The average total compensation paid to loan officers recently hit $123,000, according to a new study of independent mortgage bankers from Richey May & Co.
Additionally, independent mortgage bankers' incentive and bonus compensation plans improved in 2012, finally giving bankers an extra break, Richey May claims.
Despite the compensation cost per loan increasing a little bit in fiscal 2012, it dipped down slightly in the first quarter of 2013, Trevor Reinhart, manager of advisory services with Richey May, said.
The firm surveyed 100 independent mortgage bankers, reviewing base pay, incentives, bonuses and compensation.
"The last couple years being as good as they were we did see quite a bit more of incentive and discretionary bonuses coming out in the executive levels that had not been around," explained Reinhart.
According to the study, incentive and bonus pay made up 25% of total compensation, while base and commission pay made up the remaining 75%.
"At the executive, management and senior management level it really was a matter of the production volumes that have been so fantastic over the past two and a half years," Reinhart explained.
In the past, Reinhart says the firm performed more of an executive and high-level survey, but with changes in the industry, they decided to expand it this year.
"With rising interest rates and contracting production volumes, mortgage bankers need to operate as efficiently as possible, especially with big expenditures like labor costs, which comprise a significant portion of a company’s overhead," said Kenneth Richey, managing partner of Richey May.
He added, "Benchmarking salaries against peers is a good place to start, as long as companies are comparing apples to apples."