CompSiderations: Balancing Mortgage Compensation and Profitability
Compensating Branch Managers on Profit & Loss
How are we responding to this question? Lenders can pay regional, area or branch managers based on P&L if the individual is a non-producing manager that is also disconnected from the origination and loan-level decision-making process. LOs and producing managers involved in loan level origination must still follow the LO comp rules and cannot be paid on the individual profit and loss of a loan.
Another option for producers and non-producers is to have an agreed flat expense deduction netted from compensation to cover marketing, subscriptions or other services paid for by the company. In all cases, it is critical to have all expense deductions and compensation criteria declared in writing, signed and safely stored for documentation.
Sharing the Cost of LO Assistants
When multiple if-this-then-that type rules are in place at an organization, it is crucial to have an automated incentive compensation management (ICM) system in place to document, automate, calculate and track compensation debit and credit transactions.
Bond-Funded or Down Payment Assistance Loans
While some have created salaried positions for LOs to exclusively handle these types of loans, others have set up specialized “desks” in separate offices to keep from running afoul of Fair Lending rules while continuing to offer these types of programs.