Legal Question in Real Estate Law in California

I am a California licensed Mortgage Broker and I would like to enter into a Marketing Agreement with selected independent contractors for the purpose of having them directly market my mortgage services to Realtors and potential clients. They would not engage in any activities which would require them to be licensed, rather, they would merely promote my company so that I can develop business relationships with their Realtor and potential client contacts. Our Marketing Agreement would specifically spell out that it is a commission only (1099 based) for each of their contacts which results in a closed sale. I would like to know if this would not violate a RESPA, B&P Code or any other laws.


Asked on 9/20/14, 12:07 pm

1 Answer from Attorneys

As I understand it, without doing more research than you get for a free answer, it is illegal for a licensed Mortgage Broker to share income with an unlicensed person, except in the form of wages/salary, or a properly established employee profit sharing plan. I do not believe there is anything wrong with what amounts to "piece work" wages, where a fixed commission is paid for sales, but a percentage based commission would be illegal revenue sharing.

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Answered on 9/21/14, 12:11 pm


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