What is a mortgage loan officer?

A mortgage loan officer is the middleman between a lending institution and people wanting a mortgage to buy a home. A mortgage loan officer will be very knowledgeable about the various mortgages available, as well as the requirements needed to qualify for these mortgages. The loan officer’s job is to find a mortgage that is good for both the lender and the applicant. Mortgage loan officers are generally paid by commission, so the more loans they process, the more money they earn.

There are two ways to get a mortgage; from mortgage bankers or from mortgage brokers. A mortgage banker is a company or person who sells mortgages directly to the borrower. A mortgage banker does not have to follow federal and state laws governing the baking industry, as they are not a bank. However, many states require the mortgage banker to be licensed.

A mortgage broker, on the other hand, does not sell directly to the borrower; instead, they bring borrowers and lenders together, and charge a fee for this service. The mortgage broker does not actually lend money.

An advantage of using a mortgage banker is not being charged a broker’s fee. The drawback is that most often the mortgage banker can only offer one rate, whereas the broker can shop around for the borrower.

Due to the recent mortgage “bubble” that has rocked the U.S. economy, Congress has proposed strict new regulation of mortgage loan officers in order to protect consumers and the economy. Congress has recently approved setting up the first national licensing system for mortgage brokers and loan officers.

Congress is also proposing new disclosure laws for mortgage brokers.
Under the proposed laws, brokers would have to disclose the risks and benefits of each home mortgage. They must inform the borrower of any possible payment increases when a rate is reset as well as the amount of any prepayment penalties and/or balloon payments. Also, the broker must inform the borrower of their responsibilities to pay taxes and insurance on the mortgage.

The proposed law would also stop mortgage brokers from steering a borrower to a higher-cost mortgage than one for which the borrower would qualify. This would ensure that the consumer receives the best mortgage that they qualify for. The law would also prohibit a borrower from waiving the requirements of a mortgage broker under law. This is to close a loophole sometimes used by brokers to get around state mortgage requirements.