Hello, I was hoping someone would clearly define the differences between an officer and a processor for me. One place will refer to an officer as a processor and another will refer to them as separate entities. little lost on this.

Also, how are commissions normally split between an officer and a processor? I've seen alot of companies "recruiting" what seems to be loan officers and offer 45% no license and 60-80% w/ license. Are these companies recruiting officers, processors or something entirely different and are they a good place to start or should they be avoided?

As you've undoubtedly guessed I am a TOTAL newb. I've been studying diligently for the RE Exam and trying to decide which aspect of real estate I want to focus on. I'm pretty sure I'd be best in financing - the idea of people trusting me to serve their best interest and delivering on that trust while making a little money on the side(going part time at first) seems very fulfilling in my opinion. So, with that little side note said, thanks for reading and thanks in advance for your thoughts.

Quick summary.

A loan officer position is a sales position. Your job is to originate loans. You are out on the field all the time building mutually beneficial relationships with other professionals: agents, CPAs, CFPs, attorneys...
Your main function is to counsel borrowers on their best financing options available and finding the right loan program for them... You sell the loan to the borrower in an efficient, ethical, consultative manner no matter if it is a refinance or purchase loan. Take the loan application, collect documents... When working with referral partners such as agents, it is your duty and responsibility to make sure that their transaction goes smoothly and to keep them informed throughout the loan process.

A loan processor is the backbone of the loan originator and how well the two work together is critical to a smooth process. It is an operation position. You don't sell, you process the loans originated by the LOs. A loan processor is responsible for packaging the loan and submitting it to the lender (if working for a broker) or submitting it to the underwriting department (if working for a direct lender). Depending on the hiring organization and its in-house system, they can assist/serve as liaison between LOs and agents, LOs and borrowers....They order title, appraisals, VODs, VORs, flood certs (for direct lenders) and all necessary documents to complete the file before submission. When a processor work for a direct lender, it's a little different, they can also be a processor/ Jr. underwriter.

The LO position in a broker shop (on the retail side) is usually a 100% commission. You don't close any loans, you don't get paid. The split can vary based on experience and sales volume that the LO brings in. Sometimes, some companies offer draws, an advance that gets taken back from future commission. When you first start in the business, a draw can be good however if you don't produce any loans you will a)get fired and b)have to repay the draw.

Loan processors are paid a salary and usually a bonus per file. They are on a fixed income so they don't have to worry about making the bills each month but you do.

If you go on Monster.com, do a search for loan officers under real eatate and mortgage and then do another one for loan processor. You will be able to see what is required for both positions.

You do not need a license to originate loans for a direct lender (Account Executive position) as you do not deal with the public directly only mortgage brokers. It is more a B2B position and is called wholesale lending.

You do not have to have a license to be a loan processor for a mortgage broker or a direct lender either; however, if you'd rather work for a broker, the more you know the better so it can't hurt.

Ask yourself these questions?
1) are you good at selling? yes-you can be a Loan officer or an Account Executive

no-that's a problem, maybe you would be better behing the scene as a loan processor and then move on to being an underwriter

2) are you good with people? do you like talking to customers? are you patient? yes-become an LO either for a broker or direct lender

no-become an AE for a wholesale lender. You will be talking to other professionals just like you, in this instance LOs.

Based on what you said, you want to make a difference in people's lives by providing a great mortgage solution to your borrowers, if that's the case look into becoming a loan officer and take your CA DRE salesperson license.

Invest in yourself, and get the trainig you will need to become a great LO. This industry is very competitive but very lucrative when you are the best at what you do.
Go to loanofficerschool.com and look at classes they offer. They have some for loan processors too.
Read everything you can about the mortgage industry, the loan process....

Don't settle for the first job you will find. Make sure that the company fits the bill and match your standards.

Any additional questions, let me know. Hope this helps clarify some of your questions.

Thanks for all that info, that does help me out.

Just one more question though.

I know a few people who obtained their RE license (kind of crammed for the exam, not very knowledgable in RE. memorized a whole list of exam questions) Whatever, That's their deal but they're making a considerable amount of money just doing refis for people. They simply meet with the clients, get the 1003 filled out, collect needed documents and submit it to the lender - who I believe is who they work for. They don't shop for loans because they always use inhouse. They get 85% of closing. Question is - what are they? processors or officers or other and should this be avoided or is this business pretty common?

I just want to make sure i'm on the right path.

hehe, i'm learning it's not quite like the text books describe - out there in RE land. So again, thank you for the "real world" insight.

Jsar, I wouldn't solely rely on refis to make a good living in the mortgage industry. Refis were very strong in the last few years because of the unprecedented real estate market boom. Interest rates were at an all time low and they have been hedging back up since June 2004 at a very steady pace. If you want a career in this industry, you will have to diversify your pipeline. The way I see it is that those who solely rely on refis will have a very hard time maintening their present income level in the next few years. The purchase market is where the action is at right now. Sure there will always be people who need to refinance, i.e. people going through divorces, or people going through financial, family crisis in general and needing to access cash but the market has definitely changed.
Some LOs are in their office all day and rely on internet leads to make a living...those leads are 1)expensive 2)many of them are worth nothing 3)these people are rate shoppers and will nickel and dime you to death. I'd much rather build long term relationships with other professionals, I help them, they help me, we help each other, and the referral sources become endless and loyal. It's a choice I have made and have not regretted one bit.

As an AE working for a wholesale lender, your bread and butter are the mortgage brokers and LOs you build relationships with. If these brokers and LOs' solely rely on refis, sooner or later their business will slow down and so will yours.

The people you are referring to work for a direct lender. They lend their own money. There are for instance bank retail branches where you are hired as a retail (retail, meaning you work with the public) loan officer.

The best advice I can give you is if you choose to work on the retail side, do not solely rely on refis and internet leads. Build strong mutually beneficial relationships with other professionals. These referrals are the best ones you can get.

Also, take your R.E. License, take the class and learn the basics of Real Estate. Key work: learn don't just memorize the answers. If you want to be the best at what you do and have high standards for yourself, I believe this is what you will do. If you want to make a name for yourself as a mortgage expert and earn the trust and respect of your clients and other industry professionals, you'd better know your stuff because you won't be able to fool people for very long. Learn as much as you can. There are plenty of free seminars that you can go to if money is tight. Try to find a good mentor if you can. Finding a reputable company with a training department is very hard to find. Evaluate all your options.

If you choose to build your own business and generate your own leads, remember that it will take a long time. Have enough money saved to be able to live for the first 3-4 months. If you are consistant and dedicated, there is no reason why you can't make it.

Hope this helps.

Great post, Alea!

Well thank you Promised Land!

Yes - great post! thank you for your time and advice.

Loan Officer vs Processor?

I have been a loan officer for several years, but I would have to say in a fight the processor beats the loan officer 9 out of 10 times (+=

There are some tough Processors out there