in Blog, CompenSafe by Lori Brewer
Conquer Complexity: Defuse the destructive power of spreadsheets in mortgage lending with LBA Ware

Conquer Complexity of Paying Commissions to Terminated Loan Originators

As with any sales profession, the amount of commission paid is based on actual sales. What happens though if the employee who captured the lead is no longer employed by the time the sale hits the books? Does that terminated employee still earn commission for that sale? If so, is it the same amount it would be if the employee was still at the company?

Here are three tips to help you conquer the complexity of paying commissions to terminated loan originators.

1. Define When a Loan is Commission Eligible

At what point in the loan origination process do your LOs earn commission for a loan? Is it once the loan is funded or when the wire is sent? Or, is it once the loan has gone through closing? Does it differ by channel?

Since there are variations in the mortgage industry for the determination of a commission eligible loan, it’s important to have a clearly defined definition that all your employees understand. In CompenSafe, we refer to this as the Completed Date to signify that the loan’s compensation can be calculated and cued up for payroll.

2. Outline How Terminated Loan Originators Will be Paid

We see a variety of rule-based compensation structures for terminated loan originators whose pipeline loans close and fund after they’ve left the company. Such structures for example state,
  • LO receives 50% of normal commission for loans completed within 30 days of the employee’s termination date.
  • LO receives 100% of normal commission for loans completed within 15 days of termination, 50% if completed in 30 days, or 10% if completed in 60 days.
  • LO receives 100% of normal commission for loans submitted to underwriting prior to termination date and completed within 45 days.
  • LO receives no commission on loans completed after termination date.

3. Automate Loan Originator Commissions

Mortgage software like CompenSafe gives you the flexibility to set and control LO termination rules. With CompenSafe seamlessly integrating with many LOS’ that track employee termination dates, such as Ellie Mae’s Encompass, you can create rules to have the commission payment process completely automated, such as,
  • Auto-assign a terminated commission schedule to an employee’s compensation plan.
  • Deactivate an employee’s compensation plan.
  • Use the LOS termination date to track when a pipeline loan is no longer eligible for commission.
  • Split commission between the terminated LO and the LO that takes over on the loan.
In addition to automating how the terminated employee will be paid commission, CompenSafe can track the new loan originator assigned to the loan and keep the terminated LO as LO of Record on the loan file.
It’s time to take the complexity out of paying your loan originator commissions and start using CompenSafe to automate the process. Contact us today to schedule a live demo to learn more about all the ways in which CompenSafe helps 100’s of lenders each day conquer complexity and take down the Spreadsheet Syndicate.
This post is part of the on-going blog series, Conquer Complexity: Defuse the Destructive Power of Spreadsheets in Mortgage Lending that focuses on how to conquer complexity, eliminate the use of spreadsheets, reduce inefficiency, and increase margins!
As the eager-to-help “masters of problem solving,” it is our mission to build value-laden software that helps mortgage lenders engage in optimized and efficient lending by eliminating repetitive and manual processes through integration and automation. Our promise – integrated systems, automated processes and eliminated inefficiencies – is your competitive advantage in today’s market!
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