What is a marksheet loan?

What is the commission split between a high producing loan officer and their mortgage banker?

• 8 years ago I worked in a small mortgage brokers office (e.g. 5 loans per month). He let somebody hang their license their for a 90% / 10% split on each loan, however he was a broker, not a correspondent or banker. I'm looking for a place to hang my license, and am researching commission splits and tiers depending on loan volume. 1. The banker has the ability to sell directly to fannie/freddie. 2. The loan officer does 100+ loans per year. 3. The loan officer does all their own marketing 4. In fact, the loan officer is the primary source for most of the monthly volume.  In other words, I'm looking for a small broker, who wants to get their own warehouse line. 50/50? 60/40? 70/30/? 80/20? 90/10? 100% + per loan fee? What would the typical per loan fee? Can answer anon if you prefer.

• Answer:

  Loan officers who work for a "mortgage lender" (meaning an institution that funds their own loans and sells them to the secondary market, be it Fannie Mae, Freddie Mac, GInnie Mae, or even another bank) do not get paid in "splits" like a mortgage broker used to (or in some situations, still does).  Let's call this loan officer who works for a mortgage lender, a "mortgage banker". A mortgage banker gets paid on "bps" (basis points), which are a percentage of the loan amounts they are funding.  For example, 100bps = 1% of the loan amount.  For someone who is producing their own leads (whether they are generating them from their own website, purchasing them from lead companies with their own money, etc.) you could expect to get paid anywhere from 60-175bps per loan.  A big bank like Chase or Wells Fargo will pay on the lower end, because they feel that their name is so big that they are the reason people come to you to get loans (brand name recognition).  A smaller, unknown mortgage lender could pay on the higher end because they know you are the sole reason that you get your own business, and most people don't know who "Orange County Lending" (just an example of a generic company name) is. The reason they are paid in bps rather than a split is because there is a lot more profit to be made in mortgage lending than there is in mortgage brokering.  A mortgage lender may price their rates competitively (which would leave less overall profit to be made by all) or not too aggressively (which would allow more overall profit to be made by all).  So if a mortgage lender has very competitive interest rates ("interest rate leaders" they are often referred to as) then you could expect be paid on the lower end because in theory you should be making it up with a higher volume of loans (as there is a good percentage of the mortgage seeking public that will base choosing their loan officer solely on the interest rates/fees being offered, which you would be able to better capture).  There may only be a total of 300-400bps to be made by everyone involved. A lender who isn't very aggressive on their interest rates would likely pay a higher amount of bps to their loan officers, because each loan is very profitable for that lender.  There may be more along the lines of 500-600bps to be made by everyone involved. For the situation you describe, you should be able to command a high amount of bps per loan, but again it would depend on what type of mortgage lender you would be working for.  If you are well capitalized, then you may consider starting your own mortgage lender and then you'd be able to retain a much larger amount of the profit that is made.