Loan Broker Agreement for the United States

Loan Broker Agreement Template for United States

A Loan Broker Agreement is a legally binding contract used in the United States that establishes the terms and conditions between a loan broker and their client. The agreement outlines the broker's responsibilities in helping the client secure financing, compensation structure, and compliance with federal and state regulations including TILA, RESPA, and ECOA. It includes provisions for confidentiality, representation terms, and specific service obligations while adhering to state-specific licensing requirements and consumer protection laws.

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What is a Loan Broker Agreement?

The Loan Broker Agreement serves as the foundation for the professional relationship between loan brokers and their clients in the United States. This document is essential when a client seeks assistance in securing financing through a broker's services. The agreement addresses crucial aspects including the scope of services, compensation structure, regulatory compliance, and risk allocation. It must comply with federal regulations such as TILA and RESPA, as well as state-specific requirements for loan brokerage services. The agreement is particularly important in protecting both parties' interests and ensuring clear understanding of responsibilities and expectations in the loan procurement process.

What sections should be included in a Loan Broker Agreement?

1. Parties: Identification of the broker and the client

2. Background: Context of the agreement and relationship between parties

3. Definitions: Key terms used throughout the agreement including regulatory definitions

4. Scope of Services: Detailed description of broker's services and obligations under relevant regulations

5. Compensation: Fee structure and payment terms in compliance with federal and state regulations

6. Term and Termination: Duration of agreement and termination conditions

7. Representations and Warranties: Statements of fact and promises by both parties, including regulatory compliance warranties

8. Confidentiality: Protection of sensitive information and compliance with privacy laws

9. Regulatory Compliance: Specific obligations under TILA, RESPA, ECOA, FCRA, and SAFE Act

10. General Provisions: Standard legal provisions including governing law and jurisdiction

What sections are optional to include in a Loan Broker Agreement?

1. Exclusivity: Terms of exclusive arrangement between broker and client

2. Territory: Geographic scope of services and applicable state-specific requirements

3. Insurance Requirements: Required insurance coverage and minimum amounts

4. State-Specific Provisions: Additional provisions required by specific state laws

5. Sub-broker Relationships: Terms governing relationships with additional brokers or agents

What schedules should be included in a Loan Broker Agreement?

1. Schedule A - Fee Schedule: Detailed breakdown of fees and commission structures

2. Schedule B - Service Level Agreement: Specific performance metrics and service standards

3. Schedule C - Required Licenses: List of necessary licenses and certifications by jurisdiction

4. Schedule D - Compliance Procedures: Detailed compliance requirements and procedures

5. Schedule E - Required Disclosures: Mandatory federal and state disclosures

Authors

Alex Denne

Head of Growth (Open Source Law) @ Genie AI | 3 x UCL-Certified in Contract Law & Drafting | 4+ Years Managing 1M+ Legal Documents | Serial Founder & Legal AI Author

Jurisdiction

United States

Publisher

Genie AI

Document Type

Broker Agreement

Cost

Free to use
Industries

Truth in Lending Act (TILA) and Regulation Z: Federal law requiring disclosure of credit terms and costs, and regulating the advertising of credit terms

Real Estate Settlement Procedures Act (RESPA) and Regulation X: Federal law governing real estate settlement processes, including the regulation of referral fees and kickbacks in mortgage lending

Equal Credit Opportunity Act (ECOA) and Regulation B: Federal law prohibiting discrimination in lending practices and ensuring fair treatment of all loan applicants

Fair Credit Reporting Act (FCRA): Federal law regulating the collection, dissemination, and use of consumer credit information, including privacy and disclosure requirements

SAFE Act: Secure and Fair Enforcement for Mortgage Licensing Act establishing requirements for mortgage loan originator licensing and registration

State Licensing Requirements: Various state-specific requirements for loan broker licensing, including potential bonding and insurance requirements

State Consumer Protection Laws: State-specific laws providing additional consumer protection requirements and disclosure obligations for loan brokers

State Usury Laws: State-specific regulations governing maximum interest rates and fee restrictions in lending transactions

CFPB Regulations: Consumer Financial Protection Bureau regulations governing consumer financial products and services, including loan brokerage

FTC Guidelines: Federal Trade Commission guidelines regarding fair business practices and consumer protection in loan brokerage

Anti-Money Laundering Regulations: Federal regulations requiring procedures to prevent and detect money laundering in financial transactions

Bank Secrecy Act: Federal law requiring financial institutions to assist government agencies in detecting and preventing money laundering

Teams

Employer, Employee, Start Date, Job Title, Department, Location, Probationary Period, Notice Period, Salary, Overtime, Vacation Pay, Statutory Holidays, Benefits, Bonus, Expenses, Working Hours, Rest Breaks,  Leaves of Absence, Confidentiality, Intellectual Property, Non-Solicitation, Non-Competition, Code of Conduct, Termination,  Severance Pay, Governing Law, Entire Agreemen

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