Hello, LOs!
In yesterday's edition of LL, I asked about the etiquette surrounding leads. The consensus from dozens of LOs who wrote to me was essentially this: If the lead came directly to the LO or was a referral from a past client, that's the LOs loan, and, within reason, they should hold the cards. Loans that were generated from the company are property of the lender and shouldn't be diverted even if the LO joins a new company. That would be very bad form, and would likely catch legal action.
There's a bit more to it, though.
"Technically, the loan always belongs to the lender," wrote one mortgage industry executive. "However, if the LO generated the client and it was not from marketing efforts of the company, we would never fight the outgoing LO on keeping his/her client. If the file was already in process, we would expect that it would remain with us, but we would still pay the LO per their comp agreement as if they had not left. I think most people who put some thought into it can agree that is fair for everyone."
He continued: "If the client called the company and then the LO got involved, it's the company's. If the client called the LO directly, it's the LO's. Either way, we would still pay the LO. Even if it was our lead and they didn't finish the file before they left. We don't see the value in keeping the commission and having an LO out there who can now say we didn't pay them."
A retail LO in Kansas wrote me to say if he decides to part with his current employer, he would try to close his current locked pipeline – not preapprovals – or leave those loans with the lender, as most of the time it's "what's best for the borrower and referral partner."
"Most originators will confirm it's often frustrating and stressful when switching mortgage companies with learning new LOS, product matrices, policies and procedures," he said. "But in today's unique mortgage environment, we are faced with unique decisions and challenges."
I think that's all really well said. LOs, would you take loans that are in-process to your new shop? What about pre-approvals? Thanks to everyone for sharing their thoughts. Keep 'em coming!
James Kleimann
Managing Editor, HW Media
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