The "Dodd-Frank" Ammendment to the Wall Street Reform and Consumer Protection [sic] Act has far reaching consequences on various planes. Most recently the reform touched on compensation for loan officers. Loan officers who for decades have had to compete for savvy buyers business by cutting costs to as low a number as possible to be profitable and still get the business.
Thanks to the Dodd-Frank Ammendment you will no longer have to worry about the loan officer working for free. Now they will only work for almost free and because of the huge burden being placed on banks and lenders two things will, and in fact already have happened.
- Loan officers who were only capably of closing 3 or 4 loans or fewer per month will be out of a job.
- Banks and lenders will be forced to rais their fees to cover the cost of employing the remainder of the Loan Officers because of the cost of covering each employee with a wage somewere between $8 and $12 whether or not they are producing any volume.
The legislation because law in April 2011 and we have already seen a mass shifting in the way loans are handled, the way new employees are treated and with the elimination of thousands of positions nationwide of loan officers who may have been only doing loans for their small referral base. Possibly only two or three agents may have been referring loans to a local loan officer for many years. With the housing market as slow as it has been those relationships may have only resulted in two or three closed loans per month.
Obviously with the lenders and banks being forced to pay a minimum wage for such an employee who rarely visits the office is cost prohibitive so relationships which have been around for many years are now dissolved and the local loan officer is replaced by anonymous voices at the end of a telephone line many states away.