Occupational Employment And Wage Statistics
The Occupational Employment and Wage Statistics program produces employment and wage estimates annually for over 800 occupations. These estimates are available for the nation as a whole, for individual states, and for metropolitan and nonmetropolitan areas. The link below go to OEWS data maps for employment and wages by state and area.
Mortgage Broker Vs Loan Officer
Mortgage brokers are financial professionals who work with a number of lenders to offer a wide range of loan programs to consumers. These brokers match borrowers with specific lenders and loan programs that best meet their needs for a fee or commission.
A loan officer, on the other hand, works for an individual bank or other direct lender and can only sell mortgage products offered through that institution. For this reason, mortgage brokers give clients access to a much broader array of lendersincluding lesser-known institutions that may offer more favorable terms than well-known, brick-and-mortar banks.
What Is A Mortgage Loan Originator
This is an individual who works with the borrower to complete the loan. Basically, you sit between the person getting the loan and the person giving the loan, making sure that everything goes smoothly, all paperwork is filed correctly, and that all information is gathered fully.
The mortgage originator may take part in a primary mortgage market, working with underwriters and loan processors. This is usually done from the application date until the closing of the mortgage so that all documentation is filed correctly for the loan to continue.
Thus, mortgage loan officers are important for first-time homeowners and loaning organizations who want to ensure that their paperwork is done properly. The lender doesnt want to give out too much money for someone who may not be able to pay it back and the loanee wants to make sure that theyre getting the best possible loan they can get considering their circumstances. It saves the lender and loanee the headache but transfers the burden onto you.
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Mortgage Loan Originator: The Lending Institution
While the term mortgage loan originator can refer to the person originating your mortgage loan, it can also mean the institution responsible for funding that loan. In the mortgage industry, loans are made through either bank or non-bank lenders.
Some mortgage loans are funded by traditional banks who hold your checking and savings accounts, lines of credit and other investments. Meanwhile, non-bank lenders like Rocket Mortgage specialize in mortgages.
Regardless of which institution initially funds your loan, its probably not the end of the line. Very few banks or other lenders hold a ton of loans in their portfolio to collect payments over the life of the loan because they prefer to get money on a quicker basis to make more loans.
To help accomplish that goal, the majority of mortgage loans are backed by one of several major mortgage investors, including Fannie Mae, Freddie Mac, the FHA and the VA. Loans that meet these institutional investors standards are insured by them before being packaged into mortgage-backed securities and sold on the bond market.
The Increasing Cost Of Financial Intermediaries
An excellent example of a bigger, systemic problem of financial intermediation is mortgage loan officers commissions, where financial institutions charge fees for providing the service of connecting customers with their products.
Those charges are increasing every year for the last 30 years or more, even though the advancement in technology has significantly improved the efficiency of the process of financial transactions. As per a 2012 paper, these intermediary costs are at an all-time high.
We can decrease the reliance on expensive intermediaries by creating advanced systems that match clients to the right loan products and also provide clients direct access to these systems.
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Loan Officer Career Advancement
- Its generally a lateral move from one shop to another based on compensation structure
- Other than going from say a junior loan officer to a senior loan officer
- Most LOs just switch companies to get better commissions
- Though it might be possible to open your own shop or become a sales manager as well
Loan officers generally stay in one place and dont advance internally within a company.
They may change their status to Senior Loan Officer, but usually it means very little aside from the fact that theyve been around a little longer than typical loan officers. There could be a bump in compensation levels though.
More likely, loan officers can advance externally if recruited by other companies paying higher commissions, or even a base salary. Or a mega bonus to jump ship.
Those who are able to create and manage a large book of business may wind up with a lot of suitors, and its not out of the realm of possibilities to be offered a six-figure bonus to change companies.
Many loan officers also apply for a brokers license as a means for advancement. And eventually employ their own loan officers, and take a cut off everything they earn.
In that sense, there are a variety of advancement opportunities for successful individuals. Its also possible to shift to the operations side of things if you turn out to be not much of a salesperson.
Do Loan Officers Need To Be Licensed
Mortgages come in several different loan types, have various qualifications, require certain documents and vary in terms by different lenders and state laws. Its important that you work with an MLO whos knowledgeable in the mortgage industry and your specific state.
Nationwide banks are required to have federal registrations and do not require individual MLOs to obtain a license.
For non-bank lenders, MLOs are required to be licensed with individual states. An MLO could be licensed in multiple states, even if they work in one state. To become licensed an MLO must:
- Complete 20 hours of pre-licensing education
- Score a minimum of 75% on the two-part nationwide SAFE MLO Exam, developed by the Nationwide Mortgage Licensing System
- Agree to a thorough background check
- Commit to continuing mortgage education each year
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Fifth Third Providing Employment Solutions To Unemployed Mortgage Borrowers
Heres a little something related, as it has to do with employment. Fifth Third Bank said it partnered with NextJob, a nationwide reemployment solutions company, to find jobs for its unemployed mortgage borrowers.
The program, which was piloted in 2012, targets bank customers who are at serious risk of default on their mortgages.
Of those who took part so far, 40% were fully employed after six months, making the program a novel way for both the bank and borrowers to avoid foreclosure.
NextJob helps borrowers create an effective resume and cover letter, carry out a targeted job search, and train and prepare for interviews.
Perhaps banks and lenders should consider hiring these at-risk borrowers in their own lending departments, seeing that theyre all having capacity constraints.
That could solve two problems in one, and by the sound of it, the compensation aint too shabby. But in all seriousness, if youre a Fifth Third mortgage customer in need of assistance, check it out.
To Illustrate This Average Let’s Say That A Loan Officer Originates One $250000 During The Month
$250,000 loan X 2% = $5,000
The 2% commission on that $250,000 loan that the officer originates will give the MLO $5,000 in commission for that one loan. If over the course of a year the MLO closed one loan per month over 12 months, that loan officer will have made $48,000 that year. Keep in mind that this scenario assumes only one loan originated a month. Most loan officers can close anywhere from 18 to 25 loans in a year, with some doing as many as 35 to 40. According to U.S. News, which ranks loan officers as #14 on its list of Best Business Jobs, the average salary for a loan officer in 2015 was $63,430 with the upper 75th percentile making over $90,000.
But that income comes at a cost: hard work. Originating mortgage loans is not a simple walk-in-the-park job. The life of a mortgage broker or loan officer is one that takes deadline management, marketing, communication skills and a desire to succeed. The industry also demands much from its loan officers as there are a number of government regulations, rules and laws to abide by in order to obtain and maintain a MLO license.
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Tactics To Watch Out For
As mentioned above, mortgage brokers may not always come up with the best possible offer if it’s not in their financial self-interest to do so.
Loan officers may have similar conflicts. Bear in mind that loan officers are essentially salespeople who get paid for selling you somethingspecifically, a loan. The loan that is best for you and the one that’s most lucrative for them may be two different things.
For example, be wary if a loan officer seems to be trying to steer you into an adjustable-rate mortgage . ARMs can be a good choice for certain people, especially those who know they won’t be in their home for very long. However, if you are planning to stay in your home for more than seven years or so, then an ARM may not be a very good choice, since the interest rate could dramatically increase over that period. A fixed-rate loan would be safer, even if it starts out with a higher interest rate.
Because it behooves loan officers to sell as many mortgages as possible, some may be tempted to steer you into an ARM with the idea of persuading you to refinance with a new loan in a year or two. If you find yourself in that situation, before you take them up on the offer you’ll want to find out:
Is The Survey Skewed
While this survey gives us a little insight into how much some originators are making these days, the number of participants is a bit limited.
Additionally, you have to wonder how many of the low-producing originators chose to take part in the questionnaire.
Those who arent having a banner year might not be keen on filling out a survey.
And salaries are always going to display an enormous range in the real estate business, mainly because there are those who work part-time, those who just entered the fray, and those who have been in business for decades that are well connected.
Just look at real estate agents, excuse me, Realtors, who made a median $34,100 in 2010.
The median salary for those in business for two years or less was just $8,900, while it was $47,100 for those in business 16 years or more, per NAR.
And 16% earned a six-figure income, revealing the major disparity among agents.
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Mortgage Loan Officer Vs Mortgage Loan Broker
MLOs are commonly confused with mortgage brokers. If you are confused on the difference, perhaps this can help. When a homebuyer wants to get a loan, the homebuyer finds a mortgage broker to broker the loan. That means that the broker finds a loan officer to help originate that loan. Oftentimes, the mortgage broker works in the same office and manages loan officers.
So what’s the difference between the two when it comes to education? To put it simply, nothing. Mortgage brokers and mortgage loan officers both must complete the same education requirements in order to obtain their license to operate in their state or states.
How Do I Choose A Mortgage Broker
The best way is to ask friends and relatives for referrals, but make sure they have actually used the broker and aren’t just dropping the name of a former college roommate or a distant acquaintance.
Learn all you can about the brokers services, communication style, level of knowledge and approach to clients.
Another referral source: your real estate agent. Ask your agent for the names of a few brokers that they have worked with and trust. Some real estate companies offer an in-house mortgage broker as part of their suite of services, but youre not obligated to go with that company or individual.
Finding the right mortgage broker is just like choosing the best mortgage lender: Its wise to interview at least three people to find out what services they offer, how much experience they have and how they can help simplify the process.
Check your states professional licensing authority to ensure they have mortgage brokers licenses in good standing.
Also, read online reviews and check with the Better Business Bureau to assess whether the broker youre considering has a sound reputation.
A mortgage broker finds lenders with loans, rates, and terms to fit your needs. They do a lot of the legwork during the mortgage application process, potentially saving you time.
Mortgage broker fees most often are paid by lenders, though they sometimes can be paid by borrowers. Competition and home prices will influence how much mortgage brokers get paid.
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How Are Loan Officers Compensated
Loan officer commission structure varies widely. MLOs who work in call centers might receive a flat salary, but most are paid on commission. Commissions are calculated according to the basis points of the loan: Each basis point is 1/100th of 1 percent, so 25 basis points, or BPS, equals 1/4 of 1 percent. For example, the commission of 25 BPS on a $100,000 mortgage would be $250.
According to a survey conducted by Inside Mortgage Finance, just under half of retail residential MLOs receive commissions that are between 75 and 150 basis points per loan.
âGo where you can get the very best training and support at the beginning of your career â donât worry about the BPS you get per loan in the beginning,â advises Joe Parsons, a mortgage originator in the San Francisco Bay Area, via a response on Quora.com. âOnce you have learned the ropes and have begun to build a reputation, and a book of business, youâll be in a far better position to look for the best commission schedule.â
Most loan officers close anywhere from 18 to 25 loans in a year, with some doing as many as 35 to 40. U.S. News ranks loan officers as #15 in its list of Best Business Jobs, with a median salary of $63,040.
How Many Loans Does The Average Loan Officer Close
Loan officers, also known as mortgage loan originators or MLOs, are individuals employed by banks or financial institutions to help recommend the right loans to potential homebuyers.
Loan officers are monitored by the Nationwide Mortgage Licensing System or NMLS, through which they obtain a license. This license is required both nationally and at the state level for loan officers to originate loans.
Originating mortgage loans is not an easy job. According toMortgage Educators and Compliance, the life of a mortgage broker or loan officer takes deadline management, marketing activity, communication skills and a strong desire to succeed. There are also a number of government regulations, rules and laws to learn and abide by to obtain and maintain an MLO license.
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Being A Loan Officer Can Be Really Lucrative
- There are few jobs other than doctors, lawyers, and sports stars
- That pay several hundred thousand dollars a year in salary
- Top loan officers have the potential to make that kind of money too
- And even average ones can make six-figures annually during good years
If a mortgage loan officer gets just one of those deals to go through, it often equates to a huge payday, sometimes as much as a few months salary working a minimum wage job or other lower paying jobs.
So thats the incentive, big money. But there are a number of questions you need to ask yourself before setting out in the mortgage industry as a loan officer.
First and foremost, it is not an easy job. Sure, a mortgage broker or bank may tell you that its simple. And yes, you may not have to work very hard in the traditional sense, or take part in any back-breaking work.
But factor in the stress, the near misses, lost deals, the shots to your ego, and the wheel-spinning and it isnt as effortless as they may make it out to be.
You will see deals fall through and you will waste a lot of time. You will have mental breakdowns as loans slip through your fingers, and brokers and real estate agents scream at you as deadlines close in.
You will undoubtedly make mistakes, which will require a phone call to the borrower to let them know you cant do the deal. It will be embarrassing and unpleasant.
All that aside, lets look at a loan officers typical day, not that any day is ever typical
Reasons Why Loan Officer Commission Is Bulls#t
Mortgage loan officers typically get paid 1% of the total loan amount. We explore the reasons why loan officer commission is bad for consumers. And we offer an alternative Better Mortgage has loan officers who dont get paid commission, ever.
Loan officers are the main point of contact for borrowers throughout the mortgage application process at almost every mortgage lender. Thats an important job, right?
In return for this service, the typical loan officer is paid 1% of the loan amount in commission. On a $500,000 loan, thats a commission of $5,000. Many banks pass this cost through to consumers by charging higher interest rates and origination fees.
We think its crazy that consumers are effectively charged to pay loan officers who may not be representing their best interests. Thats why at Better Mortgage, we dont pay our loan officers any commission, period. Instead, we pass on the savings to consumers via industry-leading rates, and we invest in technology to make the customer experience faster more transparent, and a whole lot better. In this article, well explain why.
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