We have a loan originator who in the past was a loan officer and since has a full time job not related to loans but would like to start originating again. We would like to consider this but would like to know the ins and outs. He would be contracted with the bank with a pre determined compensation plan based on whether he takes the loan all the way through or gives it to our current originator after pre approval. Can we do that? Can we give he so many basis points per loan volume for loans that he does start to finish versus loans that he just prequals and passes off to our current originator? Or a fee splitting type deal. For example you get 1% total loan volume for all secondary market loans you take start to finish and you get .2% for loans you just prequalify and the other originator gets the .8%? Any guideance would be greatly appreciated.

You let loan officers preapprove customers? Do you do inhouse loans?

Yes when we get an application the loan officer will prequal them. Yes we do inhouse loans but we have 1 secondary market lender who only does secondary market loans not inhouse. And this possible relationship would only be secondary market loans.

So any applicant that contacts this lender will be forced to go secondary? Isn't this steering? Otherwise, how you choose to compensate the lender, as long as it is not based on a term of the transaction is acceptable.