A few of the considerations that must be taken into account are:
1. If you don't pay yourLoan Officers in a way that mirrors their existing split, then they will will go to your competitors, who have figured it out.
2. If you set it up wrong, you may face severe financial penalties.
3. If yourPay Plan is better than your competitors, you will have an easy time recruiting unhappyLoan Officers.
4. What percentage are you going to set up with your Lenders. You want to be low enough to compete, but you also have to make a profit and pay your Loan Officers.
5. Do you know exactly what you need to calculate that percentage to receive the same return you are used to? Too high and you've priced yourself out of the Market. Too low, yourLOmakes all the money and you make nothing.
6. Is your payroll going to become an absolute nightmare because you have come up with a plan to Bonus your Loan Officers, and your still not quite sure yet how you are going to calculate and pay it to them? Do you plan to pay your Bonuses every quarter as has been widely discussed? I doubt your Loan Officers will embrace the idea of you holding their money for three months, and then having half taken away in Taxes because of the amount of their check.
7. Some have discussed paying a draw. Are you willing to float Tens of Thousands of Dollars to them until you pay them their Bonus? What if they have a few bad months in a row? What if they quit? How will you collect their Draw back?
8. What if you set their Fixed Percentage too high? You will be giving everyone an ongoing advance that can add up to be a massive amount of money. It will end when they quit, and they take your money with them.
9. Have you prepared an easy to comprehend matrix to explain what they can and cannot do depending on whether you Broker the Loan or go through yourCorrespondent Channel? What constitutes Borrower Paid as opposed to Lender Paid?Seller Concessions? YSP? Processing? How to use Discount Points to your advantage instead of Origination?
10. If you need to lower your initial terms, can you do it, or are you locked in?Do you have to send them away?
11. Safe Harbor Requirements? Anti-Steering Rules? When they apply and when they don't.
12.If you are aCorrespondent Lender , are you planning to change your Rate Sheet? Multiple Rate Sheets?
13. How will you pay yourLoan Officer if you do a "Borrower Paid" transaction, and He/She isn't Hourly or Salary?
14. Do you have clear and concise Agreement Forms for eachIndividual Loan Officer Compensation Agreement ?
There are still many considerations you must take into account when you prepare your plan. If you do it wrong, it could spell disaster. If you do it right, it should be absolutely seamless.
After spending two days putting together aComprehensive Pay Plan, Checking every aspect for compliance, The answer to the Million Dollar Question is "Yes, you can pay your loan officers the same Percentage Split they are making today". The difference is in HOW you pay them and still stay compliant.We will use a different basis and different terminology,but the check will be the same. Everyone knows they will no longer get paid a percentage of Loan Revenue. I have developed a pay structure that is completely 100% Compliant, and the Loan Officer receives the same check , twice a month , for the same amount, he received under his current plan. I even created a Loan Officer Bonus Compensation Calculator, that converts their current Split into BPS for their Bonus. The Individual Loan Officers Compensation Payroll is as easy as it is today. Loan Officers are happy. Instead of spending the next month trying to figure out how to keep Loan Officers, and listening to an endless string of complaints, I am going to be out recruiting Loan Officers.
