Bonuses, Fat Retirement Plans Spread

No longer is a staid salary, an annual Christmas dinner, and a gold watch upon 50 years of employment enough compensation for home loan originators at banks. Today, they demand more complex mixes of bonuses and incentives and more rewarding retirement plans.

"You are seeing an industry forced from two sides to reinforce its compensation," said Dennis Christiansen, partner, Bank Compensation Strategies Group, Mequon, Wis.

Those two sides are mortgage banks and mortgage brokers.

During the recent refinance boom, mortgage bankers and brokers swallowed up much of the lending business in the marketplace. And they paid their loan originators to do so.

Some loan officers at mortgage banks earned more than the chief executives during the refinance boom. That pushed open the compensation envelope at banks, Mr. Christiansen said.

"I think in the thrift industry, that's where it's at -- becoming more like a mortgage banker," said David M. Marshall, vice president, North Shore Trust and Savings, Waukegan, Ill.

Mr. Christiansen said the main change is that banks are moving more toward incentive-based compensation, rather than salaries, for their loan originators.

He said also that banks were changing their retirement plans. He said that past plans favored upper-level management. Now, banks have had to even out the retirement plans - and find new ways to benefit certain, premier employees.

Green Point Savings Bank, Flushing, N.Y., has formed a new unit of eight loan originators who get home loans much as employees of mortgage banks do.

They call on real estate brokers and others who may be able to refer borrowers.

In the past, Green Point relied on mortgage brokers to originate loans for it.

With the new group has come a new compensation scenario. The bank now offers two variations of the same three-tier compensation system, according to a company spokesman.

Employees qualify for each tier based on the amount of volume they produce.

The spokesman said Green Point may continue to move toward a incentive-based compensation program. The thrift may also expand the new unit of originators should they produce adequate volume.

Home Savings of America, the nation's largest thrift, based in Irwindale, Calif., bases its compensation largely on incentives, a spokeswoman said. She said the company had two kinds of mortgage originators: loan consultants and associate loan consultants.

The company changes its employees' compensation depending on its target goals for originations. Few Home Savings employees are on base salaries, the spokeswoman said.

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