[Anonymous]

Our bank has begun the process of becoming a wholesale lender for other community banks. We will process, close, and service loans from other community banks that do not have a platform to accomodate these services. We will disclose the loans in our name and close them in our name. The community banks will be performing five of the required steps that RESPA requires for us to be able to compensate them. Our goal is to make 3% on the loans when we sell them to our investor and we will be compensating the community bank 1.5%.

1) Is the compensation structure allowed by RESPA?
2) Are we required to disclose this compensation to the borrowers?
3) If we are required to disclose this compensation to the borrowers, how do we do that?

[JGo9]

I’m not sure what the percentages are of. You can charge a percentage of the loan amount, but be careful here, you don’t want to run into a MLO compensation issue.

You will need to disclose the fees properly on the HUD, refer to the latest HUD FAQs on RESPA and the recent RESPA RoundUps.

[Author]

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