Hello, LOs!
On Thursday, my colleague Matthew Blake reported that Knock, the New York-based mortgage lender and "power buyer," reversed course on a decision to cut the salary of its 30 LOs by 33%. Knock loan officers draw a median salary of about $75,000 a year, company sources told HousingWire.
"Over the course of the week, with multiple 1:1s, we have heard feedback about some of the mechanics of the plan and confusion over how it works," company COO Jamie Glenn wrote in an email obtained by HousingWire. "As a result, we have decided to not roll out the plan we communicated. We are working on a revised plan that will roll out in January, that addresses the feedback, keeps base salaries the same, while giving everyone the 43% increased upside for repeat customers and stellar customer service."
Knock is one of a few startups trying to disrupt the two predominant compensation models: the inexperienced LO who works at a call center for $40,000 and hopes to move up in the world, and the commission-only LO who bets on herself/himself and could make a few hundred thousand dollars – or more – in a year.
The lenders who are courting LOs with solid – if relatively unimpressive for the industry – salaries aren't getting entrepreneurial LOs with a big book of real estate agent contacts and a lot of experience. But they're still paying a fair amount per loan, certainly more than they would with a newbie in a call center.
To me, they seem to exist in a no-man's land. And as we saw with Better.com, which had salaried LOs making roughly similar salary ranges as those at Knock, there are pressures when purchase business is the name of the game.
So, LOs – what do you think about these types of compensation models? Would you work for $75,000 in salary but with a lower ceiling on total compensation? Normally I would ask you to share your thoughts with me via email, but today is my last day before parental leave. Mortgage reporters Georgia Kromrei and Maria Volkova will be taking over LendingLife until I return on Jan. 18. Please share tips and your thoughts with them at gkromrei@housingwire.com and mvolkova@housingwire.com.
I hope you all have a fantastic holiday! See y'all in a month!
Best,
James Kleimann
Managing Editor, HousingWire
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