Loan Referral Agreement

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Updated April 21, 2022

A loan referral agreement is to establish commission rates to an affiliate that produces successful applicants. A loan referral may be for any type of loan except residential mortgages due to the Real Estate Settlement Procedures Act (RESPA). In most States, an affiliate may only provide the name and phone number of the individual or company seeking a loan. An affiliate is not allowed to negotiate the terms of the loan.

An affiliate is usually paid on the closing date.

Loan Types

  • Auto / Vehicle
  • Commercial
  • Personal
  • Small Business Administration (SBA)

Are Loan Referral Fees Legal?

Yes, for all loan types except residential mortgages. Due to the Real Estate Settlement Procedures Act (RESPA), specifically § 1024.14(b),

“No person shall give and no person shall accept any fee, kickback or other thing of value pursuant to any agreement or understanding, oral or otherwise, that business incident to or part of a settlement service involving a federally related mortgage loan shall be referred to any person.”