Getting paid as a RELO
As a RELO agent, you have two methods to earn compensation. As an overview, these are described below but this section is focused on Loan Compensation.
- Loan Compensation:
- Loan compensation is payable on your personal mortgage customers when the transaction is completed. This compensation is a percentage rate based on the loan amount.
- Recruiting (Tier) Compensation:
- Recruiting compensation is earned based on the activity of the RELO agents in your downline. This compensation is dollars per loan based the agent’s tier in your downline. More on this in the next section.
What is Loan Compensation
In RELO Funding transactions, the RELO Agent is the Loan Officer. The RELO Agent’s name and license info are shown on the loan application (1003) as the Loan Officer of Record. The only loan compensation you earn on a transaction is commission as the mortgage loan originator. This is an important concept. Real Estate and residential mortgage lending are both heavily regulated industries, as you well know. The RELO Funding program was designed to be fully compliant with all these requirements. Loan compensation is determined much like Real Estate commissions. When your mortgage transaction is completed (aka closed or funded), your loan compensation is determined by multiplying the loan amount by your loan commission rate. For example; Your customer, John Smith, is purchasing 1234 Main Street for $400,000 with 25% down payment and a mortgage amount of $300,000. The transaction closes on January 15th. Your Loan Compensation would be $1,500 and payable on February 20th.
Loan Commission Rate
In RELO, the loan commission has already factored in all mortgage costs and expenses. In this example, the $1500 is your net loan compensation earnings.
How Loan Compensation is paid
Loan compensation must be paid as wages and reported on IRS form W2. The wage classification is mandated by HUD (see Mortgagee Letter 2006-30). The upside of this is RELO Funding is responsible for the FICA employer matching.
- You are considered a part-time employee of RELO Funding
- Your compensation is reported on a W2 instead of a 1099
- You will have required FICA withholdings for the employee portion only
- RELO Funding is responsible for the employer FICA withholding
At the time of your onboarding with RELO, you will complete a standard W4 withholding form.
How Loan Compensation is paid
All loan transactions are included in the calendar month they are closed and payment is made on the 20th of the following month. As a RELO Agent, you will be provided an online portal for you to view your transactions and compensation. You will be able to see in real-time what you have earned in the current and previous periods. Loans Closed in January Paid on February 20th Loans Closed in February Paid on March 20th …and so on
There are some loan types that are ineligible for RELO Funding. These are easy to identify and make up a small percentage of the mortgage market. Ineligible loan types;
- FHA, VA and USDA (Government Loans)
- These make up less than 18% of the purchase money mortgage market
Conventional and Jumbo loans make up the vast majority of the mortgage market (82%) and are eligible for RELO. The government loans are ineligible due to a HUD limitation on dual agency.
Tracking RELO Compensation
Your personal loan activity and loan compensation is tracked in your RELO portal. We provide you a RELO Portal that tracks your entire personal and Downline activity. This is a very easy to use web portal you can use on your computer, phone or tablet. All of your Loan Commissions and Tier Compensation is tracked thru your RELO Portal.
- Updated in Real Time
- Mobile friendly
- View your personal activity
- View your Downline activity