A Mortgage Loan Originator is sometimes called an LO or loan officer, and it’s their job to determine which potential borrowers have enough credit to move onto the loan underwriting process. While these professionals handle a variety of loan types, this article will refer to them as mortgage loan originators. Read on to learn what a mortgage originator does and how they can help home buyers.
The Basics of Being a Mortgage Originator
According to the BLS (the U.S. Bureau of Labor Statistics, a Loan Originator evaluates, authorizes, and recommends loan application approval for businesses and individuals. While computer algorithms sometimes assume mortgage underwriting duties, they haven’t entirely replaced loan officers. Borrowers will still find them working in credit unions, banks, and mortgage lenders’ offices.
Generally, a mortgage originator screens a loan before algorithmic or human underwriting occurs. Investigations have found that algorithms sometimes discriminate against certain borrowers. But those who meet with an underwriter and a mortgage originator are better able to make their cases.
The Mortgage Originator’s Job
For many years, the loan officer’s job was alluring because it offered a high, stable salary to those without professional degrees. Officers must have a state license, but the job doesn’t require a person to spend a long, expensive time in school. According to the Bureau of Labor Statistics, the median yearly salary for loan originators is just above $63,000. The field is expected to grow significantly in the next few years. While the job does not require substantial training, it requires good people skills, a great deal of paperwork, and attention to detail.
What to Expect When Meeting With a Mortgage Originator
If a person is getting a mortgage for the first time, they may wonder what the first meeting with an originator will be like. In some cases, borrowers don’t meet with a loan originator at all, but if it’s necessary, the initial meeting gives the borrower a chance to document their creditworthiness and explain any blemishes on their credit history, such as late card payments. If the officer doesn’t want to take time to answer a borrower’s questions, they’re in a hurry, or they use high-pressure sales tactics, the client should take his or her business to another Mortgage Loan Office in Madison WI.
Qualities of an Effective Loan Officer
Apart from completing the tasks necessary to process a mortgage, an effective originator should have certain traits. Most importantly, they should maintain a high standard of integrity and honesty. Even as borrowers gain more protections, it’s still possible to end up with a dishonest lender, and the best way to find an ethical LO is to research them and their company. Check the firm’s BBB rating, ask for recommendations from past clients, read online reviews, and rely on instinct. By meeting the officer in person, it’s easier to get a feel for them and the level of service they provide.
The Bottom Line
Like many other markets, the home loan market has become largely automated. Many decisions are driven almost entirely by numbers. A mortgage application’s failure or success depends on the applicant’s yearly income, credit score, total debt level, and debt-to-income ratio. Applicants tend to engage in self-selection, which means they only apply if they believe there’s a good chance of approval. However, it’s the loan officer’s job to screen mortgage applicants and decide whether they’re eligible to move on to the loan underwriting process.