The current system is such that lenders and their loan officers look forward to the refi boom years. And that occurs on a fairly regular basis due to the ubiquitous 30 year fixed. If loan officers were paid a small share of each monthly payment, they would look to sell sustainable mortgages, not ones that are constantly refinanced. Unfortunately, the industry isn't set up for that.
The current system is such that lenders and their loan officers look forward to the refi boom years. And that occurs on a fairly regular basis due to the ubiquitous 30 year fixed. If loan officers were paid a small share of each monthly payment, they would look to sell sustainable mortgages, not ones that are constantly refinanced. Unfortunately, the industry isn't set up for that.
I've always said that if loan officers were paid residually like insurance agents, it could have prevented the entire mortgage meltdown fiasco.
Wow! I had to look up what "paid residually" means but it sounds like a great idea.