Can a mortgage loan originator’s compensation be reported on Form 1099-MISC rather than Form W-2?
It is NCCOB’s position that the reporting of compensation on Form 1099-MISC demonstrates conclusively, for the purpose of licensing under the Mortgage Licensing Act (MLA), that the individual compensated is an independent contractor. If that individual acts as a mortgage broker, as defined under the MLA, he must be licensed as such (unless he is exempt). Licensees who compensate unlicensed, non-exempt mortgage brokers are subject to (1) regulatory action (i.e., license suspension or revocation), (2) criminal referral to local prosecuting authorities, and (3) reporting of such practices to Federal and State taxing authorities.
