Phil Grossfield's Blog

A LITTLE EXTRA…

Would Further Comp Plan Changes Be So Bad?

My Schedule…and A Little Extra:  Would further comp plan changes be so bad?  I’m sure most of you heard about the changes to the comp plans that Franklin American announced yesterday.  In a nutshell, they eliminated borrower-paid transactions and fixed lender-paid comp at 2.250% for all their brokers on every loan.  So, if you wanted a comp plan of say 1.500%…too bad, you get 2.250%.  For all practical purposes, they have eliminated any competition regarding price, that is if you want to use Franklin.  This policy change was instituted in a reaction to Wells Fargo’s settlement with the Department of Justice.  Word is the decision was based on the concern over Disparate Impact and Disparate Treatment…if you’ve ever worked for a bank you might be familiar with these terms, if not, email me.  I don’t see how these issues affect lender-paid comp but I have not read any arguments explaining their position and the Consumer Financial Protection Bureau (CFPB) issued a similar warning recently.  So, there must be some validity to the argument.  Whether other wholesale lenders will follow suit is yet to be seen.  If comp does get fixed, would it be that bad?  If everyone had to sell the same price, wouldn’t your ability to get clients weigh more on your sales skills as a trusted counselor?  If you think about it, it might actually benefit our industry, no?  I’m not a fan of putting more rules in place…I’d rather see less, but if it goes the other way, it wouldn’t be so bad, right?  Your thoughts?

My Market Watch:  Bonds are down and rates are worse.  And, bonds were continuing to fall earlier but bounced back already since this morning’s rate publication.  Traders are reacting to positive news in Europe and lower jobless claims in America.  When traders feel the economy is stronger they would rather invest in stocks than bonds and when that happens rates generally get worse.  Obviously if there is positive news in Europe, traders feel more comfortable about global markets.  And if there are less jobless claims, then that’s a good sign for the local economy.  These feelings give traders more comfort to invest in stocks and bonds suffer as a result.  Make sense?  Disclaimer

My Schedule: I have a 10a appointment and will be difficult to reach this morning.  I will be available all afternoon….


UPDATED DAILY:

Guideline Guidance to get a clean underwriting decision resulting in happiness and adulation, or, you could Ignore This and find yourself with a long list of conditions, a huge hassle, and massive frustration

My Procedures are updated daily – check it out…

Leave a Reply

Fill in your details below or click an icon to log in:

WordPress.com Logo

You are commenting using your WordPress.com account. Log Out / Change )

Twitter picture

You are commenting using your Twitter account. Log Out / Change )

Facebook photo

You are commenting using your Facebook account. Log Out / Change )

Google+ photo

You are commenting using your Google+ account. Log Out / Change )

Connecting to %s

%d bloggers like this: