HUD allows loan officers to have other employment including self-employment.
HUD Handbook 4000.1 eff 9/14/15: I A. 3 (iv) Dual Employment: “The Mortgagee must require its employees to be its employees exclusively, unless the Mortgagee has determined that the employee’s other outside employment, including any self-employment, does not create a prohibited conflict of interest” The CFPB, state regulators and the Company are concerned about potential “reputation and brand risk”. Regulations potentially violated include: RESPA; TILA ; Loan Officer Compensation rules as well as others.
Some thoughts for Company policies: Outside employment/self-employment can benefit both the Company as well as the loan officer but can lead to serious compliance problems. The Company should institute a written policy for additional employment/self-employment which should include:
Michael J. Wallace, Esq.
TMC - Chief Operating Officer