Every so often I'll receive an email from someone who asks me about becoming a Loan Officer. Last night, just after hearing the news about Greenpoint, I had a lady contact me wanting to take the plunge into lending. "What? Now? Have you been watching the news? It's tough out there, Missy!" Okay…okay…I didn't say that to her…but I was thinking it! After getting over the shock of someone innocent and new wanting to enter into this field, I read her questions which I thought were pretty interesting (by the way, she's very persistent). I thought I would share some of them with you:
What exactly does a Loan Officer do? In a nutshell…meet with either people who are considering buying a home or refinancing their existing mortgage. A professional will explain the mortgage process, answer any questions and help the client understand what all their options are. (This could be a post on it's own!). May days are often spent completing loan applications (interviewing borrowers), learning and searching for specific loan programs and educating Real Estate Agents and borrowers on different products and guidelines as well as talking to various wholesale reps to learn about their products and reviewing files with my processor and underwriter. Every blue moon, I'm able to sneak out and make a "sales call" on a real estate office, it's rare these days.
What sort of skills do I need? If you enjoy helping people, are patient and aren't afraid of crunching numbers…you have some basic skills. You should also be computer savvy and able to constantly learn. You cannot be afraid of tons of paperwork, paper cuts and have an attention for details.
Are there any classes I can take? Check out local community colleges for classes they may offer. Contact the local lending associations, for Seattle some would be the Washington Association of Mortgage Brokers, or the Seattle Mortgage Bankers Association. Jillayne Schlicke is CEO of an excellent school called CE Forward. Many of her courses are approved with DFI and feature approved clock hours. There are also advanced programs to receive designations such as Certified Mortgage Planning Specialist.
Mortgage Originator Magazine may also be a good read for someone considering entering this business.
What is the income for someone entering the business? It can range from $0 to "the sky is the limit". In fact, you could even lose money being a Loan Officer. According to the U.S. Bureau of Labor and Statistics, the average LO made $59,350 in 2005. Something to keep in mind is that there are hundreds of thousands of LOs factored into that average. And it can cost quite a few bucks just to be a LO with marketing, leads, etc. I would recommend having a back up source of income and 6 months of living expenses in the bank before starting any career that may be 100% commission.
Jillayne Schlicke, Co-Executive Director of Ethical Lending, also suggest "if someone wants the easy route and wants a base salary and on the job training included, then they should try to hook up with a bank or credit union. If the person does not have a sales mind, then they are better off starting out as a processor because the training is INVALUABLE. The competition for these jobs would probably be higher unless the candidate is bilingual. They won't have to pass the LO test if they start out here."
Jillayne's suggestion of starting at a bank or credit union is great because these institutions may also provide leads to a new loan officer. A bank or credit union may also provide you with more strict working hours, unlike a broker where you could be "on call" depending on how you structure your business. Last, banks and credit unions will not have as many programs to learn as a Mortgage Broker where you're learning many different lenders and all of those lender's programs and guidelines.
Bottom line: I would never recommend that someone get into the mortgage business with dreams of striking it rich. You may be setting yourself up for disappointment and money should not be what motivates you when you're helping someone with the largest investment of their lifetimes…their homes.
EDITORS NOTE 2/4/2009: I have updated Jillayne's contact information on this post thanks to another person who is interested in becoming a mortgage originator.