Phil Grossfield's Blog

A LITTLE EXTRA…

Comp Plan Changes 4th Q; Fed Chair and Meeting

commissionpercentageLower Your Comp For Higher Volume?  The window to change Lender-Paid Comp Plan for Brokers begins today and ends on Monday 9/30.  This is a relevant discussion for correspondent bankers too…it’s the same analysis on whether a new commission strategy should be implemented. The questions are:

  1. Should you reduce your commission as a strategy to increase volume?  That is, if you reduce your commission, will this make you more competitive and allow you to win against other LOs?
  2. Should you increase your commission as a strategy to increase revenue?  That is, if volume is decreasing because of the market, should you make more on each transaction?

compchartMy opinion depends on your current marketing strategy.  If you rely on consumer marketing then I advise you reduce your commission to strengthen your competitiveness. However, if you rely on solid long-lasting referral sources, then you might want to increase your compensation to account for an expected drop in volume. I am happy to discuss…call or email anytime….

The window for Brokers to change their comp plan is currently open…but it closes on Monday 9/30. If you do nothing your comp plan will stay the same.  If you change your comp plan it will be effective for submission packages uploaded on October 1 and for the remainder of the fourth quarter. Let me know if you require instructions on how to change your plan….

My Market Watch.  Bonds Up Then Lost Half The Gains Fast – Fed Meets This Week On QE Tapering. The 30-year Fannie Mae bond was up ~ +70bps this morning after Larry Summers withdrew his name from the Fed Chair appointment race. Since he bowed out, there is less uncertainty about who is going to get the appointment, traders like it when there is less uncertainty so they started buying big early this morning. But then  bond sold off and half of those gains went away, and rather quickly. My guess is traders saw this as an opportunity to take some quick profits ahead of the Fed Meeting this week…and that’s where all the focus will be the next couple of days. It’s all about QE Tapering.

Without more information, my previous explanation is good…at least I think so…let me know your thoughts…..

My Disclaimer

My Schedule:  Available all day….


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Wholesale: Non-Conforming Matrix & Guidelines
Correspondent: Non-Conforming Matrix & Guidelines


QE Tapering Explained – For my explanation QE and tapering, read my QE analysis from an earlier post.  

LO Comp, Ability To Repay Qualified Mortgages. Here is Fannie’s announcement about ATR – Ability To Repay, QM – Qualified Mortgages, and the new compensation rules:  Fannie Guide Announcement.  And here is a video by the Consumer Financial Protection Bureau – CFPB explaining Qualified Mortgages and Ability To Repay guidelines :

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