Are Mortgage Loan Originators Professionals?
When I ask the question “Are loan originators professionals?” to a group of loan originator students in ethics classes, almost everyone says “yes.” Anyone can do their job in a professional manner (adjective,) but not everyone is a Professional (noun.) Is your barista at Starbucks or the person who bags your groceries a professional? If you answer “yes,” what makes a barista different than a lawyer? When we use the word Professional as a noun, there’s a classic definition that we refer to here:
A Professional:
- Has specialized knowledge in his or her field. (Update: This body of knowledge is generally agreed-upon by those in the industry and is typically described within state and federal law.) This person knows way more than the average random consumer about his or her area of expertise;
- Is required to complete a minimum amount of formal, academic education;
- Is tested for competency;
- Is licensed;
- Must maintain that license with mandatory continuing education;
- Subscribes to a mandatory code of ethics in an industry that is self-regulating. This is different from state or federal government regulatory oversight. The industry itself regulates ethical conduct over and above state and federal law;
- The self-regulating body enforces their code of ethics with sanctions for violations;
- Owes fiduciary duties to clients. This means the professional has the highest prescribed duty of loyalty to the client, to put the client’s interests above his or her own interests.
Here is how loan originators (LOs) measure up against the above list:
- LOs, there is a power imbalance between you and the consumer. You know way more about how the machine we call mortgage lending works than the average random consumer will ever know.
- In many states, including WA, no education is required to begin originating loans. (However, this may be changing at the federal level.)
- Testing LOs for competency finally began in 2007 for LOs in WA state
- Licensing of LOs is currently not required in all states and for originators employed by all types of lending institutions.
- Continuing education requirements are very low if they exist at all (WA state only requires LOs to take two classes per year.)
- There is no mandatory code of ethics for mortgage lenders. What codes exist at the national trade level, are voluntary and offer insufficient guidance.
- Currently there is no ethical oversight in mortgage lending by the industry. There may be individual company codes of ethics for employees. Were you asked to read and sign a company code of ethics before or during the hiring process?
- Fiduciary duties are now required for mortgage brokers and loan originators as of June 12, 2008.
One of the ways we can better understand the current crisis facing the mortgage industry is that loan officers, loan originators, mortgage planners, loan consultants, or whatever their job title, had absolutely no duty to put their client’s interests above their own. The relationship between a loan originator and the consumer was (and still is in many states) a retail relationship. During the mortgage-lenders-gone-wild days, many consumers (based on countless interviews held by regulators, consumer advocacy groups and even the mainstream media) held a false belief that a loan originator is a “professional” and owes a duty to the consumer not to harm him or her.
Loan originators are classified as an “emerging profession.” We are living through a historic, transformational phase. On the other side of the transformation, which could come sooner than some people think, I believe LOs, no matter where they work, will owe fiduciary duties to consumers, even with LOs who work at a bank. If you look at the narrative history of any profession you would see, over time, a steady increase in the number of continuing education classes required, more mandatory pre-licensing education, an elevation of duties owed to clients, more expansive ethical codes, and tougher licensing exams. Loan originators, no matter where they work, will eventually transform into professionals, though some will have to be dragged kicking and screaming.
Many brokers believe fiduciary duties means higher liability. However, if done right, this may actually have the reverse effect by lowering the mortgage broker’s liability.
Hi Terri,
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By the way...sorry for such the long post for those who read it...had alot on my mind...obviously. 
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Pingback by Solutions to the Mortgage Lending Crisis : National Association of Mortgage Fiduciaries on 13 June 2008:
[...] post education, tougher exams, and higher duties owed to consumers, but moving into the realm of professional status also means more prestige, less government oversight, and the fees emerging mortgage professionals [...]
Comment by Brad Allen on 14 June 2008:
Great definition of a profession. I don’t know that there is one that is universally accepted but you have captured many of the usual key points contained in other definitions I am familiar with. Your definition is missing two key elements, however. A profession has a well established body of knowledge that members of the profession are exepected to have mastery of. There is no such established body of knowledge for the mortgage broker industry. And professions generally have a measure of public purpose. The mortgage broker industry has yet to define and accept for itself any public purpose.
As for your analysis of how the mortgage broker industry stacks up, I would disagree with your acceptance of the current licensing exam as a test of competency. Insurance agent exams, mortgage broker exams, stock broker exams are focused primarily on making sure that the practitioner has an acceptable understanding of his industry and of the regulations governing it. They all fall short of any measure of competency, that is, the examination and evaluation of the practitioner’s mastery of that defined body of knowledge that is central to the profession. It is not sufficient to say that mortgage brokers know more than average citizens regarding mortgage origination and lending. The real question is do they know what they ought to know relative to the accepted body of knowledge to be deemed worthy of entry into the profession. You cannot even begin to examine for mastery of the subject matter until you define the subject matter to be mastered.
I think you are on the right track. I am not sure that the industry has any real interest in becoming a profession, however. Until industry leaders recognize the importance of and the need for fiduciary responsibility, they will not provide leadership leading to the acceptance of fiduciary responsibility. As long as we are just in the business of selling loans, the closest thing to a profession we belong to is the sales profession. And that one fails to meet yours or anyones elses difinition of a true profession.
Brad
Comment by mf on 18 June 2008:
Hi Brad,
You know what? I agree with you and I’m going to update the main article to include “a specialized body of knowledge.” That’s on my main list and I accidentally left it off.
“A profession has a well established body of knowledge that members of the profession are exepected to have mastery of. There is no such established body of knowledge for the mortgage broker industry. And professions generally have a measure of public purpose. The mortgage broker industry has yet to define and accept for itself any public purpose.”
The industry does have an agreed-upon, established body of knowledge. That knowledge is made up of state and federal laws governing the mortgage lending industry. A list is located here:
http://mortgagefiduciaries.com/mortgage-broker-or-loan-originator-exam-preparation/links-to-state-and-federal-laws/
The “public purpose” of mortgage brokers can be found inside each state’s Mortgage Broker Practices Act, located in the pre-amble. Here is WA State’s MBPA:
http://apps.leg.wa.gov/RCW/default.aspx?cite=19.146.005
Comment by Brad Allen on 18 June 2008:
The fact that the government views the activities of mortgage brokers as having a potential to negatively impact the public gives rise to the need to regulate those activities. However, this is very different from a profession that has a self awareness of and general acknowledgment of a calling to provide a benefit to the public. When the government regulates an industry for the purpose of protecting the public, they provide minimum acceptable standards of practice. When a profession is self actualized by its own sense of the value it brings to the public, it aspires to the highest practice standards. The difference is substantial. The state can, and has, declared mortgage brokers to be fiduciaries. But until mortgage brokers view themselves as fiduciaries – a valuable benefit to the public – they will not self regulate their practice standards from an aspirational standpoint. This is one of the significant distinctions between an industry or trade and a profession.
Brad
Comment by SL on 20 June 2008:
I was looking at signing up for the ethics class you offer and all the good feedback. But when I checked with DFI, they said this company is not on the approved CE Provider list and they will not honor it. Can you please explain? I don’t want to take it twice and lose any money. Thanks.
Comment by mf on 20 June 2008:
Hi SL,
NAMF is a newly approved professional association. We are WA DFI approved. Perhaps their staff did not have a copy of the updated list of approved entities.
Comment by SL on 20 June 2008:
I don’t know. She said she was looking at the updated list from June 13, 2008. She was very stern. She said if it wasn’t on the list, they wouldn’t honor it. Maybe she just wanted to get her weekend started.
Comment by mf on 20 June 2008:
Let’s seeee….the NAMF approval letter is dated June 9th. I sent an email to Crystal at DFI asking her to make sure their staff has the updated “approved providers” list.
Thank YOU for the heads up!
Comment by Susan on 21 June 2008:
Hi Jillayne, As a paid member of the Ethical Lending Foundation I haven’t heard from you in a while other than your witty blogs on Active Rain. Just what did my membership buy besides a couple of great trainingt courses last year? I note your ELF schedule of courses is blank on that site. Is the NAMF venture a new replacement and if so am I a charter member?
Thanks for clarifying your ficudiary responsibility to me!
Comment by Jillayne Schlicke on 23 June 2008:
Hi Susan,
I blog on raincityguide.com and rarely, if ever, on ActiveRain. Maybe that’s what you meant?
Yes, NAMF is a replacement.
I am offering all ELF members a free charter membership in NAMF. Would you like to take a look at the NAMF Code of Ethics?
Comment by Susan on 24 June 2008:
So many blogs so little time! Nice of you to offer NAMF membership for Ethical Lending members…did I miss that email?
I’ll take a look at your new code of Ethics.
Thanks, Susan
Comment by Roger Ingalls on 25 June 2008:
Jillayne:
I didn’t see this post at RCG either. A good topic, and worthy of wider debate. New strategy?
Susan’s comment that a formal notice of the name change from ELF to NAMF has some validity. I presume at least some of the members of ELF take the organization and it’s goals seriously (like I do), even if it may have been only the classes and CE that brought us there originally. I have been looking forward to an opportunity to meet some of the members FTF, as it seems difficult to find like-minded loan originators in this business.
I’d like to throw in a vote to be able to work on the existing Code of Ethics as well. I don’t think such a document has as much meaning unless it is subject to periodic review and revision, subject to a prescribed and public set of rules for it’s revision. Kinda like the Constitution.
That’s just one guy’s opinion…I could be wrong
Comment by Roger Ingalls on 25 June 2008:
Oh, and I thought the price of the classes and membership was entirely reasonable. It’s weird that the laws that I (in parts) supported ended up eliminating the requirement that I take CE, but irony is like that some days.
I look forward to taking my 2 VOLUNTARY CE classes this year, as it is included in the price of memebership!
Comment by Roger Ingalls on 22 July 2008:
I could not find a copy of the new code of ethics. As a charter member of ELF, I’d like to have a chance to offer some input into it.
I just read Brad Allen’s comments, I agree with the body of knowledge and purpose issues, but the body of knowledge issue will be VERY tough to quantify and measure.
It certainly could be added as a stretch goal!
Also, is there a method to signing up for a class via the web site, or is just emailing better?
I want to hear about short-refi’s and see there is a class in Everett. Any planned in Bellevue area?
Comment by Jillayne Schlicke on 22 July 2008:
Hi Roger,
Our new code has not yet been posted yet. I will email you a preliminary draft in PDF format. I would love your input!
Brad has some very, very good input into fiduciary duties.
Best method for signing up for a class is to click on “schedule” on the menu bar at the top of the site.
The closest I will come to Bellevue for a Short Refi class soon is Renton at Firstam Lender’s Advantage on Aug 21st.
Comment by Susan on 4 August 2008:
Jillyane, Considering the new Housing Bill is only 700 pages(!) …how’s your interpretation going? Susan
Comment by Jillayne Schlicke on 5 August 2008:
Hi Susan,
The “foreclosure rescue” portion of the bill will not help as many people as the politicians would have us believe.
The fannie/freddie bailout is not nearly enough money and is simply getting us prepared for an eventual complete nationalization of fannie and freddie.
Downpayment assistance programs should die and never return. I am not pleased that the house has introduced legislation to bring them back to life. FHA is not the government’s subprime nor should it ever be. We should fight hard to keep it solvent.
National loan originator licensing is now coming as it is part of the foreclosure/fannie/freddie rescue bill. This is fantastic.
The buyer tax credit is a joke. I can’t imagine who would fall for it but I’m sure some people will get talked into using it.
The bill’s new nickname is HoHo: Hope for Homeowners.
Comment by Laura Young on 16 September 2008:
I feel that SOME LO’s are professionals. If you have been in the industry and have a bank of knowledge in your field and have a strong code of ethics established you could be considered professional. Unfortunately there are still LO’s who are greed stricken and need to be held accountable.
Pingback by Fee for Service : National Association of Mortgage Fiduciaries on 19 October 2008:
[...] Being able to charge a fee for service brings brokers and LOs closer to professional status. (Brokers and LOs are classified as emerging professionals. The only thing missing is a mandatory code of ethics with sanctions. For background on professional status, read this article.) [...]
Comment by RRK on 27 October 2008:
I do this for a living. Yes, I’m a professional Loan Originator. I’m accountable for my for my clients and practice fiduciary duties.
Comment by Sandi Paradiso on 27 October 2008:
When did LO’s and Mortgage brokers become so greedy and not put there client first, isn’t that our responsability as a “Professianl”. Remember I am new to this world of LO’s, so has it always been more about sales than fiduciary duties? I like what Brad said “A profession has a well established body of knowledge that members of the profession are exepected to have mastery of. I agree with the diffinition listed about a Professional, that sets you a part from just a profession. Recieving a license after classes or training, does that realy make you a perfissional? maybe it shold be harder to become a LO. If you were a Dr. you still have eithics and a service to take care of the ones that come to you for help.We should be no different, people are looking for honest LO’s to help take care of there needs, and that’s what we should do.It really comes down to you and me, what and how are we going to be, have intergirty or not. I want to be able to walk down the street and be able to look people in the eye, knowing I did a good job for them.
Comment by Brad Allen on 6 November 2008:
“The “public purpose” of mortgage brokers can be found inside each state’s Mortgage Broker Practices Act, located in the pre-amble.”
Let’s not confuse issues here. The legislature recognized that that “brokering of mortgage loans substantially affects the public interest”. This is to say that they recognize that there is great potential for significant harm to the public if mortgage brokers do not do meet certain minimum standards of performance. This preamble simply sets the stage for the regulations that follow. It’s because of the potential for great public harm that the regulations of the MBPA are required. This is the public purpose for the regs contained in the MBPA. This is not the same as a profession recognizing that it has a public purpose.
By way of example doctors generally feel, justifiably so, that their actions are a true benefit to their patients. Sure, there’s the business aspect – it is often lucrative to become a doctor. But at the end of the day, most doctors feel pretty good that the knowledge and skills that they work so long and hard to build and maintain actually help people. Their actions help sick people to become well or at least suffer less; their skills help injured people survive and return to healthy lives. The medical profession takes very seriously its public purpose of curing disease and healing injuries and improving the lives of patients. Yes, there are laws and regulations that govern the practices of doctors. But those laws and regulations are often created and tightened in response to input from the medical profession that sees importance in protecting patients from bad actors and bad actions. The standards are set and endorsed by the profession out of a sense of the need to protect the public.
This is not what we see in the mortgage broker industry. Most mortgage brokers rail against regulation that they see as impacting their ability to make money without regard to the benefit those regulations afford to their customers. The regs of the MBPA are not there because the mortgage brokers collectively see a need to provide and enhance protections for borrowers, they are there because the government sees a need to protect borrowers from mortgage brokers. Professions seek regulation that promotes the highest standards of practice that will enhance the value of the profession. Governments seek regulations that establish minimum acceptable enforceable standards to protect their constituents. Members of a profession understand the difference.
We agree that one of the elements that need to exist for an industry to become a profession is a sense of public purpose. But if you believe that the words in the preamble of the MBPA establish that professional sense of public purpose, then we are not in agreement. The profession’s sense of public purpose comes from within the profession; it’s not dictated to them by regulators. The fact that it took an act of the legislature to impose fiduciary responsibility on mortgage brokers and the industry’s continued refusal to accept and embrace fiduciary responsibility, even after the law declares them to be fiduciaries, is clear evidence that there is no internal sense of valuable public purpose.
This ties back into another element that needs to be in place for a profession to exist. That is an that professions require their members to have demonstrated mastery of an accepted body of knowledge.
In this blog you stated that “The industry does have an agreed-upon, established body of knowledge. That knowledge is made up of state and federal laws governing the mortgage lending industry.”
Again, you confuse a government imposed requirement with an internally developed sense of what is valuable to the profession. Professions establish their own body of knowledge and demand formal education through methods and means established by the profession to meet the aspirational needs of the profession. And professions demand rigorous examination of each prospective members mastery of that body of knowledge. This is not at all what we see in a pre-licensing examination. The government has established a minimum for what they believe a practitioner should know about the industry and, in particular, about the rules and regulations that establish minimum standard of conduct within the industry. The government standards are not the aspirational standards of the profession, they are the minimum standards deemed to be necessary to ensure that practitioners do not violate minimum standards of performance out of ignorance.
While the list of topics to be examined in the pre-licensing exam do establish a body of knowledge, it is different from a body of knowledge that might have been established by a mortgage broker profession. Professions define for themselves the body of knowledge that the profession expects members to master and maintain. What we see in the pre-licensing test is an examination of a body of knowledge imposed on the industry by the government in order to protect the public. Very different – I have to disagree with you on this one as well.
Comment by Garry Carlin on 7 November 2008:
I like your approach in defining a “professional”. I absolutely see where you are coming from and even partly agree.
Being licensed, educated and being held to a higher standard is all good. Especially during these times, we in the mortgage business have a lot to prove before the consumer will decide to trust us again.
Your idea of an emerging profession is right on. However, that term should apply to an individual who has not yet attained that stature and not to the industry. Before licensing, code of ethics and continuing education there were always “Mortgage Professionals”. While these credentials add credibilty they do not define who or what a “Professional” is.
Comment by mf on 8 November 2008:
Hi Brad,
I classify LOs as an “emerging” profession. They’re not quite there yet, as you pointed out. I expect that the transition will take many years.
Comment by Denise Swafford on 10 November 2008:
Loan officers are an emerging profession and you are correct that the amount of continuing education is insufficient.
I believe that there truly needs to be an apprenticeship/internship period for those entering in to the industry in order to allow them to fully understand the impact that they have on the consumer. This would also allow for practical application of products, rules and regulations, and customer service/ethics skills under the scrutiny of proven ethical professionals.
Comment by Leslie Maki on 11 November 2008:
Based on the above criteria for a professional, LO’s are emerging as professionals in the mortgage industry. LO’s have a broader base of knowledge of loan programs, the loan process and real estate matters than the general population. LO’s are now required to meet mimimum academic standards as well as continuing education in the mortgage field. Thankfully, the continuing education courses have improved tremendously over the past fee years and are of some actual value whereas in the past the classes may have satisfied the regulators, but offered very little in the way of benefiting the LO. Testing of LO’s and Mortgage Brokers plus licensing is now required in some states and I believe that all LO’s (banking and broker) should be tested and licensed. A code of ethics and fiduciary responsibility is a must for the mortgage industry.
Comment by jae cavner on 14 November 2008:
I think that if you do a particular job for a living and hold yourself to a high standard of ethical behavior and conduct your business in a professional manner, then you are a professional.
Comment by Jillayne Schlicke on 14 November 2008:
Hi Jae,
Thanks for stopping by the NAMF website.
Anyone can do their job in a professional manner.
In order to become part of a professional group of people there are far higher standards.
Professionals get together and set forth a set of standards that they would all objectively agree to abide by.
Loan originators are classified as an emerging profession because they are missing this last step.
Think of the bar association’s very long, prescriptive code of ethics or even the Realtor organization’s Code of Ethics which is over 100 years old. Loan originators are missing this piece.
Comment by Tiffany Grosely on 18 November 2008:
Being licensed and having higher education may be a must. But in all reality if you stop and think of all the costs you have to maintain a license, it makes you wonder why the economy is slipping. In our state it costs $125.00 a year to renew your license using the NMLS system. Put that on top of the cost to actually get your license and to keep up with your classes and your adding another few hundred dollars. Then you look at the new annual $30.00 fee just to have your license on the new system and another $30.00 per year to keep your license on the system. Looks like the more people start to think of ways to change the licensing system, the more ways they think of to nickel and dime loan originators. With my company there are many opportunities to have “in house” training and education that does not cost us anything. That should be incorporated into licensing, not having to pay for more education.
Comment by Sam Tabatabai on 20 November 2008:
all to gether my answer is going to resemble my answer for the ethics section. I believe the mortgage industry needs to have oversight. I agree wth Brad that our industry needs to have questions in their exams that evaluates ones finance abilities to assist ones clients difrenciate from one loan package to another. You will not become a professional overnight. Your cliets also have a say if you are a professional or not. Everyday we have coffee and we go to restaurants and we have people serve us and yet they all mean well but one in everyten we call a professonal.
Comment by phylis nelmark on 24 November 2008:
I belive Professional and Ethical are not the same thing. There will always be Professionals who place monetary gain above anything considered Professional or Ethical. Any further laws and requirements will probably do very little to change that type of person. Brokers may be called Professionals but they still do not make the underwriting decisions and I see no law that is going to change that.
Comment by Theresa Reyna on 25 November 2008:
I truly believe that LO should be consider a “professional”. Financial planners, real-estate agent, or insurance agent, all call them self professional, we too should be in that category.
However, have said that, before we can really start using this term to describe LO, we have to have several rules in place.
1- It should be a Federal law that all LO be license, not just one that works for brokers, but lenders as well.
2- Like doctors and lawyers, there is a period of real-life testing or studying phase (internship period). All LO need to be guided and taught how loan programs works and how it affects their borrower. Show them the fiduciary duty that comes along with this title. Show them the important of clients needs over their own monetary needs.
3- Create a system that can self-regulated and monitor itself among the loan industry.
4- Providing continuous education should be provide by the Lender/Broker at no cost to the LO. After all, the more well educated an LO is, the better it is for all parties.
Until there is some type of system that is in place. It’s hard to differentiate between an LO and a car-salesman.
Comment by richard martin on 26 November 2008:
As a newncomer to the industry, I see a professional as a person who has been trained to a high standard of competence in their disipline and operates with highest Ethical Business Standards and Practices.
I believe this is the way the Mortgage Industry will be viewed by the Public and the Industry its self more and more as we move forward, what I see is a sort of regeneration and renewal as the Industry takes this opportunity in time to strengthen its professional structure and do what it realy has to do.
Comment by Robert Duppenthaler on 3 December 2008:
PROFESSIONAL
IN THE FOLLOWING ALL WE NEED TO BE PROFESSONAL IS TO BE CONNECTED WITH A JOB
1 [ attrib. ] of, relating to, or connected with a profession : young professional people | the professional schools of Yale and Harvard.
2 (of a person) engaged in a specified activity as one’s main paid occupation rather than as a pastime : a professional boxer.
IN THESE WE NEED PROVEN DEMONSTRATABLE KNOWLEDGE TO BE PROFESSONAL
• having or showing the skill appropriate to a professional person; competent or skillful : their music is both memorable and professional.
• worthy of or appropriate to a professional person : his professional expertise.
• a person engaged or qualified in a profession : professionals such as lawyers and surveyors.
• a person engaged in a specified activity, esp. a sport or branch of the performing arts, as a main paid occupation rather than as a pastime.
• a person competent or skilled in a particular activity : she was a real professional on stage.
So, according to the dictionary, we’re probably all professionals. Now we have to find a way to add honesty, integrity and honor and then ensure that we all commit ourselves to serving our clients before self.
Comment by beth ward on 7 December 2008:
Are loan originators professional … this is an awesome way of pointing out true facts. Professionals are defined as what you stated and what is amazing is that the standards are not met out there in the world of originators … this who CE information has been an eye opener to me for a lot of aspects. I thank you for writing and doing this.
Comment by Neal Eifling on 15 December 2008:
When crossing over the abyss to accept required fiduciary responsibility you have arrive in The Land of Professionals. Every thing is on the line. You have to prove your innocence if called out. It forces you to be aware of your obligations in protecting the client and yourself by doing what is right. You have to know what you preach and teach. No one should be able to hide behind a banks wall from these standards. You talk it! You back it! I believe the majority of loan originators still do not grasp the responsibility and duty of these practices. The higher of reasonable standards set the better. You become more elite in being defined as a professional of your practice. You also grow a greater desire in protecting your industry because of the time you have invested achieving or maintaining your professional status.
Comment by Tom Strain on 16 December 2008:
Wow what a difference between a “professional” in general is defined as vs what L.O. are required to meet as guidlines.
Our profession is lacking. we need all L.O to be licensed and all processors to be licensed and we need mandatory continuing education. There needs to be a mandatory code of ethics that includes “putting the clients best interests first”.
i also feel that we could use oversight into holding our lenders and brokers,whollesalers, and L.o. accountable for the paper we right. i think some formula can be derived to reward those who have good loss ratios- in the form of possibly better cost of funds? Just a thought.
Comment by Yoshiho Takamoto on 20 December 2008:
Great way to define Professional. I do think there are some “Professional” LOs but there are also many greedy LOs who are giving the rest of us bad names. If all the LOs are able to follow the code of ethics and deliver fiduciry duties to our consumers, I believe our profession will soon be considered a “Professional” occupation.
Comment by William Schornack on 29 December 2008:
I would have to agree that we are professional’s in transition and that we need to be more proactive in writing our own code of conduct before legislators begin trying to write them for us. Like anything else in life, if you wait for the politicians to decide something it always costs more and is less efective than if it were created in the private sector.
Comment by Mark Johnson on 30 December 2008:
Mark Johnson
510-LO-44600
509-457-1978 (fax)
I feel that a loan officer needs to present himself in a vry progessional way with the borrowers best interest at the core of his/her service. A minimum amount of testsing/experience is a good requirement in becoming a L.O. Belong to professional associations adds credibility as well.
Comment by Benjamin Bergsma on 30 December 2008:
I can appeciate being educated ad licensed BUT I find that my brokers in the past and present do not update us on the programs or educate us on them so that we can in turn explaim then in detail to out clients whic I beliee is impariative and necessary for a professional relationahip.
Comment by Kent Kiser on 30 December 2008:
The loan officer has to be as you write above “a professional”.
In order to properly point clients in the right direction and guide them through a tenuous process requires a high degree of professionalism. Its like an airplane pilot that is control of your immediate future from start to stop.
I like the feed back clients give me personally when they are gracious at the end and send over new clients.
Self regulation and a professional approach are the absolute keys to success in this business.
Comment by Bartholomew Henning on 31 December 2008:
I don’t believe any one can put a ‘list’ together to say whether or not you are a professional. I do, however, believe that if you have pride in your workplace, work ethically, earn money, contribute, and know your work – that makes you a professional. Whether you are white collar or not doesn’t stipulate professionality. It’s what you make of your work that does.
Comment by Mike Vandenbos on 31 December 2008:
I like the imagery of “emerging profession”, and would agree. It’s intriguing to reflect on how young our industry is…it was only in the early 1990’s, if i’m not mistaken, that the loan officer/originator vocation really became of age. We are in a young industry and the current crisis will do much to refine our profession.
I appreciate the blog entry above that mentions the legal industry and the stringent requirments for the BAR exam to become a lawyer. Hopefully the licensing requirments for loan officers will continue to become more substantial and relevant to the importance of what we do for our clients.
Comment by Mila Usher on 3 January 2009:
I always thought that LO’s were proffesionals.Thank-you for the definition, now I see they are not quite there.
Comment by Mila Usher on 4 January 2009:
Now my question is once L.O.’s are required to go to school and get licensed will that by definition make them professionals?
And then aren’t they to uphold a new set of laws and ethics?
Comment by Laurie Morgan on 28 January 2009:
So, no doubt I consider myself a professional, and work in the best interest of my clients.
I think education and professional licensing should be disclosed to the consumer. That way I can differentiate myself from the 20 year old credit union and bank “professionals”, who’s education is what? Training by other non professionals? No back ground check, no finger printing to prove they aren’t felons, and no documentable education.
It sure would be nice to not have to compete with non professionals.
Comment by Beth Damery on 28 January 2009:
I consider myself a professional and so do my clients.
Before it was a licensing requirement I attended many educational classes related to mortgage lending ethics and the proper placement of clients into loans that serve their best interest.
I have completed all of the license requirements over the past few years, and know I have more knowledge than a new person entering the field. Maybe this would help new LO’s define themselves and be proud of their profession.
Comment by Vladislav Baydovskiy on 2 February 2009:
Great definition! But I would think that proffesional is someone who takes his or her proffesion seriously, with great care, and attention to client needs. I think big part of being proffesional is being accountable to clients. It starts with small things, like returnig their phone calls, and being available! I know some LO’s who are part time, and the clients are being so frastrated not being able to talk to LO when then need to. And lets face it, getting a loan, especially these days could be nerve racking. I think proffesional is someone who delivers consistancy from time to time, of being the top in helping a client to achive clients goals.
Comment by Teresa Tait on 8 February 2009:
As a Loan Officer I would definately like to believe that I am a professional. However, I do agree that this profession is evolving as we speak. I am not sure that we will define our profession as quickly as we would like. I think we are in the early stages and that the entire process will take some time. Until then,we need to continue to educate ourselves,keep current on our licensing and remember to put our clients needs first. A true professional treats others in the same way that he/she would like to be treated.
Comment by William Platts on 27 February 2009:
I have worked as a “professional” in the past. As a LO I do not have professional status in the business sector of America. I may work, act, and be compensated financially as a professional but I am not there by definition. We will not attain professionl status until our industry raised the bar on educational requirements. Also a self-governing body with the ability to sanction members of our industry for violating our precise and easily understandable code of etics must be in place before we can claim professional status. I would love to see this happen. I would be happy to donate a certain amount of my time to make this happen, but until we are all willing to give action not lip service to professionalizing our work place we shall enjoy the status of a non-professional.
Comment by Terry Birkland on 6 April 2009:
I was not asked to sign a code of ethics, however, I was required to sign an agreement to not solicit or sell insurance or investment products to Reverse Mortgage clients (directly or indirectly.) This had been a source of substantial revenue to my broker.
There is a “power imbalance” in many cosumer areas.
Don’t most of us learn the business from the company we initially work for. This was true for me in the insurance and securities business. Luckily I picked first class organizations.
Lastly, the words “professionalism and professional” implies compentence and care in dealing with the public. A medical doctor is a professional putting the patient uppermost in the service. A LO is someone that can incorportate professionalism in the way they go about their work, they are not professionals.
Comment by Mary McGraw on 21 April 2009:
They should be professionals if they are in that business however i have went to different ones that were not so professional but what i think is a professional someone else might not.
Comment by Mary McGraw on 22 April 2009:
There definately is a big difference between professional and not. I dont believe that knowledge makes you smart…you still have to conduct yourself professionally and be honest about what you know or don’t know.
Comment by Raylene Ramos on 23 April 2009:
I believe that this industry is making possitive steps towards regulating LO’s by offering or requiring continued education. It sure helps with our role as a professional to be able to acknowledge and understand possible questions consumers may have. One thing I’ve noticed for myself is that I’m learning alot about fraud and what really goes on out there.
Comment by Joe Dahleen on 14 May 2009:
All mortgage professionals should be:
Licensed
Tested
Must attend education and CE
Must attend some level of skill training (additional certification)
I agree with you was the adverse effect of all of this is that now the mortgage loan originators liability.
Comment by Melissa Morgan on 21 June 2009:
A realtor selling a $2,000,000 property has had to be licensed going back how long? But as a loan officer giving him a $2,000,000 mortgage is not required to be.
I never could understand that one. The loan officer has far more access to view the borrowers financial situation. In most cases this is the largest financial transaction the average consumer has made to this point and should be serviced by a professional.
Comment by Ross Palmer on 31 July 2009:
I agree in the definitions for a professional, I also believe that there are many Loan Originators who live up to the definition.
Although, the licensing structure and continuing education is becoming more inconvenient for the people who do their job correctly. LO’s that have done the right thing are now being punished were more extensive education (which certainly isn’t free) , testing etc. I also think the state should offer free continuing education if they are going to keep increasing it. The NMLS is also a huge money maker, for everyone being so greedy and bringing the market to where it is, it’s funny how they created another system that costs the professional more money.
Comment by Jillayne Schlicke on 31 July 2009:
Hi Ross,
Yes there were and are plenty of loan originators who lived up to the classic definition of a professional.
They sought out education even though it was not required, they put their client’s interests ahead of their own, the abided by an internal code of ethics, and so forth.
But just because one person says “I am a professional” does not make it so. Subjectivism means any LO could say “I am a professional” and their idea of a professional could be completely different.
It’s when an entire group of people come together and set down guidelines as to what it means to be a loan originator that include ALL the hallmarks of a professional.
Yes continuing education is expensive.
If you look at the history of any profession, you can expect more and more required pre and post education, tougher tests and more rigorous licensing standards.
Being a professional is expensive and requires an investment by that person.
Compare the costs of becoming an LO to the costs of becoming a doctor, lawyer, engineer, CPA.
Comment by New Orleans Home Mortgage on 13 August 2009:
Like every industry there are bad apples in every bunch. I’ve seen LO’s walk consumers to the edge then soak them with a smile on their face and a pat on the back. On the other side I’ve seen brokers take a genuine interest in their customer/client lay out a selection of options that were more than competitive. Only to see the borrower go across the street because the lender had their name on a stadium and promoted rock concerts. Sure the borrower over paid some 8k at a minimum. But they felt more comfortable with a name they knew.
Go figure.