Define Broker Commission Hierarchy for Lending Product

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Define Broker Commission Hierarchy for Lending Product

A broker is an intermediary between the borrower and lender in transactions or commercial negotiations, who takes commission for any loan contract signed between the two parties, but does not own any stake in the contract. Usually, a percentage of the value of each transaction is charged as commission. The broker may be an individual, or a business or other institution. For information on creating a broker and assigning the broker to a loan contract, refer to section Assigning a Broker to a Loan Contract.

The mapping of brokers to contracts is created in the broker commission hierarchy. Multiple broker needs to be there to create the hierarchy. Different commission plans need to exist for different broker levels. The amount that is due for each broker is determined by the broker's level and corresponding commission plan. 

When the broker commission payout happens, each broker's commission amount is calculated as per the broker's level in the commission hierarchy. For example,  broker at level 1 gets the highest commission amount of a flat amount of 100, level 2 may get 50 and so on. Or, you may set up the reverse model where broker at level 1 gets the lease commission. The criteria for determining broker levels is outside of Cl Loan. Broker's hierarchy level is maintained but not determined in CL Loan.

To manage the Default Commission Hierarchy records without a lending product, refer to section  Default Commission Hierarchy. 

Prerequisites

The following is the prerequisite to defining the broker commission hierarchy:

  • A contact or account of type Broker is created.

  • Multiple brokers are created in CL Loan.

  • A default commission plan is created for the required broker levels.

Steps

  1. If you are not already in the lending product's page, navigate to it from Service Configuration, Product, Product Management, View/Edit Lending Products. Click on the required product to open the lending product's page. 

  2. Scroll down to the Broker Commission Hierarchy section.

  3. Click New Default Commission Hierarchy.

  4. Specify the Broker Level. This is the position of the broker in the broker hierarchy, with primary broker being at level 1, its parent broker at level 2, and so on.

  5. Select the loan Contract Type, for example, New or Refinance.

  6. Select the Default Commission Plan that applies to this broker level.

  7. The Lending Product is displayed by default. This field is editable in case you navigate to this page directly from the Servicing Configuration tab.

  8. Click Save. You can create multiple broker levels to define the hierarchy following these steps.