How to Become a Loan Originator in 5 Steps

What Is a Loan Originator?

Loan originators review and process loan applications before accepting them and arranging for money to be given out. Professionals with this career have the ability accept, reject and negotiate loan applications for both consumer and commercial loans. To ensure a loan application is acceptable they look over other documents that provide applicants' financial information. They are also responsible for making sure all paperwork is filled out correctly and the loan meets state and federal regulation. Loan originators are also responsible for ensuring applicants are kept up to date regarding the status of a loan. In the table below, you can read some details about this career:

Sources: *U.S. Bureau of Labor Statistics; **PayScale.com

Step 1: Research Loan Originator's Career Duties and Education

Loan originators are financing professionals who act as liaisons between consumers and lenders for loan transactions. They participate in all steps of the loan process. They help consumers fill out the loan applications, gather all necessary documentation, such as credit reports, and submit the completed application to the lender. There are many different types of loan originators, such as auto, commercial, student or mortgage loan originators. However, most loan originators deal with mortgages.

Step 2: Complete Education Program

A loan originator is required to have a bachelor's in economics or finance. Individuals who only have high school diplomas may advance to the position of loan originator after gaining experience in related occupations.

Step 3: Become Licensed

As of January 2009, all mortgage loan originators (MLO) must be federally registered if they work for a credit union or a federally insured depository institution. MLOs who work for other organizations must be licensed by the state, as per the Secure and Fair Enforcement (SAFE) Mortgage Licensing Act. Whether licensed or federally registered, MLOs must register with the Nationwide Mortgage Licensing System and Registry.

Step 4: Become Certified

Optional certification for loan originators is offered by the National Association of Mortgage Brokers. There are three levels of certification: General Mortgage Associate (GMA), Certified Mortgage Consultant (CMC) and Certified Residential Mortgage Specialist (CRMS). Each level of certification requires a specific amount of work experience and the successful completion of an exam. The Mortgage Bankers Association administers the Certified Mortgage Banker (CMB) designation for individuals in real estate financing.

Step 5: Keep Up to Date in the Field

Loan originators need to keep informed of changes in federal and state policies and regulations that may affect mortgage lending. You might want to join the National Association of Mortgage Brokers, which offers continuing education classes to its members. The Bank Administration Institute oversees the loan review certificate program for individuals who approve and review loans.

What Are Some Related Alternative Careers?

There are a number of careers that complete similar task as loan originators. Often working under a loan officer, loan interviewers and clerks may assist loan originators by meeting with and collecting information from applicants. In many financially related careers, including tax preparers and brokerage clerks, professionals must make sure paper work is properly filled out and numbers add up correctly. Insurance sales agents review insurance applications to ensure that they are right for clients and meet government regulations.