A residential mortgage loan originator, also called a mortgage broker, is someone who, for profit or payment, or on the hope of profit or payment, takes out or negotiates mortgage terms for a residential mortgage loan typically used to finance residential properties. Although brokers don’t deal directly with homeowners, they do often work as representatives for financial institutions that do. Some brokers are independent, and work solely as financial advisors or accountants, while others are employed by banks, building societies or private mortgage companies. Residential mortgage brokers earn a commission on the loan they secure; the buyer pays the broker a fee, which is often paid as a percentage of the loan’s cost.
While the mortgage broker doesn’t actually get to sign the loan documents, he does represent the lending institution in question. He collects monthly or annual fees from the borrower and then receives a cut of the loan amount (this is called the origination fee). The homeowner also pays this fee along with any points or closing costs that might be assessed. Brokers also make recommendations on the best loan products available, but the final say is always the homeowner.
A residential mortgage loan originator has many essential responsibilities. He must, among other things, work with the lender, the borrower and the underwriter to find the right product. He must close the deal, and he must follow all legal procedures that might be required. He must be prompt in his response to queries and in his willingness to help the homeowner with the finer points of refinancing.
The primary duty of the Residential Mortgage Loan Originator is to find the appropriate lender for the loan. Most brokers go through a s.r.f.e. program, which means that they have fulfilled all the disclosure requirements as set by the federal Home Mortgage Broker Practices Act of 2021. As an insured mortgage banker, your company is required to comply with these laws.
It is important to note that the responsibilities of the mortgage broker relate only to acts performed on behalf of your institution. An employee is not a representative of your firm and does not represent you in the transaction. As an insured mortgage banker, your company is responsible for determining whether or not an employee has registered the employee’s name with the S.R.F.E.O. If the employee does register, the S.R.F.E.O., or securities Register, will provide the name of the employee and the company, as well as the particular mortgage broker whose office records are to be maintained.
Another duty of the mortgage loan originators is to act as the representative of the lender in negotiations with third parties. This includes borrowers and/or sellers, including landlords, mortgage institutions, and title companies. Mortgage bankers are also responsible for acting as an agent for the lender and providing the borrower’s with information regarding the status of the mortgage loans, including what are known as “Loan-to-Value” (LTV). It is the responsibility of the mortgage loan originators to ensure that the terms and conditions of the loan meet the requirements of the lending institutions.
To become licensed, a person needs to complete training provided by the Department of Housing and Urban Development (HUD). The training usually lasts two years. Prior to obtaining a mortgage loan originator’s license, one has to pass the exams given by the National Association of Mortgage Brokers and the National Association of Property Professionals. Requirements to become licensed vary from state to state. In general, one has to have passed the examinations and have a portfolio that consists of at least three properties.
Another duty of the mortgage banker is the review of the income and expenses of the borrower. In order to qualify for this position, an applicant must fulfill the eligibility requirements of the Mortgage Bankers Association of America (MBA). Applicants who meet the minimum requirements to get an interview with the principal underwriting officer and the principal can select the one who he thinks can provide the best service to the organization. After selecting the one, he submits his application with a few documents and a complete set of information and documents. The next step would be for the principal to contact the appropriate Registry for Service and Purpose (RSPO) for the mortgage application. In the process, one would receive a registration number and the mortgage banker’s license.