This shows the inability of NAMB legal staff to execute on behalf of the Mortgage Brokers. I can assure you this would not happen to the Real Estate Brokers and and sales people whom work on 6% commissions. The ranks of the Loan Officer are shrinking because of all the new Goverment controls and the inability for them to survive in the once "Free Market."

I agree Fred...in the past 3 years there has been massive changes to our industry. Every time I hear the NAMB is fighting for us...I always know we are going to lose. Quite sad when you think about it. I just love how the vilify us, how they blame us little guys for everything and want to limit what we can earn back on each loan. I would love for them to jump in and do the same to the Real Estate agents, real estate attorney's (stop jacking up title), title companies (so cost for title is the same anywhere you go), car sales (why should car pricing be different for everyone)... If we are going to allow the government to jump in and regulate private buisness...then why stop with us. Why not regulate everyone???

David used a sling and a rock to slay the Goliath. NAMB seems to be using a pebble or a grain of sand. I do not want blame NAMB for the problem after all it is the Big Bank that support the politicians and it is the Big Banks that own and control the Federal Reserve. You must know that the secret Federal Reserve is Privately owned by some unnamed group. With interest rate about 4.875% when the Big Banks are paying almost nothing for the money they borrow for home loans, where is the regulation for their yield spread. The Big Banks are the culprit of the problem they create the guidelines and then they blame the LO's for over charging. The Federal Reserve needs to open their books to solve the mystery of who has control of this country and who is cheating the public while crying wolf.

STRIKE!!!

Well done Fred, I cannot tell you how many people do not know that the Federal Reserve Bank is a group of private investors. They make the rules, we follow them, they get rich and small business owners owners go out of business! It is a disgrace! on the flip side they are paying 1/4% int. on our money on main street, they refuse to lend and now they are tightening the purse strings on the few of us that have hung in there, with the knowledge that we know we make a difference in the lending community. But not to worry, house prices went up and then they came down, it's just a cycle... sooner or later their profits will dry up.

Congress should be impeached for (again) abdicating its constitutional authority by allowing a private entity that isn't elected and can't be unelected to mandate and regulate how (and how much) a citizen can earn in this supposedly free market economy. Another nail in the coffin of freedom and liberty. Too bad the majority of society is so dumbed down on american idol and dancing with the stars to even know, let alone understand what is truly happening to this once great country. Since the majority of citizens (and non-citizens for that matter) are on some sort of govt. subsistence and take more from the corrupt system than pay into it, we are far beyond the tipping point.

Hey Bryan, We no longer live in a Free Republic, we are now governed by a Benevolent Dictatorship

What do you expect when you have the best government money can buy?

We all have to become Brokers- be efficient, make the $, and grow, and get lobbyist back in play. Our power is also derived from what we close... and Politicians want to be re-elected, want the economy to grow..and lower rates, home buying helps this. We are at a "LOW" - but I somehow belive our days will slowly get better.

QUIT YOUR WHINING. NAMB's strategy may have been hopelessly flawed, but all the snivelling in here is pathetic--they at least stepped up to the plate and took a bunch of swings at the fast balls while their 'fans' jeered at them for striking out. I plan to focus all my efforts on crafting disclosures and origination explanations that offer consumer focused protection alternatives in mortgage lending to what the government has offered, do the research on why they'll work better, provide an intelligent argument that is not based on any conspiracy theories about banking cartels and private banker meetings, and more than anything, never stop believing there is still a fight that can be won on behalf of the consumer whose best interest we still claim to represent. Maybe I'm naive, idealistic BUT I CANNOT STAND THE HOPELESS WOE IS ME I'M BEING PICKED ON discourse anymore. Like Adam said months ago--It's time to MAN UP.

As a mortgage broker for the prior 20 years I saw this coming for the last 5 . While the broker / banker community continues to fight and deflect or place blame for the current state of the wholesale industry it needs to take a step back and ask .... did we do enough on our own to monitor businesses in the industry before it became what the public and government percieve it as today ? Seems a little proactive action , instead of reactive by the governing bodies like the NAMB and MBA might have gone a long way in avoiding the mess we see today .. Some of us in the broker community saw this coming and made the decision to jump to retail because the tide of public / government favor has turned and the wholesale business as we all once new it is now no more ... The old days of maximizing profit on every loan are gone ...if you want to continue to conduct business in the mortgage industry people need to ...as Frank said ...MAN UP !!!!! Break down your new LO Comp guidelines and make it work...

I really don't understand the upset. This is a natural progression from the overindulgence of previous years. If we as an industry (and special interest group) had exercised more constraints voluntarily we wouldn't have such heavy handed legislation dropped on us. As far as compensation reform. Bah! Not a problem. The reforms aren't as draconian as everyone makes them out to be. Lastly, the more of you complaining bastards that drop out of the industry means the more clients for me. Feel free to move on to bigger and better compensation. I think Goldman Sachs is hiring...

As a side note, I think it is completely silly that everytime I get an email from NAMB it has Mike Anderson's accomplishments and links to his business. First of all, I don't care about either. Secondly, are you representing NAMB or your company? Little things like that make me concerned about when NAMB does serious things... like, you know, lawsuits.

All you people that are complacent about the new fed ruling are pathetic. Among your clarion calls for "manning up" etc. misses the point entirely: This isn't about our "industry", but is about the creeping socialism and loss of our freedom and liberties. Dust off your Hayek, Ayn Rand and Friedman books (assuming you've even read them) before you get to the point where you enjoy the warm load of socialism that's being shoved down your throat - frankly, for some of you it's obviously too late.

Adam and Others Correct me if I am wrong, but all of my wholesaler comp regs refer to those lending their own money or table funding are Exempt for these Regs. So Much for a Level Playing Field. Josh Tomorrow, your new earnings will be what I Dictate. What Say You? Bryon's comments are Right on the Mark! Enough Said. Could we see peaceful revolts in the US as aboad. What would this government say about Peaceful Demonstration Here. How many industries her in the US have their Earnings Dictated by the Fed or Other Gov't Agencies. PoliticianS...........WAKE UP. THIS IS CORRUPT AND BEYOND EVIL IN OUR FREE DOMOCRACY........DISCLOSURE YES BUT THIS..........SOCIALISM HEADING TO WHAT?

Sorry for the typos, but when you are Pisa;ldsjkfaklsjsl'a ' D One might get carried away. Lol

This will effectively put more Brokers out of business. Come to think of it, it might put all brokers out of business. What's amazing to me is what little regard is given to Mortgage Brokers. The Government seems to be saying that Brokers are only worth a few hundred dollars per transaction, even with a minefield of regulations and guidelines to navigate through and far greater fallout than I've seen in almost 30 years in this business. I'm not whining here, just stating the obvious. Now, the problem becomes whether to stay as a Broker earning a very limited amount per unit or to work for a large institutional bank, earning a very limited amount per unit. With all the stress, regulations, guidelines and the great difficulty to earn a decent living, I'm strongly considering a third option, leaving the only field I've ever known. Thank you Government! My gloomy 2 cents, FWIW. .

How does this put brokers out of business? I keep hearing this and I don't get it. We've been pricing these loans out for a full week and i haven't really seen much change in how i price loans or the profit coming in. The GFE didn't put us out of business and neither will this. The government does nothing right: New GFE was supposed to decrease costs and did the opposite. HVCC was supposed to decrease costs and increase quality of appraisals and it did the opposite. I would be more afraid if they had made a law that was supposed to benefit the broker. We are all mortgage professionals whether you work for a bank or broker and the good companies from both sectors will survive.

When I arrived from New Zealand to the USA in the 3rd quarter of 2008 even in NZ there were rumblings about the insane lending practices taking place here- that and Lehman Bros. filed for bankruptcy the same day I arrived! I have now been lending in the USA in WI for about 1.4 years. My boss tells me I came into the residential market at the right time because I never experienced the insane policies in place. I agree. When it is all said and done the buck stops with someone….err…who is that someone? I think that is the problem…no accountability to the public, shareholders and anyone else who has an interest in living a decent life in this country. I believe this country has greatness. It just needs the proper, prudent leadership in place to guide it. Capitalism works! I just wish the Government would let it work. Question: Why did Bejing not interfere in the free market of Hong Kong when it got ownership of it back in 1997? Because it worked!

Bryan wrote: "All you people that are complacent about the new fed ruling are pathetic. Among your clarion calls for "manning up" etc. misses the point entirely: This isn't about our "industry", but is about the creeping socialism and loss of our freedom and liberties." Amen to that, Bryan!

I think we need a little more socialism. Those fat cat bank CEOs are gaming the system and screwing average hard-working loan officers with the new comp plan. Nobody is free when such a small slice of the population is controlling so much of the wealth.

George: I think you misunderstand. A lack of socialism isn't what caused the "fat cat CEOs" to be able to "game the system". Socialism itself, and more specifically, socialist corporatism made the way clear for them to game the system. They used government regulation in order to gain an advantage. That's what their lobbyists in D.C. do all day. In a free market, capitalist system, that isn't possible because you don't have the government operating outside the scope of its constitutional authority (i.e. regulating industries in a way that favors one segment of the population over another).

I suggest everyone on this board watch V for Vendetta

What we are witnessing here first hand, is the systematic dismantling of the entire mortgage industry, only to be reconstructed inside the glass bottle called big banks and BOA. Thats the price the Fed agreed to pay BOA to keep them from backing out of the Merrill Lynch deal after Lehman Bros failed. Our banking system was literally on the brink and Merrill Lynch was the next domino to fall. If Merrill Lynch failed, it would have brought down the whole system "within days". Ken Lewis should have backed out of the deal immediately once he saw Merrill’s blood red balance sheet, but he didn't and this is why. No doubt in my mind. Paulson promised him a competition free mortgage industry and he’s been delivering it in bits and pieces ever since. There’s no direct evidence, (there never is) but you can believe it. Paulson served up the mortgage industry to save the deal. Nothing else explains this insanity. HVCC, NMLS, RESPA, fingerprinted like a criminal, ...oh and now, you can't reduce the customers rate if you want to, oh and you cant pay for a rate lock extension, oh and, by the way, you can’t pay your guys unless its hourly. Are you serious? Wake up. This is an unhidden agenda, being executed with military precision. We got served up.

Bunch of drama queens posting. The fall of western civilization is not upon us because the mortgage industry has some additional hoops to jump through. I know nothing about the particular compensation practices at the wherever you are but I know that I haven't had any issues with the new compensation requirements. If you want to work in an unregulated industry, get into politics where sniveling, whining, and overwrought analysis is appreciated.

As a person who used to be a superstar loan officer, who is now in operations, I am extremely excited to see these changes go into effect. Finally these idiot brokers who started out as used car salesman and came to mortgage to make a quick buck can go back to where they came from. It has been very sad over the last 10 years to see an industry that I love very much get overrun with greed and stupidity. If you have to make 5 points on every deal... you don't know how to sell. When I was in sales, I had no problem still pulling down an annual income over 300k by making ONE point on every deal... ONE. You know how? I made my customers happy and gave them a good deal and SURPRISE... they came back to me and referred more people to me. I think the people who are the most upset about these changes are exactly the people who these changes were meant to target. For those of us who know how to sell and aren't in this business to gouge every customer... these changes mean nothing to us except less competition! BRAVO to the government for finally looking out for the consumer and the best interests of good, honest people.

I have been in agreement with alot of the recent changes to our industry, as we needed to weed out the non professionals who were in it for the short term. I also agree to some type of max compensation, as its rediculous for someone to be able to make more than whats justifiable on ANY mortgage transaction. What I dont understand, is how we can be regulated to the downward side of the compensation scale. If I want to do a loan for free, it should be allowed. Nothing that I have read, within the Treasury minutes, validates this decision. Why they couldnt have capped everything at 2 points net, is beyond comprehension.

Tommy, I find it interesting that you no longer originate. There's no selling involved when you're the cheapest rate around, is there? Plus if you were a true salesman there's no way you'd work in operations now. We're two completely different animals. Oh, and by the way, what this rule does is make sure everyone pays 5% on every deal, it's just that the banks now get to keep 450bps and give the originator 50bps (wow! just like you used to....big banks must love you.... oh, wait, that's right... you can't sell). In contrast, during my 21 years originating mortgages, my customers never paid over 300bps and I got to make 75-150bps.... see the problem?

Tommy, It's people like you - bragging about your income that bring undue pressure to our industry. Good job on making 300k and selling 1 pt on every deal. Did you walk to school up hill both ways through 7 feet of snow with holes in your shoes as well? The issue here is not that the Government told banks to pay loan officers less. They simply told the banks they couldn't compensate the loan officer based on rate. (in a nutshell) It is that Banks have chosen to reset the bar on loan officer pay. That I know of the big banks never paid that much to loan officers anyway. At least not for the 7 years I've been doing this. Yeah there is a certain level of risk that is uncertain for non compliance - and the banks need to account for that in the loan officer pay. However, I don't see any reason why the banks couldn't have just matched the pay based on volume. Maybe someone can help me understand that part of it. The way I see it is the banks saw an opportunity to reset the pay and based on supply and demand I see it slowly increasing over time based on people leaving here and there for the best comp plans.

Edgar... I no longer originate because the small company I worked for went out of business. I tried going to some of the large banks in my area however was dissapointed at how poorly trained and poorly equipped their sales staff is. All the big banks care about is getting more 1003's in the door (half completed 1003's I might add). I finally just decided to go into ops to wait out the current market. Turns out that just like sales, I have been pretty good at this too and do pretty well. I don't make anywhere near as much as I did closing 20+ loans per month however I also don't lose sleep when I have a rough month or two. It is funny how the dumber a sales person is... the more they think that we are "completely different animals" from sales to ops. If you know your rear from a hole in the ground... that is totally false. As a GOOD sales person... you should know your products and guidelines so well that you could sit down and underwrite a file. That helps you know exactly what question to ask at app and what documentation to require right up front to save massive amounts of time later which in turn, gets you back to originating and not babysitting processing. Not to mention that your ops staff loves you for submitting COMPLETE and accurate loan files. Then when you do occasionally disagree with your ops staff, they pay attention because they know you KNOW your stuff. When I moved from originating to underwriting it was actually a smooth transation because I already knew all of the current guidelines and programs. I already knew how to PROPERLY calculate income, how to PROPERLY read tax returns... and how to PROPERLY read a 1003 and supporting documentation. For your information also, when I worked in originations at my previous lender... we were extremely small and usually a half point higher than our competition. The ONLY way I could do any loans was to SELL because I sure couldn't offer better rates. The fact that you have that mindset tells me you aren't capable of doing that or these changes would not intimidate you so much. Good luck selling cars!

Edgar...you are right on the money! Some of these comments are coming from people only pretending to have accumulated alot of knowledge in mortgage planning and originating, and a high level of success. We know that can not be true with such ridiculous notions that the new regulations and compensation work well for the client and for the broker/agent. I started out working for a small bank that had a couple of points already built in to the bank on our rate sheets over many brokers. Of course we have to adapt and hang in if we wish to remain in this industry. That does not mean we have to be happy with all the convoluted regulations. Continue to treat clients well as you always would and provide the level of service that brings them back! In the meantime we need to continue to fight for representatives who will help us get to where we have a right to adjust our level of compensation and be competitive, much as the large banks get to do in keeping more of the money for their bank profits!

Wow, Tommy! In case you didn't know, the quality files you described is a pre-requisite of every loan originator. It's a given! True, I'm better than most, I have LO's from other companies ask me how to structure their deals, particularly FHAs and, you're right, operations loves me. But it still means that I have to sell to survive and stick it out, not sit by the sidelines and 'wait it out' By the way, the reason you were 1/2 point higher than the competition was because your company was padding the price very much the way this rule is allowing the banks to do it. So thanks for making my point for me!

Tommy? Tommy? Oh, that's right, you're a 9 to 5er now! There's no point in working hard when there's no financial incentive to do so, is there? Thanks, again, for continuing to make my point.

This rule does get rid of those that do 2 loans a month and lay people up. That is the pro. I have to say that I give repeat customers special treatment, but hard to do now. We had to build in enough to cover ourselves so I think customers will pay a tad bit higher now. There are also the deals that are more difficult, but cannot charge for difficulty. Everyone is the same.

I completely agree with Tommy on this one.

LOL Edgar, I am proudly a "9 to 5er" now. For the record, some people work hard because they are honest and have a good work ethic... not because they want to make another 8k on a 100k loan. I was also a 9 to 5er when I was in sales closing 20+ loans a month. I think my family deserves to have me around as much as possible. No job regardless of the pay is worth sacrificing your personal life. If so, what would be the point? You know what did and still does enable me to work 9-5? Because I know my stuff. I can get the job done RIGHT the first time. I have never had to sit around babysitting loans in processing or loan closings in case they blew up. They very rarely did because my files were and are complete and accurate and my borrowers are always fully informed and aware of the process and what to expect. I have always under promised and over delivered. I am not trying to come off as cocky in any way. I'm just saying that there is some wisdom in the old saying "work smart, not hard". The only calls I ever took after 5pm were from my builders and realtors and even those were rare because my loans flow smoothly and accurately. They had no problem calling me during business hours 95% of the time because they knew I would resolve it on the spot. If you have enough knowledge about mortgage you could easily slide into a nice underwriting position and be earning 50-80k a year. Based on your tone and obvious disregard for what operations does however I am guessing that you lack the skills necessary and have burned any bridges with your ops staff that could have opened any doors for you. I'm not sure at what point people developed this whole "us vs them" attitude between sales and ops however it is extremely destructive and counterproductive. I would never work in a office where the sales staff was allowed to disrespect ops. As cheesy and cliche as it sounds... you truly do depend on each other and the more you work as a team, the more loans you can close. I digress though. I don't mean to sound rude but honestly I think a lot of brokers and sales people need to start hitting up some car sales jobs or positions in other industries NOW before they are all taken by your peers. The simple truth is that the last 7 years has been a boom that created a need for many sales people very quickly. Hence the market got flooded with unexperienced, uneducated people who have no passion for mortgage and just wanted to make a quick buck. When volume drops like this... they cannot compete with good sales people so they have to gouge the few applicants that they get. That just keeps them clinging on by a thread. This new legislation should hopefully just cut that thread so that they can all go back to delivering pizza's or whatever they were doing before they jumped into this industry and tarnished the reputations of the rest of us.

I don't necessarily have a problem with the rule itself...it won't change my income much if at all. I just think the idea that govnt can select an indusry and then dictate how that industry may compensate it's employees is a scary precedent. Moreoever, it is clear the consumer will be paying higher rates for the same product..

"I don't necessarily have a problem with the rule itself...it won't change my income much if at all" Jason Harris 4/12/2011................and, that folks, sums it up. Plan accordingly.

Don...I state that because I originate high volume with little "up charging"...in essence I gve people (and always have) a good deal relative to what is available. Those that whack people on just a few loans a month serve to lose more as a result of the change in law. You should be so lucky as to have your friends or family find a loan officer as good as myself or most of the folks on this site who give a damn about the future of their industry and their clients. I certainly don't imagine you spend much time on whatever blog exists in whatever mysterious industry in which you "earn" a living. Instead you sling mud from your behind your curtain...very impressive. By the way...as far as quotes go I have one for you..."Jason, I never ignore a question. I answer very directly." Don Randomguy 3-2011 What do you do for a living? Let's see if you can live up to your word...my wager is no.

" I originate high volume with little "up charging"...in essence I gve people (and always have) a good deal relative to what is available" Jason Harris 4/12/2011 -- So you only up charge a "little" ? Well, that makes me feel better......are the people you only upcharge a "little" still getting a relatively good deal?? or is it only a good deal realtive to what is "available"?? Soooo, "in essence", you are claiming the other mortgage "professionals" available in Ohio do not provide a good deal???

Don...are you kidding me? All the time you spend on this site and you have no understanding of how I as a banker am paid? Yet you choose to judge my morality in how I deal with clients? I am paid a base level of basis points based on VOLUME. Previously bank loan officers had the ability to raise the rate in exchange for more than this base level of basis points or to offer a lower rate and receive less than the base level of basis points. I have traditionally averaged at or very near our base level of basis points which means I have chosen not to raise the rate and have structured my personal business/incomes on closing higher volumes. I was simply stating that those with a model based on less volume and higher rates would expect greater impact from the changes in legislation. But please remember, the banks will not choose to accept less profit on these deals...they will simply raise that base rate on all consumers to make up for any lost revenue received in previous comp structures. In essence indviual lo's lose income...the bank's...not so much. Please note, still no direct answer for a simple question from Mr. Anonyomous. Grow a pair Don or stay behind your curtain.

Geeze Jason, You said you originate high volume "with little upcharging". I just took you at your word and asked a few questions. You might need another cup of coffee with your USA Today this a.m...................