There are benefits and merit in each of these types of lending. The
best fit for you or for the consumer depends upon the need and criteria
of the individual.
What Kind of Training Do I
Need or Get?
In many mortgage companies, formal training is sporadic at best.
Some companies do have excellent internal programs, but many have
none. Historically, mortgage companies have relied on staff to learn
their jobs by doing their jobs.
The School of Mortgage Lending, premier educator in mortgage lending
in the nation, was created in order to fill the need for professional
mortgage training.
An Individual can take training courses and then find a job
in mortgage lending or use the School's courses to supplement current
knowledge or on-the-job training.
A Company can hire newly trained, entry-level personnel or
can use the School's courses as part of their own internal training
programs.
What are Typical Career Paths in Mortgage
Lending?
A career in mortgage lending tends to follow one of three paths:
Sales and Management
The sales function in mortgage banking is performed by
the Loan Officer or Loan Originator. Loan officers become the marketing
arm for most lenders. The loan officer is expected to write and execute
a sales plan, bring business to the firm, and to understand the concepts
of target marketing and using marketing tools-such as brochures, direct
mail, a contact database, etc.
In addition, the loan officer pre-qualifies borrowers, completes
the loan application process with them, and generally accomplishes
much of the problem-solving for the transaction.
The market for mortgage lending historically has targeted real estate
agents and builders, with the loan officer calling on those businesses
that may refer borrowers.
However, the trend is growing for companies and their loan officers
to institute a broader system of selling and marketing and it is important
for the initiate loan officer to carefully consider all the marketing
opportunities that exist. A loan officer's unique life circumstance,
together with his or her employer company, often dictates the focus
of the sales and marketing plan.
The loan officer must correlate the target market with the kinds
of loans he or she would like to do as well as with the market identified
by the employing lender. A few examples of target lending include:
The loan officer often climbs the career path to manager, regional
manager, or to self-employment with a company of his or her own.
Processing and Underwriting
The processor's role is to complete the loan file
for review by the underwriting department. A processor accumulates
the detailed paperwork required for loan approval. Processors are
generally very knowledgeable about loan programs and the required
documentation; they usually possess excellent customer service skills.
A good processor is learning to underwrite the loan as he or she
develops an expertise to move a loan quickly through to the steps
to approval and closing. The processor often works as a partner to
the loan officer who is in the field doing the selling and marketing.
As the processor develops technical depth, the loan officer often
comes to rely on him or her for an increased amount of problem-solving
and customer relations support. The processor is a key player and
essential for the success of the lending team.
Frequently, processors develop their knowledge of underwriting guidelines
and compliance and move into the underwriting department. From there,
they can move up the management ladder, if they choose to do so.
The underwriter issues the formal loan approval on behalf of the
lender and bears the responsibility to understand and communicate
investor guidelines with respect to each transaction. The underwriter
makes the final decision as to whether or not the loan is granted
and under what conditions the transaction can close.
Closing and Escrow Management
The closer's role is to close the transaction, formally
transferring the ownership of the property from one person or entity
to another. The closer ensures that the title is free from encumbrances
(that the property can, in fact, be legally transferred from one individual
or entity to another) and understands the complex process necessary
to effect the settlement.
This track often offers entry level positions to closing assistants.
The assistant might be called upon to set up the settlement or escrow
file, help clear title, and/or draw up the closing documents.
Closers become experts in understanding the title to the property
and in related legal matters. They frequently do the work needed to
clear the title when there are different filings of record that would
prevent the sale or transfer of real property.
In states where escrow companies close loan transactions, a closer
can work toward becoming an escrow officer or escrow department manager.
An escrow officer might move on to open his or her own escrow firm
if self-employment is the goal.
In states where attorneys are required, or where it is custom, to
close loan transactions, the closing assistant may also perform the
function of or move into the role of a paralegal.
What Skills Would I Need for Each
of These Tracks?
Sales
People who market mortgage loans often have "race
horse" sales personalities-high drive with strong people-orientation.
Sales folks work best who are committed to serving the customer's
best interest. The mortgage sales person must be professional and
understand the requirement for technical competence without getting
so bogged down in detail as to lose sight of the "bigger picture"
for the borrower or the loan process.
The loan officer should be a good planner, a problem solver, and
show creativity in the sales process. In the competitive market of
the 21st century, the loan officer needs to have a cast iron constitution
that accepts risk and rejection on the way to reaching the ultimate
goals.
Processing
The best processors are organized, able to work under
pressure (sometimes extreme), and are excellent "multi-taskers."
They need good "people skills" with a caring attitude toward
borrowers and their circumstances. Processors should have a commitment
to giving the best service possible.
A strong interest in technical detail is most helpful, as long as
it doesn't exclude creative problem-solving abilities. The best processors
are pro-active, not reactive - that is, they don't just wait for documents
to come in, they actively research why documents aren't in the mail;
they anticipate what the underwriting department will require and
then they submit orderly, technically correct packages that present
borrowers in the truest and best light.
Closing
Closers do well if they are detail-oriented and precise
in their work. They must be able to work well under pressure and to
work late at times (especially when everyone wants loans closed at
the end of the month). Good interpersonal skills are helpful, but
closers must also be "data oriented."
The ideal personality for this job can focus attention on precise
detail, much as accountants or bookkeepers do, but with the ability
to keep from getting lost in the detail. Closers must also be able
to manage high volumes of work and pressure with intense focus and
good memory.
What Income Levels Can I Expect for
the Three Different Job Tracks?
Sales
Sales people generally are paid straight commission
after the first three or four months (during which they often have
a base salary). The first year can be stressful, even in a good market,
but long term prospects are generally very good.
After "paying their dues" in mining and working their markets,
dedicated loan officers can earn yearly incomes in the strong five
digits or more - $50,000 to $60,000 after the first year is a reasonable
expectation.
Mortgage lending is cyclical, however, so the smart loan officer
doesn't assume all years will be good ones and sets aside money from
the big commission checks for the times when the checks will be smaller.
Processing
Senior processors generally have a base of around
$30,000 (+/-) in the metropolitan Seattle area. They frequently receive
bonus or incentive pay based on the number of loans that close in
a given month. Processors can do well in a strong market and still
have the base pay when business ebbs somewhat, as it often does.
Closing
The pay for closers is usually slightly higher than
that of processors, but incentive pay based on production volumes
are not as common. Positions such as escrow officer and escrow department
manager often can be quite lucrative.
What are the "Downsides"
of the Mortgage Lending Business?
The major downside to the industry is the interest rate fluctuation
that typically characterizes mortgage lending. By incorporating plans
for markets such as non-conforming and home equity loans into your
career, you can help even out the effects of interest rate change.
Often, other market types (and particularly the non-conforming loan
market) are not nearly as sensitive to interest rate fluctuation.
More and more lenders are carrying product lines to meet the needs
of these markets.
What Kind of Satisfaction Can I Find
in this Business?
There is great satisfaction in a career in mortgage lending for those
who enjoy helping others-especially those with credit problems or
first-time home buyers-to achieve the major investment and smooth
the life-changing impact of home ownership.
People who like a fast-paced, highly challenging environment that
requires intellectual discipline, love the mortgage and escrow business.
The strong sense of teamwork, the constant need for problem-solving
and knowing the answers, and a growing technical knowledge base are
factors to which people find they become very attached.
