Thanks, Robin. One other issue has arisen along with the proxy question. The tiers for the percentage of commission varies per the monthly volume of the LO. For example, if an LO closes a total of $500,000 in a month, they will recieve 1.20% of $500,000. If they fall in the lower tier, of less than $500,000, say $300,000, they will receive 1.00% of $300,00. We are being questioned because of this portion of the commentary. I believe it does not apply because the compensation is based on total volume of all loans closed during the month, not the amount of an individual loan. Do you agree? (see below)
From the Commentary: 9. Amount of credit extended. A loan originator’s compensation may be based on the amount of credit extended, subject to certain conditions. Section 1026.36(d)(1) does not prohibit an arrangement under which a loan originator is paid compensation based on a percentage of the amount of credit extended, provided the percentage is fixed and does not vary with the amount of credit extended. However, compensation that is based on a fixed percentage of the amount of credit extended may be subject to a minimum and/or maximum dollar amount, as long as the minimum and maximum dollar amounts do not vary with each credit transaction. For example: i. A creditor may offer a loan originator 1 percent of the amount of credit extended for all loans the originator arranges for the creditor, but not less than $1,000 or greater than $5,000 for each loan. ii. A creditor may not offer a loan originator 1 percent of the amount of credit extended for loans of $300,000 or more, 2 percent of the amount of credit extended for loans between $200,000 and $300,000, and 3 percent of the amount of credit extended for loans of $200,000 or less.