Loan Referral Agreement

A loan referral agreement establishes commission rates for an affiliate who produces successful applicants. Referrals may be made for any loan except residential mortgages. In most states, an affiliate may only provide the name and phone number of the applicant. An affiliate is not allowed to negotiate the terms of the loan.

Updated November 15, 2024

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.”