(3 minute read)

And what are they doing exactly?

A loan originator or Mortgage Originator (MLO) is the gateway to the process of obtaining a mortgage loan. An MLO has two jobs; the first is to convince yourself that their lending prowess is your best borrowing option. The second is to help you work your way to the closing table. A loan originator is a salesperson first and a loan approval chaperone second.

Google “loan originator job description” and the first result of study.com proclaims that “MLOs help loan seekers choose the right product and complete and process the loan application.” But study.com describes “Their main task is to solicit potential borrowers for new mortgages.” Translation: sales.

Mortgage approval is a team sport, MLO, Borrowers, Processors, Underwriters, Firms, everyone is focused on the same successful outcome. This is the loan originator or MLO‘s team management work. But study.com is right and the fact is the the most successful MLOs are the best sellers. This is not a negative warning or warning in any way. If you’re struggling to borrow hundreds of thousands of dollars that will be repaid over decades, you have to like and trust the person you’re working with. Good MLOs are adept at communicating trust and confidence.

According to Brian Martucci, 30-year veteran of mortgage origination; “A mortgage originator is someone in a sales role whose primary job is to originate residential mortgages, educate the consumer, and help process and close the loan.” There.

By the way, the best sellers, the most successful MLOs (who do the most business and help the most families with mortgage financing), are by default the most experienced and tend to have the most wisdom in mortgage matters.

Knowing that every lender’s entry point is a seller and that every transaction will appear to be the best, you can confidently choose your lender and your MLO from an open-eyed playground decision tree.

It is the MLO’s job to be a filter, to determine if your loan is approvable and whether or not the ironclad documentation required to support that decision is “harvestable. This is where the deal hits or begins a slow and painful death. Like almost everything else, mortgage financing is virtual with algorithms and embedded software applications doing most of the heavy lifting. Integrity information is the responsibility of MLO and you. If the information used for your successful loan decision is true, correct, and documentable, and if the loan is properly constructed, the rest of the mortgage loan approval process should be drama-free and your closing will be uneventful full disclosure, warts and any partnership with your MLO and mortgage team. they do, help them do it.

One last thing; the vast majority of MLOs receive a commission upon closing your loan. They are rarely paid, there is no safety net. MLO compensation is strictly commission. They want you to succeed, they want you to close that mortgage that you rely on so much, because they want to be paid for the weeks or months that they worked for you for free. Ask your real estate agent about this.