I'm trying to figure out if this is a violation or not.

We have a mortgage LPO offsite. We also have a secondary market program in the branch. The LPO is managed by a non-originating manager who receives compensation based on the production of the LPO. The LPO Manager himself is managed by the Manager of the Secondary Market program. *This* manager does originate loans in the secondary market program (but not at the LPO). *This* manager is *also* compensated based on the production at the LPO.

Are these techinically different departments? Is this a violation?

I've been going crazy trying to locate the section in the reg or the commentary that discusses the distinction between an originating manager and a non-originating manger to try to answer this. Was that maybe just covered in the FRB webinar on this topic, or am I just missing it?

I do know that it was covered in an FDIC webinar on 6/17/11 on Truth in Lending - Mortgage Loan Originator Compensation Rules. Also in the FRB's 3/17/11 webinar. I think the applicable Commentary section is 226.36(a)(4).

Here is the link to the FRB webcast. It was free and can be re-played.

Philadelphia FRB Outlook Live