Pay for (Loan) Performance
GMAC Inc. is getting tough on mortgage loan officer compensation.
Beginning this month, loan officers at the auto finance company's Residential Capital LLC unit will have some of their compensation tied to the performance of the mortgages they originate rather than being paid solely on the basis of volume, said a GMAC spokeswoman, Gina Proia.
"We believe this new structure will drive more efficiency in our loan origination business," Proia said Wednesday. She did not provide further details.
Many industry experts believe that
David Lykken, the president of the Austin consulting firm Mortgage Banking Solutions, said GMAC may be "ahead of the curve" in tying compensation to performance.
"There needs to be a realigning of compensation because it's been out of balance for years," Lykken said. "Loan officers will be frustrated but this is a contracting market and it's time for the industry to retool."
Matchmaker for Muckrakers
ProPublica is trying to make it easier for journalists to expose the trials and tribulations of the loan modification process.
The nonprofit investigative news organization funded by former bank honchos Herb and Marion Sandler has launched a
"Often, the media can be the most effective recourse for homeowners who have nowhere else to turn," ProPublica said.
Homeowners that want to participate give ProPublica permission to share their e-mail or phone numbers with local journalists. ProPublica then sends their names and contact information to journalists in their area who sign up for the service, which is free. Journalists are asked to cite and link to the organization's Web site in their story.
Since its launch last week, 138 journalists and 117 homeowners have signed up for the service.
Before they became ProPublica's
Golden West was a prominent originator of option adjustable-rate mortgages, or Pick-a-Pay loans. Problems with this portfolio
Quotable …
"Our loans were sold before we even made them, which put more pressure on the production groups to get loans closed. … The process was
Patricia Lindsay, the former vice president of corporate risk at New Century Financial Corp., at the
"Total Wall Street channel volumes grew 40% in 2006, and it was announced that greater growth was expected in 2007. Most of the growth was to be in the subprime mortgage business. … The term '
Richard Bowen, former business