Your Successful Career as a Mortgage Broker

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Overview

Mortgage banking is one of the fastest growing industries in the country. In the next few years, home purchases are expected to run into the trillions, creating more opportunity than ever for people seeking a career in this profitable industry. Real estate author, columnist, and veteran mortgage banker. David Reed offers practical advice on licensing and educational requirements, as well as valuable guidance on the different career options available as a mortgage broker, mortgage banker, correspondent mortgage ...

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Overview

Mortgage banking is one of the fastest growing industries in the country. In the next few years, home purchases are expected to run into the trillions, creating more opportunity than ever for people seeking a career in this profitable industry. Real estate author, columnist, and veteran mortgage banker. David Reed offers practical advice on licensing and educational requirements, as well as valuable guidance on the different career options available as a mortgage broker, mortgage banker, correspondent mortgage banker, and more. Aspiring mortgage brokers will also discover how to:

• Quote interest rates

• Get approved by wholesale lenders

• Negotiate the steps of the loan process

• Market and prospect successfully

Detailed and informative, Your Successful Career as a Mortage Broker is an invaluable tool for creating a brilliant career in an ever-changing, ever-growing field.

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Editorial Reviews

From the Publisher

“Now, finally, we have a practical guide to help people get started in mortgage lending. David Reed's latest book, Your Successful Career as a Mortgage Broker, is not only the one common-sense book every mortgage loan officer should have on their desk, it also contains important information for borrowers....Reed, a Texas mortgage lender and a contributing columnist with Realty Times, has a long history of helping consumers....AMACOM, Reed's publisher, is also the long-time publisher of Your Successful Real Estate Career by Kenneth W. Edwards. The Edwards' guide is by far the best introduction to real estate brokerage for prospective agents and brokers. Now AMACOM has also published Your Successful Career as a Mortgage Broker and obviously has another long-term winner on its hands.”

-Realty Times

"... The one common-sense book every mortgage loan officer should have on their desk... Another long-term winner."

-Realty Times

“In an age where borrowers can choose to have all or none of their income or assets verified to secure a mortgage, Mr. Reed does an excellent job describing the process and alternatives for new and potential mortgage bankers and brokers.”

--The Midwest Book Review

“..comprehensive look at how to become a mortgage originator, which route to take to success and what it takes to get there.” – MortageDaily.com

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Product Details

  • ISBN-13: 9780814473702
  • Publisher: AMACOM
  • Publication date: 4/4/2007
  • Pages: 240
  • Sales rank: 504,049
  • Product dimensions: 6.00 (w) x 8.90 (h) x 0.80 (d)

Meet the Author

David Reed (Austin, TX) is a veteran mortgage banker who has closed more than 1,000 mortgages. He is a columnist for Realty Times and Mortgage Originator Magazine and is a member of the Mortgage Speakers Bureau. He is the author of Mortgages 101 (0-8144-7245-1), Who Says You Can’t Buy a Home (0-8144-7340-7), and Mortgage Confidential (0-8144-7369-5).

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Read an Excerpt

1 • C H A P T E R •

The Mortgage Loan Officer

and His Team

A loan officer is an individual who assists those who need or want

to borrow money in order to buy real estate. Loan officers take

loan applications, counsel clients on the types of loans that best suit

their needs, and help them with other mortgage-related questions

about loan qualifications, closing costs, monthly payments, and credit

issues.

A loan officer can be an employee of a national bank or a ‘‘mom

and pop’’ mortgage-broker organization. Regardless of who employs

them, all loan officers provide the same basic customer-service functions.

There are numerous advantages to being a mortgage loan officer,

including these:

You can make a lot of money as a mortgage loan officer. Lots of it.

According to the CNNMoney.com annual salary survey, the average

loan officer makes over $76,000 per year. Make it to the top 5 percent

of the industry and you’ll make over $360,000 per year. Not bad for a

day’s work, is it?

There are no college degrees required to be a loan officer, nor do you

have to have any special education requirements. Although there are various

state licensing laws that you need to comply with, you don’t have

to amass any special formal education. Okay, you need to read and

know how to work a calculator, but that’s about it.

You help people. In fact, you help people with one of the biggest

decisions they’ll ever make. Your counsel and advice, along with your

encouragement, get people into their own homes.

If you do your job right, you will get a sense of accomplishment found

in few other careers. Helping people get into their first homes or being

the person responsible for helping someone repair his or her damaged

credit in order to buy a home is a feeling hard to find elsewhere. I

remember one young lady several years ago that actually broke down

in tears when I told her she qualified to buy her very own home. Go

ahead, find something else like that in the financial world. I dare you.

You can telecommute. You can be a mortgage loan officer anywhere.

If you decide that the Southern California lifestyle is no longer for you

and you yearn to live on a ranch in west Texas, then by gosh unpack

those boots and do it. You’re not stuck with a career that only works in

major cities. You can go anywhere you please.

The skills are transferable. Mortgage loans are approved in the very

same fashion in Miami as they are in Mobile. Geography does not

distinguish a 30-year fixed-rate conventional mortgage. That means the

skills you’ve learned in one part of the country will be the very same

skills you rely on in other parts of the country. If you’re a good loan

officer in Seattle, you’ll be a good loan officer in Schenectady. Many

jobs don’t allow you the luxuries that being a loan officer does.

You work your own hours. You can sleep late if you want. Or not.

Successful loan officers treat their loan businesses as seriously as any

other professionals. If you want to start your day at 10:00 a.m., you

can. If you want to begin work before the sun comes up, you can do

that too. Some loan officers take a day off during the week so they can

work Saturdays. Some loan officers work Sunday afternoons. Some

loan officers work in the evenings. Most successful loan officers work

a combination thereof.

You will become more financially savvy. Becoming a loan officer gives

you a better sense of the importance of financial well-being. There are

few high school or college courses that teach the importance of credit

and financial responsibility. Most of us learn it just by living every day,

paying our bills when they’re due. Others may not understand how late

payments on a credit report can affect their financial futures. By being

a mortgage loan officer, you’re knee-deep in the world of credit and

how it affects consumers. You will understand how financial responsibility

can reap rewards such as being able to borrow money at a cheaper

rate than someone with less-than-stellar credit.

As a mortgage loan officer, you will be able to share the knowledge that

owning a home is perhaps the single greatest way for someone to

achieve financial independence. Building equity in a house can mean

an easier retirement or an easier time paying for other things such as

college tuition or home improvements.

You can be a part of all that. You can become a successful mortgage

loan officer and make a lot of money if you follow the instructions

outlined in this book.

Characteristics of Good Loan Officers

Okay, so now that you know what a loan officer does, do you have the

tools necessary to be a loan officer? Maybe. Maybe not. The fact is there

are not any ‘‘core’’ requirements to be a loan officer. There are, however,

certain characteristics that will certainly help you succeed in this

career.

.

You Are Responsible Enough To Be Your Own Boss

This is probably the hardest component for a lot of people. Some need

to have an eight-to-five job—they simply need to have structure that is

sometimes attained only through a time clock.

Don’t take this the wrong way, but some people in their work lives

need to be told what to do. They perform better when someone else

sets the objectives and goals for the day.

As a loan officer who gets paid primarily on commission, you will

determine your own success or failure. You have to be a self-starter and

be able to stay on top of all aspects of your job.

Many loan officers starting out are fortunate enough to have bosses

who help steer their career paths in the right direction. Still other lenders

simply say to the loan officer newbie, ‘‘Okay, we’re going to pay you

a big commission to bring in these deals, but you have to bring them

in!’’

Being your own boss means that, whether you’re self-employed or

not, you must have the ability to establish and follow a marketing plan

as well as adapt easily to the constant changes in business climates that

directly affect your plan. Knowing these changes will occur will make

them easier to accept.

You Are Comfortable Crunching Numbers

You don’t need to be able to do calculus, but you do need to understand

numbers. Mortgage loans don’t involve quantum theory, but you must

be able to comfortably add up numbers, divide that number by another

number or two, and be able to use a financial calculator.

When I was in school, math was never my best subject. I was

definitely a ‘‘right brain’’ guy who could handle the abstract and present

it in a coherent way, but often certain calculations would leave me dry.

I didn’t necessarily struggle with math, but it was definitely harder to

execute than, say, writing or giving speeches.

Before I entered the mortgage field, I had a good friend who owned

a mortgage company. I would go over to his house and see him work

off a funny calculator that had a bunch of odd, numbered keys on it.

This funny calculator was the famed Hewlett-Packard 12C, or HP12C,

as it’s known in the financial world.

A regular hand-held calculator would let you type in ‘‘12 + 10 =

22’’ or some simple process. A 12C financial calculator would give you

an unintelligible answer when you tried to enter in the very same 12

+ 10 sequence. It was weird.

After I became a loan officer, I used the 12C every day, all day.

And now, I honestly find it difficult to use any ‘‘normal’’ calculator. It

frustrates me. My 10-year-old son can use one with ease, but I can’t

seem to make it work and I usually throw it aside.

Although I talk about the 12C, it is certainly not the only financial

calculator on the market. The point here is you need to be able to

comfortably work with a handheld financial calculator. There are a variety

of online calculators and even some you can run on your computer,

but be wary. You will need to be able to figure payments by yourself,

without the aid of a computer.

Whether you need to accomplish that feat often is not as important

as knowing how to do it. You will, someday, need to calculate payments.

You will, some day, impress your potential client when he or

she sees that you know how to figure payments with a calculator and

not rely on a computer or website. It makes them think you’re a financial

genius. And like me, who was math-challenged, that’s a big plus.

You Are Capable of Explaining Things

The mortgage business has so many foreign terms that most consumers

never run across them until they buy a house. And even if someone

buys three or four houses in his lifetime, he still might not get the

lingo down.

It’s your responsibility as a loan officer to explain the entire mortgage

process in language borrowers understand. Mortgages aren’t nec-

essarily complex, it’s just that the language inherent in the process can

make them so.

If you’re able to explain things, you won’t get your feathers ruffled

when someone asks a question or gets frustrated with you when she’s

hit with a bunch of numbers that don’t quite mean much. Your customers

will be happy and will refer you to their friends.

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Table of Contents

Contents

Preface ix

Part I

Getting Started 1

Chapter 1

The Mortgage Loan Officer and His Team 3

Chapter 2

How Do I Get Started? 16

Chapter 3

Mortgage Banker vs. Mortgage Broker 20

Chapter 4

The Loan Application and Process 36

Chapter 5

Types of Mortgage Loans 69

Part II

The Basics of the Job 93

Chapter 6

Loan Prequalification and Approval 95

Chapter 7

Loan Documentation 102

Chapter 8

Interpreting Credit Reports and Credit Scores 110

Chapter 9

Interest Rates: How They’re Set, How To Quote Them 123

Chapter 10

How Brokers Make Money 137

Part III

Making Yourself Successful 149

Chapter 11

Marketing Yourself 151

Chapter 12

Marketing Secrets from the Pros 159

Appendix A

The 1003 and Disclosure Forms 181

Appendix B

Ten Steps to Becoming a Successful Mortgage Loan Officer 198

Appendix C

Ten Steps to Becoming a Megaproducer ($250,000 per year) 199

Appendix D

Sample Marketing Pieces 201

Appendix E

Industry Resources 205

Appendix F

State Licensing Chart 210

Appendix G

Payments Per Thousand Dollars Financed 218

Glossary 227

Index 241

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