Commissions For Loans and Note Modifications?

Hi, Are there any regulations regarding the disbursement of commissions via a mortgage transaction? Can a company sign up independent agents who work as an independent contractor to market refinance and modification loans for a financial institution and receive commissions from that company as an independent contractor? Please advise... Thanks, Gary

Hi Gary,

It sounds like you are describing a mortgage broker: a person who markets lending services and then places his/her clients with a lender he/she/it (if incorporated) has "Broker Agreements" with. Mortgage Brokers specifically work as Independent Contractors for the lender(s) they have agreements with. They are paid commissions for successfully closed deals. Otherwise they would be employees and bound to sell the loans of that company only...not to mention the myriad of tax/compensation issues the lender's wish to avoid. With regard to the loan modification side of it, I would SUGGEST that the same is true. The Loan Mod industry is relatively new and mostly unregulated. I would venture to guess that ANYONE can collect commission on these files. I have heard talk that some regulatory agencies are looking into regulating this industry...but nothing concrete so far.

MortgageMaster