Wells Fargo (WFC) changed its compensation for some mortgage salespeople to include a reward for submitting complete loan applications to processors and underwriters within five days.
Pay for salespeople this year will include a 0.03 percentage point incentive to submit a loan file that meets a list of requirements attesting to its quality, according to a presentation dated Jan. 18 and obtained by Bloomberg News. That means salespeople closing a $400,000 refinancing of a prior Wells Fargo mortgage can earn $120 on top of the $1,720 commission.
Wells Fargo and other home lenders are changing the way they pay salespeople after the financial crisis showed some staff were paid on volume without regard to performance or quality. Lenders are trying to speed up processing times and boost originations as competition rebounds and the Mortgage Bankers Association forecasts a 19 percent drop in 2013 production.
The change in compensation, which goes into effect March 1, is meant to "focus on complete quality applications turned into processing in a timely manner," according to the presentation. "This is the first step in a predictable and consistent experience for our customers and referral partners."
Vickee Adams, a Wells Fargo spokeswoman, didn't immediately return a call seeking comment.