Nonbank lenders are closely watching the progress of the loan officer compensation rule set to be released mid January, 2013 by the Consumer Financial Protection Bureau (CFPB) as it could have a large effect on their income. A key issue to watch, as originationnews tells MHProNews, is dual compensation where the loan originator (LO) is paid by both the consumer and the wholesaler, a policy the CFPB strictly opposes. The National Association of Independent Housing Professionals (NAHIP) says dual compensation is not double compensation. Meanwhile, the government watchdog wants a zero-zero exemption. This policy would require lenders to make a mortgage available to borrowers “with no upfront discount points, origination points, or fees that are retained by the creditor, broker, or an affiliate of either if commission-based compensation is paid to an originator,” a rule opposed by the Mortgage Bankers Association. The MBA would support restricting the commission paid to a loan originator by a brokerage or creditor if that brokerage or creditor was also being paid by the borrower, but not the zero-zero as it stands.
