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Loan Originator Compensation

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  • #2320
    Mollu
    Member

    Is a management bonus based on overall profitability of the mortgage department acceptable?

    #2662
    jholzknecht
    Keymaster

    Section 226.36(d)(1) prohibits a person from compensating a loan originator, directly or indirectly, based on the terms of the transaction. Pay based on the overall profitability of the mortgage loan department appears to be compensation based indirectly on the terms of the loan. So the question is – Do the management employees receiving the bonus fit the definition of “loan originator?”

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