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Loan Origination
A mortgage banker work for a bank that is state-licensed banking entity that makes mortgage loans directly to consumers. Compensation for loan officers varies. Most are paid a commission that is based on the number of loans they originate. In this way, commissions are used to motivate loan officers to bring in more loans. Some institutions pay only salaries, while others pay their loan officers a salary plus a commission or bonus based on the number of loans originated. Banks and other lenders sometimes offer their loan officers free checking privileges and somewhat lower interest rates on personal loans. Brokers arrange transactions rather than lending money directly; in other words, they find a lender for you. A broker's access to several lenders can mean a wider selection of loan products and terms from which you can choose. Brokers will generally contact several lenders regarding your application, but they are not obligated to find the best deal for you unless they have contracted with you to act as your agent. Consequently, you should consider contacting more than one broker, just as you should with banks or thrift institutions. Compensation for the services of mortgage brokers frequently comes from fees paid by the borrower. Compensation may or may not also come from "indirect" fees paid by the lender providing the mortgage loan funds. Frequently, mortgage brokers offer payment options that enable the borrower to pay lower fees and points, or even no fees and/or points, in exchange for a higher interest rate, or higher points and fees for a lower interest rate. If the borrower pays lower fees and points and agrees to a higher interest rate, then the lender will pay the mortgage broker a fee that reflects the higher interest payments the lender will receive from the borrower. In other words, indirect fees paid by lenders to mortgage brokers are largely based on the interest rate of the loan entered into by the borrower and the amount of points and direct fees paid by the borrower. Typically, one or more times a day, lenders set prices that they are willing to pay to mortgage brokers for loans delivered to them. The price to be paid for a loan is generally expressed as a percentage of the loan amount. These prices are based on the interest rate of the loan arranged by the mortgage broker and the points and fees for the loan as compared to the price that the lender would purchase the loan for that day. About 9 out of 10 loan officers work for commercial banks, savings institutions, credit unions, and related financial institutions. Loan officers usually need a bachelor’s degree in finance, economics, or a related field; training or experience in banking, lending, or sales is advantageous. Earnings often fluctuate with the number of loans generated, rising substantially when the economy is good and interest rates are low. taking out a loan is the only way to buy a house, car, or college education. For businesses, loans likewise are essential to start many companies, purchase inventory, or invest in capital equipment. Loan officers facilitate this lending by finding potential clients and helping them to apply for loans. There are an enormous amount of fees associated with doing a loan. Most of them are fees that the loan officer and mortgage company cannot control, and are a part of every loan. In the case of the rest of the loan fees, the loan officer is in complete control of how much they will make off of a loan. Unfortunately, the typical consumer is unaware of these costs because they are hidden (legally so) in the loan paperwork and closing documents. However, laws are in the process of being drafted to correct this outright thievery. regulators tightened subprime lending guidance in late June to try to curtail risky practices that led to record foreclosures - such as loans with little or no proof of earnings, loans with prepayment penalties and lax underwriting standards - all it did was reinforce a trend that has been set by the subprime fiasco. In addition, the agencies — which include the Federal Reserve, the Comptroller of the Currency, the Federal Deposit Insurance Corporation, the Office of Thrift Supervision and the National Credit Union Administration — said lenders should develop strong control systems to make sure their new standards are being met. Source;Fanniemae, Wikipedia, NAR
https://www.efanniemae.com/sf/guides/ssg/annltrs/pdf/2008/0808.pdf -
http://en.wikipedia.org/wiki/Mortgage_bank
http://www.realtor.org/REALTORorg.nsf/pages/careers |
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