Seeking Advice!

[Newby]

Hello Everyone,

I would really like to learn more about the mortgage loan business. I am currently working on my master's degree which will lead to certification as a family financial planner. I am studying to get my real estate license and insurance agent licenses in order to learn more about the products that I will be advising my clients about and to also have a good understanding of the whole homebuying experience. I have always wanted to work as a loan officer, but in the state that I live in, it is hard to find companies that are willing to train.

I have found a couple of companies that I am looking at. I worked for a while under an independent loan officer and they showed me how to fill out the 1003 for a conventional residential loan and put that into calyx point. I am eventually wanting to get to a point where I can work independently as a loan officer and be able to originate loans for states that are outside of the one that I live in. Is this possible? I mean I know that there are loan officers that do this, but there are people who feel that it is not a good idea. If you are following all of the proper procedures, is this ok? Also, does anyone know of any good resources that will provide a good breakdown of the process, the terminology, the products? Does anyone know of a good legitimate place to get some good leads? The reason why I ask is because both companies that I am looking at require that the loan officers generate their own leads.

For those of you who work independently, how long did you work in an office with a mortgage broker before you decided that you felt comfortable enough to start working independently? What was the most difficult thing about making the transition? I am really wanting to make this my career, so I would appreciate any advice, about the mortgage loan officer field, that anyone could give me. Thank you so much for your time.

Michelle

[Troy]

Welcome to the forum Michelle!

If I had to do it over again, I would join a company that didn't necessarily have a great commission split, but provided leads. It takes a while to develop sales skills and it will drastically reduce your learning curve if you have a steady flow. You might want to consider any of the big dogs within the industry (Countrywide, Chase Manhattan, etc.) They typically will cover the majority of your marketing costs and have some solid training in place. Also, they can originate loans throughout the nation so that should get you started.

The alternative to that is finding a smaller intimate brokerage that is willing to hold your hand for a while. It's terrible to see loan officers trying to originate loans for the first time when the don't have a solid mentor or manager backing them.

To answer your questions, yes it is possible to originate loans outside of your own state but the rules are a bit different depending on if you are a mortgage BROKER vs. a mortgage BANKER and also the state you would be originating in. When you are searching for a brokerage to work for, ask them what states they are licensed in and if they are a broker or a banker.

What makes the transition difficult, is that there is no steady paycheck. If you are 100% commission while providing your own leads, then you are truly master of your own destiny. If you don't have enough cash to support yourself for 6 months without earning a commission, then I would be a little hesitant to jump in. If you are being provided leads, then I would make sure I had 3 months of living expenses saved up. Even if you take an application tomorrow, you still my not see the check for 4-6 weeks. Make sense?

I hopped into a brokerage that didn't provide leads and very little training. I took it upon myself to ask a lot of questions, go to seminars, and read read read. I had very little choice as a I had almost no money in the bank. In 6 months I began working from home. Within 2 years I had my broker's license and opened my own brokerage. The first 6 months was really high stress as I was flirting with not being able to pay my bills. That's why I highly suggest having saved up substantial money!

Hope that answers your questions.

Troy

[Troy]

Let me just add, that I am probably more of the exception then the rule. Most of the people at the brokerage I started with are still struggling to pay their bills, quit, or have just simply not progressed. However, you seem like a go getter! If you can master time blocking and seriously dedicate yourself, you should do ok.

Troy

[Newby]

Troy,

Thank you so much for your response! Both of the companies that I am looking at do not provide leads. It is very hard to find a mortgage company that provides leads, where I am. I wanted to go with Countrywide, but the one here no longer trains new loan officers. They only hire experienced loan officers. Some of the other places that I looked at did not do subprime loans and I really wanted to get a well-rounded knowledge of the types of loans and programs that are available. Do you have any suggestions about where to go to get some good leads? Are there any good companies that provide good leads? Do you do your own processing? If so, does that slow things up with the number of loans that you are able to close?

The one company that I am looking at pays 50% commission, no salary, no leads, but I do not have to do any processing. The second company is a bit tricky because I may be able to get some salary, but no leads. The office is more geared towards commercial, investment, building, home improvement, and debt consolidation, but they do not solicit for residential purchases or refinance. They will do it if it is something that is referred to them and the broker said that he would not mind getting more into it if he had someone to work it, and he would be willing to show me how to do everything from origination to processing, but I would have to be there to handle everything and that no one else in the office would be involved because they would be involved with the other aspects that I just mentioned. I do not have a problem with this as long as I would have the support of the manager and he is really willing to show me the ropes.

I have a mortgage encyclopedia, is there anything else that you can think of that might be helpful?

What is the difference between a mortgage broker and a mortgage banker as it applies to my position under them and how I would go about and what I would be able to do with the loan origination?

If my broker/banker is only licensed for one state and I wanted to do loans in other states, could I work under another broker/banker that is licensed for a different state or would I have to work under only one broker/banker at a time?

I am sorry that this is so long, but I really am interested in getting into this field. I think that it really fits me.

Again, thank you so much for your time!

Michelle

[Troy]

Michelle,

The best place to go to get new leads IMO is to real estate offices. Go to open houses and make friends with the real estate agents. Do your best to offer them something of value and forge long lasting business relationships.

Buying leads is tricky. Over the past few years I've purchased leads from various companies with minimal success. The benefit was that they filled up my database and I continued to market to them and stay in touch with them. Over time it has worked out to my benefit, but if you are in need of some fast money, then I don't believe that purchasing leads is the way to go.

Wow, I'm amazed that companies still offer 50% splits with no leads. The brokerage I was at prior to starting my own offered me 75% when I started (no leads). My rate for LOs at my brick and mortar office was 80%. Currently, I'm working on a form of net-branching operation that starts everyone at 90% and caps during the year depending on your production. I don't really self-promote on this site, but if you want to get the sneak peak at the operation I'm starting go [URL="http://www.conquestmortgages.com/"]here.[/URL] A lot will change on that site over the next month as it isn't truly complete, but it'll give you an idea of what other forms of brokerages there are out there.

I don't remember what area you said you were in, but check out: [URL="http://www.craigslist.com/"]www.craigslist.com[/URL] They usually have a fair amount of job postings for Mortgage broker/loan officers. I guess basically what I'm saying is...I'm pretty sure you can find a better deal then those two places!

I have a book that I like called: The Loan Officer's Practical Guide to Residential Finance
It's pretty good. The only real way to learn though is by doing and role playing. Make sure your manager is smart and has a lot of experience. Nothing beats experience, but you don't want to make mistakes with peoples' homes just because you're trying to learn.

Bankers can write their own loans. They typically have their own rate sheet, fund loans in their own name, etc. Brokers match up borrowers with lenders and do the paperwork, but the docs/loans are drawn in the lenders name...not the brokers. That's the basics. Bankers can offer slightly better deals because they decide what the rates will be, and the either sell the loan on the secondary market or keep it in their portfolio and collect the interest. Therefore, they can afford to not make as much on the origination side of the loan.

I hope that helps. Let me know if I can do anything else for you.

Troy

[Newby]

Troy,

Thank you so much for your help. You have really given me so good information and a good place to start. Thank you.

Michelle

[Troy]

Your welcome!

Let me know if you need anything else.

troy

[Newby]

Hello Troy,

It's me again, Michelle). I have decided to go with a company here that does a graduated pay scale for the commission. I am currently working out of the office. I have to generate my own leads, but they do all of the processing. The commission goes from as low as 30% for loans 1-3, 40% for loans 4-6, and then 50% for anything over 6, which I was not that thrilled about the commission structure, but they are going to train me to do processing after a month when I move into the office where the commission structure will go to 50%-70% and they also gave me a lot of materials to get me started and give me a better understanding of the processes.

What I am wondering is, is that I am currently going between two states. I see a lot of business in the state that I used to live in, but the big problem is that the company that I am currently working with is not able to originate in the state that I used to live in. Is it ok to sign up with another company just for the purposes of being able to originate loans in a state that my current company is not able to?

Also, I live in a state that does not require licensing for loan officers. Do you know if there is a standard licensing course that would apply for all the states that require licensing or do I have to go to each and every state that I am interested in, and take their separate course and pay separately for each one of those states?

Thank you so much for your time. I hope that all is well with you and yours. Also, please let me know when your net branch is up and running. Take care.

Michelle

[Troy]

Michelle,

I think the tiered scale up to 70% is very good for someone in your position. Make sure you are always learning something. Ask a lot of questions about every part of the loan process. I think that getting processing training is absolutely necessary and takes away about 90% of the mystery involved in the loan process.

Every state has their own licensing requirements (some not at all). There isn't one standardized course, but the majority of the process is the same. The differences usually come in the disclosures that are required to be signed and what is necessary for federal and state compliance. It's a marathon of regulations when you talk about familiarizing yourself with everything across the US. Talk to your broker/manager about other state licensing. They may be currently working on a plan to make more states available to you. If the broker gets approved via a net-branch with a banking license, then you won't have to pay to license yourself in the other state.

To be honest, I'm not very familiar with regulations in states without licensing requirements. Because of that, I hesitate to give you advice about what you can/can't do regarding out of state approval via a net branch. However, I'm quite sure that your broker/manager would want to discuss this with you before you sign up with a company that will allow you to do loans in another state. If you have a definite stream of income available in another state, I'm sure your manager/broker will do their best to find a way to make that available to the both of you. Also, your brokerage may have specific policy in place about out of state leads. Bottom line....check with your management and see if you can work something out! If nothing else, see if you can work with managment to expand the company...step up...take a leadership role. They'll definitely respect your ambition.

Hope that helps.

troy

[Troy]

I forgot to tell you. I found a good site with free mp3s to listen to about loan officer training. I've only listened to a few them, but they seem to be right on the spot.

[URL="http://www.loanofficersurvival.com/"]www.loanofficersurvivial.com[/URL]

troy