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Can a seller who regularly provides seller financing for residential properties satisfy the MLOLA licensing requirements by simply working through a real estate broker or salesperson who is a licensed mortgage loan originator?

If the real estate broker or salesperson receives no additional compensation beyond the customary commission on the real estate sale, a license under the MLOLA or MBLSLA is not required for that transaction.

If the real estate broker or salesperson receives additional compensation beyond the customary commission on the real estate sale, the answer is “YES” if the real estate broker or salesperson is licensed as a mortgage loan originator under the MLOLA and is also licensed as a mortgage broker under the MBLSLA.

The answer is “NO” if the real estate broker or salesperson is not licensed as both a mortgage loan originator under the MLOLA and a mortgage broker under the MBLSLA. HUD’s response to public comments on the SAFE Act Final Rule states that a seller who finances the sale of his or her own property avoids the issue of licensing by retaining the services of a licensed loan originator and having that individual carry out the functions that constitute engaging in the business of a loan originator. However, statutory language in the MBLSLA prohibits this activity unless the real estate broker or sales person is not only licensed as a mortgage loan originator, but is also licensed as a mortgage broker under the MBLSLA.