How Mortgage Loan Officers Get Started

Written by Posted On Monday, 19 November 2007 16:00

When people ask how to get started in real estate what they usually want to know is how to become a real estate broker. What people rarely ask is how to get started in mortgage lending, in large part because there's an intuitive understanding that mortgage lending is a mysterious occupation with unclear entry requirements.

The perceptions regarding mortgage lending have a basis in fact. Mortgage bankers are licensed in some states but not others. Mortgage brokers, likewise, are mortgaged in some states but not all. Some states license both mortgage brokers and bankers in some way, others license neither. In some jurisdictions first mortgage lending is not regulated. Meanwhile, there's a completely different regulatory scheme at the federal level for national thrifts, banks, and credit unions. As to training and education, with hit-and-miss licensure educational requirements range from strict to nonexistent.

These complexities contrast with the licensing requirements associated with real estate brokerage. All 50 states license real estate brokers and salespeople. There's no federal licensure for real estate brokers. The practices and procedures in most states are parallel, meaning if you know how to be a real estate broker in one jurisdiction you're largely prepared if you move somewhere else. Brokerage is a transportable skill.

Now, finally, we have a practical guide to help people get started in mortgage lending. David Reed's latest book, Your Successful Career as a Mortgage Broker , is not only the one common-sense book every mortgage loan officer should have on their desk, it also contains important information for borrowers.

Reed, a Texas mortgage lender and a contributing columnist with Realty Times, has a long history of helping consumers. I know about this because long ago, in 1992, when I first started AOL's real estate center, a number of industry professionals pitched in to answer consumer questions. We had brokers, lenders, lawyers, appraisers, accountants, home inspectors and others who provided advice on a pro bono basis. We also had tens of thousands of questions and answers posted online, a remarkable total given that the Internet was far smaller than today. The professionals who contributed to this effort were seriously-skilled people who saw a need to help the public, not because they would make huge amounts of money, but because it was decent and honorable thing to do. Many of the AOL experts went on to become leaders in their field, and among them is Reed.

There's no shortage of books and classes explaining how to buy a home. The catch is that very little is said about the particulars of finding a loan, even though the potential interest cost of a mortgage routinely exceeds the acquisition value of the property being financed.

The general lack of consumer mortgage information means that borrowers have an incredible disadvantage when going into the marketplace. Borrowers are dependent on loan officers -- and much of the lending industry firmly believes that loan officers have absolutely no obligation to get the best price or terms for mortgage borrowers. The result is obvious: Borrowers routinely pay more than they should for real estate financing.

"Some have proposed," says Harry Dinham, president of the National Association of Mortgage Brokers, "that a fiduciary duty standard should be implemented and mortgage originators and their loan officers should act in the 'best interests' of the consumer. NAMB remains opposed to any proposed law, regulation or other measure that attempts to impose a fiduciary duty, in any fashion, upon a mortgage broker or any other originator."

That's just great. I look forward to the next ad from a lender which promises not to get me the best possible rates and terms.

Reed's book explains how the lending system works from the loan officer's perspective. This means those looking for a career in lending now have a step-by-step guide. The book also means something else: Borrowers can get a better understanding of how the lending system works and save money as a result.

AMACOM, Reed's publisher, is also the long-time publisher of Your Successful Real Estate Career by Kenneth W. Edwards. The Edwards' guide is by far the best introduction to real estate brokerage for prospective agents and brokers. Now AMACOM has also published Your Successful Career as a Mortgage Broker and obviously has another long-term winner on its hands.

For more articles by Peter G. Miller, please press here .

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