What industry regulations changed to make this feasible?

New FHA guidelines quietly released in December 2022 removed real estate agents from the FHA’s precluded dual compensation list. Before this change, most lenders would not hire real estate agents as loan officers for fear of being cut off from FHA loans entirely.

RESPA rules have always allowed real estate agents to also be loan officers – but only if they were hired as W2 employees of the lender and only if the REMLO could demonstrate they sufficiently participated in loan origination process.

The requirements to hire REMLOs who are not real estate agents as junior loan officers are not any different.

Why isn’t every lender doing this now?

The FHA guideline changes are still recent, and many lenders just haven’t fully considered the implications of the guidelines changes yet.

Only federally chartered lenders can hire REMLOs without requiring them to go through the time-consuming process of getting a state loan originator license. The cumbersome state licensing requirement will likely be more than most REMLO candidates want to deal with, and that fact will keep most brokers and state-chartered lenders from ever participating.

What are the steps for REMLOs in the loan process?:

In most cases the REMLO uses a mobile app to send clients a link to their online loan application. It usually takes 5-10 minutes for the online application to be completed and submitted by the client.

Once the online application is submitted, the REMLO receives notice in the mobile app. The REMLO then reviews the file with the bank support team and does a one-click soft credit pull in the mobile app to be sure credit scores look ok.

The REMLO then asks their bank support team to review the application and credit to determine the maximum loan amount the borrower can likely qualify for, based on up front info. (REMLOs can calculate that themselves if they prefer as well).

Once a max loan amount is calculated, a pre-qualification letter can be created with a couple of clicks in the mobile app and sent immediately to the borrower.

The bank loan team takes over the loan process from there through the finish line. The REMLO is copied on all the steps along the way as the MLO of record.

How much is a REMLO usually paid?

The most common pay structure is 25-50 basis points (0.25-0.5% of the loan amount) paid to the REMLO for each loan closed, depending on monthly volume. This applies to both purchase and refinance loans.

Do REMLOs normally work remotely?

Yes. Nearly every REMLO position is a remote, part-time role. Most REMLOs have full-time day jobs as real estate agents/brokers or some other profession. The main thing they all have in common is they have contacts who need help with mortgages.

What qualifications are required to become a REMLO?

The main qualification to be a REMLO is the demonstrated ability to refer/originate home purchase or refi mortgages.

How do I learn more and get started?