There's quite a lot of job changing going on out there; the newspaper is full of Help Wanted classified ads for Loan Officers lately. Employers looking for increased production, originators scrambling for a better deal. Take a look in any metropolitan Sunday newspaper and see for yourself! This is why I feel this topic is right on target today.

Whether you're an employer or a loan originator looking for a new place to work, isn't this the number one first consideration that is verbalized? How much will the LO make, right? Although that's almost always the initial 'knee-jerk' spoken remark, isn't there really far more to it than that one measuring stick - What's the Split?

I think frequently the deeper concern is this: Are leads provided for the LO to work on, and how does that effect the commission split vs. the LO marketing on their own and generating potential customer leads for themselves. There's a big different in how the split is perceived by the LO looking for a position ... leads vs no leads.

What about training, is training provided by the employer? What kind of training, and even more notably than that if training is offered, is the teacher seriously providing the sort of tools that will actually help the LO out there in the real world of today's environment? I'm sure we've all seen trainers who are out of touch with current technology, or offer up methods that are simply out of sync with what works.

Possibly the most significant area both sides need to focus on are the real duties the LO must perform for their split. Does the LO need to totally process their own transactions? Is it simply and only the selling aspect of stuffing an application into the company pipeline for others to primarily handle after that? Or must they also engage in running around doing a lot of paperwork and helping with other clerical functions which are necessary to move their customer down the pipeline to closing? Or perhaps spending long research hours in even more non-selling activities like hunting down a wholesaler for their transaction?

For every extra piece besides selling, which the LO must engage in, the chances are greater for violations of the many laws which govern our industry. Doing more than taking applications means potentially far more liability to originator and their employer, therefore much more intense regulatory training is called for.

Because almost all residential consumer real estate mortgage origination firms operate differently, therefore if originators are offered an 80% or 50% or a 30% split, as we can all see there's a lot more to it than only those percentage differences.

If you're a loan originator, have you thought about how you're being paid right now. Are you being over compensated or paid too little being a part-time research student and/or a paper shuffler, when you should be selling? If you're an employer, are you overpaying LO's for clerical work they perform or wholesaler research you have them doing?

What are your thoughts on this provocative subject. Do you think most are short-sighted enough that the commission split is king in the decision making process, or do they think things through thoroughly?
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One poster on our Discussion Board asks why prosecution seems nonexistant in his area, where kickbacks to Realtors appears to be running wild. To read more and add your 2¢ simply Click Here
 

 

 


 
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Happy Holidays from our family to yours!

In the Special Projects department at the Secret! University we've currently been engaged by one of our alumni to recruit, hire, train, and subsequently supervise up to 5 dozen new LO's nationally. We were hired to perform these tasks, since our client wants to grow and doesn't have the resources to deal with the potential LO applicants. So far we have attracted 813 potential LOs to hire; I have spoken to scores of them on the phones these past 7 weeks this project has been going.

Yesterday an LO who's been in the biz a year and a half told me "...training? Heck I don't need no stinking training! I made this nifty flyer that shows how much of a great monthly savings our 1.9% loans give people when we do bill consolidations for them. Get all the customers I need that way or from my Realtor buddy who I pay a little bit to for his referrals. I take the application, charge them $50 for their credit reports, have them pay COD for the appraisals so I don't get stuck wasting my time! Do all my own processing, work on their files at my home with my girlfriend who helps me some, so I don't need an office. Find a lender, they check everything out and it closes. I don't normally get any rejects, since I do all my deals Stated, and you know what I mean - they all end up getting approved from a DTI standpoint one way or the other. Plus I hardly ever get any cancels especially since I got them to pay up front for credit and appraisals, they would lose out by canceling." So what's wrong with that?

Here's how I see that statement: He's running an ad with the interest rate quoted in it and and it doesn't have the APR (with the same size font in the ad), a significant Truth In Lending violation. He's paying an unlawful referral few to somebody if any referred loans close, a RESPA Section 8 violation (a potential felony). He's overcharging customers for their credit reports (and making a small bit of income on the mark-up of the price), also unlawful. He goes on to tell us of his GLB privacy act violations at his home, where their is obviously no printed security procedures manual and other privacy safeguards are not in place. Next he says he jams all his applicants into the higher rate Stated wholesaler programs (because he's lazy), both unethical and it violates the 2003 ab489 law here in California, where brokers are no longer neutral - they are the fiduciary of the customer. Next he admits to fraud by being sure the income 'stated' on the 1003 always ends up qualifying his applicants. I especially loved that last one, where a customer may cancel during their 3 day cooling off period and he doesn't know HE has to give back the credit report money and HE has to give the customer back the money they paid the appraiser for their earlier appraisal!

Every one of you must help our industry, it's in trouble. I'm reading too many fraud and otherwise ugly articles in the news daily about one problem after another. The ethics and integrity levels I see all around are truly sad. I can tell you, I have never seen it this bad in my entire career - and I have always paid attention to what's out there in industry trade papers; I didn't just wake up last night and happen to start to notice these things. We're all responsible to help fix this epidemic. This is the real problem with our industry today.
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