Mortgage Essentials

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What Is a Mortgage Loan Originator?
November 30, 2021

What Is a Mortgage Loan Originator?

by The CE Shop Team

So, What Is a Mortgage Loan Originator, and What Do They Do?

Breaking into the mortgage industry and don’t know where to start? Most people begin as a Mortgage Loan Originator (MLO). Here, we will explain what an MLO is, what they do, and how to become one.

What Is a Mortgage Loan Originator?

A Mortgage Loan Originator, also referred to as a Mortgage Loan Officer, is a financial professional who helps applicants acquire loans when purchasing property. They guide clients through the mortgage approval process from the beginning of their loan application to closing on the property itself. MLOs gain a wide variety of knowledge on different types of mortgage loans and use this information to help their clients choose the best loan for their specific situation.

Though the titles are similar and are sometimes used interchangeably, Mortgage Loan Originators are most often associated with mortgage companies in which the MLO would originate the loan, a processor would process it, and an underwriter would underwrite the loan inhouse.

On the other hand, Mortgage Loan Officers are generally tied to one financial institution or mortgage company. They often work in local banks or local offices of a national mortgage company, and Mortgage Loan Officers can only offer the products that their employer or institution offers. Sometimes a Mortgage Loan Officer is also an assistant vice president or vice president of a bank, holding the responsibilities of an MLO as well as a bank officer. 

How to Become an MLO

Mortgage Loan Originator

In order to become an MLO, you’ll need to fulfill a few requirements. To begin, you’ll need to be at least 18 years old. You’ll also need to enroll in education and earn your license. Mortgage education is regulated at the federal level by the Nationwide Multistate Licensing System (NMLS), and NMLS is also the system through which mortgage licensing is approved. 

MLO licensing education begins with Pre-Licensing coursework. This Pre-Licensing education is required by the Secure and Fair Enforcement for Mortgage Licensing Act of 2008, or SAFE Act. Pre-Licensing comprises a minimum of 20 hours of national education, with at least 8 of these hours covering specific topics and fulfilling set elective hours. While a majority of the Pre-Licensing content is national, many states necessitate an additional 1-5 hours of state-specific education. It’s important to note that National Pre-Licensing must be completed within 14 days of starting the course — but don’t worry. It’s possible to take your MLO education online, allowing you to earn your license from the comfort of your home.

MLO online education is delivered in one of two ways: via online self-study (OSS) and online instructor-led (OIL) courses. OIL courses are designed and delivered so the instructor leads the course through instructor-to-student or student-to-student interaction, and this style is only used for national Pre-Licensing coursework. OSS-style courses provide videos, text slides, and/or learning-based inquiries to guide students through the coursework, and this style is available for state-specific Pre-Licensing curricula and all Continuing Education (CE) courses.

Once you’ve completed your Pre-Licensing education, you’ll have to pass the SAFE MLO exam, register with the NMLS, submit your background check/fingerprints, and pay the required fees.  Next, you’ll need to find a sponsoring Mortgage Broker under whom to work.

  • MLOs must be sponsored by an NMLS-licensed employer. With enough experience, they can eventually become Brokers themselves.
  • In order to maintain your MLO license, you’ll need to complete Continuing Education on an annual basis. Pre-Licensing education does not count towards your annual CE requirements, and you are not required to complete CE within the same year as your Pre-Licensing.
  • Also regulated by the NMLS, CE requirements differ depending on whether your state requires specific CE or not. MLOs with state-specific CE requirements take 7 national hours and their state-specific hours (usually between 1-3 hours) to maintain their license. MLOs without state-specific CE requirements have to take 7 national hours plus 1 elective hour to maintain their license. Continuing Education deadlines begin October 31st and go through December 31st, depending on the state in which you work.

Mortgage Loan Originators are an important piece in the mortgage process. Becoming an MLO gives you the opportunity to help clients afford their dream property, operate in a fast-moving career, and enjoy good job security. Are you feeling inspired to become an MLO? With the right mindset, networking, and some stellar education, you’ll be on your way to helping clients through the mortgage process.

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