LO Compensation

To Set Up Default LO Compensation Plan Data:

Use the Default Plan Settings section to set up default values to apply to each new LO Compensation plan that is created.

1. On the menu bar, click Encompass, and then click Settings.

2. On the left panel, click Tables and Fees, and then click LO Compensation.

3. In the Default Plan Settings section at the bottom of the LO Compensation screen, use the Loan Officer/Broker Value dropdown list to indicate to whom the compensation plan will apply: loan officers, brokers, or both.

   • This setting helps determine which plans will be available to assign to different originators. For example, let’s say you select Loan Officer here. Later on, when you are ready to assign a plan to a loan officer, only plans that have been identified as Loan Officer plans will be available to assign. When you are assigning a plan to a lender or third party originator, this type of plan would not be available to assign to them. Note, if you select Both for the Loan Officer/Broker Value, the plan will be available to assign to loan officers lenders, and third party originators.

4. In the Trigger Basis field, type the Encompass field ID of the field that Encompass will use to determine which compensation plan to apply. By default, the Application Date (field ID 745) is used, but you can enter the field ID for any date field in Encompass.

   • When assigning a compensation plan to an originator (later in this process), you will need to provide a start date for the plan (i.e., the date that the plan will go into effect). With that in mind, you also need to identify a Trigger Basis field which is the date field Encompass uses to determine the compensation plan to apply to the originator. When the date entered in this date field is the same or later then the start date for the plan (and the date occurs before the plan’s end date if one exists), the plan will be applied to the originator.

   For example, let’s say you set the start date of a plan as 06/12/2015 and the Trigger Basis field being used is 745 which is the Encompass field ID assigned to the Application Date field. With these settings in place, the compensation plan will go into effect for the loan when the Application Date entered for the loan is 06/12/2015 or later.

    The date field specified here applies to all compensation plans. If you change the Trigger Basis field after compensation plans have already started (and have not ended), the new date field will be used for those plans and all other compensation plans going forward.

    Some users may want to use a different Trigger Basis field for loans in different loan channels. For example, they may use one Trigger Basis field for loans in their Banked-Retail loan channel and use a different Trigger Basis field for loans in their Banked-Wholesale loan channel. This can be accomplished by creating and using a custom field. When creating the custom field, a calculation would be required with logic that explains something to the effect of If "Banked-Retail" = copy this date [date field] to the Trigger Basis field; If "Banked - Wholesale" = copy this date [date field] to the Trigger Basis field.

5. Type the minimum number of days in which this plan will be in effect in the Minimum Term # Days field. Note that this term will not start until the plan is activated and assigned to a loan originator.
• If an administrator tries to assign a different compensation plan to the originator before the minimum term of days is reached, a warning message is displayed that informs the administrator that the start date for the new plan occurs prior to the "earliest change date" (i.e., prior to the minimum term of days being reached). The administrator can then continue to assign a different plan or cancel the operation.
6. For the Loans to be Exempt option, select the type of loans for which LO Compensation will never be applied: HELOC and/or Investment Property.

7.  LO compensation plans will never be applied to loans in your Correspondent loan channel, nor to loans where broker compensation is being paid by the borrower.

7. To round the compensation amount to the nearest dollar, select To Nearest $ from the Rounding dropdown list.
8. The Lender Paid/Borrower Paid/Exempt option applies to the LO Compensation tool itself, not compensation plans. Here you can select an option from the dropdown list to indicate the default value that will display in the Borrower / Lender Paid field (field ID LCP.X1 in the Compensation Plan Details section) every time you open the LO Compensation tool: Lender Paid, Borrower Paid, or Exempt. The Borrower / Lender Paid field on the LO Compensation tool indicates who is paying the broker compensation or if the loan is exempt and an LO compensation plan is not being applied.
9. Click the Save icon.

To Create an LO Compensation Plan:

1. On the menu bar, click Encompass, and then click Settings.

2. In the left panel, click Tables and Fees, and then click LO Compensation.

3. To create a new compensation plan, click the New icon.

   • If you configured Default Plan Settings, the corresponding fields will be auto-populated accordingly in the LO Comp Plan Details window. You may edit all of these default values except for the Trigger Basis field. To edit the Trigger Basis field, you must do so in the Default Plan Settings section.

4. In the LO Comp Plan Details window, type a Name and Description for the plan.

5. Using the Loan Officer/Broker Value dropdown list, indicate to whom the compensation plan will apply: loan officers, brokers, or both.

   • This setting helps determine which plans will be available to assign to different originators. For example, let’s say you select Loan Officer here. Later on, when you are ready to assign a plan to a loan officer, only plans that have been identified as Loan Officer plans will be available to assign. When you are assigning a plan to a lender or third party originator, this type of plan would not be available to assign to them.

   • Note, if you select Both for the Loan Officer/Broker Value, the plan will be available to assign to loan officers, lenders, and third party originators.

6. Type the minimum number of days in which this plan will be in effect in the Minimum Term # Days field. Note that this term will not start until the plan is activated.

   • If an administrator tries to assign a different compensation plan to the originator before the minimum term of days is reached, a warning message is displayed that informs the administrator that the start date for the new plan occurs prior to the "earliest change date" (i.e., prior to the minimum term of days being reached). The administrator can then continue to assign a different plan or cancel the operation.

7. To round the compensation amount to the nearest dollar, select To Nearest $ from the Rounding dropdown list.

8. Use the % Amount field and the associated dropdown list to indicate the percentage of the total loan amount the plan will pay or to indicate the percentage of the base loan amount the plan will pay.

    Encompass always calculates LO compensation based on the total loan amount (field ID 2). If you choose to base your plan on the base loan amount (field ID 1109), the compensation percentage and flat charge populated to the Broker Compensation line in section 801 of the 2010 or 2015 Itemization will not match the corresponding values in the LO Compensation tool. Instead, these values are adjusted so that the total compensation amount being paid to the broker is the same on the 2010 or 2015 Itemization and the LO Compensation tool. For information about adjusting the values on the 2010 or 2015 Itemization to match the values in the LO Compensation tool, refer to the 2010 Itemization or 2015 Itemization help topic.

9. Use the Minimum $ and Maximum $ fields to enter the minimum (floor) and maximum (ceiling) amount the plan will pay.

10. To update the Trigger Basis field, you must make the update in Default Plan Settings section.

     The Plan Users section lists the loan originators to whom this plan is assigned. If this is a brand new plan, no loan originators will be listed here. Once you assign the plan to a branch, loan officer, or broker, they will be listed on the appropriate tab.

11. At the top of the window, select the Active checkbox to activate the plan.

    • Once you activate the plan, the Activation Date is populated with the current date (i.e., “today’s date”). This value cannot be changed once the plan is activated. If you deactivate this plan, and then reactivate it, this date will remain unchanged and still reflect the original activation date.

     If you want to make changes to this plan after you click the Active checkbox, you must clear the Active checkbox and then make your changes. Once you activate a plan and assign it to an originator, you will not be permitted to make any changes to the plan.

12. Click Save.