What is the difference between a mortgage broker and a real estate broker?
A mortgage broker arranges residential mortgage loans by bringing borrowers and lenders together and is paid a loan-specific fee, while a real estate broker is licensed under state real estate law to arrange property sales, leasing, and related activity. Federal rules exempt individuals performing only real estate brokerage activities from state mortgage loan originator licensing, unless they are compensated by a lender, mortgage broker, or other loan originator. The two roles require separate licenses from different regulators.
A real estate broker in California is licensed by the Department of Real Estate (DRE) and may negotiate loans secured by real property under Business and Professions Code 10131(d), plus conduct other real estate activity; originating residential loans requires an MLO endorsement. A mortgage broker on the DFPI track is licensed under the California Financing Law and can broker loans only to lenders licensed as finance lenders. The DRE license requires experience, education, and an exam, while Financing Law company licensing rests on net worth and surety bond requirements.
Sources: California DRE: MLO License Endorsement Information; California DRE: How to Obtain a Mortgage Loan Originator License (RE 19).
A Florida mortgage broker is an entity-level license under Chapter 494, Florida Statutes, held by a company that conducts loan origination activities through one or more licensed loan originators. A real estate broker works the property side of the transaction, while a mortgage broker arranges the financing. The roles are distinct, and one person may hold both; a Federal Housing Administration letter from December 2022 confirmed that individuals may serve as both real estate agent and mortgage originator for FHA-insured home sales.
Sources: Fla. Stat. 494.00312: Loan originator license; Fla. Stat. 494.00313: Loan originator license renewal.
A mortgage broker arranges financing by soliciting, processing, placing, or negotiating mortgage loans for others, while a real estate broker arranges the sale, purchase, or lease of property. A real estate broker or salesperson who does not accept a fee for mortgage-brokering services is not deemed a mortgage broker under New York Banking Law. A licensed real estate broker who does broker mortgages must still register, but the real estate license waives the two-year experience showing the registration otherwise requires.
Sources: N.Y. Banking Law § 590: Definitions; registration required; N.Y. Banking Law § 591-a: Application to register as a mortgage broker; fees.