estate agent and mortgage originator on FHA-insured sales, and dual licensing is also permitted for conventional and VA mortgages.