Thread Starter: E.E.G.B
Title: Re: fair lending
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A lot of mortgage companies, even those owned by banks, price loans the way BeachGirl described. Rather than saying rates should be centrally set - which can be hard when you're running a large operation with national markets, what I tend to see is a base price set by corporate and a limit on how much the LO can vary on the price. For example, a limit of no more than 2 points up or down (industry standard.) I do agree that fees should be centrally set though, especially junk fees. (YSP you're not going to be able to do much about, if you're dealing with brokers at all.)
The other piece of that though is very hard line monitoring - any variance of more than the allowed 2 gets charged back to the LO or the branch. Additionally, regular monitoring of loan data including as much prohibited bases information as you can get and statistical analysis of same is required. Look at the DOJ order with Fleet Mortgage from what, 11 years ago? for some ideas on what they had to do.
Base compensation tied to loan originations is definitely an area you can argue though, most reputable places are moving away from that and going with a flat fee structure, or basing it on multiple factors, including # (not $) of loans originated, # loans originated in a specific targeted product or market, cross-sells, # of seasoned loans current and on the books at 1 year, subtracting $ for any compliance dings or failure to follow policy (and of course any variance over the 2%), etc.
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