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Loan Originator Compensation Plan Template - Anti Steering Compliance

The Loan Originator Compensation Rules represent some of the most arcane and risk-fraught pieces of the Dodd-Frank regulation for mortgage companies. Defining mortgage compensation plans presents a double edged challenge: you have to be competitive enough to retain talented, productive originators, yet you must also keep your structure in-line with any proxy or element that might cross the line. In addition, state regulators review compensation agreements against payroll records to ensure that companies adhere to their policies. For these reasons, your company's plans must continually evolve, but must also have the basic compliant framework to ensure that you do not accidentally break the rules.

Compensation "Plans" versus "Agreements"

A compensation "Plan" is a general description of how you compensate loan originators. This is very different from an employment agreement or compensation agreement, which defines each party's legal responsibilities. 

Compensation Plan

A compensation plan includes:
  • Basis point payouts
  • Volume drivers, e.g.; units or dollar amount
  • Transaction types e.g.; purchase vs refinance
  • Lead generation distinctions; e.g.; self -generated or company provided
  • Borrower paid or lender paid
​

Employment Agreement

An employment agreement stipulates:
  • What the originator must do in his or her job - minimum duties
  • When commissions will be paid
  • Whether commissions will be paid after separation
  • How the company will arbitrate for employee errors or malfeasance
  • Circumstances for termination
  • What expenses employees are responsible for or what is reimbursed
​
In this context, you can see an employment agreement may reference a compensation plan, but it is not the same as a compensation plan. A company may have numerous compensation plans, and employees may be eligible for compensation under different plans and circumstances. A compensation plan may change from time to time, but an employment agreement normally stays in place. 

In addition, we recommend that you always have legal "Agreements" written or reviewed by duly licensed attorneys. If you are concerned that your compensation plan may be outside the requirements of the Loan Originator Compensation Rules, you may consult a compliance expert, but ultimately if any aspect of your plan is questionable, we recommend consulting an attorney specializing in Dodd-Frank rules. 

Free Sample Loan Officer Compensation Agreement

While you are free to use this agreement as a sample, please note that MortgageManuals.com is not a law firm, and this document has not been approved by an attorney for your use.  Complete Compensation Plan Samples are included in the Compliance Policies and Procedures Manual.
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  • Home
    • Search our site
    • The CFPB and You
    • What Does a QC Plan Do?
    • Choosing the Right One
    • Free Sample Request Form
    • Request Discount Code
    • About Us >
      • About Us
      • FAQs
      • 100% Guarantee
      • Client List
    • Industry Blog
  • Single Policies
    • Single Policies
    • Free Sample Policies >
      • TIL-RESPA Integrated Disclosure (TRID)
      • HPML Appraisal Policy
      • Social Media
      • Ability to Repay
      • SAFE Act Policy
      • E-Sign Policy
      • Loan Originator Comp
      • Complaint Resolution
    • Disaster Recovery/Business Continuity Plan
    • Fair Lending/Fair Housing
    • Secondary Marketing-Loss Mitigation
    • Anti-Money Laundering (AML/BSA/SAR) Plan
    • Appraiser Independence - Appraisal Management
    • Anti-Predatory Lending (UDAAP)
    • Vendor Management
    • Business Plan
    • MERS QA Plan
  • Modules
    • Module System
    • Mortgage Compliance Manual
    • Quality Control Options >
      • Quality Control Options
      • Lender Quality Control Plan >
        • HUD-FHA Quality Control Plan
      • Broker/Non-Del QC Plan
    • Information Security - FACTA/Red Flags & ID Theft >
      • IT/Cyber Audit
    • Origination/Production Module
    • Processing Module
    • Underwriting/Credit Policy
    • Closing/Funding/Warehouse
    • Mortgage Ops & Employee
    • Wholesale/Third Party Origination
    • Mortgage Servicing Module >
      • Mortgage Servicing
      • Mortgage Sub-Servicing
      • MERS Quality Assurance (QA)
  • Packages
    • Packages
    • Complete Mortgage Banker Package
    • Complete Correspondent Pack
    • Lender Compliance Pack
    • Broker-Non Del Compliance Pack
    • Processing Company Package
    • Anti-money laundering AML/BSA/SAR package >
      • Annual AML/BSA Audit
      • Annual AML Training
      • Free AML/BSA SAR Evaluation
    • Cyber/IT Security Audit Package
    • Advertising Audit Package
  • Services
    • Services
    • State Audit Prep >
      • State Audit Prep Package >
        • Pennsylvania Exam Preparation
        • Washington State Mortgage Lender Broker
        • New York Lender Broker Audit Prep
        • North Carolina Lender Broker
        • Ohio Mortgage Lender Broker
        • Texas Exam Preparation
      • Annual Audit Preparation
      • State Examination System (SES) Support
      • State Examination Packages >
        • Supervisory Plan
    • Training Services >
      • AML Training
      • Fair Lending Training
      • ID Theft Training FACTA
      • Cybersecurity Training GLB Safeguarding
      • Fraud Red Flag and QC Training
      • Privacy Act - GLB Training
      • Advertising Compliance Training
      • New Employee Training
    • Knowledge Base-FAQ
    • My Compliance VP - Manager >
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    • How to: Customization Services >
      • Customization Services
      • How to: Downloading Documents
      • How to: Customize Your Manual
      • Free "Generic" Customization Offer