Of all the parties involved in a mortgage, one of the first people you'll probably talk to will likely be a mortgage loan originator, also known as a loan officer. In some cases, this person is a mortgage broker.
They are crucial in the mortgage process. Their primary role is to assist clients in finding the right mortgage. They assess each applicant's financial profile to recommend suitable loan options.
They're often paid on commission, meaning a percentage of the loan amount will go to the mortgage loan officer. This amount can come from one of two places: either the loan originator (like the bank or mortgage seller), or from a loan origination fee paid by the borrower.
A mortgage loan officer is just another name for an individual who has a mortgage loan originator license. Loan officers typically work for one institution, such as a bank or specialty mortgage lender (think Rocket Mortgage).
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The most popular types of mortgage originators are mortgage brokers and mortgage bankers. The creation of a mortgage is primarily carried out by a mortgage originator. They can be a mortgage broker, a mortgage bank, or even a retail bank.
As an MLO, you may be able to enjoy a flexible schedule, no cap on your earnings, and the opportunity to help people's dreams come true. Plus, because people will always need to buy places to live, you'll enjoy solid job security. It's worth noting, though, that mortgage loan originating is a highly regulated industry.
What is the Loan Originator Rule about? The Loan Originator Rule generally regulates how compensation is paid to a loan originator in most closed-end mortgage transactions, including: Prohibiting a loan originator's compensation from being based on the terms of the transaction or a proxy for a transaction term.
An originator is responsible for procuring grain from producers, growers and grain elevators. They maintain and grow business relationships by providing strong, credible and trustworthy services for producers.
Mortgage Loan Originators work with borrowers to initiate and guide them through the application process, while Mortgage Loan Underwriters assess the risk associated with the loan application and make lending decisions based on established criteria and regulations.
An origination fee is typically 0.5% to 1% of the loan amount and is charged by a lender as compensation for processing a loan application. Origination fees are sometimes negotiable, but reducing them or avoiding them usually means paying a higher interest rate over the life of the loan.
Mortgage loan originators help borrowers through the mortgage application process, from initial inquiry to closing. Their work can involve collecting your credit and financial information, assessing your needs and what loan options make sense for you, negotiating rates and submitting your application for underwriting.
Trying to do too much, not taking time away from work, or using outdated technology are some of the few reasons that loan officers burn out and turn to other career options.
The easiest way to remember the difference is that loan officers are almost always people while loan originators can be people or financial institutions. Another way to think of it is that a loan officer could be employed by a loan originator.
In general, mortgage originators make money through the fees that are charged to originate a mortgage and the difference between the interest rate given to a borrower and the premium a secondary market will pay for that interest rate.
Mortgage lending companies, mortgage brokers, and loan officers may be considered loan originators. The rules prohibit dual compensation and steering practices that do not benefit borrowers, as well as prohibit compensating loan originators based on the terms of a mortgage transaction.
The typical MLO is paid 1% of the loan amount in commission.
"It's one of the most flexible jobs out there," says Glover. "You can fit your schedule around client meetings, and most employers are supportive of you working from home, in my experience, that's been a common practice for loan officers even before the pandemic."
Mortgage loan officers get clients through networking, referrals, online marketing, and community engagement. Relationships with real estate agents, financial advisors, and past clients can generate referrals. Social media, email marketing, and educational workshops can also attract new clients.
As a mortgage loan originator, you have an in-demand career. According to the Bureau of Labor Statistics, the employment of loan officers is projected to grow by 8% from 2014 to 2024. Imagine never having to worry about not finding another job or losing the one you have.