Account Executives/Wholesalers

There is plenty of blame to go around when it comes to this mortgage mess. This post will examine the role of the account executive that works for the actual lender. To the mortgage broker, the account executive is a representative of a certain lender soliciting mortgage brokers in hopes of attracting business (loans) for their employer. On any given day, multiple account executives (AEs) will drop into the office or call the broker/originators in hopes of securing business.

In most cases, the AE is compensated based on the total dollars of the loans closed with their company generated from the brokerage firms in their book of business. Pretty simple, the more loans they close, the more they earn. On the surface, that seems like the compensation structure of just about any salesperson. The problem lies in the fact that the competitive nature of the business, coupled with the product (residential mortgage loans) being delivered leads to many egregious financial violations. It is in the best financial interest of the AE to “assist” the broker in getting a difficult loan approved. The AE was a master of the company’s underwriting guidelines and was willing to show the broker/originator exactly how to effectively manipulate the loan submission package in order to satisfy said guidelines. There is a shorter description for “effectively manipulating the loan submission package in order to satisfy underwriting guidelines.”

It’s called Loan Fraud!!!