How Would Proposed Changes To Loan Officers' Pay Affect You?
Do you know how your mortgage loan officer is compensated? You should if you plan to buy a home, because your loan officer's compensation could have the potential to affect your mortgage loan – and proposed new changes could amplify the effects.
At the beginning of 2014, the Consumer Financial Protection Bureau (CFPB) significantly changed the rules for loan officer compensation by amending and clarifying restrictions under the Truth in Lending Act. The CFPB action was designed to reduce incentives for loan officers to steer consumers toward riskier loan products that increased loan officer compensation but may not have been in the consumer's best interest.
Under the CFPB's ruling, loan officers can't receive any compensation based on interest rate, loan terms, or by steering consumers toward an affiliate third party such as an appraisal or title insurance service. They can't receive compensation from a borrower and a related party for the same transaction. Loan ...
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