With the implementation of the Federal Reserve Board’s new loan officer compensation rules now one month behind us, we decided to see how the reverse mortgage industry is adapting to the changes. It may be too soon to tell for some, but others are definitely seeing the impact on their business.
We asked several reverse mortgage professionals to respond to the question:
One month after implementation of the Loan Officer Compensation Rule, how is your business faring?*
“Operating as a broker, we were previously able to offer homeowners a lower cost HECM than many providers because we could pick up some borrowers’ costs in many cases. But the new compensation regulations have eliminated our ability to do this. How this aspect of the new regulations makes sense, I have no idea.”
—Lance Jackson, President & CEO, Castle Financial – Reverse Mortgage Experts
“Our loan officer compensation plan is getting redone right now for the second time. The first time we thought we had it all laid out, but there have been compliance issues. We’ve gone from four pages to 11 pages. It has been the biggest thorn and nobody’s 100% crystal clear on it. I cannot tell you the amount of energy and effort that have gone into this. It should have been done on a smarter level collectively, for some of the smaller industry players. We all should have gotten together collectively and had somebody on the job to get the guidelines, verbiage and interpretation together.”
—Ron Kamler, President, California Reverse Mortgage Consultants
“Like all companies, we’ve had to make significant adjustments to our compensation plans, but I have not seen any negative feedback as it pertains to the retail production side. The impact is going to be more visible on the wholesale side.”
—Sarah Hulbert, Retail Business Development Manager, 1st Reverse Mortgage USA
“We’ve spoken with several originators across the U.S. regarding the Loan Officer Compensation Rule. What we’ve heard is compensation to individual loan officers has not been significantly impacted in a negative way as many had anticipated. It appears the real changes have taken place behind the scenes with lenders revising their compensation plans to be compliant with the rule. I would be surprised if we hear from our members with reports of decreased commissions or a drastic reduction in overall production due to the new rule alone—market forces are challenging enough and it is expected that a substantial change in compensation for mortgage professionals at such a time would be met with skepticism.”
—Shannon Hicks, VP of Product Development, Reverse Fortunes
*Feel free to leave a comment below and tell us how your business is faring under the new rule.
Written by Elizabeth Ecker