Fed's Set To Regulate Pay to Mortgage Loan Officers, mortgage, lender, san antonio, austin, houston, dallas, texas.
In an article reported in the Wall Street Journal Friday, Federal Regulators are set to meet over the next 2 weeks to set policies for tens of thousands of bank employees nationwide.
Under the proposal, the Fed could reject any compensation policies it believes encourage bank employees -- from chief executives, to traders, to Mortgage Loan Officers -- to take too much risk. Bureaucrats wouldn't set the pay of individuals, but would review and, if necessary, amend each bank's salary and bonus policies to make sure they don't create harmful incentives. The Fed itself believes it has the legal authority to take such action through its existing supervisory powers, which are designed to oversee a bank's soundness.
Some congressional critics, especially Republicans, argue the Fed is exerting itself too aggressively, a complaint that will surely be amplified by its move to oversee bank pay practices. The proposal will likely please congressional Democrats, for whom corporate compensation has become a rallying cry, at a time when the Fed is defending itself from moves by Congress to restrain its independence.
When it comes to Mortgage Loan Officers, there is talk that the Fed's will require that the pay to Mortgage Loan Officers not be tied in, any way, to the interest rate charged to the consumer. Mortgage Loan Officers today can charge a rate that is say a half of percent higher than the market and pocket an extra 1% to 1.5% of the loan amount in commission. On a loan amount of $150,000, the loan officer would make an addition $1,500 to $2,250.
As a Mortgage Loan Officer is some capacity for the past 26 years, I don't have a problem with it. First of all, the consumer deserves a competitive rate. Secondly, it will weed out the Mortgage Loan Officer that is part time and is only closing 1-3 loans per month. On those loans, they try to make what a full time loan office makes in closing 7-10 loans. Although I don't like the government getting into the private business policy making, they already are and the Fed's will not go away. The only thing the industry can do is try to turn it into a positive. The positive will be to rid itself of the Mortgage Loan Office that is not in it for the loan term, that is not a "student" of the business and that does not have the consumer's interest in his/her interest.
Guys like me with a proven track record of closing high volume of good sound loans will be able to negotiate a salary based on previous years of performance. At the end of the year probably be bonuses on the number of units closed. If you don't have the numbers and you can't, try the car industry.
This blog was written by Steve Brown of Gold Financial Services, universal City, TX. Gold Financial Services is a full service mortgage banking firm with a wide variety of conventional and government loan products, including Texas Veterans Land Board assistance program. www.mortgagesbysteve.com (210)862-2885 sbrown0007@aol.com
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