What is a Mortgage Loan Originator (MLO) and its Job decsiption

An Individual, who for the sake of a compensation or gain, or in expectation of a compensation or gain, takes a Residential Mortgage Application and offers or negotiates terms of a Residential Mortgage Loan is a Mortgage Loan Originator (MLO). Mortgage Loan Originators educate, advise, and guide potential borrowers through the loan application process. MLO's typically work full time in banks or other lending institutions.

A Mortgage Loan Originator is either a Registered Mortgage Loan Originator or a Licensed Mortgage Loan Originator.

Currently, the employees of Depository Institutions that meet the definition of a Mortgage Loan Originator such as Banks or Credit Unions are not required to be licensed and are known as Registered Mortgage Loan Originators. A Registered Mortgage Loan Originator is an Individual who is an employee of a Depository Institution or its subsidiary that is owned and controlled by a depository Institution, is Regulated by a Federal Banking Agency or an Institution Regulated by the Farm Credit Administration and that is registered with and maintains a unique Identifier. Registered MLO's are required to be registered however are not required to take the pre-licensing or continuing education, nor are required to take the National Test Component with Uniform State test. A Registered Mortgage Loan Originator is not required to be licensed in each state but is required to be registered with the National Multi-State Licensing System and Registry (NMLS).

A Licensed Mortgage Loan Originator is required to obtain a license in each state in which they intend to do business. The Secure and Fair Enforcement Act of 2008 (SAFE Act) is the key federal law that regulates the licensing process and responsibilities of mortgage loan originator. Before an MLO can obtain a license, they must complete their 20 hours of pre-licesing education and pass the National Test Component with the Uniform State Test. The 20 hours pre-licensing education must include 3 hours of Federal Law and Regulation, 3 hours of Ethics and 2 hours of training related to lending standards for nontraditional mortgage product marketplace. The remaining 12 hours are electives. If an applicant intends to conduct business in multiple states, they would complete the additional education depending upon the State.

Initially, when the SAFE Act was enacted, there was a National test and an additional State test for every State. Later in 2013, the Uniform State Test or UST was created. Many States have adopted the UST in place of their own State tests, however there are still a few states that require their own State test like South Carolina, West Virginia, and Minnesota. To pass the National test with UST, an applicant must score at least a 75 percent. After completing a background check, a license is issued. Every year, an MLO is required to renew their license. The applicant must meet the renewal requirements for background check, satisfy continuing education requirements and pay all the required renewal fees.

Since the Job of a Mortgage Loan Originator is to take Residential Mortgage Loan Applications and to offer and negotiate the terms of a residential mortgage loan, therefore the MLO's have a responsibility to protect the interest of the consumers.

Safeguarding the interest of the Public in the purchase of goods and services against unfair practices in the marketplace is known as Consumer Protection. Consumer Protection laws are intended to prevent businesses from engaging in fraud, deceptive or specified unfair practices in order to gain advantage over competitors or to mislead consumers. The idea is to focus on consumer rights so that they are able to make better choices and to be able to pursue complaints against businesses that violate consumer protection laws. Entities that provide consumer protection include government organizations such as the Federal Trade Commission (FTC) in the United States, self governing organizations such as the Better Business Bureau (BBB) in United States, Canada, England etc. and non-Governmental Organizations (NGO's) that advocate the consumer protection laws and help to enforce them, such as the consumer protection agencies and watchdog groups.

Job Description:

- To maintain Referral relationships, and Approach leads by attracting Potential Borrowers. To Cultivate relationships with Real Estate Agents, Financial Planners, Accountants, and others who could refer their clients to them

- To Advise Applicants on their loan Options, interview applicants to assess their loan requirements, to advise customers regarding different available loan options and to recommend which option would be best for them

- To analyze and submit all documents for the loan, including documentation from the credit bureaus, financial institutions and Employers. To assure accurate information is filled in the application and all required information for the loan is submitted timely in the system for approval.

- To oversee and monitor the entire loan process through closing. To advise client regarding the progress of their loan with the lender while in process and to help resolve any discrepancies, if any between the borrower and the lender.

- To Provide Ongoing Customer Support, Education, Advise, Progress Reports, answer questions and resolve problems.

Skills and Qualifications:

- Ideally a Bachelors Degree in Business Administration or Finance with two years of experience in the field, Must be Licensed and Registered with the NMLS. A strong desire of continuously staying abreast of changes in laws and loan options.

- A strong Legal knowledge of State and Federal Banking and Lending laws.

- Accounting experience to assist clients and recommend which loan is best for them based upon the client's finances with an understanding of how a particular loan options would suit their needs

- The ability to convert leads into successful clients

- Strong Communication skills to assist lenders and borrowers, to address complex and sometimes sensitive subjects tactfully and with clarity

Computer Software:

- Proficient in Lending software such as LendingWise, ARIVE and Calyx

- Proficient in Office Suite Software including Microsoft Word, Excel, Power Point and Outlook

Related Topics: Explain an “MLO's” requirement to be licensed with a state, Grounds for State denying a license, Reasons for denying an applicant , License maintenance, Continuing education requirements, Renewal period, License renewal lengths and minimum standards, Continuing education courses approvals, Withholding a record What type of Business individuals may/may not conduct without being licensed as an MLO ? General business, Non-profit institutions, Business purpose loans (e.g., commercial, non-owner)? Retention of information after a solicitation • Mortgage Acts and Practices – Advertising, 12 CFR Part 1014 (Regulation N) What are Record retention time frames? What are Record retention timelines? What is SAFE Act and CSBS/ARRMR Model State Law ? What is Real Estate Settlement Procedures Act (RESPA), 12 CFR Part 1024 (Regulation X) What Documents must be provided to a borrower at loan consummation • Dodd-Frank Act ? What are the Ways to verify a borrower’s identity • USA PATRIOT Act? What is the core concepts of the Truth-in-Lending Act? What is the Equal Credit Opportunity Act (ECOA), 12 CFR Part 1002 (Regulation B)? What is the Enforcement authority for “red flag” rules • Bank Secrecy Act/Anti-Money Laundering (BSA/AML) ? What are the Duties a loan processor may/may not perform? What acts are Allowable by underwriters ? Clerical/support duties, Loan processors


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