Mortgage Brokers Comp in 2005-2008

I was recently watching this clip from The Big Short, and it was talking about how mortgage brokers were making right before the crisis. These salaries seem insane for being a normal mortgage broker. Are these massive 500-600k salaries accurate?

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Comments (6)

Sep 8, 2021 - 10:29pm

Seems right, if not more. Halfway decent ones were lending on shit and trading that shit for an even higher profit.

I know of some guys that were doing normal resi lending and then compiling and trading it for premiums. Making 10k per loan with origination and trade profits. Doing like 40-50 lone a month. Quick maths dictates 4.8-6M per year. Probs a bit overstated, but from how I've been told these stories they wouldn't bat an eye and originating this crap.

"No one cared everyone was making money and the borrower was getting what they wanted" -give or take what he said

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Sep 8, 2021 - 10:51pm

I was working in Florida at the time, saw a lot of this first hand (but did not personally participate unfortunately), but yes mortgage brokers and loan officers can and did make that kind of money. This is not "salaries", these are commissions and fees tied to closings. Before Dodd-Frank and other laws post-08 meltdown, it was A LOT more lucrative to be a mortgage broker. Between direct fees (points, often 1%), add-on charges (like $495 for "processing"), and yield spread premiums (payment from lender based on borrower taking certain terms/rates, could be 2% up to 5%), these people could make a fuck ton on a single resi mortgage. Especially if they didn't mind fucking over their clients (and most did or were somehow to dumb to realize....). 

I knew some very unimpressive people making take-home of $15k to $30k a month, and these are not like the worlds best sales people. The top 10% probably cleared above $1 million from like '04 to '06 (it starts dying in 07).  

Best part... you just needed to be able to sell. You could be a "loan officer" without a license (made more if you were a lic. mortgage broker though), didnt even need to graduate high school. This changed, now they all need licenses, wayyyy more regulated. But yes, that was the wild times of the pre-08 real estate world. Realtors have similar stories. Different times today!!

Sep 8, 2021 - 11:14pm

It's still a fee based/commission based gig, so all about sales and closings. The front end and back end fees are now limited by law and required to be disclosed to the borrower, and the exotic type mortgages went extinct and/or made illegal. So, I think they can make like 1-2% plus some random fees, not totally sure to be honest.

Still, top producers are high six figure and seven figure earners for sure, but not so easy (and have to do it with large loans!!!). Go watch one of these Million Dollar Listing shows, the mortgage broker fees are probably comparable to the broker fees (well prob a bit lower). The legit productive ones I'd guess are all six figure earners to varying degrees.  

Sep 8, 2021 - 11:09pm

Crazy money at the time considering residential real estate has doubled/tripled depending in the area since 07 now. 

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