Final answer:
A mortgage broker must use a dual agency form when they are representing both the buyer and the lender in a real estate transaction to disclose the potential conflict of interest and obtain consent from both parties.
Step-by-step explanation:
A mortgage broker must use a dual agency form under circumstances where they are acting as an agent for both the borrower and the lender in a real estate transaction. This scenario is known as a dual agency situation. The dual agency form, also sometimes known as a dual agency disclosure form, is a document that explicitly informs both parties of the broker's dual role and obtains their consent.
In many jurisdictions, it is a legal requirement to disclose this relationship because it could potentially lead to conflicts of interest. The mortgage broker must ensure that both parties are fully informed of the situation and agree to the arrangement in writing, acknowledging their understanding and consent to the dual representation. This practice must be handled with transparency and in accordance with state and local real estate laws, which can vary.