By Mortgage- Home Mortgage, Mortgage Refinancing, Mortgage Company , Mortgage Quote

Become a Mortgage Broker, National Association of Mortgage Brokers Info.

How to Become a Mortgage Broker or Loan Officer

Whether working a a mortgage broker or a loan officer, loan originators are the sales force of the mortgage lending industry.

A mortgage broker is an individual or company that charges a service fee to bring borrowers and lenders together for the purpose of loan origination. The broker¡¯s job is to help loan applicants obtain a loan product that both benefits the borrower and represents a good investment for the lender. There are approximately 40,000 mortgage brokers in the United States. The brokerage business has increased from 20 percent of originations in 1987 to about 60 percent in 2002.

A loan officer is an individual who originates mortgage loans directly for a mortgage loan company. This entails the taking of loan applications and educating potential borrowers in the home buying and financing process.

How does being a mortgage broker differ from being a mortgage banker?

Unlike mortgage bankers, mortgage brokers typically do not fund or service the mortgage loans they originate. Brokers pass on the actual funding and servicing of loans to wholesale mortgage lenders. A mortgage broker works, on average, with 40 wholesale lenders at any one time. Many mortgage brokers are also licensed as real estate brokers and provide these financing services as supplements to their realty services, being careful to avoid any conflicts of interest.

Do I need to be licensed to originate loans?

Mortgage banking is regulated by numerous federal laws and enforcement agencies, and over 45 state laws or licensing boards. Individuals interested in becoming either a mortgage loan officer or broker should check with their state for specific education, insurance, net worth, and experience requirements.

What skills do I need?

Mortgage brokerage firms and mortgage lenders generally hire individuals with:

• Previous sales experience with demonstrated potential to transfer skills to mortgage origination
• Excellent communication and interpersonal skills (bilingual abilities a plus)
• College degree or equivalent
• Personal computer skills and typing skills
• Ability to work flexible hours (including nights and weekends)

Mortgage Brokers

The first step for a real estate broker is to originate the loan. He then simplifies this process for the borrower and wholesale lender. Counselling the consumers, thus enabling them to select the right loan is also another important function offered by such brokers.

The following requirements must be completed for a wholesale lender to evaluate a consumer's home loan request:

• A detailed application process
• Financial and credit worthiness investigation
• Extensive disclosure

Real estate negotiators provide the same services to consumers as do retail loan offices that charge the consumer an origination fee. These services include taking the application and obtaining the credit report and appraisal. They counsel the consumer on the loan process and also collects the necessary documents. They provide separate and distinct services and facilities to wholesale lenders. They market the lender's products. Assembling and delivering the completed loan package is also the responsibilty of such brokers.

Mortgage lenders may pay the such brokers a premium, (called a "yield spread premium" or a "service release premium"), this includes compensation for the services and facilities, and also represents payment for the intrinsic market value of the closed loan. Regardless of which party provides compensation (lender or consumer), in almost all cases the broker receives nothing until the loan closes.

National Association of Mortgage Brokers (NAMB)

The National Association of Mortgage Brokers was established in 1973 and is the primary trade association representing the community. The association has affiliates in 46 states of the United States and promotes professional certification. A home loan broker who is a member of the association has to subscribe to the code of ethics and best lending practices in his profession. He is an intermediary between the consumer and lender in a mortgage transaction, and therefore he must be completely thorough in the mortgage process.

A real estate broker can provide the consumer with a numerous options in home financing on account of his extensive links with numerous banks and lenders. If the broker is domiciled in a state that is affiliated to the association, he has to apply for membership at the state association. Otherwise, he can apply for NAMB membership directly. Commercial mortgage broker membership is open to mortgage professionals who primarily practice in the commercial mortgage sector.