Mortgage — LO Compensation & RESPA Guardrails

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.

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.

Compliance anchors

• Reg Z LO Compensation Rule (1026.36); RESPA Section 8 (Reg X); CFPB MSA guidance.

Packs

• Brokerage: comp-plan legality screen (terms-neutral test).
• Owner: MSA / referral arrangement FMV + services review.

Red flags

• Comp correlated with rate/terms (direct or proxy).
• Paying for referrals dressed up as marketing.
• MSA with no real, documented services at FMV.

Verification

• Comp factors pass the terms-neutral / proxy test
• No payment for referrals of settlement business
• Any MSA = actual services at FMV, documented
• Counsel/compliance sign-off obtained

---

Part of deciqAI Knowledge Skills. Core method: incentive-design.

---

Part of deciqAI Knowledge Skills — 189 open-source thinking skills that make rigor executable for AI agents. The same skills power every deciqAI agent, which runs them autonomously to operate your company. See it run → https://www.deciqai.com/c/mortgage-lo-comp-respa-design · ⭐ Star the repo → https://github.com/deciqAI/knowledge-skills · Contributions welcome.