What is the difference between a loan broker and a mortgage broker?
A loan broker who arranges loans secured by real property is performing the same role as a mortgage broker. A broker does not lend money; the broker finds lenders or mortgage loans for the borrower and is paid a loan-specific fee for the service. Under the SAFE Act, a broker who takes residential mortgage loan applications or negotiates terms for compensation or gain is a mortgage loan originator and must be state-licensed and registered through NMLS.
A mortgage broker negotiates loans secured by real property; under California law this falls under the real estate broker definition in Business and Professions Code 10131(d), or the DFPI finance broker track for loans made by finance lenders. A loan broker who works outside real property collateral is licensed under the California Financing Law, which authorizes brokering only to lenders licensed as finance lenders, not banks or credit unions.
Sources: California DRE: MLO License Endorsement Information; California DRE: How to Obtain a Mortgage Loan Originator License (RE 19).
Florida's Office of Financial Regulation publishes a license catalog that lists the loan originator, mortgage broker, mortgage lender, and servicer licenses, with no loan broker category. The mortgage broker is the entity-level license: a company conducting loan originator activities through one or more licensed loan originators it employs or contracts with. The individual who solicits or negotiates loans holds a loan originator license and may work for only one mortgage broker or mortgage lender at a time.
Sources: Fla. Stat. 494.00312: Loan originator license; Fla. Stat. 494.00313: Loan originator license renewal.