Monthly Archives: June 2015

3 Tips for Becoming an Expert Mortgage Loan Originator

HomeEvery mortgage loan originator is essentially their own business entity within a larger organization. Creating a sustainable business model, therefore, should be every mortgage loan originator’s top priority. This business model would need to include three central components—marketing, sales and customer service, as these three factors are responsible for a loan originator’s recurring revenues.

Contrary to popular belief, the loan industry isn’t simply about closing the deal. It’s about helping people make, in most cases, the biggest investment of their lives, while simultaneously differentiating your services from the rest of the markets’. What was the keyword in the previous sentence? Differentiating. It’s what set you apart from the thousands of other mortgage loan originators vying for the same clients.

So how does a mortgage loan originator differentiate themselves?

  1. Understand the real estate process.

This may seem obvious but a mortgage loan originator ought to know the real estate business backwards and forwards. Real estate is the industry loan originators work in; so, in order to be viewed as a credible source, originators must understand the economics of owning a home—not simply selling one. The concepts of real estate finance—stemming beyond loan programs—should be mastered by loan originators. This knowledge will reinforce a loan originator’s image as a trusted adviser, able to look beyond the immediate purchase into the client’s future financial goals. Donning the hat of the home buyer will better enable a loan originator to empathize with their clients, a key ingredient in the sales profession, translating to more sales. Lastly, viewing real estate agents as friends and not foes will go a long way toward understanding their industry.

  1. Master the art of underwriting.

Mortgage loan originators are in the business of evaluating peoples’ finances and determining their loan qualifications. Once a loan originator has conducted this review, he/she will then underwrite and process the loan, which requires knowledge of complex accounting. Running to the nearest CPA will not boost an originator’s image as an expert adviser.

  1. Become a marketing guru.

No, mortgage loan originators really must become well-versed in marketing best practices/principles. Marketing is how you generate quality leads and establish a customer base, which can be a time consuming and costly endeavor. Cold calling and paying for leads is old-fashioned. Loan originators should attend marketing seminars and discover which marketing campaign works best for their business.

A mortgage loan originator who masters these steps will clearly set him/herself apart.

Source: http://www.harriscompanyrec.com/files/contrib.pdf

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Key Industry Changes for TILA-RESPA

law-books-291676_640With the TILA-RESPA integrated disclosure implementation date, August 1, 2015, fast approaching, many in the mortgage industry are about to be caught with their fly undone. However, there still is ample time to brush up on the new regulation and receive training. Ameritrain is offering an “Implementing TILA-RESPA: A Workshop for Mortgage Professionals” class on June 18th, so take full advantage of the class and receive 8 hours of CE credit. Until then, a summary of the key changes of the new regulation and how it affects current practice should prove handy.

First, TILA-RESPA redefines what constitutes a borrower application. Previously, any information arbitrarily deemed necessary by a mortgage loan originator qualified as a loan application. The new rule revises this vague outline and details six components needed for a formal application: the borrower’s name, income, social security number, the property address, a property valuation, and loan amount. This new guideline should clarify when an application has been completed.

As mentioned in previous posts, one of the major changes the TILA-RESPA rule implements deals with disclosure forms, combining the four previous disclosure forms into two user-friendly documents—the Loan Estimate and Closing Disclosure.

Briefly, the new Loan Estimate combines the Good Faith Estimate and Initial TIL disclosure, with the new information that must be provided by lenders including total interest paid over five years and total interest percentage over the life of the loan. Updated guidance on origination charges are also contained within the Loan Estimate.

In the same vein, the Closing Disclosure consolidates both the HUD-1 and Final TIL. The Closing Disclosure’s new timing requirement falls within three day before consummation of a loan. Additionally, to the CFPB’s credit, the new disclosure provides a side by side comparison between the Loan Estimate and Closing disclosure. The primary goal of these of new forms is to clarify the loan closing process—for both parties.

The TILA-RESPA integrated disclosure isn’t entirely a rewrite of the previous law. It also introduces new requirements, such as an Escrow Closing Notice that must be provided within three days before closing an escrow account, along with two other new regulations: Disclosure of Partial Payment Policy and Record Retention.

This overview should help mortgage loan originator’s understand the new rule’s scope. Ideally, mortgage loan originators will need to review the 1,888 page law more thoroughly and may consider training if the law proves overwhelming.

Source: http://www.navigant.com/~/media/www/site/downloads/financial%20services/val_knowbeforeyouowe_tl_0914.ashx

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A Day in the Life of a Mortgage Loan Originator

Business MeetingEveryone, at some point in time, wants to buy a house. It’s the American Dream. A house shouts, “We made it. Whatever we’ve done, it was right.”

For mortgage loan originators, this means humanity is your target market. Broadly defined—everyone is a prospect or client. All you have to do is earn their trust, which in turn means you’re trustworthy. You have great interpersonal skills, because you care about people and like helping them achieve their dream—the one of owning a home.

When you think of networking, you don’t cringe, because you enjoy it and roughly 70% of your job entails doing just that.

Does it really?

It does, but you have the flexibility to network on your terms. You set your day-to-day work schedule. Mortgage loan originators manage their client base as they see fit, meeting them in the mornings for breakfast, for afternoon coffee appointments and even for homebuyer seminars.

But it isn’t all wining and dining prospects/clients. Developing your marketing strategy and working alongside your team will also take much of your time. This part of the job occurs at home base, HQ—your office.

Let’s talk numbers: How much do loan originators make?

A mortgage loan originator makes an average of 2% on every mortgage loan closed. 2% doesn’t seem like much until you multiply it by the amount of the loan. Say, an average home costs $250,000 and you multiply that by 2%, which translates to a gross revenue of $5000. Not too shabby, is it? Now take that $5000 and multiply by however many homes you expect to close in a month and you’ll get a feel for your total earning potential.

Essentially, the mortgage loan closing process is a people business, and the amount of money you make is determined by how hard you work. If you like having autonomy and measurable results, while also making a difference in people’s lives, a career as a mortgage loan originator may be the way to go.

Sources:

http://newloanofficer.com/loan-officer-careers

http://www.passthesafeexam.com/5-benefits-of-becoming-a-mlo-mortgage-loan-officer/

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Mortgage License Requirements 101

Group of happy business people clapping their handsMany people who want to become a mortgage loan originator don’t know where to begin.

Do I drive to the closest mortgage lender and check for openings? Do I need a four-year degree? Is there any mortgage training needed?

To answer these questions a brief overview is necessary. First, there are two kinds of mortgage loan originators—registered and state-licensed. Registered mortgage loan originators work for depository institutions such as banks. State-licensed mortgage loan originators work for non-depository institutions such as lenders and brokers. For the latter, there are a series of steps to be completed before you can become a registered loan originator.

NMLS, the governing body which regulates the mortgage licensing industry, mandates that people wanting to become a state-licensed mortgage loan originator take education courses. 20 hours of pre-licensing education must be completed before you can take the national exam, which serves as the major hurdle for those seeking a license. The national exam is comprised of 125 questions, with 75% being a passing score. Ameritrain’s pre-licensing education courses provide you with the mortgage training you’ll need in order to pass the exam and become licensed.

You’ll also need a unique identifier, a number assigned by NMLS, which permanently identifies a loan originator, tracking originators employment history and disciplinary record.  In keeping with this tracking process, prospective mortgage loan originators must not have had a felony conviction within the last 7 years, no convictions involving fraud and never had a mortgage loan originator license revoked.

This process is relatively straightforward and intuitive for many people seeking a license. Where the process becomes slightly more complicated is with state-specific education requirements some states have in addition to the 20 hours of prelicensing education. Refer to the NMLS Resource Center to see what the education requirements are for the state you’re applying for. Luckily these state-specific education requirements rarely exceed 5 hours and average in the 2-3 hour range. Therefore, the required mortgage training can be completed in as fast as a weekend, depending on the course provider you choose. Ameritrain offers three different learning platforms (live class instruction, online and webinar) to help you get trained as conveniently as possible.

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