MBANow: MBA President & CEO Bob Broeksmit, CMB on Loan Originator Compensation Rule

The Mortgage Bankers Association’s latest MBANow video features MBA President and CEO Bob Broeksmit, CMB, who discusses MBA’s proposed changes to the Bureau of Consumer Financial Protection’s Loan Originator Compensation Rule.  

The video can be viewed at https://www.youtube.com/watch?v=dmaSaDI_fYw&feature=em-uploademail.  

The 2013 Loan Originator Compensation rule was intended to prevent mortgage loan officers from steering borrowers into higher-cost (and higher LO-compensated) loans. “But unfortunately, the rule has had some unintended consequences,” he said.  

MBA is seeking three changes to the LO Comp rule:  

–Allow LOs to reduce his/her compensation to meet a competitive offer;  

–Allow lenders to pay LOs less for programs from state housing agencies; and  

–Allow lenders to take from LO compensation mistakes or errors made during the loan process.  

“A customer who’s working with a loan officer will benefit from a lower price, so that is clearly in the consumer’s interest if that loan officer can lower his or her commission to keep the deal,” Broeksmit said. “The ability to recoup losses by loan officers in the disclosures would also, we believe, increase compliance with those rules if the lenders had a more powerful way to ensure compliance.”  

Broeksmit noted a recent MBA member letter, signed by more than 250 senior executives, as well as an MBA-led coalition letter, speaks to how important members regard this issue. “We’ve heard from our members on this issue probably more than any other issue–and we’re on it,” he said.  

Other videos in the MBANow series can be viewed at the MBANow website: https://www.mba.org/get-involved/stay-connected/mba-now.