NACA S RESULTS COMPENSATION PROGRAM (NRCP) NACA s Purchase Program attracts large numbers of homebuyers with what has been established as the Best Mortgage in America. The NACA mortgage requires no down payment (i.e., 100% loan-tovalue), no closing costs, no fees, no consideration of credit score, flexible credit requirements, and likely the lowest below market 30-year or 15-year, fixed interest rate (for the current rate, go to our website at www.naca.com). NACA provides the same interest rate and mortgage terms for all mortgage applicants without consideration of their credit score. Virtually all Purchase Program loan applications are approved by participating lenders who have committed over $13 billion to the NACA program. The NACA mortgage and program are so superior that they require minimal marketing efforts. The NACA Results Compensation Program ( NRCP ) applies to NACA staff providing purchase counseling. The NRCP is designed to provide significant compensation for NACA employees while obtaining the best mortgage solutions for homebuyers with a primary focus on assisting low and moderate income people and communities. NACA provides an instant pipeline of homebuyers without the need to generate leads. This allows the MC or HC to be dedicated to counseling Members, and, when the Member decides to seek the NACA mortgage product, to assist them in securing a NACA mortgage. This NRCP sets forth certain job requirements, compensation criteria, and employment policies that apply to all NACA counseling staff. It is NACA s policy to comply with all applicable laws and regulations; thus, this NRCP will be adjusted to adhere to all such laws and regulations. I. POSITION DESCRIPTIONS: Counseling positions with NACA are the best jobs for people truly dedicated to providing professional counseling and mortgage services to those who are often the most exploited. NACA s programs require comprehensive counseling from the initial intake through the mortgage closing. A NACA counselor must be an advocate who provides comprehensive counseling and affordable outcomes. First and foremost, all NACA staff must provide professional services to our Members and must adhere to NACA s Policies and Procedures. Counseling activities include NACA Workshops and individual counseling sessions either face-to-face or via telephone. Employment with NACA also requires continued participation in NACA s advocacy, outreach, community organizing, and other activities as determined by NACA. Participation in NACA s confrontational advocacy campaigns and other activities is important in achieving NACA s mission of advocating for economic justice and expanding NACA s best in America homeownership programs. While these activities may impact an MC s or HC s compensation, they are crucial for NACA s continued success and for meeting NACA s mission and therefore they are an integral part of the job responsibilities. Job requirements and compensation are different for Mortgage Consultants and Housing Counselors with more specifics provided in the respective job descriptions. Mortgage Consultants (MCs) are counseling staff licensed in one or more states (note: licensure within the employee s state of employment is mandatory) as a Mortgage Loan Originator (MLO). MC s pending licensing are considered conditional MCs. Conditional MCs only receive the Base Pay, as stated herein, until they become licensed. Housing Counselors (HCs) are staff who are hired as counselors without the requirement that they become licensed as a Mortgage Loan Originator (MLO). II. COMPENSATION: Counselor compensation is results-based and tolerates no exploitation of Members to increase an MC s or HC s compensation. There is additional pay for achieving performance standards, but no pay for items that are not in the best interest for the Members, such as additional fees or costly products. The NRCP (Ver. 15.1) Page 1 of 6
compensation plan is structured to provide both Base Pay and Performance Pay. The Base Pay ensures that an MC or HC receives a minimum cash-flow each pay period to compensate for outreach and service to NACA s advocacy campaigns and other activities that may reduce the time available for obtaining Performance Pay. It is expected that the overall compensation will significantly exceed the Base Pay with Performance Pay. Overtime is paid for all hours worked in excess of 40 hours in a week, or as otherwise required by state law. In addition, Base Pay may be increased to meet minimum requirements of government hiring and training programs. Performance Pay is increased for overtime during the week the closing occurred. An MC must be actively employed at the time of the loan closing to receive Performance Pay as stated below. The benefit calculation for Personal Time Off ( PTO ) for MCs and HCs is $12.00 per hour (or greater if required by law). NACA compensates MCs and HCs for their results by providing Performance Pay for each Purchase Program loan that closes (Closed Loan) where the MC has counseled the Member according to NACA s Policies and Procedures. Performance Pay is also significantly higher for Targeted Members. Targeted Members are low and moderate income individuals and communities. Low to moderate income Members need the NACA program the most since they are often overlooked, exploited or rejected by lenders. Priority areas are neighborhoods and communities with the greatest need for stabilization. NACA is committed to providing at least 70% of its mortgages to low and moderate income individuals and communities. Targeted Members: Members earning 80% or less of the Metropolitan Statistical Areas ( MSA s ) median income, Members purchasing in an area where median income is equal to or less than 80% of MSA s median income ( Priority Areas ), or Members who are self-employed are defined as Targeted Members. Non-Targeted Members: All other homebuyers. A. Mortgage Consultant: The MC counsels the Member throughout the home buying process. This includes the initial intake session, becoming NACA Qualified, submitting a mortgage application and closing on a home. The MC focuses on determining and documenting that a Member is ready for homeownership as well as determining the maximum affordable mortgage payment and purchase price to provide a reasonable opportunity for a Member to purchase a home in his/her desired community. The MC is the primary point of contact throughout the entire process including addressing lender conditions during the mortgage process. 1. Compensation: This NRCP is structured so an MC can earn an overall compensation of $65,000+ per year with the opportunity to make over $100,000 per year. This expectation is based on the MC closing between five (5) and ten (10) loans per month through the Purchase Program 1 which requires about twenty counseling sessions a week. a. Base Pay: The Base Pay for MCs is an hourly wage rate of $8.00, greater if required by law, plus any overtime ( Base Pay ). b. Performance Pay: MCs receive Performance Pay, after obtaining their MLO license, for each loan which they took the mortgage application and closed through NACA ( Closed Loan ). The Performance Pay will be reduced by payments to another staff person for qualifying the Member and as 1 This would include refinances when this product becomes available. NRCP (Ver. 15.1) Page 2 of 6
stated in the below Payment Adjustment Section. The vast majority of Member applications result in a loan closing. Purchase Program Closings Payment: Targeted Members: $800 per closed loan. Non-Targeted Members: $500 per closed loan. c. Bonus Payment: Bonuses are based on Closed Loans for a calendar quarter and are intended to reward staff for work that meets or exceeds performance expectations. NACA may, at its discretion, establish office bonuses that reward all the staff in an office for effective recruiting and counseling teamwork that increases NACA s overall success for that office. A bonus of an additional $100 for each Closed Loan for an MC who meets both of the following criteria for a calendar quarter: Closed Loans 18 or more, and; Targeted Members 70% of the Closed Loans are Targeted Members that the MC NACA Qualified. d. Performance Pay Adjustments: Performance Pay will be reduced by payments to other NACA staff including payments to an HC for qualifying that Member. In addition, Performance Pay may be adjusted or shared as determined by NACA management, in its sole discretion, due to: shared work; poor/ineffective counseling, poor origination; or lack of follow-up. NACA management may also determine to decrease or eliminate the Performance Pay if an MC s or HC s counseling or submissions were inaccurate, incomplete, or did not adhere to NACA s policies and procedures or other requirements. This includes, but is not limited to, instances where income was not calculated correctly or properly documented, late payments were not addressed, debts were not properly identified, etc. While this determination can occur at any time in the process, such counseling deficiencies are often identified in Purchase Program submissions for qualification, credit access or bank application. NACA s Underwriting Department reviews all submissions for compliance with NACA s policies. In addition, one of the main responsibilities of an MC is to follow-up with the Member once they are NACA Qualified through the closing. This includes maintaining Qualification by requalifying Members between 90 days and 120 days from when they were last NACA Qualified if they have not yet identified a property. When the Member executes a purchase contract with a NACA Qualification that is more than 180 days old, and the file has been assigned to the MC for at least 30 days, the MC s Performance Payment will be reduced by $100 or as NACA determines. NACA may change the amount of the Performance Pay at its sole discretion or as permitted or required by applicable law or regulation. 2. Licensing Requirement: NACA requires that applicants for a MC position have or will obtain a state Mortgage Loan Origination (MLO) license within 90 from the first day of employment (see license requirements below for details). During the initial 90-day period of employment, or until licensing, whichever comes sooner, NACA will consider the employee a conditional MC. Those without an MLO license must prepare for the state and/or federal exam(s), pass the state and/or federal exam(s), and meet state licensing criteria. California applicants must also obtain a Bureau of Real Estate Salesperson License (BRE Salesperson License). NACA provides considerable licensing assistance to applicants. NACA pays the costs associated with obtaining NRCP (Ver. 15.1) Page 3 of 6
the MLO license including study time, outside courses, support from NACA s compliance department, exam costs, and the costs of obtaining and maintaining the MLO license, including continuing education coursework. In addition, during the period from the first day of employment at NACA until passing the licensing exam (both federal and state as required), NACA pays a rate of $8.00 an hour (or greater if required by law) plus overtime. This wage reflects the considerable support NACA is providing such applicants with the expectation that they will be licensed in a relatively short period of time. Once the MC passes the federal and any required state MLO licensing exam he/she would begin the below Development Period and compensated as stated below. If an MC applicant is to work at a local office, at the time of employment, and is not a licensed MLO, his/her continued employment is conditioned on meeting the following two requirements: Passing the state and federal exam requirements within 21 days of hire date ( Exam Period ), and; Obtaining his/her MLO license within 90 days of hire date ( License Period ). An applicant is a Conditional MC until obtaining his/her MLO license at which time he/she becomes an MC. During the Exam Period the applicant will be able to study, prepare for, and take the exams. NACA will provide applicants with resource materials for the required elements of licensing and the opportunity to study while at work. The NACA Compliance Department will also assist in coordinating with coursework providers and testing site providers. Once an applicant has passed the exams, he/she must apply to the state licensing authority to complete the requirements to obtain an MLO license. This requires meeting all state and federal requirements including the applicable state credit and personal responsibility standards. These requirements may prevent or delay the applicant from obtaining an MLO license regardless of exam performance. All applicants should review their state requirements 2. NACA will not extend the Licensing Period to accommodate the need for extended time to meet these requirements. The NACA Compliance Department will assist in the completion of these requirements when necessary and possible, but it is the applicant s responsibility to meet all licensing requirements. It is important that the applicant begins working on the compliance requirements prior to beginning employment with NACA and throughout the Licensing Period. If an applicant in a local office does not pass the federal and state licensing exams within the first twenty-one days of employment, the conditional employment will be terminated. If the applicant passes the exams but fails to obtain the MLO license within the License Period, his/her employment with NACA will be terminated. NACA at its sole discretion may make exceptions to these requirements including, but not limited to, extending a time period, executing an earlier termination or retaining the applicant as an HC. An MC must keep his/her individual license active and in good standing with the NMLS system and the respective states in which the MC is authorized to conduct business and cooperate with the NACA Compliance Department at all times. 3. Development Period: NACA provides a Development Period for newly hired MCs during which they receive training and can develop a pipeline of Members they will work with to become NACA Qualified and to purchase a home. For an MC, the Development Period begins the week following when he/she passes the MLO exam requirements or the first day of employment if he or she is already licensed. 2 Found for each state at: http://mortgage.nationwidelicensingsystem.org/slr/pages/default.aspx. NRCP (Ver. 15.1) Page 4 of 6
The Development Period consists of 16 continuous weeks. A licensed MC can earn Performance Pay during the Development Period. Compensation during the Development Period is at a higher Base Pay of $12.00 per hour, (or greater if required by law) plus overtime. After completion of the Development Period, the Base Pay for an MC reverts to $8.00 per hour (or greater if required by law). NACA, at its sole discretion, may extend the Development Period if the MC shows determination, commitment and results but needs more time to be successful. This does not change the MC s at-will employment status or NACA s discretion to take action, including termination, at any time. B. Housing Counselor: The HC provides comprehensive counseling to qualify Members for mortgages ( NACA Qualification ). For some Members this can be achieved quickly while for others it may take several months or more. Since a HC is not a licensed MLO, he or she is limited in his/her job duties and must not take or submit a bank application or engage in other mortgage origination activities until he/she is fully licensed. 1. Compensation: This NRCP is structured so an HC can earn an overall compensation of $45,000 per year with the opportunity to make significantly more. This expectation is based on the HC qualifying at least five (5) Members per week through the Purchase Program 3 which requires about twenty counseling sessions a week. a. Base Pay: HCs are paid an hourly wage rate of $12.00 (or greater if required by law), plus overtime, if any. b. Performance Pay: An HC will be paid Performance Pay for Members he/she counsels to become NACA- Qualified. The NACA Underwriting Department reviews and makes the final determination that the NACA Qualification is the result of comprehensive and effective counseling reviewing the HC s assessment of homeownership readiness with a realistic purchase price for their desired area. The underwriters approve the qualification or require additional counseling or documentation. NACA Qualifications Initial: Qualification of a Targeted Member: $100 per NACA Qualified Member. Qualification of a Non-Targeted Member: $60 per NACA Qualified Member. NACA Re-Qualifications Is a Qualification after 180 days from the initial NACA Qualification. Only the first re-qualification qualifies for payment. Re-Qualification of Targeted Member: $50 per NACA Re-qualified Member. Re-Qualification of Non-Targeted Member: $30 per NACA Re-qualified Member. If a Member executes a purchase and sales contract on a property within the first 90 days from his/her initial NACA Qualification date and closes on the mortgage, the HC will receive $50 per such Closed Loan. c. Bonus Payment: Individual bonuses will be paid to HCs following the end of each calendar quarter for performance during the quarter: For HCs that qualify at least 50 NACA Members and 70% are Targeted Members, the bonus is an additional $15 for each NACA Qualified Member. 3 This would include refinances when this product becomes available. NRCP (Ver. 15.1) Page 5 of 6
III. ADMINISTRATION: Paychecks are issued bi-weekly, on Fridays. Each paycheck includes Base Pay based on time worked and Performance Pay based on triggering events (e.g., loan closings and NACA Qualifications) that occurred during the applicable period. The pay-period encompasses the two weeks (Sunday through Saturday). Payment is one week in arrears. Hours paid, including overtime pay, are based only on actual hours of work as reflected in the approved timecards in the Enterprise etime system from ADP. NACA staff are required to maintain their timecards in the ADP Enterprise etime system and to approve their timecards, according to NACA s Policies and Procedures. NACA reserves the right to use other tracking mechanism(s) or documentation methods to monitor work hours. IV. ADHERING TO NACA REQUIREMENTS: MCs and HCs must adhere to NACA s Policies and Procedures. This includes working effectively with all Members regardless of the complexity of a file and regardless of whether the Member is targeted or not. They must submit appropriate documents and accurately input data. MCs and HCs are not to undertake activities that violate NACA Policies and Procedures or undermine NACA s Member services or mission, including submitting inaccurate work, misrepresentations or referring Members to third-party service providers. No NACA counselor may participate in any real estate or mortgage activity outside of NACA. Under no circumstances may a MC or HC refer a Member to a real estate agent (whether or not they are associated with NACA), lender, vendor or individual unless approved in writing by NACA Management. NACA may impose disciplinary action at its discretion, including possible termination or the reduction or adjustment of compensation. NACA may also take legal action against an MC or an HC for misconduct, including referral for criminal prosecution for reasons including, but not limited to, charging Members for any services or receiving other compensation outside of that described in this NRCP. NACA provides extensive training and support for MCs and HCs. If an MC or HC voluntarily leaves NACA or is terminated for cause within the first year, the MC or HC is responsible for the cost of training and licensing, which may be deducted from pay or become payable to NACA after termination of employment with NACA as permitted by applicable law. NACA reserves the right to make unilateral changes to this compensation plan for all staff or on an individual basis as permitted by law. NACA may also change the compensation during campaigns, activities and events such as the American Dream events at its discretion and as permitted by law. This document is not intended to be a contract of employment. Nothing herein shall limit NACA in its sole discretion from terminating an MC or HC for any reason or no reason. All employment is at-will. ACCEPTANCE: I have read and understand the document as outlined above, and I agree that I am able to perform the duties and adhere to the requirements described above. Print Name Signature Date NRCP (Ver. 15.1) Page 6 of 6