g an improved credibility environment for themselves and their employers, and move away from the ‘big fat commission’ concept of putting their own selfish interests ahead of the customer’s.

D). There will be far fewer thinly capitalized organizations, as this payroll structure will provide for a larger remaining checkbook balance for employers after payday. With that they can/will have better f

Last month in Part 1, I discussed several of the reasons that have lead the residential real estate mortgage industry to the crisis it faces; at its core in my view, is the whole notion of originators being commissioned sales type ‘closer’ personalities, a relatively recent concept.

As we work our way through today’s industry wide mess, out the other side should emerge a wiser group of survivors, hopefully YOU will be one of them.

The benefits of replacing LO’s and AE’s ‘big fat commissions’, and instead offer a more traditional salary + modest bonus structure, will result in a great number of improvements to the new organizations that ‘make it.’

Considering all that went wrong these past several years since ‘big fat commissions’ were common, history won’t repeat itself with the absence of such available excessive personal gain as has been commonplace, plus the positives will be numerous. On the plus side we have:

A). The effect of better management control over it’s employees, since as W-2 salaried people, owner/operators and managers will be more careful on who they hire and how much they’ll invest in training and how closely they’ll supervise their activities. Not so many loose cannons poking around in the unsupervised darkness.

B). With this payroll structure, those LO’s & AE’s won’t be so quick to “close’ every applicant on a STATED Wage Earner 100% Option Arm with a 4 point YSP; this difference will surely result in overall better quality originations in the long run.

C). These better trained and now salaried employees, will work towards creating an improved credibility environment for themselves and their employers, and move away from the ‘big fat commission’ concept of putting their own selfish interests ahead of the customer’s.

D). There will be far fewer thinly capitalized organizations, as this payroll structure will provide for a larger remaining checkbook balance for employers after payday. With that they can/will have better fu

s, hopefully YOU will be one of them.

The benefits of replacing LO’s and AE’s ‘big fat commissions’, and instead offer a more traditional salary + modest bonus structure, will result in a great number of improvements to the new organizations that ‘make it.’

Considering all that went wrong these past several years since ‘big fat commissions’ were common, history won’t repeat itself with the absence of such available excessive personal gain as has been commonplace, plus the positives will be numerous. On the plus side we have:

A). The effect of better management control over it’s employees, since as W-2 salaried people, owner/operators and managers will be more careful on who they hire and how much they’ll invest in training and how closely they’ll supervise their activities. Not so many loose cannons poking around in the unsupervised darkness.

B). With this payroll structure, those LO’s & AE’s won’t be so quick to “close’ every applicant on a STATED Wage Earner 100% Option Arm with a 4 point YSP; this difference will surely result in overall better quality originations in the long run.

C). These better trained and now salaried employees, will work towards creating an improved credibility environment for themselves and their employers, and move away from the ‘big fat commission’ concept of putting their own selfish interests ahead of the customer’s.

D). There will be far fewer thinly capitalized organizations, as this payroll structure will provide for a larger remaining checkbook balance for employers after payday. With that they can/will have better f

e absence of such available excessive personal gain as has been commonplace, plus the positives will be numerous. On the plus side we have:

A). The effect of better management control over it’s employees, since as W-2 salaried people, owner/operators and managers will be more careful on who they hire and how much they’ll invest in training and how closely they’ll supervise their activities. Not so many loose cannons poking around in the unsupervised darkness.

B). With this payroll structure, those LO’s & AE’s won’t be so quick to “close’ every applicant on a STATED Wage Earner 100% Option Arm with a 4 point YSP; this difference will surely result in overall better quality originations in the long run.

C). These better trained and now salaried employees, will work towards creating an improved credibility environment for themselves and their employers, and move away from the ‘big fat commission’ concept of putting their own selfish interests ahead of the customer’s.

D). There will be far fewer thinly capitalized organizations, as this payroll structure will provide for a larger remaining checkbook balance for employers after payday. With that they can/will have better f

so many loose cannons poking around in the unsupervised darkness.

B). With this payroll structure, those LO’s & AE’s won’t be so quick to “close’ every applicant on a STATED Wage Earner 100% Option Arm with a 4 point YSP; this difference will surely result in overall better quality originations in the long run.

C). These better trained and now salaried employees, will work towards creating an improved credibility environment for themselves and their employers, and move away from the ‘big fat commission’ concept of putting their own selfish interests ahead of the customer’s.

D). There will be far fewer thinly capitalized organizations, as this payroll structure will provide for a larger remaining checkbook balance for employers after payday. With that they can/will have better f

g an improved credibility environment for themselves and their employers, and move away from the ‘big fat commission’ concept of putting their own selfish interests ahead of the customer’s.

D). There will be far fewer thinly capitalized organizations, as this payroll structure will provide for a larger remaining checkbook balance for employers after payday. With that they can/will have better furniture, fixtures and equipment for their employees, better employee benefits and significant cash available to advertise their products.

E). This model also insures that new owner operators will begin their operations with a significant financial investment. Therefore their outlook will be to establish and maintain at the core, a more ethical and solid company than many of the fly-by-night operators we can see today on both the wholesale and retail sides.

This list I’m sure you can add to as well as I can. What I describe here isn’t a ‘pipe-dream” it’s what I saw with my own two eyes, my first 30 years in this industry; it’s how my first employer operated, and how I operated for several decades also.

Returning to this way of operations naturally is not the solution to all our problems, but it will mitigate future ones a great deal; as well as help restore the former luster we all had as home loan providers.

If on the other hand, you're left standing after this cleansing is over, and you are in a position within your own organization to make these payroll changes and you don't, then you can expect to not receive the benefits A thru E above (and others), but instead you'll be part of the problem next time.