Monday, June 14, 2010

But, he warned that restricting yield spread premiums (YSPs) and limiting how much a loan officer can make would impact lenders' ability to attract and retain qualified loan officers on their staffs.

Found this sentence is this article and it kinda makes me nauseated.  You see, I think reducing the amount earned by loan officers per mortgage transaction will reduce the origination capacity down to a level that more accurately reflects the true nature of the job and might even burst the compensation balloon that maintains upward pressure on appraisal numbers.

In my humble - perhaps vintage mortgage lady - opinion, the cost to the consumer of mortgage origination could be reduced if we returned to a system of a commissioned loan officer supported by a salaried processor.  Even with software support, the task of mortgage processing placed back into the hands of efficient clerical support frees up the time of a loan officer to handle more volume.  A loan officer whose time and effort have been freed to handle a larger number of transactions does not have to desperately grasp so much income from one transaction.

I see it as a win-win-win.  The consumer gets a better price, the loan officer gets the peace of mind to concentrate on origination instead of the extreme multi-tasking of also being a processor, and the mortgage lender gets a better mortgage application package because it's been processed by a person with the right set of skills to do the job.

I see no reason why a loan officer whose time has been freed to handle more volume can't make a nice living making 40 to 100 basis points per transaction.  Do you?

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