When you decide to get a mortgage to purchase a new property or refinance your current mortgage, many entities would be involved in that transaction. Real estate agents, appraisers, underwriters, loan officers, etc.
One of the most significant parties in this transaction is going to be your mortgage loan originator also known as MLO which could be an individual or a company. In this post, we will learn about third-party origination in detail.
A TPO mortgage originator is an individual or a company that helps the lender in the mortgage loan process right from the application to the closing of the mortgage loan.
Many lenders use third-party originators to market their service through online portals where the MLOs will contact the customers and understand their need for the loans and help the lender to take mortgage applications, underwrite, and closing of the loans.
Initially, the lender will have a signed contract with the TPO mortgage originators laying down the term of their service, roles, and involvement of the mortgage originators in the mortgage loan process.
This could be marketing the lender’s services using different marketing strategies, taking loan applications online, assisting the lender in underwriting the loan, and assisting the lender to close on a loan.
Once the contract is signed between the lender and the TPO mortgage originator, the originator can start taking an application for a loan from the potential borrowers.
The lender’s automated system will determine if the borrower is getting qualified based on the required loan parameters.
If the borrower qualifies, the mortgage originator will request all supportive documents and will screen them before submitting them for underwriting and get an initial loan application signed by the borrower.
Once the documents are screened by the third-party originators, they will be submitted for underwriting with the lender’s in-house underwriting team or again a third-party underwriting firm or company.
While the loan is underwritten, the third-party originator will be a mediator between the underwriter and the borrower.
Any conditions that are held by the underwriter to close the loan will be shared with the borrower by the third-party originator.
Once the underwriter clears the file to a clear to close status, the originators will assist the borrower in sending all the closing disclosures to the borrower and set up a closing date with the borrower.
Once the loan is closed all the documents are submitted to the lender and the servicing rights are handed over to the lender for the loan.
By signing up for a third-party mortgage loan originator, the lender will reduce the cost of processing, underwriting, and scheduling the closing for a loan. The lender can capture the online market as the originators also do their own marketing to acquire more clients.
Since the mortgage originators are usually paid in form of a percentage on the loan, lenders don’t have to have fixed expenses compared to if they do it all in-house.
Since this option is inexpensive, the lender can compensate the borrowers by providing more attractive interest rates and other lending terms.
All the third-party (TPO) mortgage originators need to have licenses so that they can originate loans on the lender’s behalf.
The license is based on the state where the originator is planning to originate the loans.
Your mortgage loan originators are the people that you would be constantly in touch with when you plan to get a mortgage or refinance your current one.
Usually, mortgage originators have tie-up with different lenders and would only get paid once the loan is closed. This means that the mortgage originators would intend to find the best deal possible with the fastest closing time.
A mortgage is a golden opportunity. The good news is that whoever can get the customer first wins and can turn their business into gold.
The way this market is going we are absolutely living in the best times we ever could live in to be a mortgage loan originator.
In this post, we will learn who is a mortgage loan originator and what do they do.
The reason why the mortgage is a golden opportunity right now is that you get to help people and also make money and that’s why it is successful and rewarding.
You get to close the deals, put people into homes or restructure debts or lower their monthly mortgage payments, and get paid pretty well to do that.
A mortgage loan originator is a person who helps people get money for their home or refinance their mortgage simultaneously simplifying the process for them.
For starters, the first job of the mortgage loan originator is to assess the client’s situation and fill up a mortgage application form.
A licensed mortgage loan originator has to be available for clients at their convenience to provide the best of service.
It is not a typical 9-5 job a mortgage loan originator might also have to work after hours and weekends.
A mortgage originator has multiple roles and responsibilities.
A loan originator should know how to take the mortgage applications over the phone, personally, and over an online application.
This might require spending time with the client and understanding their situations and needs.
Collect the relevant documents concerning income, photo id, and assets.
Once documents are received, a mortgage originator would have to review the documents and analyze them to ensure that the client qualifies for the mortgage according to the loan program guidelines.
This will also help the originator to provide multiple options to the borrower to choose from.
Once the files are reviewed and analyzed, the licensed mortgage loan originator needs to submit the file to the lender for underwriting.
Once the file is in underwriting, the mortgage loan originator needs to keep a constant watch on the status of the loan and make sure the client is kept informed in every step of the process.
The underwriter may ask for some additional documents to get the final approval for the loan.
The licensed mortgage loan originator would need to ask the client to provide those documents and ensure all conditions posted by the underwriter are cleared.
There are constant changes that are made to the mortgage guidelines.
The mortgage loan originator needs to stay up to date with the latest mortgage updates and changes.
This would help the mortgage originator to give the right information to the clients with proper solutions to their requirements.
A mortgage loan originator would also need to have good relationships with other mortgage partners like Title companies, realtors, and homeowners insurance agents.
This would help the originators to provide exclusive service with regards to the process for the mortgage that includes competitive deals to the clients for insurance and title.
A mortgage loan originator is a sales-oriented position through consultation and developing relationships with clients and referral sources.
If you are thinking about getting into the mortgage origination industry you need to know that it is very fast-paced and competitive so you will be constantly engaged and challenged.
If you are a people person and you enjoy being social, the mortgage loan originator is definitely a job for you.
All you need to do is practice time management and setting your priorities upfront.
Mortgage origination can help you create wealth that you always dreamt of while you are helping people the right way.