Education and Certification
Although loan officers need at least a high school diploma, advanced positions, such as commercial loan officers, will require a bachelor’s degree in economics, finance, business or other related fields. Pursuing a degree in one of these fields can prepare a commercial loan officer for analyzing the finances of a business, reading financial statements and understanding principles of business accounting. Coursework for these programs typically includes accounting, mathematics, finance, economic statistics and business statistics.
It has been reported that many employers require experience prior to hiring a MLO. How can you be hired if with no experience into a profession that prefers experience? The best solution is to earn your bachelor’s degree in business administration or finance. The higher the education level, the better chance one has of entering this field.
Even with the finance degree in-hand, the prospective MLO will need excellent communication skills and interpersonal skills. If the student is not proficient in these areas, then extra-curriculum courses and speaking clubs are recommended.
The Secure and Fair Enforcement for Mortgage Licensing Act of 2008 (SAFE Act) established requirements for the licensing and/or registration of all Mortgage Loan Originators (MLOs.) Each state has its own licensing requirements and exams which are filed through the Nationwide Mortgage Licensing System and Registry (NMLS).
As with most careers in finance related businesses, there are professional designations to be earned. The American Bankers Association (ABA) offers the certified financial marketing professional (CFMP), certified lender business banker (CLBB), and certified trust and financial advisor (CFTA).
The Mortgage Bankers Association (MBA) offers a host of certification options for mortgage bankers, including commercial and residential. The certifications offered by the ABA and MBA require a minimum amount of work experience, successful completion of an examination and the completion of continuing education courses.
The mortgage loan officer has many roles:
- Sales and marketing- Mortgage loan officers actively seek clients through advertisement and by building relationships with commercial and residential real estate agencies. Real estate agents then send interested buyers to the loan officer.
- Financial analysis- Assessing an applicant’s credit worthiness requires detailed analysis of financial information and risk. In loan collection scenarios, loan officers may help analyze and restructure payments to help borrowers at risk of default.
- Communication- It’s crucial that buyers understand the terms of the loan and their obligations. Loan officers explain the terms of the loan, the buyer’s responsibilities and the approval process. It’s especially important that buyers understand how the loan terms impact monthly interest and principal payments as well as how these payments may evolve over time.
- Administration- Loan officers track every detail of the loan and may manage multiple loans to cover the costs of a single transaction.