In June, the Consumer Financial Protection Bureau took notable steps that could significantly reshape the regulatory framework governing loan officer compensation. Among the most consequential developments was the submission of a proposed rulemaking to the Office of Information and Regulatory Affairs (OIRA), which appears to contemplate rescinding or significantly amending the current Loan Originator Compensation rule under Regulation Z of the Truth in Lending Act.

If enacted, this rulemaking could remove long-standing restrictions on LO compensation, including the prohibition on payments based on loan terms and the ban on dual compensation. This would give lenders more latitude in designing compensation structures, potentially allowing for alternative models tied to retention, digital adoption, or customer satisfaction, instead of being limited to new loan origination volume.

Currently, the LO Comp rule prohibits compensation that varies based on the terms of a single transaction or multiple transactions. It also bars reductions in LO compensation to offset pricing concessions and bans dual compensation — meaning that a loan originator cannot receive compensation from both the consumer and another party (e.g., lender or broker) in the same transaction.

While these rules were originally designed to prevent steering and promote transparency, industry leaders — including the National Association of Mortgage Brokers — have expressed support for revisiting or rolling back portions of the regulation. They argue that the rule has evolved beyond its initial aim of eliminating yield spread premiums (YSPs) and may now hinder fair competition and innovation in compensation structures.

At the same time, broader industry forces are influencing the conversation. The re-proposal of the Basel III Endgame by federal regulators could impact capital requirements, particularly for mortgage assets held by large banks, which may in turn affect mortgage pricing and product availability.

Meanwhile, compensation trends are shifting away from traditional volume-based bonuses and toward innovation-driven models, including performance metrics like customer satisfaction, technology adoption and retention. Some firms are even embracing 100% commission structures, supported by advanced technology platforms that enable originators to operate with greater independence and efficiency.

In this evolving regulatory environment, one truth remains clear: Regardless of how LO compensation rules may change, lenders with the most advanced technology stack will be best positioned to attract and retain top-producing talent.

What the top performers say

To better understand what motivates LOs, and where lenders can improve, Floify commissioned a study of 150 top-producing originators across the country. The findings underscore one central theme: LOs know what drives their performance and want the tools to make it happen.

Consider these key stats:

  • 89% said they would consider switching employers if they didn’t have access to digital mortgage tools.
  • 95% ranked tech flexibility and customization as the top factor in their success.
  • Only 38% reported being “definitely happy” with their document collection process.

In other words, digital empowerment isn’t a nice-to-have. It’s the deciding factor for where top producers work — and stay.
RELATED: Loan officers rank technology high among reasons to stay or go

Technology-first mindset

You can learn a lot about any industry by asking its top earners what energizes them toward peak performance. In mortgage lending, LOs we surveyed made it clear: they value tools that allow them to work faster, communicate better, and eliminate bottlenecks. This becomes even more crucial in light of another worrying trend: 31% of mortgage borrowers abandon their loan applications, and only 18% return to the same LO for a future transaction.

These numbers suggest a serious “stickiness” problem. How can an industry built around helping consumers achieve one of the most significant financial decisions of their lives struggle so much with loyalty?

The answer lies in experience. Top-performing LOs concentrate almost entirely on the front end of the transaction — sourcing leads, qualifying buyers, and moving deals into the pipeline. When asked what aspects they prioritize to close deals, LOs overwhelmingly emphasized communication and integration, each cited by 69% of respondents, followed closely by automation at 67%. Meanwhile, customer experience came in dead last at 31%. That’s not because LOs don’t care about clients, but because their system doesn’t reward long-term engagement.

Compensation vs. customer loyalty

Lenders tend to incentivize new business rather than client retention, and LOs have adapted accordingly. In our study, 79% of top LOs acknowledged their focus is on acquiring new customers, not keeping existing ones (21%). Post-close engagement is minimal, with follow-up messages (44%), promotional offers (40%), and birthday cards (38%) being the most common retention tactics. These aren’t bad strategies, but they highlight an imbalance. Without compensation models prioritizing relationship-building, LOs don’t have the time or resources to make client loyalty a core part of their workflow.

This transactional focus creates significant challenges. One is vulnerability to churn, since only 18% of borrowers return to their original LO, lenders are forced to continually replenish their pipeline, which is both costly and inefficient. Another is the growing credibility gap when lead generation becomes the primary growth strategy. In such cases, lenders may resort to aggressive, consumer-unfriendly tactics like trigger leads, which can undermine trust and damage long-term relationships.

Technology as a talent magnet

In an industry with thin margins and intense competition, retaining top talent is one of the most cost-effective ways to grow. The study shows that the best LOs are already gravitating toward tech-forward lenders. This is why your tech stack matters more than ever. A robust digital mortgage platform isn’t just about faster processing or prettier interfaces — it’s a recruiting asset. It signals to top performers that your organization understands their needs, invests in their efficiency, and helps them deliver a better borrower experience.

Technology also levels the playing field. Whether a lender is local, regional or national, a modern platform allows them to compete with the big names by offering streamlined workflows, real-time updates, and personalized borrower journeys.

The path forward: Where trust meets tech

Right now, the mortgage industry stands at a crossroads. Compensation rules may shift, and compliance standards may tighten, but the underlying mission remains: to guide people through the most important financial decisions of their lives. To do that well, lenders must go beyond transactional thinking. They must empower LOs with the tools to deliver consistent, personalized experiences and consider compensation models that reward not just production but retention.

Top producers rely on automation that removes pain points and accelerates turn times and communication tools that keep borrowers actively engaged and informed throughout the process. Just as importantly, their success is driven by data insights that enable them to follow up in meaningful, personalized ways — not just through routine, manual outreach.

Although we can’t predict precisely how LO compensation rules will evolve, we are confident the lenders with the best tech stack will win. They’ll win talent, borrower trust, and repeat business. The next era of mortgage lending belongs to those who combine compliance with innovation and performance with personalization.