Following up with Tim’s post on getting rid of YSP, I thought I’d share my idea on just getting rid of commissions being paid to a Mortgage Originator all together. Why stop at the misunderstood yield spread premium when the current system is flawed. Why should be we be compensated based off of what size the loan amount is when we should be paid based on how much work and time is invested with the client.
Mortgage Professionals should be compensated based on how many hours they spend with each client.
- This would eliminate steering to other mortgage products which might be more lucrative.
- Assure that consumers would receive plenty of consultation from their Mortgage Professional.
- Mortgage Professionals would be compensated for helping consumers with their credit, debt and asset management scenarios regardless of whether or not they ever finance a home using their services.
- If a consumer really needed to reach a LO after hours or weekends; they could pay overtime to the Mortgage Professional.
- Mortgage Professionals would change their directive from how many millions in loans they are originating to how much time is spent with each consumer.
- Consumers could freely select one Mortgage Professional to help with getting ready to purchase or mortgage a home and another to finance the loan with no strings attached or hard feelings from the LO. Perhaps some Mortgage Professionals would become specialist in such areas.
- Consumers could select various Mortgage Professionals based on their experience which would be reflected in their hourly rate of pay. This falls in line with suggestions that Jillayne has made on a having a tiered system of Mortgage Professionals.
- No more YSP. (Even though this is silly because mortgage bankers receive compensation on the back end and are not required to disclose it).
- True Mortgage Planners and Consultants instead of “Originators”.
A big argument I would have against this is that I would not want someone to not call me because they’re afraid of the bill that would follow after I provide hours of advice.