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Mortgage Loan Originator (MLO)
A mortgage loan originator, previously known as a loan officer, is critical in aiding borrowers in one of the most important financial decisions they will ever make - purchasing and refinancing their home. As a mortgage finance consultant, the MLO negotiates the terms of the loan, quotes rates and executes the residential mortgage loan application. A MLO is compensated on a partial or full commission basis generally based on the principal amount of the loan. A MLO that works for a bank or depository institution is referred to as a Registered MLO and a MLO that works for a non-depository institution such as a mortgage broker or lender is required to be licensed as s State Licensed MLO. Both categories of loan originators must be registered through the Nationwide Mortgage Licensing System and Registry ( NMLS&R), a national regulatory and licensing system. The NMLS system will issue each registrant an identification number called a “Unique Identifier Number.”
There is no experience requirement to become a MLO: however, there are specific background checks, financial responsibility standards, pre-license education and testing requirements that must be achieved before a license to originate as a State Licensed MLO can be issued. It is now a civil, and in many instances a criminal violation, to originate residential mortgage loans without being registered through the NMLS& R and/or be state licensed. Having the required knowledge of the industry, including products, programs, compliance and other related areas plus a commitment to customer service is a prerequisite to success.
Loan Processor
A mortgage loan processor plays a critical role in validating all supporting documents and preparing the loan file for underwriting. Loan processors are tasked with the responsibility of preventing fraud and protecting the mortgage company and the MLO. Attention to detail, excellent follow-up skills and outstanding customer service skills are necessary to be a successful loan processor.
Loan processors must have a complete understanding of the mortgage process and general underwriting guidelines for different types of mortgages. Loan processors generally work inside the mortgage company providing critical support needed to have successful loan closings. Some processors work independently and contract their services to multiple mortgage companies. These independent processors must also be registered with the NMLS system and licensed as State Licensed Mortgage Loan Originators.
Mortgage Broker/Banker
A mortgage broker/banker is generally a licensed individual or entity working under a specific state license or licensed in numerous states. Mortgage brokers are able to work under their own business entity either as a sole proprietor, limited liability company (LLC), partnership or corporation. They can hire employees and thus generate earnings from their own efforts and their employees' production.
The benefit of becoming a mortgage broker is the ability to work with numerous banks and institutional lenders providing many financing options for clients. Additionally, as a mortgage broker, all the broker compensation comes directly to the broker and does not have to be shared. The broker also generates earnings on the production of mortgage loan originators working for the broker.
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