With the new compensation regulations faced by the mortgage industry, it's important to understand your role in your organization
By David Lykken
Special to MPA
Recently, on my Lykken on Lending radio show, I had the opportunity to discuss the legal ramifications of the new compensation regulations faced by the mortgage industry. One of the most common questions is whether or not branch managers can legally take a share of the company's profits. Here's what I learned...
If the branch manager is a producing loan originator, then he or she cannot take a share of the profits. That is, if the branch manager has direct communication with the consumer, he or she cannot share in the profits. On the other hand, if the branch manager doesn't produce, he or she may share in the profits.
It's a subtle distinction. The important thing is that we be careful about designating responsibilities and keeping to our roles in our organizations. If we understand our roles and we fill them appropriately, we should be just fine.
David Lykken is 40-year industry veteran who has been an owner operator of three mortgage banking companies and a software company. As co-founder and Managing Partner of Mortgage Banking Solutions, David consults on virtually all aspects of mortgage banking with special emphasis executive leadership development, corporate strategic direction and implementation as well as mergers & acquisitions. A regular contributor on CNBC and Fox Business News, David also hosts a successful weekly radio program called “Lykken On Lending” (www.LykkenOnLending.com) that is heard each Monday at noon (Central Standard Time) by thousands of mortgage professionals. Recently he started producing a 1-minute video called “Today’s Mortgage Minute” that appears on hundreds of television, radio and newspaper websites daily across America.
