Broker Compensation Overview

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_{Paid by either the Borrower or the Lender, but not}

both.

Lender paid compensation is:

▪ Calculated as a percentage of the loan amount according to the

Compensation Agreement

▪ A Fixed Percentage that cannot vary by transaction

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_{Borrow paid compensation:}

▪ Can vary based on transaction

_{Borrower Credits Available for both Borrower and}

_{Borrower Credits– Available for both Borrower and}

Lender paid comp plans

Borrower credit may be used to pay closing costs and pre‐

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Broker negotiates directly with the borrower

_{Compensation can vary from one transaction to}

another.

_{Broker may not receive compensation, directly or}

indirectly, from any person other than the borrower in

the transaction.

Borrower may use a Borrower Credit to pay closing

costs and pre‐pay items, but may not pay broker fees.

When borrower paid compensation is selected brokers can

When borrower paid compensation is selected, brokers can

never receive compensation from CountryPlace.

_{Brokers may not credit their compensation for any}

reason including curing RESPA tolerance issues

reason, including curing RESPA tolerance issues.

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Compensation can be paid in cash by the borrower,

paid by the seller or financed through the loan

proceeds if allowed by investor guidelines

proceeds, if allowed by investor guidelines.

Seller concessions may be used to pay broker’s

compensation, provided it is not prohibited by the

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sales contract.

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Discount Ch /

Compensation

$100,000 Loan Amount

1.50% origination fee

Rate Price Charge/ Borrower Credit 3 750% 97 80 2 20

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$500 processing fee

Total compensation=$2,000

3.750% 97.80 2.20 3.875% 99.20 0.80 4 000% 100 50 -0 50

Pricing Examples

3.75% rate: Borrower pays 2.20%

discount

4.000% 100.50 0.50 4.125% 101.50 -1.50 4.250% 105.70 -5.70

discount

4.25% rate: Borrower receives 5.70%

Borrower Credit towards closing

costs and/or pre pay items

4.375% 106.50 -6.50 Note: Borrower Credit can

costs and/or pre‐pay items

_{never be used to offset broker}

(6)

_{Compensation percentage is selected in advance}

Must have an executed Compensation Agreement with CountryPlace

CountryPlace’s compensation levels vary from 1.5% to 4.0% in .50%

point increments

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Compensation levels must remain in effect for a minimum of 6

months.

_{Compensation is a percentage of the loan amount}

_{Broker cannot collect any other compensation from any other}

party (such as borrower or seller) including:

Underwriting fees

Administrative fees

Processing fees –

A processing fee can be charged outside of broker compensation only if its a bona fide 3rd_{party with no affiliation. Paid directly to} the processor or processing company through closing. Broker must provide evidence they paid in full in order to receive direct payment.y p f p y

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Borrower can use Borrower Credit to pay closing

costs and pre‐pay items

Seller can contribute funds towards third party fees

based on the sales contract

Seller cannot contribute to broker compensation

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Broker cannot reduce compensation or give credits

for third party fees

Broker cannot charge revenue fees or origination

fees to the borrower

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Broker’s compensation amount cannot be

reduced for any reason, including:

Lock extension fees (must be paid by borrower)

Cure of a fee tolerance violation

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Compensation

B k Discount Ch /

Compensation

Broker selected to receive 2.0% per

Compensation Agreement

$100 000 Loan Amount

Rate Price Broker Comp Charge/ Borrower Credit 3 750% 97 80 2 00 4 20

$100,000 Loan Amount

Broker cannot charge any revenue

fees

Total compensation=$2 000

3.750% 97.80 2.00 4.20 3.875% 99.20 2.00 2.80 4 000% 100 50 2 00 1 50

Total compensation=$2,000

Pricing Examples

_{3 75% rate: Borrower pays 4 20%}

4.000% 100.50 2.00 1.50 4.125% 101.50 2.00 0.50 4.250% 105.70 2.00 -3.70

_{3.75% rate: Borrower pays 4.20%}

discount

4.25% rate: Borrower receives 3.70%

Borrower Credit towards closing

4.375% 106.50 2.00 -4.50 Note: Borrower Credit can

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costs and pre‐pay items

never be used to offset broker

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Lender Compensation does not allow brokers to reduce

_{Lender Compensation does not allow brokers to reduce}

compensation to cure problems such as:

_{Rate Lock Extensions}

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GFE

Curing costs in excess of 10.0% tolerance on GFE

High Cost APR or points and fees

Broker applications without correct initial disclosures

will not be accepted

Brokers may not credit their compensation for any

reason, including curing RESPA tolerance issues

If at any time the broker fails to choose a rate that

adequately covers the brokers compensation,

CountryPlace will cancel the application. A new

application and re‐submission will be required

application and re‐submission will be required.

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Ch k th

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f th GFE

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Check the accuracy and completeness of the GFE and

itemization of fees prior to submitting to

CountryPlace

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You may email

[email protected]

for review prior to submission

Lock for a realistic timeframe to avoid lock extensions

Ensure accuracy and completeness of loan processing

prior to submission to CountryPlace. Incomplete loan

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submissions cause multiple underwriter reviews and

are the most frequent cause of delayed closings

Ensure third party fees are accurate

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Compensation type may change from Lender Paid

to Borrower Paid, or vice versa if an initial GFE has

not been provided to the borrower

If the GFE has been provided to the borrower, the

borrower must submit a signed, written request

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that includes the reason for the change.

For example, the borrower may wish to change from

Borrower Paid to Lender Paid in order to bring less money

to closing in exchange for a higher rate

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Must be paid by the borrower

Lock extension fees must

Reduce the Borrower Credit or

Reduce the Borrower Credit, or

_{Increase the Discount point}

_{Written Agreement must explain that the borrower is}

responsible for lock extension fees

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Borrower Paid Lender Paid Borrower Paid Lender Paid

Source of Compensation Paid by the Borrower from their own funds to CountryPlace pays the compensation directly to o t e o u ds to the broker; either cash at closing, from loan proceeds, or seller i co pe sat o d ect y to the broker concessions

Compensation Amount Compensation may vary per loan based on negotiations with the Compensation will be paid based on percentage of loan amount and range negotiations with the borrower. Must comply with high cost loan requirements loan amount and range from 1.5% to 4.0%

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Borrower Paid Lender Paid Borrower Paid Lender Paid

Broker Concessions Broker may lower

compensation or offer credits toward 3rd_party

None credits toward 3 party

costs

Borrower Credit May be used to pay CountryPlace fees (i.e. May be used to pay CountryPlace fees (i.e. y admin fee, underwriting fee, extension fees, etc.) Cannot be used to pay any portion of the y admin fee, underwriting fee, extension fees, etc.) Cannot be used to pay any portion of the broker’s any portion of the broker’s compensation portion of the broker s compensation

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Block 1: Equals the total compensation paid to the

broker, either by the lender or borrower plus

CountryPlace fees (admin underwriting etc )

CountryPlace fees (admin, underwriting, etc.)

Block 2: Equals the net amount of borrower discount

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points or Borrower Credit plus any credits for Lender

Paid Compensation.

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Block 2 can change in the event of a valid Change of

Circumstance, including:

_{Initial rate lock}

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Rate lock extension

Borrower Pricing changes

Change of loan characteristics that affects pricing (i.e. discount

points)

Block 1 fees CANNOT change, even with a Change

of Circumstance

Exception: If the loan amount changes and a portion

of the “Origination Charge” is a percentage of the

loan amount or the overall loan program changes

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11 2 1 2 1 Block 1 will be calculated as follows: ⁺ Broker Origination Fee ⁺Broker processing fee 1 Block 2 will be calculated as follows: ‐Borrower Credit, or 2 1

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11 2 1 2 1 Block 1 will be calculated as follows: ⁺ Lender Paid Compensation ⁺CountryPlace underwriting fee/admin fee 1 Block 2 will be calculated as follows: ‐ Lender Paid Compensation d 2 1 ‐Borrower Credit, or + Discount Points

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Discount Ch /

Compensation

$100,000 Loan Amount

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1.5% origination fee

$500 processing fee

_{Total compensation=$2 000}

3.750% 97.80 2.20 3.875% 99.20 0.80 4 000% 100 50 -0 50

_{Total compensation=$2,000}

Pricing Examples

4.000% 100.50 0.50 4.125% 101.50 -1.50 4.250% 105.70 -5.70

3.875% rate: Borrower pays

0.80% discount =$800

4.375% 106.50 -6.50

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1 $3 200 1 2 $3,200 $ 800 $ 800 x 800 3.875 Block 1 will be calculated as follows: ₁ ₁ ₂ $4,000 Block 1 will be calculated as follows: $100,000 Loan Amount 1.5% origination fee $500 processing fee 6 C t Pl d i f 1 Block 2 will be calculated as follows: + Discount Points $800 2 1 $650 CountryPlace admin fee $550 CountryPlace underwriting fee Total fees=$3,200

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Discount Ch /

Compensation

$100,000 Loan Amount

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ti

f

1.5% origination fee

$500 processing fee

_{Total compensation=$2 000}

3.750% 97.80 2.20 3.875% 99.20 0.80 4 000% 100 50 -0 50

_{Total compensation=$2,000}

Pricing Examples

4.000% 100.50 0.50 4.125% 101.50 -1.50 4.250% 105.70 -5.70

4.00% rate: Borrower receives

0.50% borrower credit =$500

4.375% 106.50 -6.50

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1 $3 200 1 2 $3,200 $ (500) x 5005 4.0004 _$ (500) Block 1 will be calculated as follows: ₁ ₁ ₂ $2,700 Block 1 will be calculated as follows: $100,000 Loan Amount 1.5% origination fee $500 processing fee 6 C t Pl d i f 1 Block 2 will be calculated as follows: ‐ Borrower Credit $(500) 2 1 $650 CountryPlace admin fee $550 CountryPlace underwriting fee Total fees=$3,200

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Broker Discount Charge/

Compensation

Broker selected to receive 2.0%

per Compensation Agreement

Rate Price Broker Comp Charge/ Borrower Credit 3.750% 97.80 2.00 4.20

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$100,000 Loan Amount

_{Broker cannot charge any revenue}

fees

3.875% 99.20 2.00 2.80 4.000% 100.50 2.00 1.50

fees

Total compensation=$2,000

4.125% 101.50 2.00 0.50 4.250% 105.70 2.00 -3.70

Pricing Examples

3.875% rate: Borrower pays

2 80% discount = $2 800

4.375% 106.50 2.00 -4.50

2.80% discount = $2,800

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1 $3 200 1 2 $3,200 $ 800 $ 800 x 800 3.875 Block 1 will be calculated as follows: 1 ₁ 2 $4,000 Block 1 will be calculated as follows: Broker selected to receive 2.0% per Compensation Agreement $100,000 Loan Amount 6 C t Pl d i f 1 Block 2 will be calculated as follows: + Discount Points $2,800 ‐Lender Paid Compensation $2,000 l 2 $650 CountryPlace admin fee $550 CountryPlace underwriting fee Total fees= $3,200 Total = $800

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Compensation

Broker selected to receive 2.0%

per Compensation Agreement

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$100,000 Loan Amount

_{Broker cannot charge any revenue}

fees

3.875% 99.20 2.00 2.80 4.000% 100.50 2.00 1.50

fees

Total compensation=$2,000

4.125% 101.50 2.00 0.50 4.250% 105.70 2.00 -3.70

Pricing Examples

4.000% rate: Borrower pays

1 50% discount = $1 500

4.375% 106.50 2.00 -4.50 Note: There is a discount not a

1.50% discount = $1,500

Note: There is a discount not a

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1 $3 200 1 2 $3,200 $ (500) x 500 4.000 _$ (500)

Block 1 will be calculated as follows: 1 Block 2 will be calculated as follows:_Di _{t P i t}₁ 2 $2,700 Block 1 will be calculated as follows: Broker selected to receive 2.0% per Compensation Agreement $100,000 Loan Amount 6 C t Pl d i f 1 + Discount Points $1,500 ‐Lender Paid Compensation $2,000 Total = $(500) Note: When discount is less than $650 CountryPlace admin fee $550 CountryPlace underwriting fee Total fees= $3,200 compensation plan a credit is created on the GFE; however there is not a

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B k C

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Broker

Discount Charge/