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Compensation for Banks Referrals

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  • #2534
    ditkadg1222
    Participant

    Good afternoon all! I have done a good amount of research and cannot seem to find that actual clause I am looking for with regard to the above subject. Here are the details and a little bit of background. As a licensed broker shop with licensed MLO’s here in Illinois we have noticed that we can close many different types of loans that the banks around us cannot. Some of them cannot exceed 45% DTI (even on FHA loans), some cannot do FHA down to 620 scores, etc. The question is if we can do these loans for them (that they otherwise would not be able to do at all) can we offer any type of flat compensation to the banks or Loan Officers? I know that the compensation cannot vary and must be reasonable and I am almost certain that I read somewhere that it can be done if it was one company to another company but I cannot find this anywhere. Can anyone help me with this please? I am also aware that the compensation could not be offered if it was the case of a banker referring the loan to us so that the banker or the bank would make more money on it than they otherwise would be able to if they simply did the transaction themselves.

    #3148
    jholzknecht
    Keymaster

    Rules regarding compensation of loan originators are contained in Regulation Z (Truth in Lending). Regulation X (Real Estate Settlement Procedures Act) also has restrictions on compensation.

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