What Is a Loan Originator?

There are several key players in the whole process of mortgage acquisition, and of them is the loan originator. This is usually the person who works with those who are hoping to take out a loan, from giving them the best mortgage options to helping them complete the borrowing process.

But it is not only the borrowers who he helps. He also makes sure that he also protects lenders from bad loan applications and investments (people who won’t pay back their debt).

This individual usually works for banks and other lending institutions or for himself. However, he usually doesn’t have a salary and earns on commission. This means that he will only get paid for the services he provides you for several months when you are able to close a deal with a lender.

Other names for Loan Originator

Additional titles used to refer to a loan originator are mortgage loan originator (MLO), mortgage loan officer, loan officer (LO), mortgage broker, and mortgage banker.

What Does a Loan Originator Do?

Here are the general tasks of an MLO:

  • Interview mortgage applicants, then analyze and screen their initial loan application.
  • Gather information on a potential borrower’s financial background.
  • Review all defaults, credit misdeeds, and delinquencies and assess how these will affect the lending decision.
  • Submit loan applications and monitor their progress until the closing of a deal.

What to Look for in a Loan Originator

  • Licensed by the state regulatory agency
  • Follows industry rules and guidelines and maintains integrity and honesty
  • Educates and informs you on all your available financing choices and risks, especially when dealing with balloon payments and high-risk adjustable-rate mortgages
  • Is experienced and carries valuable mortgage wisdom

 

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