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June 20, 2013

Few are broke in brokerage

Few are Broke in Brokerage

Many notaries are broke, or nearly so. Not so with the lucrative Mortgage Broker Profession. Not to be confused with the Loan Officer, generally a bank employee, the Mortgage Broker directs lenders thru the “front end” of the system. While the Loan Officer has the final say in granting the loan, it is the Mortgage Broker who often initiates the Mortgage process. The typical Mortgage Broker will handle fewer transactions compared to the Loan Officer; but makes more money per loan compared to the Loan Officer.

Mortgage Brokers are licensed and regulated. Their allegiance is to the borrower to market to them the “best fit” loan. They actively advertise to attract clients and provide support is creating the “front end” services necessary for the Mortgage to proceed. They determine the financial status of the client often analyzing salary, tax returns and bank statements. The Mortgage Broker will assist the mortgage applicant in obtaining pre-approval and completing the lender application forms. They actively search the various bank and other financial institutions to find an appropriate mortgage loan offering. They submit the completed package seeking to obtain from the Loan Officer approval for their clients’ Mortgage Loan need.

Notaries take note: While most Loan Officers work for the lending institution, it is also permitted for representatives of the Mortgage Broker to refer to themselves as “Loan Officers”. The more “independent” Mortgage Broker is licensed and personally liable for inappropriate activities.

The Loan Officer on the other hand is an employee of the bank and is usually covered by their license and their insurance. Mortgage Brokers are licensed by the Nationwide Mortgage Licensing System and Registry. Loan officers, working for direct lenders, must register with the NMLS, but are not licensed.

Where do us notaries fit in? Well, we fit in before, during and after the Mortgage Loan is
processed. Our activities before assist the Mortgage Loan Broker in preparing the completed package for approval by the Lending Institution. Our stamps and seals on the Mortgage are required during the processing of the Loan. But how about after? Actually our work becomes very important after the Lending Institution grants the Loan and Mortgage. The selling of loans on the Secondary market is a tool for the direct lender to raise capital. In addition to the “quality” of the borrower, the “quality” of the paperwork is critical. Paperwork that passed approval for the Loan Officer to grant the Mortgage may not meet “standards” on the secondary market – making that particular loan difficult to transfer! Keep your stamp clear and clean, be sure all entries are EXACTLY proper and legible. Lending Institutions always want the option to sell the loan. Work with the system and consider the lifespan of each loan package you process.