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Residual Income for MLOs From Closed Home Loans
Is NEXA’s Mortgage Servicing Residual Income Program a Transformative Development, or is this Opportunity Replicable By Other Mortgage Brokers?
GCA Mortgage Forums Daily News – October 31, 2026
Currently, the mortgage industry is characterized by diverse perspectives. Loan originators, branch managers, broker owners, and retail executives each offer distinct perspectives on the industry’s status.
Some mortgage company executives are celebrating record growth and recruitment wins, but many individual loan originators are struggling to stay afloat.
This raises an important question: Are mortgage companies really doing well, or are some executives just making things look better while their loan officers continue to face challenges? Today, GCA Mortgage Forums Daily News examines two prominent industry figures: Thuan Nguyen of Loan Factory and Mike Kortas of NEXA Lending. This analysis explores NEXA’s widely discussed residual income program and evaluates whether comparable opportunities exist elsewhere.
Thuan Nguyen of Loan Factory: A Realistic Perspective on the Mortgage Industry
Thuan Nguyen, President and founder of Loan Factory, has built one of the better-known mortgage brokerages in the country. I have the utmost respect for Thuan Nguyen and certainly appreciate his willingness to talk about the problems facing the mortgage industry.
Nguyen is notable for his candor regarding the substantive challenges of mortgage origination. Achieving success in this field necessitates continual adaptation to fluctuating interest rates, constrained inventory, unpredictable demand, and evolving lender regulations.
Many mortgage professionals are seeing less work and more competition, making it harder than ever to earn a steady monthly income. Nguyen emphasizes that mortgage originators should not rely solely on the prospect of a future refinance boom to address current industry challenges. Mortgage companies might be expanding their market share, even as individual loan officers scramble just to boost their own numbers. These circumstances may coexist within the industry.
Mike Kortas and NEXA Lending: A Different Management and Recruiting Philosophy
Mike Kortas, founder of NEXA, has established a large mortgage origination organization and is widely known for his enthusiastic approach to recruiting and promotion. Kortas’s leadership and communication styles differ significantly from those of Thuan Nguyen. Kortas focuses on growth, celebrates recruitment wins, discusses compensation packages, and highlights the benefits of joining NEXA.
I prefer leaders who transparently address the financial challenges loan originators face, rather than focusing exclusively on positive recruitment messaging.
This does not imply that NEXA lacks successful loan officers. It is evident that certain NEXA mortgage originators generate substantial loan volumes and achieve significant earnings. However, even if the company’s overall numbers are up, that doesn’t mean every loan originator is benefiting from that success. NEXA’s new mortgage servicing initiative has attracted considerable attention by offering loan officers an additional stream of income.
What is NEXA’s Mortgage Servicing Residual Income Program?
NEXA announced a mortgage servicing initiative in March 2026 and subsequently launched evoLend, a separately managed mortgage servicing company. The goal is to unlock ongoing income through servicing, instead of tying an originator’s earnings solely to the moment a loan closes.
Traditionally, the mortgage broker gets paid on close of the mortgage. Once it’s funded, the wholesale lender or the other company that has been designated will either take on or pass on the servicing rights.
The mortgage servicer then takes over the day-to-day administration of the loan, which includes the collection of payments, the management of escrow accounts, the production of statements, and all other normal servicing functions. Mortgage servicing generates ongoing revenue for the company that holds the servicing rights.
How Mortgage Brokers Can Retain Servicing Rights
NEXA’s initiative is to develop arrangements in which servicing rights are managed via evoLend, and eligible participating loan officers can carry out servicing and borrower retention work.
In theory, this arrangement could provide loan officers with supplementary compensation in addition to their standard origination commissions.
However, it is important to separate NEXA’s public business plan from the actual residual income that loan officers have received. Public information does not yet show the average monthly residual income that NEXA loan officers actually earn.
How Much Residual Income Could NEXA Mortgage Loan Officers Potentially Earn?
Some of the NEXA promotional material has talked about the potential for compensation of circa $25 to $30 per eligible mortgage loan per month. Those numbers are marketing estimates, not guaranteed earnings.
For example, it is important to note that these figures represent marketing estimates rather than guaranteed earnings.
- The proposed model suggests $25 per loan each month.
- That would be $2,500 a month, or $30,000 a year, provided, of course, that every loan remains eligible and continues to make payments throughout the year.
- An originator with 200 qualifying active loans could in theory be producing $5k per month under the same assumptions.
- These examples illustrate why experienced mortgage professionals may find this concept appealing.
- Mortgage loans are often refinanced, paid off, sold, or moved between servicers.
- There may also be rules about who qualifies, changes to payments, servicing costs, and contract requirements.
Does Residual Income Continue If MLOs Leaves Mortgage Broker and Joins Another Lender?
It is essential for loan originators to determine whether residual income will persist after their departure from the company.
You can’t understand the program’s long-term value without reviewing the written pay agreement and the actual payments. Mortgage servicing rights (MSRs) give the holder the right to manage a mortgage loan for payment.
When the borrower pays, the servicer collects and handles the payment for the loan investor. Servicing companies can earn ongoing fees for managing the mortgage.
However, servicing income is not all profit, as servicers incur costs such as staff, technology, customer service, legal compliance, escrow, and late-payment handling. The value of mortgage servicing rights changes with interest rates, how quickly loans are paid off, and how well the mortgages perform. So, a mortgage company can’t simply promise a fixed share of servicing income to every loan officer without considering the real costs and pay rules.
Is NEXA the Only Mortgage Broker That Can Offer Residual Income From Mortgage Servicing?
No. There is no federal law. There is no federal law giving NEXA exclusive rights to offer mortgage-servicing-related pay for loan originators. NEXA may be one of the few publicly promoting this idea, but other mortgage companies could create similar programs. The key is to build a business plan that makes financial sense and follows the law.
Mortgage servicing rights don’t automatically belong to the broker just because the broker originated the loan through a wholesale lender.
A broker must negotiate the servicing deal, set up a servicing company or partnership, and decide how loan originators get paid. This is more than just announcing a residual income benefit for recruiting.
Still, this business chance is not unique to NEXA. Could Barrett Financial, Loan Factory, Edge Home Finance, Coast 2 Coast Mortgage Lending, and C2 Financial offer similar programs? This is what makes the topic of mortgage servicing so interesting. These established mortgage brokerages all have relationships with wholesale lenders. Explore whether their wholesale lending relationships would support mortgage-servicing partnerships or other compliant, recurring compensation arrangements.
Case Scenario Where Mortgage Broker Retains Servicing Rights and Collects Residual Income
For example, Loan Factory could assess the viability of bringing mortgage servicing in-house onto its existing technology-driven mortgage platform. Barrett Financial and Edge Home Finance could explore partnerships that let eligible loan originators offer important borrower retention or servicing services. Coast 2 Coast Mortgage Lending could assess whether a servicing partnership would create additional pay opportunities for its loan originators while maintaining its current mortgage broker model.
C2 Financial could consider similar options through its wholesale lender relationships or independent servicing partnerships. Independent mortgage brokers might also join through third-party servicing companies without needing to create their own mortgage servicing firm. However, none of these possibilities should be interpreted as confirmation that these companies currently offer an identical program. The bigger question is whether wholesale lenders, servicers, and mortgage brokerages can create a deal that benefits everyone financially. If NEXA figures out a sustainable compensation model, other companies will likely try to do the same.
Can a Mortgage Loan Originator Legally Receive Residual Income from Mortgage Servicing?
Mortgage loan originator pay is controlled by federal and state laws. The CFPB administers the federal loan originator compensation requirements under Regulation Z. Those rules usually forbid any pay based on the terms of a mortgage loan or things that stand in for those terms, except for some regulatory exceptions.
Federal regulations also address compensation in relation to the long-term performance of mortgage loans. However, that does not mean every recurring payment related to mortgage servicing is automatically allowed.
The Real Estate Settlement Procedures Act (RESPA) also bans improper referral payments and fees that are not earned. The act is assessed in terms of its actual contractual structure, the services it covers, and the relevant federal and state requirements. For example, paying a properly authorized person for real servicing work is very different from paying an originator just for sending mortgage business to a company.
Paying NMLS Licensed MLOs for Servicing and What Happens if MLO Leaves Mortgage Broker and Works at Another Mortgage Company?
A mortgage broker considering this model should get a legal and compliance review before proceeding. The same advice applies to any mortgage loan originator reviewing a proposed servicing pay agreement. Regarding residual income, what occurs when a mortgage loan officer leaves NEXA? This is one of the most important questions mortgage loan originators should ask before joining any company that offers recurring servicing income.
Suppose an MLO originates 150 qualifying mortgage loans whilst working for NEXA and then commences to receive their monthly compensation in respect of those loans.
What if the originator resigns, retires, becomes disabled, or moves to another mortgage company?
Does the loan officer get paid?
Does the monthly payment cease immediately on termination of employment?
Does the loan officer have any contractual interest in the servicing income?
Can the compensation arrangement be transferred or inherited?
These questions cannot be answered clearly without reviewing the underlying contracts.
MLOs should never assume they own any part of the mortgage servicing rights just because a company advertises residual servicing income.
The difference between true ownership, contract pay, and ongoing employment payments is very important.
Sharing Program Is Different From Its Mortgage Servicing Initiative
Another key issue is the difference between NEXA’s recruitment-related revenue-sharing and its new mortgage-servicing initiative.
NEXA has launched a revenue-sharing scheme for recruitment and organization production.
The evoLend initiative involves a distinct potential source of compensation tied to mortgage servicing or borrower retention activities.
The two programs should not be confused.
Revenue sharing for recruiting more originators does not constitute ownership of the mortgage servicing rights. In the same way, getting recurring servicing pay does not mean a loan officer owns the mortgage loans or the servicing portfolio. Loan officers should know exactly where their commission payments come from and what conditions they need to meet to earn them.
Is NEXA’s Mortgage Servicing Program a Real competitive Advantage?
Potentially, yes. If NEXA can show that the participating loan officers actually receive a meaningful residual, the scheme could be a real advantage for recruitment and retention. Naturally, mortgage loan officers want a pay structure that lets them build real, lasting financial security. A well-designed compensation scheme is not in itself a proven program.
The mortgage industry should evaluate NEXA’s initiative based on verified performance, sustainable economics, transparent agreements, and regulatory compliance.
If NEXA’s program is a financial success, other mortgage brokerages will no doubt take note and want to follow a similar model. In the end, competition might just work in favor of mortgage originators, pushing companies to find new ways to reward production, service, and lasting client relationships.
Why Mortgage Companies Should Focus on Loan Officer Profitability Rather Than Recruiting Numbers
One of my biggest concerns about the mortgage industry is the emphasis that some organizations place on getting a very large number of mortgage loan originators. Growth matters, but recruitment numbers alone never tell the whole story.
A mortgage brokerage might add hundreds of licensed originators, while many existing loan officers continue to struggle to close enough loans to earn a reasonable income.
A company’s financial performance and the financial position of the individual loan officers within it are not necessarily the same.
Mortgage executives should be ready to discuss average production, real earning potential, actual costs, and what it takes to survive in this tough market. A top mortgage producer equips its originators with competitive pricing, fast processing, reliable technology, strong underwriting, and practical training. Extra pay opportunities, like servicing income, are a nice bonus but cannot replace the basics of a strong loan origination business. Ultimately, the MLO needs to produce consistently and earn enough to support themselves and their family.
What Should Mortgage Loan Originators Be Asking Before Joining a Company That’s Offering Residual Income?
Mortgage loan officers should ask for a complete written explanation of how any residual pay plan works. They should find out which loans qualify, how monthly payments are calculated, whether payments depend on staying employed, and whether payments continue when the borrower refinances or pays off the loan.
They should also ask if the company has already paid servicing-related compensation and if proof of actual payments is available.
Most importantly, loan officers should know if they are getting contract pay, employee pay for servicing work, or actual ownership of mortgage servicing rights. They should also consider the future value of the arrangement. A persuasive recruiting message cannot substitute for a comprehensive, enforceable contract.
Final Thoughts: Could Mortgage Servicing Residual Income Become the Next Major Trend?
I respect Thuan Nguyen of Loan Factory for highlighting the challenging, competitive realities mortgage loan originators face daily. I also believe Mike Kortas deserves recognition for pursuing new business opportunities through NEXA’s mortgage servicing initiative, even though I have a different perspective on the leadership and recruiting messages I prefer to hear from mortgage executives.
If NEXA successfully implements a transparent, compliant, and financially sound servicing compensation program, it could represent a significant advancement for mortgage loan originators.
However, I do not believe this opportunity must remain exclusive to NEXA. There is no compelling reason to assume that Barrett Financial, Loan Factory, Edge Home Finance, Coast 2 Coast Mortgage Lending, C2 Financial, and other independent mortgage brokerages are precluded from exploring similar arrangements.
The real challenge is finding the right service partners, negotiating workable deals, and complying with compensation rules. Loan originators deserve a clear view of their earning potential, not just big promises about endless income and growth.
The most successful future mortgage companies may not be those with the largest number of recruits, but rather those that enable originators to achieve consistent production, maintain client loyalty, and develop new income streams. NEXA’s servicing program warrants further examination. Its true impact will be demonstrated by measurable outcomes rather than recruitment claims.
Join the Discussion on GCA Mortgage Forums
We would love to hear from mortgage loan originators, branch managers, mortgage broker owners, wholesale account executives, and mortgage servicing professionals.
- Do you believe mortgage loan originators should be eligible to earn recurring compensation associated with the mortgages they close?
- Would you consider joining a mortgage company offering a documented residual servicing income program?
- And should mortgage brokerages such as Barrett Financial, Loan Factory, Edge Home Finance, Coast 2 Coast Mortgage Lending, and C2 Financial investigate similar opportunities for their originators?
- Most importantly, if you are currently participating in a mortgage servicing residual income program, we would appreciate hearing about your actual experience, how compensation is calculated, and whether it continues after you leave the company.
- Share your experiences and professional opinions at GCA Mortgage Forums.
Editor’s Note:
This edition of GCA Mortgage Forums News contains industry commentary and publicly reported information available as of October 31, 2026. Hypothetical compensation examples are illustrative and are not representations of guaranteed earnings. Company leadership opinions are editorial perspectives, not independently established findings about individual originators’ profitability.
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