Clarification on LO Comp Has Lenders Scrambling
With the April 1 compliance deadline fast approaching, lenders and brokers are struggling to draft and implement loan originator compensation plans that are both compliant with the new compensation and anti-steering provisions in Section 226.36 of Regulation Z and consistent with the regulatory interpretation of the rule. In a Webinar, staff members from the Federal Reserve Board’s Division of Consumer and Community Affairs provided their interpretation of the rule’s requirements and restrictions related to a number of common questions they have received in recent months. While many of the topics covered were consistent with the industry’s understanding of the rule, certain guidance provided in the Webinar sent much of the industry scrambling to revise compensation plans that were assumed to be in final form in the final two weeks of the implementation period.
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