3.6- What disclosures is required to the customer for an MLO who is also a Real Estate broker?

Most lenders do not allow an MLO to be a Real Estate Agent or broker on the same transaction due to conflict of interest, however it is not prohibited with one exception.. FHA loans strictly prohibit an MLO to be the Real Estate Agent or broker on the same transaction.

An Affiliated Business Arrangement Disclosure must be provided to the home buyer in case the MLO is also a Real Estate Agent or Broker on the same transaction.

ABA (affiliated business arrangement), means that the loan officer has an ownership interest in the service providers. Such arrangement has to be disclosed before the referral is made and the transaction takes place.