Virginia Wholesaler Exits Channel, Citing LO 'Compliance Implications'

Southern Trust Mortgage Co. of Virginia Beach late last week told its loan brokers that it would exit the channel, citing what it calls "increasing compliance implications" tied to the Federal Reserve's new loan officer compensation rule. Instead of funding mortgages through loan brokers, STMC will concentrate solely on retail production.

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Last week a Federal court overturned a recent stay that would have temporarily blocked the Federal Reserve's new loan officer compensation rules, which dictate stricter terms on how independent third-party brokerage firms can be paid and how these firms pay their loan officers.