Mortgage Industry Overview

 

Mortgage Industry Sales Commission

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Mortgage Industry Loan ManagerSales Commission can be a flashpoint in disputes between mortgage brokerages and their agents. Litigation related to these disputes can result in monetary losses, and in some cases the distraction of the lawsuit can drive brokerages to collapse.

QCommission enables you to quickly calculate commission, draw, and bonuses, verify results and distribute this information to your agents, loan officers and managers. Present the commission information in such a way that your agents clearly understand what they are being paid and why they are being paid at a very detailed level. Excel and manual calculations can introduce a lot of errors into your calculations and cause your agents to lose trust in you. QCommission can help avoid that by calculating all commissions systematically and reliably.
 
Overview

The mortgage industry is involved in mediating a customer and the financial organization with whom they are partnered. The primary service of a mortgage company is to provide financing options to the customer in the mortgage-lending environment. These mortgage industries offer many different lending programs to meet the variety needs of its customers.

The recent housing boom, due to the lowest interest rates seen in the United States in the last 45 years, has caused many mortgage companies to expand rapidly. With larger volume, additional employees, and compensation calculation changes due to this rapidly changing industry, commissions paid to brokers have become harder to track, calculate and communicate. QCommission helps to do this task easily.

QCommission solves the major issues in calculating and paying commissions in time.

Features
  • Pay against Loan originations
  • Pay against Loan referrals
  • Pay differently by Loan providers
  • Pay differently by Loan products
  • Pay differently by brokers
  • Pay weekly, bi-weekly, monthly and other time periods
  • Tier rate commission calculations
  • Split commissions with the agency or between brokers
  • Provide clear commission statements
Minimum Wage

Recently some companies have been concerned about the impact of minimum wage rules on their loan offers. In periods where there are no loans, loan officers may not get any commissions at all. This could be illegal because of the minimum wage law (check wity your accountant). QCommission can handle this by setting up a draw for the minimum wage amount and paying it weekly or bi-weekly, and then adjusting it against the commissions when commissions is paid out.

 
Multi-level commissions

Recently some companies have been converting their sales model to model where loan officers referring other loan officers to the company get an override on the loans brought in by the new loan officer. This override may extend to a few level of referrals below the a current loan officer. QCommission can handle this commission calculation by keeping track of the referral relationships and paying a varying rate of commissions based on the relationship level and role.

 
Article
 
Avoid Sales Commission Litigation Mortgage Broker - 10 Steps to Avoid Sales Commission Litigation.pdf
Mortgage Broker Sales Commissions - A Primer - Article 
 
Sample Plan
 
 
Customer Quote

Dennis Loosli, President - Community Lender | click here for complete case study

"With QCommission I am able to calculate and communicate with my mortgage   agents' commissions very easily. QCommission found calculation problems the first   time around and saved me money. I'm just tickled pink with this program;   QCommission has already paid for itself and more."

 

Case Studies

Redwood Mortgage

Redwood Mortgage chooses QCommission for their Sales Commission

Customer Profile

REDWOOD MORTGAGE provides quality mortgage lending within California for both residential and commercial properties. Founded in 1978, Redwood Mortgage is an established financial organization with 35 years of experience in arranging and funding mortgage loans in California. Redwood Mortgage and its affiliates have arranged around 2 billion dollars in loans and currently manage a loan portfolio of over $275,000,000. They provide tailor-made loan direct funded solutions secured by residential, multifamily and commercial properties.

The Problem

Prior to QCommission, Redwood Mortgage was calculating commission manually using Excel and 3rd party application report. Samina Shaheen, Compensation specialist spends time in mining the data manually to line up to their commission rules for all their Agents, Brokers and Manager. One of their key problem is calculating override commission when the manager cross overs tiers. Due to new commission rules, too many variables for clean calculation in excel is a very time consuming task every month. The company had new commission fees in place and Samina wanted to have accurate calculation and to handle various scenarios for current plans and new changes in future down the road. The company also expects to have a good customer services when needed readily.

The Project

QCommission implementation crew worked with Samina and her team and underwent an in-depth discovery meetings and designed the commission rules in a way that can be easily processed their current needs and for future changes. QCommission could integrate a custom version of mortgage transactions from an excel file to feed QCommission for processing.  There were 3 different commissions plan incentives configured in QCommission (Personal Production Commission, Closed Loan Volume Bonus and Override Commission). The software processed commissions and bonuses on loan amount on any closed deals correctly without any errors given the complexity of year to date tiered rate calculation. The project was average in complexity and got accomplished with the project accessed estimated and on time. I am very happy to have professional looking commission statement being produced every month without any delay to my team.

 


 

Stearns Lending

Stearns Simplifies their Sales Commission Process with the Help of QCommission

Customer Profile

Stearns is a highly ranked and rated mortgage provider. Headquartered in Santa Ana, California, the company employs approximately 2000 people.

Stearns has been in the business of providing home loans for over 28 years. Over the past few years, they have released over $58 billion in funding, representing about 230,000 funded loans.

The Problem

Stearns has quite a complex sales compensation plan, which meant it took at least 4-5 days every bi-monthly pay period to process their sales commissions.

With their old process, Stearns had:

  • limited calculations available
  • no draw calculations available
  • difficulty with splits and sharing
  • could not upload or directly share their report with Payroll.
  • had to manually key in everything from their old sales commission system to payroll batch.
  • did not have a plan document solution nor a change request workflow and approval solution available.

Stearns’ old process was difficult and time consuming to say the least.

The Project

After conducting a vendor search process, Stearns selected QCommission for a needs analysis and a requirements-based demo. Satisfied that QCommission could keep up with their needs, they met with the CellarStone QCommission Team to get the ball rolling.

Stearns provided the following requirements that needed to be met:

  • Plans/payees (Each of which will have their own payout rules for calculation and payout timeframes)
  • Some commissions are flat rate
  • Some are flat rates, based on a tier rate matrix
  • Customer: Some transactions are excluded from processing based on the customer it is transacted through, or paid a different rate
  • Product: some tranactions may be paid a different rate for certain products
  • Channel specific plans and requirements (Retail, Wholesale, etc)
  • Payroll specific file outputs
  • Date based/effective date based calculations and prorations
  • Splits and Sharing Agreements
  • Recoverable and Non-Recoverable draws
  • Referral and Lead Source
  • Overrides
  • Handling canceled transactions
  • Termination of payees/payouts
  • Monthly true-ups on bi-monthly pay-outs
  • Monthly and Quarterly Production Bonuses
  • Audit reports for pre-processing review
  • Reporting needs for post processing analysis
  • Plan documentation and plan approval/sign-off
  • Workflow processsing, with Management and Payee sign-offs

The QCommission team got to work and tailored the QCommission system to the needs of Stearns.

Challenges included:

  • Concurrent, interdependent, conversion of source data systems
  • Interdependent source data system projects
    • Complicated finalizing what data elements (fields) would be known and available, in order to calculate and pay commissions.
    • Added a historical complexity, wherein certain known fields needed for calculations were also being readdressed in new Loan Origination System itself, so would need to be addressed there first, before being known and available to be brought into QCommission for calculations. Resulted in some delay to the project schedule.
  • Project had to be completed within a minimum timeframe, because previous source systems were being retired; so, without the timely completion, there was no current/previous payment system available to fall back on.
  • On-site hosting at Stearns own site, with four multiple environment installations (Stage, Test, Prod, etc)

Once QCommission was all set, the team helped Stearns set up for processing, completed the training, and facilitated the turnover to the customer.

Melody McClain, VP for Human Resources, had this to say about the QCommission Project and Team: “Above and beyond. We have a very complicated system of commissions and we also made some changes during the implementation process. We also made it, I think, more difficult with our specific IT requirements of internal hosting. This made it exceedingly difficult to stay on our targets, so things did take longer than anticipated but the team worked regularly to keep us on track and were very responsive in resolving everything and trouble shooting.

Stearns is a satisified customer, and has been using QCommission for 2 years now.

Quote

“The biggest accomplishment is dropping our processing time to 2 days for commissions from the time we receive the pay period's transactions to being ready for upload. It is a huge timesaver with a much reduced incidence of errors and complaints and we have been able to automate many of our previously manual calculations as well as implement new plans that we previously could not accommodate which makes the business happy and a more productive sales team.”

- Melody McClain, VP Human Resources, Stearns Lending