in Articles, Blog by Lori Brewer
Performance Based Pay in Mortgage Lending by LBA Ware

Using Performance Based Incentives for Processors, LO Assistants, Closers, Shippers & More

Does performance-based pay increase work performance? Will per file bonuses for processors and other back office staff contribute to a decrease in the time from mortgage application to closing? Can this ultimately help increase branch revenue?


These are important questions for mortgage companies. And, we’ve been noticing they are at the forefront of many C-suite discussions.

For such an intensive workflow process that involves careful coordination between multiple people, how can the entire loan pipeline process – taking a mortgage loan from prospect to application, processing to underwriting, and closing to shipping – be streamlined and made more efficient?

Software tools certainly help and as much as we’d like to take full responsibility, the real key is all about finding the right motivation factor. We are all motivated by several different factors such as rewards, time off, snacks, a fun work environment. But generally-speaking, the most powerful motivator is cold-hard cash.

Performance-based pay, therefore, shouldn’t be restricted to just your licensed mortgage loan originators. Here are a couple of ways in which you could pay your non-LO employees with performance-based incentives:

  • Per file bonuses based on the number of loans they process.
  • Tiered compensation based on the number of files during a specific timeframe. 
  • Using a varying scale per the quality of the work.
  • Tiered compensation based on the number of days a file sits on their desk.
Tying certain performance metrics to total pay is certainly a way for mortgage companies to drive desired behaviors. However, it can be quite tricky figuring out all factors that come into play and that could ultimately have a negative impact on someone’s pay. Especially outside forces that you don’t necessarily have control over.  Determining the best way to handle these situations can get awfully tricky and deter a company from implementing performance incentives. 

Are you using performance-based pay at your mortgage company? Do you use it as a best-in-class tool for all your employees or just your loan officers? What kind of key performance indicators and metrics are you using? We’d love to hear ideas and get a conversation going on this topic.

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