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#2172960 - 04/11/18 02:24 PM Re: dinging a mlo Burgess
rlcarey Online
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rlcarey
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What is the point you are trying to make, if I may ask, with that citation?
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Loan Originator Compensation Rule
#2173077 - 04/11/18 07:45 PM Re: dinging a mlo Burgess
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I was following up to my previous post about the cures. Even though the fee that you may be having to cure is a term of the transaction, because it is the tolerance cure that you are "compensating" on and not the underlying fee, then that makes it permissible?

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#2173377 - 04/13/18 02:10 PM Re: dinging a mlo Burgess
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The tolerance cure is not a term no matter what the underlying item is?

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#2173383 - 04/13/18 02:26 PM Re: dinging a mlo Burgess
rlcarey Online
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Re-read the quotation that you presented:

The payment of any fees or charges imposed on the consumer
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#2173483 - 04/13/18 06:49 PM Re: dinging a mlo Burgess
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Okay, I think I get where you are going with it. So, because the lender credit (tolerance) is not a charge imposed on the consumer, but rather issued by the bank, it can never be a term of the transaction.

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#2186795 - 07/25/18 06:56 PM Re: dinging a mlo Burgess
rgillette Offline
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Maybe I'm misunderstanding what is allowed under this. Wouldn't the ability to "ding" an MLO's comp on specific loans effectively give MLO's control over their pricing? Let's say I normally have a comp plan at 100 bps to stay competitive in my market. If I was able to get 'dinged' for mistakes, I would elect a 150 bps plan (for the clients who won't shop me), and then on the clients who are shopping, I make "mistakes" like under-disclosing the rate or giving too large of a lender credit or forgetting to disclose discount points. Now the lender shaves the, say, 100 bps mistake off of my comp - which allowed me to still get 50 bps on a deal I would have lost, and charge the rest of my clients the higher 150 bps. It doesn't hurt the client in the immediate deal where I "mistaked" my comp to 50 bps, but it certainly hurts all of my other customers.

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#2186806 - 07/25/18 07:20 PM Re: dinging a mlo Burgess
rlcarey Online
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I have no idea what point you are trying to make. What do you mean by "elect a 150 bps plan"?

If you make mistakes like the ones you mentioned on more than one occasion, you would be looking for a new job in my book.
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#2186838 - 07/25/18 08:37 PM Re: dinging a mlo Burgess
rgillette Offline
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The point is you cannot ding a loan for cures on a loan by loan basis. Mistakes by an MLO are not unforeseeable.

Your statement was:

>Basically, if it does not involve the terms of the transaction - you can pretty much do whatever you want too. Dinging a LO for quality or cures, regardless of the cause, has nothing to do with the terms that the consumer receives.

If an MLO makes a mistake, like disclosing a lower rate than was par with his compensation plan, and we ding the MLO to cure his mistake, he will succeed in having different pricing for his customers who he may need to provide a lower rate for than his comp plan allows. In other words, it creates a system where the MLO can select below par rates and shave it off those respective deals, giving the MLO full autonomy. It's why, at least to my understanding of how the rule is written, the lender has to pay the same comp (barring narrow unforeseen items like rate extensions) on each loan. Overall quality can be a factor in how comp plans are determined in the future, or could result in termination of the MLO, but it certainly can't be dinged to cure his mistakes.

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#2186849 - 07/25/18 09:54 PM Re: dinging a mlo Burgess
rlcarey Online
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We are talking about accuracy and completeness of the loan documentation. If that causes a cure, then you could ding the MLO for that. What you are talking about has nothing to do with the accuracy and completeness of the loan documentation.
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#2219634 - 08/13/19 04:55 PM Re: dinging a mlo Burgess
City Girl Offline
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If for example a lender credit was entered twice by the MLO thus causing a cure of $2,000, you can ding the MLO for it correct?

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#2219639 - 08/13/19 05:11 PM Re: dinging a mlo Burgess
rlcarey Online
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Your MLO's must make some big bucks if you have a compensation plan the allows you to assess a $2,000 penalty based on the accuracy and completeness of the loan documentation on one loan. I would also suggest that you need to take into consideration compensation laws if you plan on clawing back that type of cash.
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#2239865 - 07/20/20 06:59 PM Re: dinging a mlo Burgess
RR Joker Offline
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Dredging this up because I now have a need to know.

What is meant here by 'unforeseen'? That is confusing to me.

If an MLO received notice of a CC that is going to increase docs stamps, for instance, by say $1500.00, yet fails to re-issue an LE within 3 days...that isn't unforeseen. It was just 'ignored'.

Now, $1500.00 may not be a reasonable 'ding' based on some of the more recent comments on the fact that all of this should be spelled out in their plan...and within reason...and if it hasn't been...then best to stay away from dinging an MLO at least or until a plan is defined.

Comments?
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#2239872 - 07/20/20 08:26 PM Re: dinging a mlo Burgess
rlcarey Online
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rlcarey
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I think you are confusing voluntarily reducing compensation to the loan originator (like you eating a fee due to a tolerance violation) in 36(d)(1) - Comment 7 versus dinging a loan officer for inaccuracies in a file under 36(d)(1) - Comment 2.

Should it be outlined in the MLO compensation plan - most likely it should be.

But like I said before, too many of those errors if inadvertent and you would be looking at a pink slip rather than worrying about dinging a MLO. Probably only one of these errors that was "ignored" would do it for me.
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#2241148 - 08/17/20 07:45 PM Re: dinging a mlo Burgess
RR Joker Offline
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Thanks Randy...I've absolutely missed seeing this, but will look up those cites.
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