One of the greatest pleasures is helping talented mortgage professionals significantly improve their career situations. This is especially true when the new position provides a substantial increase in income, in some cases almost doubling the commissions earned on each 500 fast cash tribal payday loans direct lenders! How is that even possible, you ask? Well you may be interested to learn about the enormous disparity between different compensation plans within our industry.

First, I would like to suggest that you should never, ever make a career move just for the money. This especially holds true for large sign-on bonuses. There are far more important things than dollars that must be weighed carefully. The critical question you should ask yourself; "is the company a perfect, long-term fit for me and my business? Change employers only because the opportunity is vastly superior to what you presently have and keep in mind, the important things are what you get after you arrive, not what it takes to get you in the door.

We each have a responsibility to our families and ourselves to maximize our income which will provide more financial security, fund college educations and retirement, and provide a better overall quality of life for our families. In recent years, most of us in the industry have done extremely well. The times are finally changing. In 2006 and the next few years, earning into the six-figures will be a challenge for most mortgage professionals. Now may be the right time to see how your present compensation plan stacks up to what else is out there. You may be quite surprised by what you learn.

You personally generate 100% of every dollar of revenue for your employer. Then your employer tells you how much they are going to give back to you for bringing this revenue in the door. The vast majority of Loan Officers working for large, national lenders and banks earn roughly 35 cents (one-third) of every dollar they generate, with 65 cents (two-thirds) going to the company. If you earn an overall 60-65 basis points on your loan volume, then you fall into this category. That's assuming a lender's total revenue is roughly 1.8%-2.1% of total loan volume, which may be a bit conservative. In 2003, if you closed over $25 million, this was probably more than adequate to earn a decent living. Well, that was then and this is now. Loan volume has dropped sharply and the slowdown is well underway. Many companies continue to tinker with comp plans, reduce support staff, and otherwise try to enhance the bottom line at the expense of the Loan Officers on the front lines.

If you receive referral business through bank branches or a captive realty situation, and this is more than half of your business, then a 50-65 basis point comp plan is probably justified and fair. However, if you 'self generate' or go out and get the majority of your own business and you are still working for 60-65 bps, then you are severely underpaid...and you may be able to do much better! Most mortgage professionals simply don't know any different because they have never seen the entire revenue picture behind the scenes. Here is what most mortgage companies keep well out of sight from their Loan Officers:

o Service Release Premiums (SRP's) - This is an extremely lucrative revenue source for companies that sell their loans on the secondary market. These servicing rights (SRP's) can range up to 2.5% or more of the 500 fast cash bad credit loans online direct lenders amount on certain loans, which amounts to $2,500 in revenue on a $100,000 loan. Most companies keep this hidden from the Loan Officer and pocket the premium when the loan is sold.

o Retail Pricing Rate Sheets - Interest rates are marked up from the lender's price (the wholesale rate) to what the Loan Officer sees and what the borrower receives (the retail rate). 500 fast cash direct tribal installment loan lenders Officers are given retail rate sheets that have a portion of 'built in' profit for the company. Again, the Loan Officer does not see this rate bump and is not compensated at all for this revenue generated. It goes straight to the company's bottom line.

o Total Gross Revenue - Companies are always trying to bolster and increase gross revenue as a percent of loans funded to please their shareholders. In addition to substantial SRP's, built in profits with retail pricing, lenders also may receive YSP's (Yield Spread Premiums) on any brokered loans, and of course generate significant revenue from processing, underwriting, application, and other junk fees. The end result is the Loan Officer generates thousands of dollars in revenue, and is normally paid a small portion of the total income as basis points instead of being paid on the total gross revenue generated.

You probably know someone that has worked for a mortgage broker (or have worked as a broker yourself) and marveled at the enormous commissions they can earn on each loan. The reason is not because they are a broker, but because they are paid based directly on the revenue they generate. These Loan Officers typically receive a fair commission split of 50% of total gross revenue. In other words they get to keep 50 cents on the dollar (one-half) of everything they bring in instead of 35 cents (one-third), a huge difference. Now I am not suggesting that you run out and start originating loans for a small broker shop. The truly good ones are few and far between. Brokers also don't get wholesale pricing or have access to Service Release Premiums (SRP's). In addition, brokers face a number of other challenges in today's environment and don't control the entire process in-house.

Many seasoned mortgage pro's can tell you from experience that the most sophisticated, highest level, and most lucrative business model for veteran Loan Officers is that of a true Mortgage Banker. They are probably working for one now and would never consider returning to a basis point environment. The reason is that a mortgage banking Loan Officer is in total control of everything they touch. They price out their own loans from wholesale correspondent rates, have access to the same dizzying array of products that a broker can offer, enjoy in-house delegated underwriting authority, close loans in their own name, generate much more revenue through SRP's, and are usually paid on a fair gross revenue split that is far superior to anything else out there. It is not uncommon for a Loan Officer to generate over $4,500 on an FHA loan and earn in excess of $2,200 in commissions. One correspondent of a key client even pays $2,000 in revenue ($1,000 to the Loan Officer) on each home equity line of credit set up even with no advances!

As 100% commissioned professionals, we have chosen to leverage the risk / reward relationship in our favor. We have each made a conscious decision to bet on ourselves, to assume a little more of the risk, with the expectation that we will also reap much more of the rewards. The rewards include a very flexible schedule, the ability to build your own business, spend more quality time with family, solid financial security, and a better overall quality of life. If you are both happy and successful, are achieving the level of income you desire, while maintaining a very nice work / life balance in your present position, then you may have found your ideal career home. If you are not completely satisfied, then perhaps you should ask yourself, "am I earning what I am worth?"

Todd Mikesell is 100% committed to helping experienced mortgage professionals improve their career situations and achieve long-term success and happiness. Todd is a Certified Personnel Consultant (CPC), the highest designation awarded to executive search professionals. He is a 15-year mortgage veteran, has several years of senior leadership expertise, and has conducted management training throughout the Midwest. Todd moved into the executive search field in 2001 and has consistently performed in the Top 10% of recruiters in the country. His mission is to have a positive impact on the lives of his candidates and their families by helping dedicated professionals reach their full professional and financial growth potential.