I searched the internet but figured I needed some real world advice on this one and I figured this is the best place to ask as it is still somewhat relevant.
I have gone through some interview steps with an auto loan lending company that buys subprime auto loans. My initial goal is to get into the mortgage industry but I am having a hard time with a tough market and I have a lack of experience in loans. I am fairly certain that I will be offered a position and I am wondering if a job like this is similar enough to residential or commercial lending that I might be able to transfer my experience 1 or 2 years down the road.
I do not necessarily want to stay in this position for the long term but if it can give me some experience that would be helpful in real estate then I am interested in doing it. It might also open my eyes to see if I even do like the lending side of RE.
Any advice, tips, help is appreciated.
@Cody Steck very possible. I've never don't mortgage sales but I'm a private lender and also have owned a dealership and installed the finance department. I suspect the auto job you are considering will be calling on dealerships and developing a relationship with them so that they will "send deals" to your company for approvals. Good , competitive sales experience. You will not learn much about underwriting, but enough to advocate. The basic principals are the same, credit vs collateral but the product is very different. Both are heavily regulated. Mortgage underwriting seems a lot more complicated to master but would be more lucrative as well. I would think that the auto position would be good experience to parlay into mortgage. Feel free to pm me if I can be of assist. Persevere!
You can go take your state MLO licensing course. That would be a good start.
Actually, I hired an F&I guy out of a large dealership as a mortgage loan officer, as I suspected, he couldn't cut it and much had to do with bad habits from personal loans and the auto environments.
In lending, the niche you begin is will most likely be what you get stuck in, unless you begin in a bank or CU. The natural progression for a loan officer is:
1. Lending department admin support to
2. loan processing to
3. consumer lending
or 3a. to mortgage processing, then to
4. Assistant loan officer in consumer loans
or 4a. to mortgage originator, to
5. Consumer loan officer or
5a. Mortgage Originator/Loan officer, to
6. Commercial Lending
a. personal property and small business loans
b. commercial real estate
c. secured commercial lending and that fractures off into specialized areas.
Now, it's possible to be hired directly into mortgage processing and even as a mortgage originator with those making secondary market loans.
As Wayne mentioned, you can obtain the RMLO license without any prior lending experience and that license is required to originate for any type of institution originating mortgages.
Depending on the institution, it's charter, its size and portfolio, employees can be cross trained depending on their abilities demonstrated, I have seen folks get to a loan officer status with loan authority in a year, some 3-5 years, some never get there. The other thing is that a loan officer, in larger or regional banks will generally require a degree and better in banking, accounting, finance or economics, somewhere in the financial arena. Banks began letting loan officers go that did not have degrees in the 90s, I hired a commercial officer who didn't finish college, he was ticked, but that's where education takes us.
I don't know of a commercial loan officer with loan authority who does not have a business degree, many have MBAs.
The American Banker's Association has educational courses for employees, most banks require advancing through the ABA courses to advance as well. A degree alone may not move you up.
So, IMO, going to sub-prime auto loans is much like going to some title loan joint on the corner. As was mentioned, you'll get sales experience (loans are financial products) you'll meet the public or dealers, you may learn collateral aspects and perfection of liens, but IMO, you'll be seen as picking up bad habits and attitudes.
There is a perception of a ranking of those in lending, pawnbrokers and title loan types are at the bottom, commercial lenders on top, much has to do with the barrier to entry into lending, it's pretty easy getting a pawnbroker license, it's pretty hard getting into commercial lending with lending authority. It's not a natural progression getting up there starting off as a title lender.
If you don't have your own money, you need to follow the institutional progression.
So, if mortgage lending is what you want to do, I suggest you follow what Wayne suggested, get a RMLO license then find a home with a mortgage lender.
Depending on who that lender may be, past employment in auto loans may not help but it may not hurt either, take the job to live on and on your dime get your license as a RMLO. You may then go to a bank, then you might become a broker with your own shop after you get experience in mortgages and are financially qualified. You can make more money going that way than being an employee at a bank in short order. Hurry, some states may make degree requirements for brokers, if you don't have one, such have been considered for Realtors! Good luck :)
Wow, thank you everyone for the wealth of knowledge.
I like what you said @Bill Gulley said though, I feel I would be better off getting MLO licensing and searching for opportunities with that as a loan officer assistant (until I build knowledge and track record in the position and can move up) or even as loan officer to begin with. I briefly talked with a loan officer from my local REIA and he highly recommended just jumping right into mortgage loans and becoming a loan officer. Although he might be slightly biased ;)
Yes, just go directly into mortgage originations. You're on the right educational path as well.
You can have both licenses, but working at a bank an active license is a conflict of interest, anywhere else like at a brokerage, they may let you, but you can't originate your sales. It is also a hindrance to business, trying to play both sides of the fence, pick one side or the other. :)
Hmm, makes sense.
Thanks for your help
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I am a sub-prime auto lender for the past 25 years. I am liquidating my portfolios in blocks to go into home loans in OTHER states, still to be determined.
If your goal is to work with residential loans, then move in that direction. Sub-prime is a very tough area. There are lots of moving parts when it comes to automotive and its a rough business. As a principal, you can make a lot of money with the right model, but it takes a lot of cash to build your own book and remember, you'll be asking lenders and investors to borrow their money to collect on accounts that they consider the bottom of the barrel and very risky.
Get some underwriting / risk experience where you can (you can cut your teeth in sub-prime automotive paper) and I think the future is the RMLO to residential and commercial real estate loans.
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