Real estate agents w/o any background in lending are being recruited by mortgage shops to close loans in their name, even though they haven’t taken the MLO exam & might not even touch the file.

“This seems like a disaster waiting to happen,” said John Cassels, a loan officer at CrossCountry Mortgage who recently heard from an agent partner who’d been approached by a broker shop called Orca Home Loans. “Here you have an agent w/ no experience on the lending side, closing loans in their name w/o knowing loan program guidelines, just for the opportunity of getting paid.”

He added: “What if the ‘support’ drops the ball on the file, quotes the wrong fees, rate or program… or worse, commits fraud in the agent’s name? The agent isn’t going to know what happened b/c they never touched the file.”

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According to the email pitch Cassels shared, Orca claims to have partnered w/ an FDIC-insured bank (Midland Federal Savings) to make its model “fully compliant.” The offer promises agents 50 bps per closed loan ($2,500 on a $500K mortgage) w/ no mortgage exam required. All the agent has to do is share their unique mortgage application link with clients; Orca’s internal “support team” handles the rest, from pre-approval to closing. Top producers can earn up to 75 bps, plus overrides for referring other agents.

Orca’s founder Dan Savage said rival LOs complaining about this growing model “should be nervous.”

“Agents are finally waking up to how their brokers & team leaders have been getting paid & wondering how they can get involved. They are also now realizing that 80-90% of their clients are approved in 2 minutes. On top of this, most of our RELO’s say they have been gathering documents for LOs forever while also figuring out the DTI before sending it to an LO.”

Per Savage, Orca’s RELOs are fully licensed as 1099s, get applications from borrowers & communicate w/ clients throughout the process. Despite the email pitch saying the RELO just has to share the application link w/ clients, the RELOs are involved in the deals & have monthly CE requirements, Savage said. As to the hypothetical question Cassel posed about fraud, Savage said it wouldn’t happen at Orca b/c they “don't tolerate it” & the agent is now “associated w/ the file.”

He added: “I really do not see how this is any different from a top producer getting apps in & then having the junior LO work the file from there. We work as a team & we only see this growing more & more w/ agent commission coming down combined with tech advancements.” 

To Cassels, the Orca model looks more like a recruiting engine built around referral payouts than a legitimate dual-licensing path. “Hopefully our industry hasn’t become fixated on finding loopholes to bring in business,” he said. “Because that’s what this looks like.”

Savage says that’s not true & the wrong interpretation of where the industry is heading. When Savage worked at Better Mortgage between ‘15-’17, they had hundreds of files getting refinanced w/out an LO ever talking to the client. 

“What happens when POSs like Tidalwave using AI fully approve the client?” he asked. “Who is the LO? It’s going to get strange, but we know the agent will remain & most likely fully take on the LO role (or what remains) in the next 5-10 years.”

Hey, everybody! The Mortgage Scoop launched about 2.5 months ago & I’ve been blown away by the support. Thank you 🙏 so much. I wanted to share an important update about the business. We’ll be moving to a paywall starting Wednesday, Nov. 19.

Paid subscribers will get exclusive MWF newsletters packed with scoops, analysis & insights you won’t find anywhere else (plus some bonus content). Founding Members can lock in the price of $240 per year. Monday editions will remain free & open for all subscribers. Hit me up w/ any questions you might have. - James Kleimann

A weekend stunt at Mar-a-Lago has turned into a political & policy mess for the Trump administration & potentially a defining moment for Bill Pulte.

According to Politico, Pulte arrived at President Donald Trump’s Palm Beach Golf Club on Saturday night armed with a 3x5 posterboard comparing FDRs New Deal–era 🎷 30-year mortgage to a “50-year mortgage” under Trump. The headline read: “Great American Presidents.”

Within 10 minutes, Trump had posted the graphic to Truth Social. White House aides were quickly flooded w/ angry calls 📞 from conservative allies & business leaders who saw the idea as both bad politics & bad economics.

“He just sold POTUS a bill of goods that wasn’t necessarily accurate,” one White House official told Politico. “He said ‘FDR did it, you can do it, it’s gonna be a big thing.’ But he didn’t tell him about all the unintended consequences.” The blowback, aides say, has been “more intense than anything else” since Trump’s return to office. Even MAGA influencers, usually Pulte’s natural allies, piled on.

Pulte has since floated assumable loans & even portable loans as options to help w/ affordability. Assumable mortgages might be doable for Fannie & Freddie. The FHA/VA has permitted the practice for many years & there were about 10,000 processed last year, so there’s at least a template. However, mortgage servicers absolutely loathe 😠assumable mortgages.

“They're more heavily geared toward churning delinquency than allowing the assumptions,” AssumeLoans’ Mark McDonough told The Scoop in September. “I have 7 active assumptions right now that I'm working on. All of them are fighting w/ a loan servicer to take an application from the borrower, even though they're obligated to by VA or FHA. They just don't want to do it.” More to the point, few first-time buyers have the cash to bridge the sale price & mortgage. 

Portable mortgages might be the most fantastical idea 🧝‍♂ of them all. Portable mortgages exist in Canada, the U.K. & some other countries. Here’s how they work:

1. Sell current home & notify lender of intent to port
2. Apply to transfer the existing note to new property within set period
3. Requalify for the loan (credit, DTI & income)
4. Appraisal of the new property ensures sufficient collateral coverage
5. New mortgage recorded, but old rate & term are retained. If the new home costs more, a blended rate add-on kicks in & they extend w/ the same lender.

This is only possible b/c lenders keep loans on portfolio. Look, U.S. lenders that keep mortgages on portfolio could theoretically do this, though I can’t imagine there’s much appetite to do so. And as far as I’m aware, there is currently zero mechanism for Fannie & Freddie to do it b/c of the securitization model.

“It’s essentially like a 1031 exchange only you are swapping the debt, instead of the equity,” said John Downs of Vellum Mortgage. “Either way, a sale is required to free up the debt…so hard to say logistically how it would help in any meaningful way. The rich would benefit, as w/ most every program 💸 these days. Regular people, it’s likely never useful.”

Bottom line: Portable mortgages aren’t a serious proposal unless there’s a rethinking of the entire concept of collateral in the U.S. mortgage system. It’s just more mortgage spaghetti at the wall.

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