Commercial Loans Blog

Commercial Mortgage Referral Fees

Posted by George Blackburne on Tue, Jul 18, 2017

Is it legal to pay referral fees for commercial mortgage referrals?

Yes!  Even in states where a license is required to broker commercial loans (California, Florida, Nevada, Arizona, etc.), you can legally pay a referral fee on a commercial mortgage loan, as long as the referring source does nothing more than to call you with a name and number of a prospective borrower.


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 However, if the referral source - say, a commercial real estate broker - starts to negotiate terms (rate, points, term, etc.), at that point he is working as a commercial mortgage broker.  In those states requiring a license to broker commercial loans, the referral source is now breaking the law. 

Therefore, don't let your referral sources try to gather documents for you or to issue loan quotes.  As long as he merely gives you the name and number of someone seeking a commercial loan, it is perfectly legal to pay him a referral fee.

When is it illegal to pay a referral fee for a mortgage borrower?  Under RESPA, it is illegal to pay a referral fee (called a kickback) on a residential loan.  A residential loan is a mortgage loan on a house, condo, townhouse, duplex, triplex, or fourplex.  In the parlance of the Federal government, such loans are called loans on a one-to-four family dwellings.

Is it legal to pay a banker a referral fee for a commercial mortgage referral?

Never be the first to suggest a referral fee to a banker!  Most bankers consider referral fees - even on commercial loans - to be kickbacks.  A kickback is an illegal and immoral payment to a real estate broker to steer his trusting buyers to a particular lender. 

Therefore, if you offer a referral fee to a banker, 90% of them will be horrified.  They will look at you as a leper and probably cut you off.

Most banks also forbid their loan officers from receiving referral fees.  The reason why is because of the potential liability.  Lots of banks have been sued for referring customers to mortgage companies.  If the mortgage company is negligent and the borrower loses a large purchase deposit, such borrowers have been known to sue the bank for a negligent recommendation.

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So while it is NOT illegal to pay a banker a referral fee on a commercial mortgage referral, the loan officer can still get in trouble because it is against the policy of most banks for their loan officers to receive referral fees.

That being said, if the banker asks for a referral fee, you should gladly pay it.  There is nothing sweeter than a banker sending you one or two referrals every business day.

How large should the referral fee be?

It's whatever you negotiate, but the standard commercial mortgage referral fee is 20% of your company's gross commission.  Ten percent is also common.

My own hard money commercial mortgage company, Blackburne & Sons, will gladly pay you a referral fee of 20% of our gross loan fee for commercial mortgage referrals.  Please call Tom Blackburne at 574-210-6686 or email him at

Blackburne & Sons is looking for commercial first mortgages nationwide of $1.5 million or less on standing commercial properties.  Sorry, no construction loans, no land loans, and no land development loans.


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Topics: referral fees

Referral Fees on Commercial Loans

Posted by George Blackburne on Fri, Sep 23, 2016

Referral_Fees-1.jpgAnyone who owns a web site that is related to real estate or which provides services to high net worth individuals (accountants, attorneys, insurance salesmen, financial planners, etc.) should pay close attention to this article.  It is perfectly legal for a commercial mortgage company to pay referral fees for commercial loans, and the recipient does not need to be licensed in any way.  Remember, I am an attorney.  Still doubt me?

"But George, I thought that referral fees were illegal?"

A little history will help.  Many decades ago real estate agents used to steer their home loan clients to particular lenders and to particular settlement companies (escrow companies, title companies, closing attorneys, etc.) in exchange for hefty kickbacks from from those companies.  The home loan lenders then would then charge these unsuspecting borrowers extra points or a higher interest rate.  The title companies would also charge these innocent, trusting folks extra high fees.

Finally in 1974 the Federal government stepped in and passed RESPA, which stands for the Real Estate Settlement Procedures Act, which made it illegal for a residential lender or a settlement provider to pay anything of value for a referral.  The power of the Federal government, however, is not unlimited.  For example, the Federal government could not order the citizens of any state to wear only white shirts and black shirts.


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Therefore RESPA only applies to transactions involving a federally-related mortgage loan, which includes most loans secured by a lien (first or subordinate position) on residential property. Residential property includes only one-to-four family dwellings; which, translated into English, means single family homes, condo's, duplexes, triplexes and fourplexes.  Mortgage loans, by definition, includes home purchase loans, refinances, lender approved assumptions, property improvement loans, equity lines of credit, and reverse mortgages.

But note: RESPA only applies to 1-4 family loans.  It does not apply to commercial property.

Now most states do not require a license to broker commercial real estate loans; but even those states that do require a license still allow commercial mortgage companies to pay referral fees, as long as the referral source is not quoting rates and terms and is not playing document fetcher.  It's fine to pay a referral fee for the name and telephone number of a prospective commercial borrower; however, the referral source cannot be running around playing unlicensed mortgage broker. 




Now that we have the legality issue settled, let me tell you a real life story.  By the way, a real life story told to a sales prospect is called a verbal proof story; so let me tell you a verbal proof story about referral fees.

About six years ago, a guy named Wayne owned some sort of real estate web site.  For all I know, Wayne could only have owned a tiny residential real estate brokerage in some small town in the boonies.  Or heck, he could have been a really smart financial planner.  Anyway, Wayne put a link on his website that read, Commercial Loans, and he pointed it to  He didn't even tell us about the link.  He didn't need to tell us.  He just did it.

Well, six year ago a very productive mortgage broker named Mario visited Wayne's website.  Mario saw the Commercial Loans link, clicked on it, discovered, and then entered a commercial loan.  The deal closed!

C-Loans, Inc. then went into its database of loan applciations, found the original digital application on this closed loan, saw printed at the bottom a link to Little Wayne's Bayou Tackle Shop and Real Estate Brokerage, looked up who owned the site, called Wayne, and then gave him the good news!  Wayne was paid an unexpected referral fee of 12.5 basis points, probably around $1,500.

Important note:  On deals larger than $5MM, our referral fee is slightly less (8.33 bps.) because we only earn 25 bps. ourselves. A basis point is 1/100th of one percent.  Therefore a half-point would be 50 bps.




But the story gets even better!  Mario turned out to be a hot agent, and he has already closed a total of 8 deals on C-Loans.  C-Loans pays its referral sources (hyperlink partners) on every subsequent closing as well, until the C-Loans user changes his email address.  After that it becomes economically infeasible for us to track the deals.

So far we have paid Cajun Wayne on 8 closings for a total of $17,798.75!  And the reason this came up is because Super Mario is poised to close his 9th deal for Wayne, a $935,000 commercial loan where Cajun Wayne will earn another $1,168.75 referral fee.  That will be a total of $18,967.50 - all for spending just ten minutes six years ago to put a link to on his website.

But watch out for the Hyperlink Police!  If you put more than one link to on your website, ten heavily-armed SWAT guys might kick down your door in the middle of night, drag you out of bed, hogtie you, tickle your wife, and then shoot your dog with a squirt gun!

Helloooo? I'm kidding here.  Do you want to make a little bit of referral fee money or a lot?  We once paid a guy named Alan Dunn a referral fee of $21,250 for the referral of a $17 million land development loan.  

I therefore urge you to put three links to C-Loans on every page on your website.  I would make a Commercial Loans tab at the top, a Commercial Mortgages navigation link along the left side, and a Commercial Mortgage Rates link at the bottom as a footer.  And not just on your home page.  Do it on your interior pages as well.

And remember, you do not have to notify us that you have created these links. is programmed to automatically capture the referring URL (website address) and to print it at the bottom on the application.


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"But George, how do I know that you won't cheat me?"

Blackburne & Sons manages about $51 million in hard money commercial first mortgages for about 1,500 elderly investors.  On any given day, we might have $2 million or more sitting in our loan servicing trust acccounts.  We are audited every quarter, and we have been in business for over 36 years.

Do you regularly email a newsletter to your clients?  It is possible - and super smart - to put a similar link in your newsletter; but in this case you will need a special partnership code.  To get this partnership code, please call or email Mick Carlson at 574-855-6292.


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Continue to be on the lookout for the contact information of any banker making commercial real estate loans.  We'll trade you the contents of just one business card for a free directory of 2,000 commercial lenders.


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The ninth largest bank in the world joined this month.  Their minimum loan is $20 million!  OMGoodness.  Why did they join?  They want to use their ability to fund these huge loans as an entre to meet super-high-net-worth individuals, so they can sell them other services, like wealth management and trust servcies.

Hmmm.  Anybody remember me saying, "There is no easier way to meet high net worth investors than to be a commercial mortgage broker?"  Maybe I've said it TWENTY times.  Sorry.  I got excited.  But every commercial-investment property brokerage should have a one-man desk that arranges commercial financing, in order to meet TONS of filthy rich investors.


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Topics: referral fees

Commercial Loans and Referral Fees From Out of the Blue

Posted by George Blackburne on Mon, Apr 25, 2016

Secret_Police.jpgThis week C-Loans, Inc. paid a referral fee of $1,131.25 to a lady who had merely mentioned in one of her blog posts.  This lady had wisely made the mention of be an active hyperlink, so we were able to trace this closing back to her blog article.

Our programmers have added automatic software to whereby we automatically capture the URL of the web site from which the visitor jumped.  That URL is printed at the bottom of the C-Loans loan application.  When the deal closes, we go back to see who owns that website and send them money.

While this week's referral fee of $1,131 is a nice gift from out of the blue, we once paid a referral fee of $21,250 (!!) to a lucky guy named Alan Dunn of  Can you imagine being Alan and getting a wonderful phone call like this, "Hey, Alan, we need a W-9 from you.  We have a check here for $21,250 for you."  Alan's deal was on a $17 million closing.


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All you have to do start earning huge referral fees from C-Loans is to create a hyperlink on your real estate or mortgage web site that says, "Commercial Real Estate Loans", "Commercial Financing",  "Apply For a Commercial Loan", or "Finance This Property."  Then point this link to  Your link needs to point to our home page and not any other page because only our home page is programmed to capture the referring URL.




Beware of the Link Police (see the two photos above).  If you put more than one link to on your web site, the Link Police are likely to break down your door in the middle of the night and haul you away to Guantanamo Bay, where you will never be seen by your family again.  Not!  There is no such thing as the Link Police!  I'm just being a smarty-pants here to make an important point.  You can absolutely put a link to on every one of your website pages.  The more links you add to your website, the better your chances of getting a wonderful phone call.

Now if it was me, I would put a "Commercial Loans" link at the top of each page, a "Commercial Financing" link in the middle of each page, and an "Apply for a Commercial Loan" link at the bottom of each of my web pages.  When you or your internet guru creates a new page of content, you guys don't start from scratch each time.  Instead you copy an existing page, maybe even from a master, and then you make your changes.  Be sure that your master page contains these links so that every time you create a new web page in the future, links to will be automatically added.

Now let me speak to you commercial real estate brokers (commercial realtors).  On your company website are your active listings.  I strongly urge you to create a "Finance This Property" link at the bottom of each commercial property listing.  Give yourself a chance to make some serious dough from out of the blue.




How can you be sure that we won't cheat you?  In reality, you don't; however, Alan Dunn (the lucky $21,250 recipient) would never have known that we closed that deal.  Nevertheless, we paid him immediately.  Remember guys, I own Blackburne & Sons, the hard money commercial lender.  As part of our duties, we service $50 million in hard money loans for 900 elderly investors.  At any given time, there is usually over $1 million in our trust accounts.  If I was going to break bad (pun intended), I'd loot our trust account long before I'd steal your $1,131 referral fee.  Please also remember that this is our 36th year in the commercial mortgage business.

Still suspicious?  For just $95 we will create a special partner link for you that will allow you to -

  1. Embed a "Commercial Loans" hyperlink in your email newsletters and even in the signature block of your daily emails. Without this special link, we can only track referrals from websites, not email newsletters or even everyday emails. If you pay for one of these special partner links, be sure to insert it right into the signature block of your emails. Hey, you never know when one of your wealthy borrowers or real estate brokers might happen to need a commercial loan.

  2. Receive a copy of every commercial loan application generated by your website or emails. This way, if you happen to see a commercial loan that you want to broker out yourself, you can jump on the lead and call the borrower.  You can also use these copies to audit us.

If it is worth $95 to you to get a copy of every lead generated by your website, please call Mick Carlson at 574-855-6292 or email him at  In my opinion, this is NOT necessary, unless you publish an email newsletter and want to embed a hyperlink or two in your newsletters.

Now let's talk plagiarism.  The nice lady who wrote the blog article mentioned above, and who earned a nice referral fee, probably got a lot of her material from my blog and my website.  Good for her!  I'm happy to let anyone use my material (you don't want to copy my articles or web pages word-for-word because Google will punish you for duplicate content), as long as you include an active hyperlink back to

Are referral fees legal?  Absolutely, as long as you don't try to quote material terms.  I wrote an excellent whitepaper on the subject of referral fees for commercial loans.

Please continue to be on the look-out for bankers who make commercial real estate loans.  We'll trade you the contents of just one banker business card for a free directory of 2,000 commercial real estate lenders.  We solict these guys to refer their turndowns to


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Have you registered on  Registration is merely the process of inputting your name and contact information (Step One of Six) into C-Loans.  Entering your contact information into one of the blue buttons on our site is NOT the registration process.  We realize that you are more likely to enter your next commercial loan into if you have pre-registered, so we are offering a free $199 Commercial Mortgage Underwriting Manual to anyone who pre-registers.


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Ready to finally learn commercial real estate finance?  Commercial real estate brokers (commercial realtors) can add a whole new profit center to their brokerage businesses by learning how to broker commercial loans.


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Topics: referral fees

Easy Way To Earn Huge Referral Fees As You Sleep

Posted by George Blackburne on Tue, Aug 18, 2015

Referral_Fees-1A few years ago, Alicia, who was running C-Loans at the time, called up a guy named Alan Dunn and said, "Alan, I'm about to make your whole day.  Do you remember that hyperlink entitled Apply for a Commercial Loan that you put on your website?  Well, guess what?  A borrower clicked on that link and applied for a $19 million commercial real estate loan using  The loan closed, and we have a referral fee check for you in the amount of ... $21,250!"  Holy Moly, can you imagine getting a call like that?

First of all, let me reassure you that referral fees for commercial real estate loans are perfectly legal, even if you are not a licensed mortgage broker or a licensed real estate broker.  You just can't be involved with negotiating loan terms.  All you can do is introduce the borrower and the commercial lender.  After that, if you are not properly licensed, you need to get out of the way and not try to play intermediary.

The strict prohibitions about referral fees or kickbacks that you've heard about apply to home loans.  Home loans are loans on single-family dwellings, residential condo's, duplexes, tri-plexes, and four-plexes, what we call in the industry one-to-four family homes.  The government doesn't want unsuspecting home loan borrowers being steered to unscrupulous, high-cost residential lenders simply because the lender is offering kickbacks.  Commercial borrowers are considered far more sophisticated and don't need such protection.

You too can earn some of these huge referral fees.  Here are more details:

Do you have a webpage?  If so, you could be earning $5,000 referral fees as you sleep. All you have to do is put a simple hyperlink on your web page that says, "Commercial Mortgages".  In return C-Loans will pay you 1/8th of a point on any closed commercial mortgage loan that came from your site. (On loans of $5 million and higher, C-Loans itself only earns 25 bps., so your referral fee will be one-third of 25 bps.)

The C-Loans On-Line Commercial Mortgage Application System is totally awesome.  The borrower or broker (yes, you get paid if brokers use it too!) merely completes a 4-minute on-line application.  Then he asks for lenders.

More than 750 nationwide commercial mortgage lenders participate in the C-Loans System, including several life insurance companies, virtually all of the largest 50 banks, dozens of major conduits, and even a handful of REIT's. The system also has a number of hard money lenders for subprime deals and bridge loans.

Your borrower studies the rates of each lender and then chooses six lenders.  He submits his loan application with just one simple mouse click. Within minutes he will receive by e-mail several quotes or turndown notices.   If the answer is no, he simply clicks on more lenders until his loan is approved.   The system is soooo sweet.

"Gee, George, it sounds great. I wouldn't mind getting a $10,000 referral check out of the blue someday. What do I do?"

Simply create a "Commercial Loans" hyperlink on your site and point it to

"But George, how will you know that the deal came from me?"

Our computer captures the URL of the referring site and prints it right on the bottom of the loan application. When a deal closes, we merely go to that site and tell them the good news.

"But George, how will I know you won't cheat me?"

C-Loans, Inc. is the sister company of Blackburne & Sons Realty Capital Corporation, one of the oldest hard money lenders in the country. Blackburne & Sons was founded in 1980, more than 35 years ago. We are entrusted by our 1,000+ private investors to manage and service more than $50 million of their mortgage investments.  The balance in our trust account is often over $2 million.  To be entrusted to handle this much money for this long, we pretty much have to be impeccably honest.

"Gee, George, this all sounds very interesting. Is there anything special I can do to increase my chances of making some serious dough?"

There are two things you can do. First of all, be patient. Don't give up. Commercial loans take on average four to five months to close.

Secondly, put our link on every one of your web pages at least three times. Maybe one link will say, "Commercial Loans". The second link might say, "Commercial Mortgages". The third link might say, "Apply for a Commercial Mortgage." They should all point to One link might be at the top of each page; the second link might be on the left side; and the third link might be on the bottom.

Remember, this is a numbers game. The more loan app's you submit, the better your chances of making some serious dough. A nice referral check of $21,250 would pay some bills, huh?

Brand New Additional Option: For just $95 we will create a special partner link for you that will allow you to -

  1. Imbed a "Commercial Loans" hyperlink in your email newsletters and even in the signature block of your daily emails. Without this special link, we can only track referrals from websites, not email newsletters or even everyday emails. I'd insert your special partner link right in your signature block. Hey, you never know when one of your wealthy borrowers or real estate brokers might happen to need a commercial loan.

  2. Receive a copy of every commercial loan application generated by your website or emails. This way, if you happen to see a commercial loan that you want to broker out yourself, you can jump on the lead and call the borrower.

By creating Commercial Mortgage hyperlinks all over your website (I'd put two or three C-Loans hyperlinks on every one of my webpages - why not, huh?), you give yourself a chance to earn some big referral fees while you are sleeping.

Want your own partner link? Please call Mick Carlson at (574) 855-6292 or email him at

If you don't regularly blast out an email newsletter, and you are not worried about getting a copy of every commercial loan app generated by your site, then you don't need to speak with Mick. Just insert the "Commercial Loans" or "Commercial Mortgages" hyperlinks all over your webpages and point them to  Remember, that lucky-lucky guy, Alan Dunn, didn't have this fancy, special partner link.  He just put pointed some hyperlinks on his website to  Our automated tracking system did the  rest.


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Topics: referral fees

Inside Secrets to Earning Huge Referral Fees for Commercial Loans

Posted by George Blackburne on Thu, Dec 15, 2011 once paid a guy a referral fee of $21,250 for referring us a commercial loan.  The really funny thing is that the guy was asleep when he referred us that loan.  Really.  How is that even possible?

describe the imageThere are lots of tricks and techniques you can use to find more commercial mortgage referrals to send to Blackburne & Sons and/or C-Loans, Inc.  For example, where do you find commercial loans to refer?  Is there a way to automate the process so you can earn $5,000 referral fees in your sleep, just like that lucky guy described above?

You'll find the answers in our wonderful free whitepaper, The Inside Secrets of Earning Huge Referral Fees.


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Topics: referral fees

Referral Fees for Commercial Loans

Posted by George Blackburne on Wed, Dec 7, 2011

From time to time you probably run across business owners and investors who are looking for a commercial real estate loan.  Blackburne & Sons will happily pay you a 20% referral fee for that lead.

referral feesAll you have to do is visit our Commercial Lead Input Form.  Then just fill in the name of the borrower.  Voila!  You're done.  When the deal closes, we'll send you a big referral fee.  We once paid a $21,250 referral fee to a guy named Alan Dunn from a company named Spydercube.  Wow.  As you can imagine, he was pretty happy to get that call.

Why don't you please go to our Commercial Lead Input Page and bookmark it right now?


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Topics: referral fees

Marketing Leverage for Commercial Real Estate Loans

Posted by George Blackburne on Mon, Sep 29, 2008

Advertise to Companies Who Are Spending Big Money to Market for Mortgages

If you're a commercial mortgage broker, you probably need more leads on borrowers seeking commercial loans. Eventually you will discover that marketing directly to the public for commercial real estate loans just doesn't work. If you send out 10,000 mail pieces, you'll usually only get around six leads and no closings.

So what does work? Residential mortgage brokers can be a wonderful source of referrals. Just pay them 20% of your loan fee in return for a name and telephone number of a prospective commercial real estate loan borrower.

Here's why advertising to residential mortgage brokers is so effective. The typical residential mortgage broker spends about $400 per month on some form of advertising - perhaps a small classifed ad in the Money to Loan section of the newspaper, a big Yellow Pages ad or a display ad in the Pennysaver or similar free grocery store magazine.

This advertisment by the residential mortgage broker probably reaches thousands of potential borrowers every month. Now if this residential mortgage broker is giving you all of his commercial loan referrals, this means that with a single $1 mail piece to the mortgage broker, you are reaching thousands of potential borrowers.

If the residential mortgage broker is spending $400 per month, then your $1 mail piece is getting leveraged by a whopping 400 times. This is marketing leverage.

Do you need to place a commercial real estate loan right now? You can submit your commercial real estate loan to 750 different commercial mortgage lenders in just four minutes using the C-Loans Commercial Mortgage Lender Portal.

Topics: commercial real estate loan, commercial loan, marketing leverage, commercial marketing, referral fees, commercial financing, commercial mortgage