Although the enactment of loan compensation rules will happen in less than six months, brokers have been slow to make any changes, industry figures have said.
Speakers at the annual Florida Association of Mortgage Professionals conference in Orlando have disagreed over the impact of the incoming 3% points and fees cap, but have agreed that the cap will significantly change the way brokers do business. Until the rule actually affects profits, however, brokers may be unlikely to make major changes to their business model.
Nathaniel Bittman, branch manager and loan originator for Security National Mortgage Company, said he believes many in the industry are exaggerating the impact of the 3% rule.
“There is still plenty of business out there with the rule,” he said. “I think there are bigger things to worry about.”
But Mark Boleky, sales manager at Plaza Home Mortgage in Jacksonville, Florida, said brokers may eventually consider changing the way they do business.
“At this point, most brokers are at least considering what to do, like change to a mini-correspondent or a banker model,” Boleky said.
Boleky manages several wholesale account executives for the region that do business with at least 50 brokers. He argued that the current state of compensation regulations means brokers still have time to assess how they will respond.
Many of the lenders exhibiting at the conference, such as Plaza Home Mortgage and Pacific Union Financial, advertised “mini-correspondent” or “emerging banker” options to brokers. In this model, brokers would operate as usual, but fund and close loans through their own warehouse line. In doing so, they would only adhere to “banker” loan originator requirements and skirt the 3% rule.