This guide covers choosing the right mortgage company for loan officers. Choosing the right mortgage company for loan officers is one of the most important decisions a mortgage loan originator needs to make. John Strange, a senior loan officer at Gustan Cho Associates, explains choosing the right mortgage company for loan officers to start their careers.
Experienced mortgage loan officers with their book of business are highly sought after by lenders. Loan officers can choose to work at banks, credit unions, mortgage brokers, and mortgage bankers. Compensation plans differ from lender to lender.
The most important factor a mortgage loan officer should consider is the mortgage loan programs and the lender overlays that the lender has to offer besides just the compensation plans. Mortgage companies’ mortgage interest rates differ from lender to lender. There are thousands of mortgage companies in the United States, and mortgage loan originators often get recruited or get offers from many mortgage recruiters. Or representatives of a mortgage company several times every year.
Choosing The Right Mortgage Company as an FDIC Bank
Choosing The Right Mortgage Company is very important. Working at an FDIC chartered bank versus a mortgage company has pros and cons. Mortgage loan originators at banks do not have to get licensed and are exempt from NMLS licensing requirements.
Loan officers do not have to take and pass the NMLS exam to become mortgage loan originators at an FDIC-chartered bank. Loan officers who work at FDIC-chartered banks can originate mortgage loans in all 50 states without being licensed.
Many loan officers who cannot pass the national NMLS exam often seek bank employment. We will explain this later in this article. Just mortgage companies are much stricter on compliance issues than others. This article will discuss Choosing The Right Mortgage Company For loan officers.
NMLS Licensing Exemptions By FDIC Banks Versus Mortgage Companies
Others who cannot get an NMLS state license due to being unable to pass a federal and state criminal background check or credit check due to bad credit can seek employment at an FDIC chartered bank.
Every bank has its employment requirements for its mortgage loan originator’s position. Banks often do a background check on every loan officer candidate. They will often do a credit check but may be lenient and not as strict as getting licensed with the individual states.
For example, suppose a mortgage loan originator candidate had a non-fraud-related felony within the past seven years. In that case, it will be impossible for them to get their NMLS license from any state. So they would not be able to seek employment at any mortgage company.
Choosing The Right Mortgage Company and Getting Hired
However, they can seek employment as a mortgage loan originator at an FDIC Bank if the bank is willing to hire them: Another example is bad and derogatory credit. Certain states have higher credit requirements for loan officers than others. The states of Texas and Wisconsin will not issue a Mortgage Loan Originator’s license if a mortgage loan originator candidate has a judgment or charge-off.
Choosing The Right Mortgage Company as a Small Mortgage Broker Shop
Mortgage brokers do not fund the loans they originate and are middlemen between the borrowers and the actual mortgage lenders. Mortgage brokers need to have relationships with actual mortgage lenders.
The commission paid to mortgage brokers is called a yield spread premium. The maximum commission a mortgage broker is allowed to get by law is no greater than a 3% commission. Most mortgage brokers will agree to a 2.5% to 2.75% commission plan with the wholesale lender so they do not go over the 3% maximum threshold.
The mortgage broker then needs to pay the mortgage loan originator who originated the mortgage loan under the mortgage broker a percentage. The percentage is between 2.5% and 2.75% of brokers make from transactions. Most mortgage brokers will have a split of 50/50 from the commission that the mortgage broker gets from the wholesale mortgage lender.
Advantages of Small Mom & Pop Mortgage Broker Shop
When choosing the right mortgage company for loan officers, a mortgage broker shop may be the right fit for a brand new mortgage loan originator: Most mortgage broker shops are small.
New loan officers can get one-on-one training and see how the mortgage business works. Mortgage brokers need to be licensed like any other mortgage banker.
All mortgage loan originators who work under the mortgage broker must have their NMLS licenses in the states where they intend to originate loans. For the mortgage loan officer to get an out-of-state license, the mortgage broker shop must also be licensed. When they refer a mortgage borrower to a particular lender, the lender will pay the mortgage broker a commission.
Disadvantages of Working For Mortgage Brokers
The disadvantage of working for a mortgage broker is that you do not have control because the company does not underwrite the loans you originate. Most mortgage broker shops are only licensed in one of only a few states.
Many states who have never cracked down on bad credit for loan origination NMLS licenses are now putting the breaks on them. f they do not have entered into a payment plan.
They cannot seek employment at any mortgage company if they need to originate loans in those states. However, they can seek employment at an FDIC chartered bank. So if you want to get licensed in multiple states, you may be limited to getting licensed in other states.
Limited Growth And Advancement Opportunities In Working at Mortgage Broker Shops
Growth and advancement opportunities working under a mortgage broker may be limited: Just being a loan officer may be your only position working for a mortgage broker.
Support such as marketing support, leads, and training may be limited to working for a mortgage broker versus working for a national mortgage lender.
Commissions, or the yield spread premium the mortgage broker makes, must be disclosed if you work for a mortgage broker. Mortgage bankers do not have to disclose the comp the mortgage banker or loan officer makes on the file. Since mortgage brokers are limited on commissions from wholesale lenders, you may be limited on a small commission plan versus working as a mortgage banker.
Choosing a Small Correspondent Lender To Work For as a Loan Officer
After the implementation of QM, Quality Mortgage, many small mortgage broker shops turned into mini-correspondent mortgage lenders: They are somewhere between a mortgage broker and full eagle mortgage banker. A mini correspondent lender is a mortgage broker that is not a full eagle lender.
Looking forward to our conference call together. After our meeting, I will brief Elbert and others and discuss the next step for our restructuring.
But has developed a line of warehouse line of credit with wholesale mortgage lenders. They use that line of credit to fund loans and resell them to the wholesale mortgage lender once the loan funds. Mini correspondent lenders can also broker out loans to wholesale lenders.
Choosing The Right Mortgage Company: A National Lender
Choosing a national full-eagle mortgage lender offers many opportunities for loan officers who need to be licensed in multiple states and need name recognition. Consumers are very leery when choosing financial services companies from the internet.
Smaller broker shops with a no-name brand tend to be scrutinized by consumers who are internet shoppers for home loans. Many small mom-and-pop mortgage broker shops have the broker’s names, such as Jimmy Smith Mortgages or Mike Jones Financial.
Nothing is wrong with it, but you may encounter leery borrowers. Choosing a national mortgage lender also provides room for advancement for the loan officer if the officer becomes a top producer. It is up to the mortgage broker and the loan officer to agree on a comp plan.
Potential Advancement To Management
For example, with loan officers under my umbrella, I allow every mortgage loan officer to become the assistant sales manager, sales manager, branch manager, area manager, and regional manager.
Whenever the website is down, has broken links, or has tons of SPAM, The Smart App gets shut down often, and either Alex or I discover it. NOT HIM. It is supposed to be his job to maintain the website.
His mind is not on GCA but on some other tasks: EXAMPLE: In 2018, our unique daily traffic went from 2,500 unique visitors to 1,200. This holds true as long as they are willing and able to proceed and have proven themselves. Every loan officer under my watch has an opportunity to start their own net branch office and have a team of loan officers under their wing.
Career Opportunities At Gustan Cho Associates
If you are a new or experienced loan officer interested in finding a home where you can grow and advance with your career, contact us at Gustan Cho Associates at 800-900-8569 or text us for a faster response. Or email us at gcho@gustancho.com.
All of my loan officers do not have to worry about cold calling. We have more mortgage loan applicants than we do borrowers. Never have to worry about not closing a loan in any given month.
How The Team at Gustan Cho Associates Was Born
All of my loan officers are allowed to become sales managers and will be allowed to open up their net branches. I will provide the initial financial and emotional support in growing your business.
General Overview of How Gustan Cho Associates was Created and Launched
When I started as a loan officer in 2012, I bought leads, hustled to get referrals, and contacted hundreds of realtors, but the results were very disappointing. I got yelled at by the leads of the people I called. They were telling me you are the 10th loan officer who called me.
When Gustan Cho Associates Website Was Founded and Launched
The Truth Always Comes Out
Due to the losses of my real estate holdings, if you Googled Gustan Cho, my reputation was not good. Who will apply for a mortgage with a deadbeat who has a bad reputation as a slumlord and has foreclosures on all search engines? So, I decided to clean my name and bought the domain Gustan Cho Associates in January 2013.
The leads I bought that I called were telling me you are the 10th loan officer who called me. These low credit score people with crappy credit called me a loser, got a real job, and depressed me. I could not afford the $1,500 per name premium leads, so I wanted to create my own Zillow-like website.
Thank you for all this great information about choosing a loan officer! One thing that really stood out to me is that you say to look for someone that is highly experienced, and has their own book of business, Since we were looking into getting a mortgage, it would be nice to have them at our backs.