Complying With the CFPB Regulations on Mortgage Loan Originator Compensation
The Consumer Financial Protection Bureau (CFPB) has stated that one of its primary examination and enforcement targets this year will be compliance with the restrictions on mortgage loan originator compensation. However, there are still many lingering questions about what is allowed, what is prohibited, and what the downside risks are. Even some of the principles that seemed clear at first have started to seem cloudy again. With its recently released supervisory tactics in various areas, it will assist the industry to be in compliance with federal consumer financial law. This will include failures to maintain written policies and procedures and also to include LO’s name and NMLS ID # on loan documents.
In this webinar, Kris Kully, a partner with Mayer Brown in Washington, DC, will discuss questions and provide you some principles you need to know in order to comply with complex regulations. The webinar will be discussing the CFPB targets for 2016, various enforcement actions, and explain various tales from experience. Get to know the How-to tips, smart strategies for compliant lending, risk management and how to train your staff. If you’re a mortgage banker, compliance officer or executive sailing through the current regulatory hurdles, this session is for you.
We’re bringing in a new branch, and they want to be compensated as a team. Can I make that work?
Can I allow my loan originators to pick their own compensation plans (i.e., a so-called “pick-a-pay” plan)?
Can I pay my loans originators differently for purchase money loans versus refinancing’s? Reverse mortgage loans versus forward loans? Jumbo loans versus conforming loans?
How can I hold loan originators responsible for controlling costs like tolerance violations or buyback costs?
What will the CFPB be looking for, and how I can get prepared?
What other compensation issues should I watch out for?
Can a lender look at the historical default rate or prepayment history of an LO’s loans when establishing the LO’s commission for an upcoming period
Can a lender reduce an LO’s compensation if the LO omitted a $500 fee from the Loan Estimate (the fee was known when the Loan Estimate was issued)?
Can a lender establish a program under which an LO, that originates loans with terms above the lender’s rate sheet, earns bonus compensation and/or “points” that can be used to establish loan prices below the lender’s rate sheet for one or more other loans?
Can LO “A” and LO “B” work as a team to originate loans? Must they get paid the same?
How can branch managers be incentivized through their compensation to increase branch revenue and reduce expenses? What about nonproducing branch managers?
Can a lender charge the LO for repurchase costs?
Can a lender pay an LO differently for reverse mortgage loans?
In establishing (and re-establishing) compensation levels, can a lender consider the LO’s/branch’s historical product mix (and profitability of that mix)?
Who Should Attend
In-house counsel and compliance personnel for mortgage lenders, mortgage lending divisions of financial institutions, and financial advisors or wealth managers who refer clients for mortgage loans
Kris Kully is a partner in Mayer Brown's Washington DC office and a member of the Consumer Financial Services group. She advises clients on federal and state regulatory compliance matters affecting providers of consumer financial products and services, including licensing and substantive practic...
Disclaimer: The content herein does not represent any association between CFPB and Eli Financial LLC. CFPB neither endorses any product of Eli Financial LLC nor warrants accuracy of the content hereto.