Permissibility To Collect Separate Fees For Serving As A Mortgage Broker and Real Estate Broker In The Same Transaction - Q3 1999By the Division of Banks
A licensed mortgage broker in the Commonwealth is governed by Mass. Gen. Laws chapter 255E, section 2 and its implementing regulation 209 CMR 42.00 et seq. The statute does not apply to a real estate broker or real estate salesman who, in connection with services performed in a prospective real estate transaction, provides mortgage information or assistance to a buyer if such real estate broker or real estate salesman is not compensated for the same in addition to the compensation received from the seller for such real estate services. The regulation at 209 CMR 42.07(4) prohibits any person licensed as a mortgage broker from acting as a mortgage lender in any transaction in which the person is acting as mortgage broker. However, no provision contained in 209 CMR 42.00 addresses the issue of acting as mortgage broker and real estate broker in the same transaction. The Division's position is that but for the language in section 2 of chapter 255E of the Mass. Gen. Laws, there is no other reference to such a transaction in regulations within the jurisdiction of the Division. However, other state and federal offices may have regulations which may significantly impact such a proposal. A different position statement would likely be issued if the real estate broker business shared in any compensation or gain from the mortgage broker business.