The ever-changing regulatory landscape surrounding compensation of loan originators is one of the most difficult areas for lenders to navigate
By David Lykken
Special to MPA
The ever-changing regulatory landscape surrounding compensation of loan originators is one of the most difficult areas for lenders to navigate. One small oversight can lead to drastic consequences. We want to incentivize our people to get results, but we've got to be careful that we're playing by the rules.
One important thing to remember is that the compensation structure for your loan originators must be prearranged. You cannot base the compensation of an individual according to his or her profitability to the company. In other words, you can't pay a higher commission to LOs who bring in more revenue.
This is one of the easiest rules to break, but you've got to decide before the LO even starts with you what the compensation structure will be. If you hire the right people who are results-driven, you shouldn't have any trouble generating the kind of volume you need to make your business sustainable.
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.
