Loan Originator Compensation Rules
After many changes and much uncertainty, Loan Originator Compensation Rules are final. This webinar explains the final rules that take effect January 10, 2014, in time to help you plan for year-end bonuses, retirement plan contributions and more.
As we approach year-end it is time to think about year-end bonuses, contributions to employee retirement plans and compensation arrangements for next year. But what can we do considering the loan originator compensation rules contained in Regulation Z?
We finally have some certainty regarding loan originator compensation. The final rules are less than satisfying, but they are final. Loan originator compensation rules were originally effective on April 1, 2011. At the end of 2011 and 2012 uncertainty reigned. On January 20, 2013 the Consumer Financial Protection Bureau (CFPB) published a final rule amending Regulation Z to revise and clarify existing regulations and commentary on loan originator compensation. The final rules were further impacted by proposed rules on May 7, 2013 and June 21, 2013 and by a final rule on May 29, 2013. The final rules are effective on January 10, 2014.
Upon completion of this program, participants understand the final Regulation Z rules that:
- Prohibit compensation based on loan terms and conditions: The rules prohibit compensation that varies with the loan terms. Two major problem areas – contributions to retirement plans and profit sharing bonuses have been resolved to some extent. The alternatives for resolving the issues are analyzed.
- Prohibit steering incentives: The rules prohibit compensation that varies with the loan terms. A broker or loan officer cannot get paid more if the consumer takes a loan with a higher interest rate, a prepayment penalty, or higher fees. Moreover, the mortgage originator cannot get paid more if, for example, the consumer agrees to buy title insurance from the lender’s affiliate. Previously, loan originators could make more money by getting the consumer to buy these services from the lender, broker, or one of their affiliates.
- Prohibit “dual compensation”: Under the CFPB’s rules, the loan originator cannot get paid by both the consumer and another person such as the creditor. In the run-up to the crisis, too often consumers incorrectly assumed that their loan originators were looking out for the consumer’s best interest.
Participants receive a detailed manual that serves as a handbook long after the program is completed.
Management, human resources staff, loan originators, loan officers, lending assistants, compliance officers and auditors.
Jack Holzknecht, CRCM, a principal with Pegasus Educational Services, LLC, has been delivering the word on lending compliance for 37 years. Jack’s career began as a federal bank examiner. He also headed the form and software division of a regional consulting company and spent seven years in charge of their education division. He also developed and delivered training for the FDIC and OTS.
Institute of Certified Bankers: Visit http://www.icbmembers.org/login.aspx for instructions regarding self-reporting. Estimated credits: 2.5 hours/session CRCM/CLBB.
Member price: $265.00 | Non member price $530.00
Member price: $280.00 | Non member price $560.00
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