Legal Blog

Compensation and Compliance Matters- 2.14.14

Open-Ended Loans WE’RE HEARING in terms of compensation plans, many lenders treat open-ended loans as a non-issue given their exemption from the compensation provisions of Dodd-Frank. Lenders, however, should consider carefully the potential for loan officers to steer borrowers from closed-end products into open-ended loans. This is particularly true in a rising interest rate environment. Indeed, one can easily envision a lawsuit or Consumer Financial Protection Bureau action against a lender, who, without disclosing the financial incentive for a loan officer to close an open ended loan, advises a borrower to forego a fixed-rate closed-end loan. Click here to read the entire blog by Ari Karen on National Mortgage News