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My bank owns a mortgage company that makes secondary market loans. Bank employees are asked to refer customers to the subsidiary if a customer wants a long term fixed rate loan product we don’t offer. Employees earn $100/loan originated if they refer it. When the Reg Z Loan Orig Compensation rules become effective in Jan., will our non MLO/LO staff be considered LOs because of this referral payment? and therefore subject to the compensation limitations and qualifications rules?
The commentary says no, provided that the person does not discuss particular credit terms …. based on the consumer’s financial characteristics and does not direct the consumer, based on his or her assessment of the consumer’s financial characteristics, to a particular loan originator or particular creditor seeking to originate credit transactions to consumers with those financial characteristics…..
However would we be able to support employees would not know the consumer’s financial characteristics, i.e. does the very nature in this set up cause all referrals to be subject to the LO Compensation and any employee making the referral becomes a LO due to a referral? Any help is appreciated.
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