Most homebuyers need a loan, and therefore need a mortgage loan originator when buying a house. Commonly known as loan officers, they pre-qualify you for a loan, take your application, and gather documents necessary for mortgage approval. Originators also answer your home financing questions. The federal government oversees mortgage origination fees and provides public access to originators' work experience through a national registry.
Mortgage Originators, Processors and Underwriters
You deal with loan officers and loan processors during the mortgage origination process. They prepare and package your loan application and supporting documents for underwriting. The loan decision makers, known as underwriters, consider all aspects of your application and paperwork to ensure that you meet qualifying criteria. An underwriter looks at your credit scores, payment history, employment, income and debt load, and analyzes the home's value and condition via an appraisal report. If the loan is approved, mortgage originators then oversee the loan's funding, or distribution of the loan funds that pay for your home.
Where to Find Originators
Mortgage originators work in businesses ranging from small mom-and-pop shops to lending franchises or large corporations. Loan officers work in banks, thrift-and-loans, credit unions, and other federally chartered or insured institutions. They may also work for mortgage brokerages. Unlike banks and national institutions, mortgage brokers have access to loan programs from multiple mortgage-lending companies. A mortgage originator at a bank or credit union can only offer you that firm's own line of loan programs.
Licensing and Registration Requirements
Mortgage originators must be licensed or registered with the Nationwide Mortgage Licensing System & Registry, or NMLS. A federal agency, the NMLS is a one-stop source of standard information regarding mortgage companies and their originators. Mortgage originators have an NMLS identification number, which you can find on their business cards and promotional documents, and on your loan application. The unique number allows you to look up your originator's employment history and any previous disciplinary and enforcement actions.
Mortgage Origination Fees
Originators may charge an "origination" fee for the service of putting together, or making, your loan. Originators must disclose the fee up front on a Good Faith Estimate within three business days of your application, unless the lender denies your loan within that time frame. Generally, the fee may not increase at closing. In a 2014 Bankrate study of closing costs, the national average for mortgage origination fees on a $200,000 loan was $1,877.