By David Lykken
Special to MPA
During my Lykken on Lending radio broadcast on the new rules surrounding compensation, an interesting issue was raised. What are the rules for pooling compensation? Given today's regulations, can lenders split compensation among multiple LOs? Here's the simple answer...
It turns out that compensation can be split unequally among multiple LOs, but here's the catch: the rates and fees for each LO must be identical. As long as each member in the pool shares the same rates and fees, the compensation can be divided at the lender's discretion.
This is good news. When we are given the freedom to split compensation based on our expectations, we are able to more easily incentivize production. When we can still reward people for getting great results, there is hope for the future of the industry.
David Lykken is 40-year industry veteran who has been an owner operator of three mortgage banking companies and a software company. As co-founder and Managing Partner of Mortgage Banking Solutions, David consults on virtually all aspects of mortgage banking with special emphasis executive leadership development, corporate strategic direction and implementation as well as mergers & acquisitions. A regular contributor on CNBC and Fox Business News, David also hosts a successful weekly radio program called “Lykken On Lending” (www.LykkenOnLending.com) that is heard each Monday at noon (Central Standard Time) by thousands of mortgage professionals. Recently he started producing a 1-minute video called “Today’s Mortgage Minute” that appears on hundreds of television, radio and newspaper websites daily across America.