Net Loan Officer Banking Vs. Broker

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If you are an aspiring loan officer, you have two options. You can be associated with a traditional bank, lender, or brokerage firm on a shared commission basis, or you can work as a literal partner within a mortgage branch operation. A mortgage loan officer is generally associated with a mortgage company and even a bank. Most consumers think that a mortgage company is basically a bank that will lend them the funds they need to buy or refinance their home.

What a consumer has to understand is that when they are dealing with you as a loan officer, you could really be a representative of a mortgage bank, lender, or a mortgage broker.

On the other hand, if you choose to be a mortgage loan officer for a mortgage broker, then it means that you will be working as a middleman. A mortgage broker is responsible for loan shopping on behalf of the borrower. As a mortgage broker loan officer, you are responsible for doing the loan analysis for the borrower and bringing the borrower and the lender together.

When a consumer deals with a mortgage bank, then he/she will statistically end up paying a much higher cost for the money they borrow. As a mortgage loan officer working as a mortgage broker, you will have a definite advantage as you will be able to provide first hand loan information from multiple lenders to the prospective borrower. As a part of being a mortgage broker, you will be charging the client a fee for your service. The salient point of being associated with a mortgage broker is that you will have access to a wide variety of loan programs. You will also have the necessary information of how your client can present his/her loan application to various lenders for approval. The fact is, there are some mortgage bankers who broker loans because they know the advantage mortgage brokering has to closing more deals.

According to a government survey, it has been observed that:

There are at least 9 out of 10 loan officers working for commercial banks and other financial institutions. That's a real shame, considering all of the profit they're losing out on. Even considering lost profit opportunities, just to qualify to work at a typical bank, a Loan officer in a mortgage banking facility is typically required to have a bachelor's degree in finance, economics, or a related field. If you have undergone loan officer training or hold experience in lending, banking, and sales, then it will be a definite advantage, but still no assurance that you'll have an opportunity to work at a prestigious "Commercial Bank" for $30k or $40k a year -- peanuts in what you could be making as a net loan officer.

Although there is an increasing demand for loans, the employment growth for a mortgage loan officer is expected to be slower than average due to the housing market slump, rate increases, and default rates. Loan officers who are trained to market and place loans will be the survivors in this market.

Lastly, the earnings of a loan officer in mortgage banking fluctuate based on the number of loans generated. It rises substantially when there is a good economy and when interest rates are low; however, low rates and market tightening does not mean you have to starve.

A loan officer plays a dual role. Firstly, you will have to protect your employers from risky borrowers who might not be able to pay back the loan on time or pay it back at all. Secondly, you will have to sell loans to prospective borrowers and generate revenue for the company. You can learn to do both and make more money.

As a loan officer, you should have the flexibility to work from home. Your main aim is to evaluate the risk of lending money to a borrower - this can be done by reviewing the borrower's collateral, financial assets, and credit history.

Whether you are a loan officer with a big box bank or a loan officer working with a brokerage firm, you should seriously consider switching to a net loan officer role today!