What is the difference between a mortgage broker and a real estate agent?
A mortgage broker arranges financing rather than lending money: the CFPB describes a broker as someone who finds different lenders or mortgage loans for a borrower, with the borrower paying a loan-specific fee for the service. A real estate agent, by contrast, represents buyers or sellers in property transactions and is licensed under state real estate law rather than mortgage licensing law.
A real estate agent, licensed by the California Department of Real Estate (DRE), helps clients buy, sell, or lease property. A mortgage broker arranges financing for borrowers, either under a DRE real estate broker license or a company license from the Department of Financial Protection and Innovation (DFPI). State law treats negotiating loans secured by real property as broker activity under Business and Professions Code 10131(d), and anyone taking residential loan applications or negotiating terms must hold an MLO credential. Many DRE brokers do both jobs.
Sources: California DRE: MLO License Endorsement Information; California DRE: How to Obtain a Mortgage Loan Originator License (RE 19).
A mortgage broker in Florida is a company licensed under Chapter 494 that conducts loan origination activities through one or more licensed loan originators, arranging mortgage financing for compensation. A real estate agent represents a buyer or seller in the purchase or sale of property and does not arrange loans. The two roles are licensed separately, and one person may hold both; a December 2022 Federal Housing Administration letter confirmed individuals can serve as both agent and loan originator on FHA-insured sales.
Sources: Fla. Stat. 494.00312: Loan originator license; Fla. Stat. 494.00313: Loan originator license renewal.
A real estate agent lists and sells property, while a mortgage broker solicits, processes, places, or negotiates mortgage loans for others. Under New York Banking Law, a real estate broker is not deemed a mortgage broker as long as he or she does not accept a fee for mortgage-brokering services. A licensed real estate broker who registers as a mortgage broker is exempt from the two-year experience requirement, and federal guidance permits serving as both agent and loan originator on the same FHA-insured transaction.
Sources: N.Y. Banking Law § 590: Definitions; registration required; N.Y. Banking Law § 591-a: Application to register as a mortgage broker; fees.