A mortgage originator has the responsibility of working with a client to close a mortgage loan transaction, and in most cases will work through the lender or broker who originated the loan. A mortgage originator has the authority to negotiate terms on behalf of the originator and the client. Once the terms are agreed upon, the mortgage originator obtains a written binding agreement between the originator and the borrower at the closing.
A mortgage originator can be either a mortgage banker or mortgage broker. Many mortgage bankers will work through brokers or agents and mortgage brokers will typically work independently. As a mortgage originator, you will act as the middle person for a home loan. You will receive offers from many different lenders and have the responsibility of matching them with borrowers who are willing to purchase the home based on your best offers.
There are two primary mortgage markets – the primary mortgage market and the secondary mortgage market. In the primary mortgage market, homebuyers and investors refer to a lender for a home loan. The mortgage originator acts as the middleman by communicating directly with the appropriate financial entities. In the secondary mortgage market, homebuyers and investors refer to a secondary financial institution for a home loan.
If you are a mortgage originator, you must complete the pre-licensure education provided by your applicable NMLS agent. This training program is required to ensure that you are knowledgeable and experienced with the laws, regulations, procedures and NMLS rules that apply to your business. The NMLS rules require mortgage originators to obtain pre-licensure education every year. This pre-licensure education must be completed from an accredited NMLS approved provider.
It is important for mortgage originators to understand the differences between NMLS policies and NMLS rules for mortgage bankers. A mortgage banker is not an NMLS member nor does it have to be. An NMLS member mortgage banker has to be registered with NMLS in order to access the NMLS National Leads database. In addition, in order to have their name included in the database, mortgage bankers must first complete an approved lender registration with the Federal Housing Administration or FHA.
As a mortgage originator, you will work directly with the home loan lender to obtain a home mortgage loan. Your role as a mortgage broker involves coordinating with the mortgage lender for the client’s best interest. You will work closely with the mortgage broker company and provide information to the home loan lender regarding the client’s finances, credit history, and other information related to the client’s home loan needs.
NMLS mortgage originators must register with the National Mortgage Lender Registry (NMLS) in order to access the National Mortgage Market System (NMLS). The mortgage lenders are then authorized to use your information throughout the loan process. This enables NMLS to provide quality customer service to clients and to make mortgage loans to homebuyers that they otherwise would be unable to approve. In addition, registering with NMLS gives mortgage brokers the opportunity to become a member of NMLS’s Mortgage Electronic Application System (MEMS). Through the Mortgage Electronic Application System, mortgage brokers can submit more than one application to a single mortgage lender.
The role of a mortgage originator extends beyond simply working with the lender to obtain mortgage loans for buyers. The originator may also act as a third party or a liaison between the lender and the buyer. In this role, the mortgage banker or lender drafts the Buyer’s Affair, the contract that outlines the specifics of the lending money. Once the contract is signed, the mortgage originator becomes involved in negotiating the contract for the borrower as well as acting as a mediator between the buyer and the lending money lender during the closing process. They may also draft and sign the contract for the property as the seller of the property.