The rules
Federal loan originator compensation rules prohibit paying loan officers based on a loan’s interest rate or terms, which reduces incentives to steer borrowers.
Who pays
Originators can be paid by the lender or by the borrower, but not both on the same loan.
Federal rules on loan originator compensation and what they mean for borrowers.
Anti-steering
Brokers must present options including the loan with the smallest interest rate and the one with the smallest total origination costs among options for which you likely qualify.
Where it shows up
Compensation appears on the Loan Estimate and Closing Disclosure.
No dual compensation
Under Regulation Z, a loan originator generally cannot be paid by both the consumer and another party, such as the lender, on the same loan.
No pay based on terms
Compensation cannot be based on a loan's terms, such as the interest rate. This rule is meant to remove incentives to steer borrowers into costlier loans.
Steering safe harbor
For brokered loans, the rule offers a safe harbor when the broker presents options from several lenders that include specified choices for each loan type.
Ask directly
You can ask a loan officer how they are paid and who pays them. The answer should be clear.
Check the license
Every loan originator should have an NMLS number you can look up before applying.
General education only; confirm current rules with official sources and a licensed lender.
Sources
Sources checked 10/23/2026.