Mortgage broker vs a loan officer?

Question

Hello,

I don't quite understand the differences between the two. Does a  loan officer work for say Wells Fargo and a broker worker for a mortgage company? Are they the same thing? Do they have different licences?  Does it depend on the state? Is one better then another? I am asking because I am interested in changing careers, I want to learn more about loans and the industry in general. Ultimately I want to invest in multi-family homes, and I feel this line of work would get my involved pretty heavily.

Also, are loan officers and brokers going to be obsolete anytime soon with online mortgages? Is it a dying industry?

-Chris

Andrew Postell · Answer

@Chris DeSisto the basic difference here is between a Banker and a Broker.  A Mortgage Broker represents many different banks.  A Mortgage Banker represents one bank.  The term "Loan Officer" or "Mortgage Loan Originator" is often used in either position and sometimes referred to both types of positions.

A Broker will have the ability to basically shop many different banks for you. Some banks will not allow their loans to be represented by a broker but the broker's main job is to be able to find you a loan you can't find anywhere else. As a broker, the broker's job, in a sense, is to call customers and to also call banks to continue to find more loans for their clients.
I hope this explanation helps and if you think it would be helpful for others to read then please give it a vote. Thanks!

Account Closed · Answer

The industry is changing and will keep changing but at the end of the day no matter the title the job is to close loans. While there are more and more tools and automation coming I can not foresee it being obsolete any time soon there are too many task needing a real person in the process. Online mortgages is just a sales platform there are real people on the other side. If you want see about taking the jump check out NMLS that is where all the qualifications licensing or not needing a license are spelled out.

Jeff Dulla · Answer

@Chris DeSisto I want to expand on this a little because the interpretation of mortgage banker here doesn't seem to fit my company or some of my largest competitors either.

The difference between the basic terms broker and bankers seems to stem from one major deviation and that is whether or not you fund the loan yourself as a company. A broker does not. A broker sends the entire loan out to whatever bank they shop, they do not control the process from that point on. They do not fund your loan at closing. The end bank does.

A residential mortgage bank, like mine, can do the entire process, start to finish, in house, close and fund your loan ourselves. I believe this is where the difference in the banker/broker term comes from. We still however as mortgage bankers, shop your loan to different banks, even though we are the entity closing it. So we add the same benefit of shopping rates.

To touch on one more point - both of those are different from a retail bank as a broker or mortgage banker typically won't deal with depository transactions, personal loans, etc

Also the licensing question is a good one and I believe it is a bit more detailed than described. I cannot speak for the large bank employees but for us mortgage bankers, we have to license ourselves in each state we operate. For a guy like me who was licensed in my states before the UST came out, I had to take an exam for each state. We also have to take continuing education federally as well as in certain states we are licensed in.

Hopefully this answers your questions.

Andrew Postell · Answer

@Chris DeSisto it is a little different depending on if you work for an insured depository regulated by OCC, OTS, FDIC, FRB and NCUA or the Farm Credit Administration.  One of those mentioned bank types don't require you to take a test (Wells Fargo or Bank of America for example).  But if you don't work at one of those types of institutions then your license test is exactly the same if you are a banker or a broker.  And while the internet is growing in it's presence even the most internet heavy lenders still MUST have licensed loan officers to originate those loans.  Even if it went entirely online, there must be licensed originators. Hope this helps!

David Dachtera · Answer

@Chris DeSisto,

It might be more accurate to say that a broker shops your application around to lenders to find one who will accept you at favorable rates and gets a commission for doing so.

A loan officer works for the lender and is usually on salary.

Chris Mason · Answer

Hi Chris,

Feel free to reach out if you want to go over nuts-and-bolts California specific "what does getting started look like" stuff.

I really enjoy what I do. It's basically the American Dream, as a job.

Chris DeSisto · Answer

Account Closed

Ok, thanks for the information. You guys like your jobs in the industry? Any tips on getting into it?

Thanks and I appreciate it!

Chris

Jim Blackburn · Answer

@Chris DeSisto -  I work 18 hours/day, but I never feel like I'm working.... It feels more like a puzzle, chess match, or treasure hunt... The destination is always the same (helping clients achieve the dream of home ownership, to buy their dream house, or to find freedom with passive income)... but new obstacles are always arising... constantly having to regroup, "coming back to the center," learning new strategies, and new paths to that destination.  It's constant growth every day --- knowing that you will never be a master because you can always be better.  It's fun.  Thanks for asking.

Chris DeSisto · Answer

@Andrew Postell

Yeah, definitely appreciate the time people took to write something up. With all of it together it feels more clear for sure.

Mortgage broker vs a loan officer?

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