Dual licensing is one of the opportunities being opened to the mortgage industry by the National Association of Realtors’ (NAR) pending nationwide settlement of commission lawsuits, according to Bob Broeksmit, president and CEO of the Mortgage Bankers Association (MBA). 

“There will be market reactions to this settlement, and it will create openings for other business models where we want the buyer represented, but the seller may not want to pay 3% for a buyer’s agent,” Broeksmit said on Tuesday morning during the MBA’s National Advocacy Conference in Washington, D.C. 

“One of those models could be that you, as lenders, license your loan officers as real estate agents and offer the buying agent service for less than a 3% fixed fee point. And some of you will say I want nothing to do with that. Others of you will say that is a great retention opportunity for my loan officers and the market will figure all this out,” Broeksmit added.

On Friday, NAR announced a settlement that includes a $418 million payment for damages, along with a ban on rules that allow a seller’s agent to set compensation for a buyer’s agent.

The settlement also includes eliminating fields that display broker compensation on Multiple Listing Services (MLSs) and ending the blanket requirement that agents subscribe to an MLS to offer or accept compensation. In addition, buyers’ agents must have written agreements.  

If approved by a court, the changes will go into effect in mid-July.

On Friday, HousingWire reported that Absolute Home Mortgage is testing out a dual-licensing structure. Matthew VanFossen, CEO of the New Jersey-based lender, said in an interview that loan officers may start getting real estate licenses, and/or buyer agents may become licensed LOs.

It would “bridge the gap in lower commission” by these professionals “starting to take both sides of the deal,” VanFossen said. But if real estate agents transition to becoming lenders, the dual-license trend would also have an “unintended consequence” for marketing servicing agreements (MSAs) between mortgage companies and real estate brokerage firms.

Tax credit, ‘junk fees,’ Marcia Fudge 

Broeksmit was critical of President Joe Biden’s housing plan announced during the 2024 State of the Union address on March 7. He said the proposals would “stimulate demand on the single-family side.” 

“Any lender in the audience knows that they have a huge list of people who are qualified and able to buy a house; there’s just no inventory. So, we really need to focus on the supply,” Broeksmit said. 

During the State of the Union address, Biden called for a $10,000 tax credit for first-time homebuyers and people selling their starter homes. 

Broeksmit said that people selling their homes would buy another, so the tax credit would not be enough to improve supply. In addition, people sell houses based on their own circumstances, not because of government tax incentives.

“So, you’re giving money to people who would have sold anyway,” Broeksmit said. “I think a smarter thing to do would be to raise the exemption for the capital gain when you sell your house.”

Broeksmit also reacted to the decision by the Consumer Financial Protection Bureau (CFPB) to closely scrutinize what it described as “junk fees” imposed on borrowers when closing a mortgage. 

A recent CFPB blog post stated that families closing a mortgage “often get an unwelcome surprise: closing costs that all too often are full of junk fees.”

According to Broeksmit, the CFPB can only review fees by reopening the TILA-RESPA Integrated Disclosure (TRID) rules, which the industry spent $1 billion to implement. “There’s no such thing as a surprise at closing,” Broeksmit said. Regarding the resignation of U.S. Department Housing and Urban Development (HUD) Secretary Marcia Fudge, Broeksmit said it’s not unusual for a cabinet secretary to leave before the end of a four-year term. In this case, “it’s a grueling job,” he added.

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