From channel conflict to consumer-centered change
By: Brian Vieaux | Published: 2025-07-24 08:15:00 | Source: www.housingwire.com
What I expected to be a spirited discussion turned into something more urgent and more telling.
What we have today is not just a rule in need of modernization. We have an industry at a crossroads, wrestling with how to balance consumer protection, fair competition, and operational practicality.
It’s time to rethink LO Comp, but we can’t do that from inside our silos.
A rule rooted in crisis…and stuck in time
The Loan Originator Compensation Rule was born from the wreckage of the 2008 financial crisis. Its intent was clear: eliminate steering and protect borrowers from being placed into higher-cost loans based on how much a loan officer would get paid.
Before the rule, yield spread premiums (YSPs) and margin-based commission models created perverse…
