As mortgage companies and real estate brokerage look for additional revenue to combat difficult housing market conditions, dual licensing offers professionals a way to earn income through the tasks of selling a home and originating a mortgage.
A recently published analysis by RETR identified 3,729 matches between real estate agents and mortgage loan officers in which the agent’s top loan officer shared the agent’s name. California accounted for 40% of these matches, while the top four states (which also include Florida, Texas and Arizona) represented nearly 71% of dual-licensed professionals.
RETR used name matching to identify agents whose top-producing loan officer shared their name. But the analysis does not independently verify dual licensure, and it excludes professionals who hold both licenses but do not originate mortgages for their own clients or primarily work in one role.
Potential area of growth?
For Shawn McNeil, the broker/owner of HomeFlo and a loan officer for Mpire Financial Group, the decision to pursue both licenses came from wanting more control over his clients’ financing options.
After nine years in real estate, McNeil obtained his MLO license about 18 months ago after what he described as feeling frustrated watching friends and high-value clients turn to large lenders and receive unfavorable interest rates.
“I would watch my big, high-dollar, personal friends go to these big-box retailers and just get absolutely crushed with an interest rate,” McNeil said in an interview with HousingWire. “I was like, at first, I’m going to go get licensed so that I can talk through these things and be knowledgeable in this.”
McNeil estimates that his time spent between real estate and loan originating is about 50/50, with most business coming from friends and real estate investors. He occasionally serves as both the agent and lender in a transaction, although he said that is not common.
McNeil believes more real estate agents will pursue MLO licenses as market conditions remain challenging and AI tools make it easier to research mortgage guidelines and loan requirements.
He said agents often hear that loan officers make good partners, but they may not fully understand the mortgage process or what makes a lender a good fit until they gain experience themselves.
“I think more agents are going to realize that the job on the loan officer side is getting easier from a guideline standpoint, and I think that they’re going to more and more convert to doing both over time,” McNeil said.
McNeil clarified that he does not originate every loan for clients who work with his brokerage. He refers borrowers to other lenders when his mortgage company cannot offer a particular program or when a loan falls outside his expertise.
Compliance remains a consideration
Dual licensing also requires attention to compensation arrangements, the Real Estate Settlement Procedures Act (RESPA), state licensing rules and loan program restrictions.
McNeil said he worked with legal counsel to establish disclosures, which inform all brokerage clients that he is a licensed loan officer and owns the real estate brokerage, regardless of whether they use his mortgage services.
“We require 100% disclosure. … Even if you’re not using my services, we still disclose to you that I am a licensed loan officer and I own the real estate brokerage,” he said, adding that his clients receive the disclosures electronically before a transaction goes under contract.
RETR’s analysis does not establish whether dual licensing is becoming more common or how profitable the model is. But McNeil expects more agents to consider it as they look for additional income opportunities.
“I just hope that the trend continues and more and more realize that there’s a huge opportunity to do both,” he said.
