LO Comp Compliance Strategies in a Tightening Market
Author: R. Andrew Arculin.; Peter S. Frechette.
Source: Volume 35, Number 02, February 2019 , pp.17-23(7)
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Abstract:
The BCFP’s LO Comp Rule generally prohibits a lender from varying an LO’s compensation based on the terms of a transaction or a proxy for such terms. The authors discuss the ins and outs of the Rule, including the proxy test, pricing concessions, and fair lending considerations. They then turn to the use of lead sources, dedicated product channels, quality assurance measures, and bonuses, as allowed by the rule.Keywords: Loan Originator Compensation Rule (“LO Comp Rule”); Bureau of Consumer Financial Protection; LO Comp in Purchase-Driven Mortgage Market
Affiliations:
1: Venable LLP; 2: Venable LLP.