Exactly what is a Loan Officer? How do I become I loan officer for real estate? How long does it take and about how much do you make? Any other info you guys think I need....thanks!
2006-12-04 09:31:53 · 0 answers · asked by jc207 2 in Business & Finance ➔ Careers & Employment
Long, but very comprehensive answer below is from the US Department of Labor, bureau of labor statistics
Occupational Outlook Handbook http://www.bls.gov/oco/ocos018.htm
Loan Officers
Significant Points
About 9 out of 10 loan officers work for commercial banks, savings institutions, credit unions, and related financial institutions.
Loan officer positions generally require a bachelor’s degree in finance, economics, or a related field; training or experience in banking, lending, or sales is advantageous.
Slower-than-average employment growth is expected despite rising demand for loans, because technology is making for simpler and faster processing and approval of loans.
Earnings often fluctuate with the number of loans generated, rising substantially when the economy is good and interest rates are low.
Nature of the Work
For many individuals, taking out a loan may be the only way to afford a house, car, or college education. For businesses, loans likewise are essential to start many companies, purchase inventory, or invest in capital equipment. Loan officers facilitate this lending by finding potential clients and assisting them in applying for loans. Loan officers also gather personal information about clients and businesses to ensure that an informed decision is made regarding the creditworthiness of the borrower and the probability of repayment. Loan officers may provide guidance to prospective loan applicants who have problems qualifying for traditional loans. The guidance may include determining the most appropriate type of loan for a particular customer and explaining specific requirements and restrictions associated with the loan.
Loan officers usually specialize in commercial, consumer, or mortgage loans. Commercial or business loans help companies pay for new equipment or expand operations; consumer loans include home equity, automobile, and personal loans; mortgage loans are made to purchase real estate or to refinance an existing mortgage. As banks and other financial institutions begin to offer new types of loans and a growing variety of financial services, loan officers will have to keep abreast of these new product lines so that they can meet their customers’ needs.
In many instances, loan officers act as salespeople. Commercial loan officers, for example, contact firms to determine their needs for loans. If a firm is seeking new funds, the loan officer will try to persuade the company to obtain the loan from his or her institution. Similarly, mortgage loan officers develop relationships with commercial and residential real estate agencies so that, when an individual or firm buys a property, the real estate agent might recommend contacting a specific loan officer for financing.
Once the initial contact has been made, loan officers guide clients through the process of applying for a loan. The process begins with a formal meeting or telephone call with a prospective client, during which the loan officer obtains basic information about the purpose of the loan and explains the different types of loans and credit terms that are available to the applicant. Loan officers answer questions about the process and sometimes assist clients in filling out the application.
After a client completes the application, the loan officer begins the process of analyzing and verifying the information on the application to determine the client’s creditworthiness. Often, loan officers can quickly access the client’s credit history by computer and obtain a credit “score,” representing a software program’s assessment of the client’s creditworthiness. In cases a credit history is not available or in which unusual financial circumstances are present, the loan officer may request additional financial information from the client or, in the case of commercial loans, copies of the company’s financial statements. With this information, loan officers who specialize in evaluating a client’s creditworthiness—often called loan underwriters—may conduct a financial analysis or other risk assessment. Loan officers include such information and their written comments in a loan file, which is used to analyze whether the prospective loan meets the lending institution’s requirements. Loan officers then decide, in consultation with their managers, whether to grant the loan. If the loan is approved, a repayment schedule is arranged with the client.
A loan may be approved that would otherwise be denied if the customer can provide the lender with appropriate collateral—property pledged as security for the repayment of the loan. For example, when lending money for a college education, a bank may insist that borrowers offer their home as collateral. If the borrowers should ever default on the loan, the home would be seized under court order and sold to raise the necessary money.
Some loan officers, referred to as loan collection officers, contact borrowers with delinquent loan accounts to help them find a method of repayment in order to avoid their defaulting on the loan. If a repayment plan cannot be developed, the loan collection officer initiates collateral liquidation, in which the lender seizes the collateral used to secure the loan—a home or car, for example—and sells it to repay the loan.
Training, Other Qualifications, and Advancement
Loan officer positions generally require a bachelor’s degree in finance, economics, or a related field. Banking, lending, or sales experience is highly valued by employers. Most employers also prefer applicants who are familiar with computers and their applications in banking. Loan officers without college degrees usually advance to their positions from other jobs in an organization after acquiring several years of work experience in various other occupations, such as teller or customer service representative. Personal qualities such as sales ability, good interpersonal and communication skills, and a strong desire to succeed also are important qualities for loan officers.
There are currently no specific licensing requirements for loan officers working in banks or credit unions. Training and licensing requirements for loan officers who work in mortgage banks or brokerages vary by State.
Various banking-related associations and private schools offer courses and programs for students interested in lending, as well as for experienced loan officers who want to keep their skills current. For example, the Bank Administration Institute, an affiliate of the American Banker’s Association, offers the Loan Review Certificate Program for persons who review and approve loans. This program enhances the quality of reviews and improves the early detection of deteriorating loans, thereby contributing to the safety and soundness of the loan portfolio. The Certified Mortgage Banker (CMB) designation demonstrates the holder’s superior knowledge, understanding, and competency in real estate finance. The Mortgage Bankers Association offers three CMB designations: residential, commerce, and master’s. To obtain the CMB, the candidate must have 3 years of experience, earn educational credits, and pass an exam. Completion of these courses and programs generally enhances one’s employment and advancement opportunities.
Employment
Loan officers held about 291,000 jobs in 2004. About 9 out of 10 loan officers were employed by commercial banks, savings institutions, credit unions, and related financial institutions. Loan officers are employed throughout the Nation, but most work in urban and suburban areas. At some banks, particularly in rural areas, the branch or assistant manager often handles the loan application process.
Job Outlook
Employment of loan officers is projected to increase more slowly than average for all occupations through 2014. College graduates and those with banking, lending, or sales experience should have the best job prospects. Employment growth stemming from economic expansion and population increases—factors that generate demand for loans—will be partially offset by increased automation that speeds lending processes and by the growing use of the Internet to apply for and obtain loans. Job opportunities for loan officers are influenced by the volume of applications, which is determined largely interest rates and by the overall level of economic activity. However, besides openings arising from growth, additional job openings will result from the need to replace workers who retire or otherwise leave the occupation permanently.
The use of credit scoring has made the loan evaluation process much simpler than in the past and even unnecessary in some cases. Credit scoring allows loan officers—particularly loan underwriters—to evaluate many more loans in much less time, thus increasing the loan officer’s efficiency. In addition, the mortgage application process has become highly automated and standardized, a simplification that has enabled online mortgage loan vendors to offer their services over the Internet. Online vendors accept loan applications from customers over the Internet and determine which lenders have the best interest rates for particular loans. With this knowledge, customers can go directly to the lending institution, thereby bypassing mortgage loan brokers. Shopping for loans on the Internet is expected to become more common in the future, especially for mortgages, thereby reducing demand for loan officers.
Although loans remain a major source of revenue for banks, demand for new loans fluctuates and affects the income and employment opportunities of loan officers. An upswing in the economy or a decline in interest rates often results in a surge in real estate buying and mortgage refinancing, requiring loan officers to work long hours processing applications and inducing lenders to hire additional loan officers, who often are paid by commission on the value of the loans they place. When the real estate market slows, loan officers often suffer a decline in earnings and may even be subject to layoffs. The same applies to commercial loan officers, whose workloads increase during good economic times as companies seek to invest more in their businesses. In difficult economic conditions, an increase in the number of delinquent loans results in more demand for loan collection officers.
Earnings
Median annual earnings of loan officers were $48,830 in May 2004. The middle 50 percent earned between $35,360 and $69,160. The lowest 10 percent earned less than $27,580 while the top 10 percent earned more than $98,280. Median annual earnings in the industries employing the largest numbers of loan officers in 2004 were as follows:
The form of compensation for loan officers varies. Most are paid a commission that is based on the number of loans they originate. In this way, commissions are used to motivate loan officers to bring in more loans. Some institutions pay only salaries, while others pay their loan officers a salary plus a commission or bonus based on the number of loans originated. Banks and other lenders sometimes offer their loan officers free checking privileges and somewhat lower interest rates on personal loans.
According to a salary survey conducted by Robert Half International, a staffing services firm specializing in accounting and finance, mortgage loan officers earned between $30,000 and $100,000 in 2005, consumer loan officers with 1 to 3 years of experience earned between $30,000 and $35,000, and commercial loan officers with 1 to 3 years of experience made between $45,500 and $70,000. Commercial loan officers with more than 3 years of experience made between $61,750 and $100,000, and consumer loan officers earned between $25,500 and $50,000. Earnings of loan officers with graduate degrees or professional certifications are higher. Loan officers who are paid on a commission basis usually earn more than those on salary only, and those who work for smaller banks generally earn less than those employed by larger institutions.
Sources of Additional Information
Information about a career as a mortgage loan officer can be obtained from:
Mortgage Bankers Association, 1919 Pennsylvania Ave. NW., Washington, DC 20006. Internet: http://www.mortgagebankers.org
State bankers’ associations can furnish specific information about job opportunities in their State. Also, individual banks can supply information about job openings and the activities, responsibilities, and preferred qualifications of their loan officers.
Suggested citation: Bureau of Labor Statistics, U.S. Department of Labor, Occupational Outlook Handbook, 2006-07 Edition, Loan Officers , on the Internet at http://www.bls.gov/oco/ocos018.htm (visited December 04, 2006).
2006-12-04 09:38:48 · answer #1 · answered by Piggiepants 7 · 2⤊ 0⤋
You can take courses to become a licensed loan officer. Some companies might be willing to put you through a program so that you can become licensed and work for them. They may include a clause that says you have to work for them a certain amount of time, or you'll have to pay them back for the cost of the courses, but I would check out local papers and see if anyone is hiring. The real estate market is in a major slump, right now, so many lenders are laying people off left and right, but they may want a fresh face that they won't have to pay so much money due to no experience, so you never know! Good luck!
2006-12-04 09:37:50 · answer #2 · answered by candy 2 · 3⤊ 0⤋
my mother was a loan officer... they check credit and try to find a balance what the client can pay on the house and if they can even be approved 4 the house... i believe the loan officer makes hate final decision on wither on not they can be approved 4 the house... I'm not sure how you could get started but i do know you would have to work yourself up to being a loan officer... start by processing loans and just work your way up... you may want to try and call local loan offices and see if they need a receptionist that they might be interested in training how to process...
2006-12-04 09:43:47 · answer #3 · answered by *little one* 4 · 1⤊ 0⤋
loan officer
2016-01-28 01:19:11 · answer #4 · answered by Anonymous · 0⤊ 0⤋
Wow, thank you! Just what I was looking for. I looked for the answers on the internet but I couldn't find them.
2016-08-23 12:04:16 · answer #5 · answered by ? 4 · 0⤊ 0⤋
Yes, that's a good point
2016-07-28 05:04:54 · answer #6 · answered by Anonymous · 0⤊ 0⤋