Loan Officer

A loan officer is front line employee of a mortgage brokerage or lender who attend to inquiries, counsel and sell loan products to borrowers.

When dealing with a bank, the loan officer might be a banker as well. And when dealing with mortgage brokers, the loan officer might also be a broker top.

However, it must be noted that not all loan officers hold a dual role or title.

In some cases, depending on how business operations are run, loan officers might also be involved in the tasks associated with loan processing.

While they are considered as personnel employed by their employers, their role is understood to be as independent as possible.

Whether they practice any bias towards their employer’s products is another matter altogether.

Remuneration for loan officers are largely commission-based. If there is a basic salary, it is usually a small amount. This is to motivate them to sell more loans for higher compensation.

According to the Bureau of Labor Statistics, the median pay is close to $65,000 per year.

Lenders and brokers post prices for each day to loan officers including a par rate which sets the benchmark for the mortgage prices they sell to consumers.

The par rate is the interest rate on a loan where the lender charges zero points.

Do note that the posted price and the par rate can be, and most likely, different.

When a loan is sold above the posted price, overage occurs and the officer will be banking in more commissions. When sold below posted price, underage occurs.

When a loan is sold above par, rebates called yield spread premium are credited to the broker.

The key to a successful career as a loan officer requires quick-thinking and good salesmanship.