- The Washington Times - Friday, April 18, 2003

Would you let the pizza guy deliver your mortgage? Probably not, but in these days of low interest rates and rapid refinancing, practically everyone is trying to get a leg up on the mortgage broker bandwagon.

"It used to be that the mortgage business was a closely held secret," says Kevin Connelly of Pacific Guarantee Mortgage, a national broker-lender with offices in Tysons Corner. "Now even the guy at the 7-Eleven says he can get you a better rate."

Today, those involved in the mortgage industry run the gamut from those working for a full-service agency like Pacific Guarantee, which supplies desk space, office supplies, telephones and computer access to self-styled loan officers working out of their cars and closets.

So you want to be a loan officer or a mortgage broker? Be prepared for a changing industry that is seeking to increase regulation, education and licensing requirements.

"One of our issues is that people want to be a loan officer with no goal except to make money," says Tom Shaner, executive director of the Maryland Association of Mortgage Brokers, which is working to increase regulation in the state.

The mortgage industry is a relatively new one, yet today, between 50 percent and 60 percent of mortgages originate through brokers, Mr. Shaner says.

Time may be running out for the fly-by-night loan officer. Interest rates can hardly sink any lower, and most people who are able to refinance their homes already have done so. Meanwhile, horror tales of falsified documents and loans gone bad have soured industry professionals and consumers alike.

So where does that leave a person looking for a career in the mortgage industry?

Far from at the curb, industry insiders say, especially if he exhibits that particular combination of enthusiasm, number sense, and people savvy that characterizes any good mortgage professional.

First, let's get the titles right. Generally, people speak of mortgage lenders, mortgage brokers and loan officers. The terms are not interchangeable, and each requires a different mix of skills, education and experience.

Mortgage lenders supply their own funds to close the deal.

Mortgage brokers negotiate loans, but don't use their own funds. They frequently work with real estate agents they may even run real estate offices in a kind of symbiotic relationship where each provides business for the other.

Loan officers often work for mortgage lenders or mortgage brokers, contacting firms, individuals or real estate officers to determine their loan needs. Unlike mortgage brokers, loan officers are not required to be licensed hence the pizza guy-cum-mortgage negotiator.

What does a good loan officer do? He must become familiar with all the ins and outs of the lending process, for one thing, and know about the many mortgage packages that are out there up to 500, according to Steve Baugher, executive director of the Virginia Association of Mortgage Brokers.

In many cases, the loan officer has to be willing to hold the client's hand.

"You have to put the client first," Mr. Baugher says. "Not everyone is the same but that's what makes it fun."

Thanks to technological advances, it is actually easier now than ever before to do some of the work in the mortgage industry. Mortgage companies abound on the Internet, with online log-ins that supposedly speed you through the loan process.

For the mortgage professional, loan-underwriting software allows access to credit reports and determination of eligibility with a few clicks or keystrokes.

"Automation has finally had a major impact on the way loans are processed," says Thomas Morgan of Quickstart Mortgage Training in Potomac. "It's been a sea change for us."

The reduction of time and ease of use made possible by loan underwriting means that brokers can typically handle a greater number of loans than ever before. For the mortgage industry novice, such high volume means new hurdles.

Gone are the days when the fresh young loan officer could apprentice under an experienced broker, says Mr. Baugher. People are just too busy.

So what skills does a good loan officer need?

Good communication. You'll need to be able to explain things clearly and succinctly to your client. At the same time, you'll need to be able to listen to and articulate your client's concerns.

Speak another language? In the mortgage business, second-language fluency is a definite plus.

"There are a number of things you have to explain to people, especially to first-time home buyers," says Mr. Shaner. "Sometimes, people don't understand the difference between paying a mortgage and paying rent."

Confidentiality. You'll be dealing with sensitive information here, sometimes information of which even your client may not be aware. Dealing with emotional clients in a professional, respectful way means that you'll honor their privacy even if you don't end up brokering their loan.

Number sense. Despite all the software, you'll still be crunching numbers. And you'll also be dealing with all kinds of financial statements, from wills to pensions to bank statements. You'll need to know how to understand them. Having an undergraduate degree in finance, economics or some related field is preferred.

Time management skills. Brokers and loan officers deal with deadlines all the time. So you can't be successful in the business unless you are willing to follow someone else's clock. Be ready to work irregular and long hours; some of the best deals are made on the telephone, in the car, in the middle of the night.

Computer skills. These days, you simply can't be successful without knowing about the newest software.

Motivation. Expect to be quick on your feet. You won't be successful in the mortgage industry if you sit around waiting for the business to come to you, and as interest rates rise, you'll have to be even more proactive about drumming up business, establishing contacts and even attending community events.

"Refinancing is not really the mortgage business," Mr. Morgan. "It's pretty easy to get refinancing for someone who has already gotten approval at a higher rate. A good loan officer has to work at it."

In any industry where compensation can be 100 percent commission, such people skills can be the difference between a mediocre career and a great one.

According to the Department of Labor, the median annual earnings of loan officers were $41,420 in 2000. The middle 50 percent earned between $30,610 and $57,250, while the top 10 percent earned more than $82,640.

Thanks to the drive for increasing regulation in the industry, a number of service providers for mortgage education have made their appearance.

These include everything from online sites to on-site or campus courses. Still, there can be problems. Online sites can vary in quality, and even when you go for training, you may not be getting what you need.

"There's not a whole lot in the way of formal mortgage training," says Mr. Morgan. "Even the service providers who have sprung up offer more courses about regulatory requirements than vocational training."

But if you want to be a loan officer, be prepared for a learning curve that is long and deep.

"It can take one to two years to really learn the business," says Mr. Morgan.

To begin with, Mr. Morgan recommends his book, "The Loan Officer's Practical Guide to Residential Finance," available from amazon.com. Taking a course or two from a mortgage training operation certainly wouldn't hurt.

"Now nationally there are 25 to 30 mortgage training companies," he says. "Most of them use materials repackaged and resold from the same source. So it doesn't really matter where you go; look at price and what you get for the money."

Steve Baugher recommends courses on ethics, federal and state law, and basic loan organization.

"There is so much in this industry you can have three hundred courses," he says, "but you should begin with the basics of lending and processing."

The Mortgage Bankers Association of America (MBAA) offers correspondence courses on a variety of levels from loan officer certificate programs to those leading to the coveted designation of Certified Mortgage Banker (CMB).

CMB applicants must be employees of MBAA member firms for at least a year and have a minimum of three years experience in real estate lending or a related field. Applicants must also have a sponsor who is a CMB and submit letters of recommendation by a senior officer of the firm and at least two business associates.

Once accepted, candidates must pass both a written exam and an oral interview.

If you want to get into the mortgage business to make some quick cash, you may be "too late to catch this wave," according to Mr. Morgan.

"The rates will go back up," he says, "and the people who were making ten thousand or so dollars a month will be stuck with big cars and heavy Rolexes."

When you get right down to it, there's no substitute for experience.

"On the surface, all loans may look the same, but every loan is different," says Mr. Baugher. "You need years of experience in order to sort it all out."

That may well leave the pizza guy waiting at the door.

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