Loan Referral Agreement Template for the United States

A Loan Referral Agreement is a legal contract that formalizes the relationship between parties involved in referring potential borrowers to lenders. You'll need this document to establish clear terms for compensation, compliance obligations, and performance standards while navigating the complex regulatory landscape of the United States financial services industry.

When do you need this document?

You should use a Loan Referral Agreement when establishing any formal referral relationship in the lending industry. Mortgage brokers need this agreement when partnering with banks or credit unions to refer qualified borrowers. Real estate agents require this document when referring clients to preferred lenders in exchange for compensation. Financial advisors must have this agreement in place before referring clients to lending institutions. Additionally, you'll need this document if you're a business owner referring employees or customers to specific lenders, or if you're operating a lead generation service that connects borrowers with multiple lenders.

Key legal considerations

Your agreement must carefully address compensation structures to avoid prohibited kickbacks and referral fees under federal law. You need to include clear definitions of qualified leads, payment terms, and performance metrics to prevent disputes. The document should specify compliance obligations for both parties, including record-keeping requirements and disclosure responsibilities. You must also address liability limitations, termination procedures, and dispute resolution mechanisms. Consider including provisions for regulatory changes that may affect the referral relationship, and ensure your agreement allows for proper documentation of all referral activities.

Legal requirements in United States

Your Loan Referral Agreement must comply with the Real Estate Settlement Procedures Act (RESPA), which prohibits certain referral fees and kickbacks in real estate transactions. Under the Truth in Lending Act (TILA), you must ensure all compensation arrangements are properly disclosed to borrowers. The Equal Credit Opportunity Act (ECOA) requires that your referral practices don't discriminate against protected classes. You must also consider Dodd-Frank Act requirements, particularly those enforced by the Consumer Financial Protection Bureau (CFPB). State licensing laws may impose additional requirements on referral relationships, and you may need to comply with the Fair Credit Reporting Act (FCRA) if handling consumer credit information. The Bank Secrecy Act (BSA) may apply if your referral activities involve anti-money laundering obligations, requiring you to implement appropriate compliance procedures.