Mortgage Makers: What Are They Doing?

What is a mortgage originator?

A Mortgage Originator, or MLO, guides mortgage applicants through the mortgage approval process, from loan application preparation to closing. MLOs are licensed by state and national authorities, and they are familiar with all the different types of mortgages.

When you see the term “mortgage issuer” it can mean a couple of different things. A company that arranges mortgages, like Rocket Mortgage®, is an MLO. Someone who walks you through the mortgage creation process, from application to closing, is also an MLO.

People who are MLOs can work for a single company that issues mortgages, or it could be a mortgage broker who takes your application and works with one of the many companies.

Since an MLO can be a person or a company, it’s worth taking a minute to break down their unique roles.

Mortgage creator: the person

Probably one of the first people you talk to when you get a mortgage is a mortgage originator. They can also be referred to as a loan officer.

In some cases, this person is a mortgage broker. A mortgage broker will take your application and show you your options with several lenders so you can compare prices and service policies, for example.

The job of a mortgage loan officer is to walk you through the mortgage approval process. In a refinance, this can mean helping you with paperwork, taking documents, and determining the amount and type of loan that meets your goals.

In a buying transaction, you want to get mortgage approval (often called a pre-approval) before you go shopping for a home to find out how much you can afford. The MLO will be able to make this decision based on your credit, income and assets.

Whether it’s a purchase or a refinance, the next step for the MLO after taking a full application and gathering the documentation is to get it through underwriting – the process of making sure you are eligible for the mortgage depending on your finances as well as the type of property you get.

Finally, the MLO will make sure your loan gets to the closing table. This is where you reap the benefits of your loan, whether it’s in the form of a new home or the financial benefits of refinancing.

It is important to know that the responsibilities of an MLO may fall to one or more people depending on who you are working with. At Rocket Mortgage, you will work with several qualified home loan experts at different stages of the process so that you get the highest quality experience throughout the process.

Mortgage loan creator: the credit institution

Although the term mortgage originator can refer to the person who originated your mortgage, it can also refer to the institution responsible for financing that loan. In the mortgage industry, loans are made through bank and non-bank lenders.

Some mortgages are funded by traditional banks that hold your checking and savings accounts, lines of credit, and other investments. Meanwhile, non-bank lenders like Rocket Mortgage specialize in mortgages.

Whichever institution is initially funding your loan, it’s probably not the end of the line. Very few banks or other lenders have a ton of loans in their portfolio to collect payments over the life of the loan because they prefer to get money faster to make more loans.

To help achieve this goal, the majority of mortgages are guaranteed by one of the major mortgage investors, including Fannie Mae, Freddie Mac, the FHA, and the VA. Loans that meet the standards of these institutional investors are insured by them before being aggregated into mortgage-backed securities and sold in the bond market.


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