WHat is a Mortgage Loan Originator

A mortgage loan originator, or MLO, guides mortgage applicants throughout the mortgage approval process, from preparing the loan application through closing. MLOs are licensed by state and national authorities and are knowledgeable about all the different types of mortgages.

When you see the term “mortgage loan originator,” it can refer to a couple of different people.

MLOs may work on behalf of a single company that originates mortgages, or they may be a mortgage broker who takes your application and works with one of several companies. 

Mortgage Loan Originator: The Person

One of the first people you talk to when you get a mortgage is likely to be a mortgage loan originator. They may also be referred to as a loan officer.

In some cases, this person is a mortgage broker. A mortgage broker will take your application and show you your options from several lenders so you can compare prices and servicing policies, for example. I work for CBGC Mortgage, and independent Mortgage Broker that is not tied to any one lender.

A mortgage loan officer’s job is to guide you through the mortgage approval process. In a refinance, that might mean helping you with the paperwork, taking documentation and figuring out the loan amount and type that fits your goals.

In a purchase transaction, you want to get a mortgage approval (often called a preapproval) before you go shopping for a home to know how much you can afford. The MLO will be able to make that determination based on your credit, income and assets.

Whether it’s a purchase or refinance, the next step for the MLO after taking a complete application and collecting documentation is to get it through underwriting – the process of making sure that you qualify for the mortgage based on your finances as well as the type of property you’re getting. The underwriter is responsible for double-checking everything, making sure both the borrower and the lender are protected and the proper legal steps have been followed.

Finally, the MLO will make sure that your loan gets to the closing table. It’s at this point that you reap the benefits of your loan, either in the form of a new house or the financial benefits afforded by a refinance.

MLO FAQs

Now that you know what an MLO is and what they do, there are probably a couple of other questions that come to mind. Let’s run through them.

What Are The Licensing Requirements For MLOs?

When you’re taking financial advice from someone, it’s reasonable to want them to be licensed and to be able to trust that they have the know-how to back up what they’re talking about. In the mortgage industry, this is handled a couple of ways.

Every state has different requirements for mortgage loan officers and brokers. There’s state-level licensing required for someone to be able to originate mortgages. These include certifications or licenses that an individual loan officer must have and licenses that must be maintained by the institution funding the loan.

For nationwide banks, there are federal registrations, but non-bank lenders and local originators will have their MLOs licensed at the state level.

Lenders are also required to comply with the Secure and Fair Enforcement for Mortgage Licensing Act of 2008. The SAFE act requires that federal and state licensing for MLOs be published in the Nationwide Mortgage Licensing System and Registry (NMLS).

The NMLS directory allows clients to check on the licensing and registration details of individual lenders and their MLOs to make sure they’re properly licensed.

How Are MLOs Paid?

The next logical question is how MLOs are paid. No one ever does anything for free. The answer depends on whether the originator is independent or employed by a lender.

Mortgage brokers are independent of any one lender and work with a variety of products across lenders. These folks are paid either directly by the client or –more commonly –on a commission from the lender they give a loan to.

MLOs Are Integral Members Of Your Home Buying Team

The role of a mortgage loan originator is to help shepherd your loan all the way from application through underwriting and to the closing table so you can get the keys or accomplish your financial goals.

Every MLO must maintain state and/or federal licenses. Some licenses are maintained by the individual, while others are held by the lender themselves. Finally, MLOs are paid mostly on commission, although those working directly for lenders often receive an hourly rate or salary as well. MLOs are required to complete additional training each year or risk losing their license.

As Mortgage Loan professionals, we are required to list our Nationwide Multistate Licensing System and Registry (NMLS) Identification numbers. Below are our IDs and links to our status on the NMLS website.

Kevin Austin NMLS ID: 2091075

CBGC Mortgage NMLS ID: 1782517