LO Compensation and Loan Fees: What You Need to Know About the CFPB’s New Proposal

An Inside Mortgage Finance Webinar

Recorded Oct. 9, 2012

With less than two weeks left on the comment period on the Consumer Financial Protection Bureau’s proposed rule on loan originator compensation and permissible fees, many in the industry remain confused by exactly how this massive sea change will alter the way they do business. The rule, which would take effect next year, would upend current loan originator compensation plans, require “no cost” mortgage options, make new anti-steering rules and create standardized qualifications for anyone offering a mortgage.

Find out how the new rules will change your business ina special Inside Mortgage Finance webinar. Our panel of experts detail the proposed changes as well as answer the many questions surrounding the new rules.

The CFPB is calling its new proposal an important step forward in helping consumers better understand and compare mortgage costs. And, in an important concession to the mortgage industry, the CFPB has backed away from a Dodd-Frank mandate to ban charges based on a percentage of the loan amount. Nevertheless, critics are suggesting the proposed changes may limit mortgage lender profitability.

Hear from specialists  about the pluses and minuses of the CFPB’s LO compensation and fees proposed rule and learn how you can prepare for a final rule that will be issued by January of next year.

Among the questions covered:

  • Find out what most people don’t understand about the rule.
  • Does the rule change the way credit unions compensate their loan originators?
  • Are there different standards for loan originators employed by depository institutions?
  • How does the proposal impact reverse mortgages?
  • What is meant by a “zero-zero alternative”?
  • What is the bureau considering on underwriting standards?
  • Can mortgage brokerage firms pay their brokers a commission?
  • What are the unclear parts of loan originator compensation regarding proxies?
  • What Dodd-Frank requirement on mortgage charges has the CFPB elected to ignore?
  • Should certain fees, like title insurance, be excluded from finance charges?
  • If a creditor’s pricing for a loan does not include a rate with no points, fees or rebate, what alternative pricing should it offer the consumer?
  • What exception is being considered regarding LO comp and paying for a borrower cost?


These industry experts share their insights and answer questions:

Richard Andreano
Mortgage Banking
Group Practice Leader
Ballard Spahr, LLP

Kristie D. Kully
Of Counsel
K&L Gates LLP

David H. Stevens
President & CEO
Mortgage Bankers

Guy D. Cecala
CEO & Publisher
Inside Mortgage


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After the November elections, how long will it take for a new Congress and White House to pass GSE reform legislation?

I’m confident a bill will be passed the first year.


2 to 3 years. GSE reform is complicated.


Sadly it won’t happen in a Clinton or Trump first term.


Not in my lifetime.


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