N.J.A.C. 11:5-6.8 — Disclosure of licensee’s affiliation with a mortgage lender or mortgage broker to whom the licensee refers buyers

(a) Whenever a licensee refers a buyer/borrower to a mortgage lender or mortgage broker with whom the licensee is affiliated, the licensee must provide written disclosure of the affiliation to the buyer/borrower. This disclosure must be made even though the licensee will not receive fees or compensation for the referral, see N.J.A.C. 11:5-7.2, and even though the licensee also refers the buyer/borrower to other, unaffiliated sources of mortgage financing. The disclosure must include the following statement: YOU ARE UNDER NO OBLIGATION TO USE THE MORTGAGE SERVICES OF ____________ WHO/WHICH IS AFFILIATED WITH THIS REAL ESTATE LICENSEE. YOU MAY OBTAIN YOUR MORTGAGE LOAN FROM ANOTHER SOURCE. (b) For the purposes of this section, a licensee is considered to be affiliated with a mortgage lender or mortgage broker when: 1. The licensee, or the licensee's spouse, parent or child, is an officer, director or employee of the lender or mortgage broker, or works as a solicitor for the lender or mortgage broker; 2. The licensee, either alone or with spouse, parent or child, owns more than one percent of the lender or mortgage broker; the licensee is more than one percent owned by the lender or mortgage broker; or the licensee owns more than one percent or is more than one percent owned by a corporate parent, holding company or other business entity which is a majority shareholder in the lender or mortgage broker; 3. The licensee is a franchisee of a franchiser which owns more than one percent of the lender or mortgage broker or the licensee itself is the franchiser or franchisee of a mortgage lending franchise; or 4. The licensee shares office space, facilities, or staff, with the lender or mortgage broker. (c) Where a real estate broker, employing broker, or broker of record has an individual or corporate affiliation with a lender or mortgage broker, all licensees licensed with that real estate broker must provide the required disclosures to buyers referred to the affiliate. 1. Where an office manager has such an individual affiliation, the manager and all licensees working under his or her supervision must provide the disclosure to all buyers referred to the affiliate by that office. 2. Where a salesperson (referral), a salesperson, or a broker-salesperson has such an individual affiliation, they must provide the disclosure to all buyers they refer to the affiliate. (d) The disclosure required by this section may be combined with the disclosure of affiliation required under RESPA, 12 U.S.C. §§ 2601 et seq. Copies of all written disclosures required by this rule must be retained by the broker as business records available for inspection pursuant to N.J.A.C. 11:5-5.4 and 5.5.