Mortgage — LO Compensation & RESPA Guardrails

Industry front door for incentive-design. Adds domain triggers, example, packs only. Parent Process unchanged. Not legal advice. LO-comp and RESPA rules are strict-liability-adjacent; verify with counsel/compliance before designing any plan or arrangement.

Activate when: designing/reviewing loan-originator compensation; considering a marketing services agreement (MSA), lead-buy, or referral arrangement; "can we pay for these referrals?", "can comp vary by loan?" Do NOT activate when: unrelated ops incentives with no mortgage-referral nexus.

Why this variant

The parent incentive-design aligns incentives while avoiding perverse behavior. In mortgage, incentive design is legally constrained: the LO Comp Rule bars pay tied to loan terms, and RESPA Section 8 bars paying for referrals. Design must produce alignment inside these hard limits.

Domain inputs → parent's Process

• LO comp may not vary by interest rate or loan terms (proxy analysis); may vary by permissible factors (volume, loan amount within limits, etc.).
• RESPA §8: no fee/thing-of-value for the referral of settlement business; MSAs must be for actual services at fair market value (high scrutiny).
• Design the incentive to reward outcomes that are term-neutral and referral-clean (e.g., quality, cycle-time, compliance), never terms or referrals.

Worked example

Proposed bonus for LOs who "bring in higher-margin loans." → Fails: that's comp varying by terms (proxy). Redesign to reward volume/quality/on-time-clear metrics that don't correlate with terms. An MSA with a realtor must be priced to actual marketing services at FMV, or it's a §8 kickback.