Hi Kids,

I'd like your opinions and experiences with the below scenario.

We have a handful of lenders who can originate loans on the bank side, and be paid by the bank, or they can originate conventional mortgage loans through our mortgage subsidiary and be paid a commission per loan by the subsidiary.

Other than affiliated business arrangements, and anti-steering, what other issues should I be looking for?

Are any other FIs doing this? If so, I'd like to hear from you.

Norm

bumpskis

On this topic, according to the FDIC in their teleconference yesterday Q&As on ATR/QMs and LO Compensation rules, they said that if your in-house and secondary market terms (i.e. products) are different, then you are paying differently based on a proxy of a term and therefore cannot be done.

they can originate conventional mortgage loans through our mortgage subsidiary and be paid a commission per loan by the subsidiary

I'm voicing an opinion not fact because I don't have time (or the need) to research it right now but "your" employee is not an employee of the subsidiary therefore I would think if they are being paid a commission then they are acting as mortgage brokers and would have to follow the broker compensation rules and quite possibly have to be licensed as a broker under state law.


Ps. I just notice Norm's posts are from April, but this is the first I've seen of them.