I’ve written about this issue repeatedly on this discussion group, but the truth is I’m probably preaching to the choir. If you are having your originators poached by companies that offer pick-a-pay programs, you might want to show them this. I have not heard from one attorney who thinks these programs are a good idea and I have spoken on many panels with the best in the industry.
Think about it this way. If two consumers walk into a branch or your MSA and they are similarly situated and they get different rate/price than the other, you are likely going to have a fair lending/pricing disparity issue. While you may not be breaking any LO Comp rules, you will show pricing disparity and this will result in fair lending inquiries. Fair lending inquiries add up to a lot of money for your company defense.
Loan Originators, make sure you read the article below. It’s not like it used to be. If you get a finding, you have to report it to the state. You will likely lose your license, potentially pay a fine or have to defend yourself which can run into the hundreds of thousands of dollars. So, over a great sales pitch you lose your livelihood and your money. That cannot be worth it!
Did you also know that others can report your practices to the CFPB? So why would you put your career or your company at risk?
I know many companies doing the right thing by today’s rules, but if you fall for the wrong company you may now experience individual liability. Remember, the CFPB is just warming up and you do not want to be the poster child for this issue.
I’m happy to answer any specific questions privately if you do not want to talk about it here.