Topic: CFPB 2014 Mortgage Rules: Loan Originator Compensation
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We’d like to pay an incentive for clean compliance reviews to loan officers. Is that permitted under the loan originator compensation rules?
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Yes, we believe the loan originator compensation rules permit financial institutions to pay loan originator compensation that is based on the quality of a loan file. As stated in the staff commentary: “Permissible methods of compensation.—Compensation based on the following factors is not compensation based on a term of a transaction or a proxy for…
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Is it permissible to base loan originator compensation, at least partially, on the net return assets of a bank?
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The CFPB’s final loan originator compensation rules, when effective, will allow financial institutions to pay loan originators bonuses based on the bank’s net return on assets (or other measures of profitability), subject to two provisos: (1) bonuses would have to be limited to ten percent of each loan originator’s total compensation for the year, including…