An issue arised with the mortgage co. owner ( Broker) in
Orange County, CA.
A loan was originated in Minnesota as a W2 in
7/2006 and now loan officer find outs the borrower is in default.They missed the 1st payment !!! "over 30 days late in 1st 120 days per the wholesale
lender." is a no-no with wholesale lenders & investors. !!

loan officer's next deal, loan originated in California , Dec. 2006, as a licensed 1099 DRE salesperson and the Broker is holding the commission because that older loan from Minnesota went into default with the wholesale lender. The wholesale lender has an executed agreement with the Broker that if borrower defaults in 1st 120 days, then the originating broker must repurchase the loan which is $870,000.

Can the Broker legally hold a separate & unrelated commission for this for so-called attorney retainer fees to fight against the wholesale lender.?

Broker has breached her contract,but now says loan officer agreed to hold her harmless, with her Indemnification Clause in the independent contractor agreement. it's hard to use indemnify AFTER you break the contract initially from not paying.
Loan officer talked to a few other mtg broker co. owners and they would do the same thing & said they would come after l.o, if wholesale lender came after them. Although they know l.o. does not have ability to repay or re-purchase that loan.

Moreover, l.o. did the Minnesota loan as a W2 originator

l.o was given the court documents from their broker as wholesale lender has proceeded to sue. Loan officer's name appears nowhere in this, only the (Broker) of record as she has the agreement with wholesale lender , not l.o.

With all the borrowers across the country going into foreclosure and I personally heard of many missing the 1st 2 mtg. payments, how many l.o.'s or mtg. company broker owners are liable ?
doesn't the mtg. co owner have some kind of fraud insurance for unscrupulous borrowers when this happens. I can't imagine an owner opening themself up to this kind of liability.
if it's obvious fraud OK by both parties, OK go get them, but there's no intent by l.o.

even more...the borrower was actually a mtg. co. owner.
borrower requested a SISA loan online....she said she made $25,000+ per month..OK, seems reasonable for a owner of mtg company since loan officer did a few other stated income deals for real estate co. owners earlier in the year in the same range....plus borrower got cash out of $30k. So, she, borrower, had the money, but obviously intended to do otherwise. Loan offcier had no knowledge of this.
In summary, the CA real estate commission is due to loan officer per DRE. the MN deal is a grey area.

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