Let’s get past the BLA-BLA-BLA’s on what you have to do to become qualified to apply for your STATE license:
- Get your NMLS ID #
- Take and pass your pre-licensing courses.
- Study hard and pass your NMLS National Test
Now you’re eligible to be offer a job as a loan originator, aka Mortgage Loan Originator -MLO.
What nobody wants to tell you:
Everyone wants to tell you what you must do to become a licensed MLO.
What no one wants to tell you is you’ll need more training. A lot more training, but we’ll touch on that later.
What will stop you from becoming licensed?
First: Felony Conviction;
Obvious reason, but people still try
If you have a criminal felony charge on your record, it’s doubtful any State will grant you an originators license. This also can apply to any type of felonies which have been adjudicated down to a “First Time Offender”.
So, before you start paying for NMLS pre-licensing classes and testing, please check with your State Department of Banking and Finance.
Remember: it’s the State that issues you a license NOT the NMLS.
Second: Doing It Part-Time
If you’re thinking about doing this part-time without prior lending experience, your chances of being hired are dismal. Understand that branch managers hiring new MLOs will have to invest a tremendous amount of their time and energy getting you through their onboard training process. Every MLO must learn every step in “Taking A Detailed Loan Application”. and a multitude of loan programs offered by hundreds wholesales for you to sell. Your branch manager will be responsible for training you on these subjects and more, but it’s doubtful to invest their time training you if you’re only willing to commit on a part time basis. A branch manager has a minimum of 40 hour they must squeeze into their monthly schedule to get you up and producing quickly
Sometime Exceptions to Part-Time:
Realtors wanting to cross-train and become MLOs while they keep their realtor’s license. Realtors, if hired as a MLO, need to understand they will need to commit 100% of their time for the first few months learning the skills and product knowledge required to effectively generate loans that close. Remember many States require a Real Estate agents to get written permission from their brokers to work as a loan originator for another company.
Third: Poor Credit History, along with Chapter 7 & 11 Bankruptcies
This does vary per State. Some states are critical and others more lenient. Those States that are critical may ask for a writtenexplanation of any derogatory accounts on your credit report. What these critical States are looking for is your demonstrated ability to properly manage your own personal finances.
Some States will permit derogatory credit on the MLO’s credit report if the cause of delinquencies were outside the control of the applicant. For example:If your wife or you became hospitalized and one of you lost their job. The loss of that job and income was outside of your control. Since the delinquencies were due to loss of income, the applicant MLO would not be prevented from being issued a licensed. If you know your credit is good, don’t worry. If you have serious and continuous credit issues, contact your State Department of Banking & Finance for guidance.
Fourth: You need to have some cash reserves before starting a new job as a MLO.
How much cash reserves? That depends on how much you’ll need to set aside to cover paying your regular monthly bills for 2 to 3 months. Typically, a 3-to-4-month cash reserve would be a good start. The mortgage industry typically pays on a commission basis. If you don’t close a loan, you don’t get paid. How long does it take for a loan to close? Typically, by your second month you should have a loan in the pipeline and that loan should close within 30 to 45 days, if all goes well.
What happens if you don’t close a loan in your first 60 or 90 days?
We hope your previous employer will welcome you back.
