How to Become an MLO: The All-You-Need-To-Know Guide

Mortgage loan originators/officers (MLOs) are a popular career choice nationwide. The position comes with an average annual salary of $64,000, according to the U.S. Bureau of Labor Statistics.

MLOs are often associated with lending companies, banks, and other real estate companies. Some MLOs can operate independently, depending on the state in which they reside. People who choose this field can earn a high income, achieve a healthy work-life balance, and fulfill a meaningful role in their communities.

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What is a Mortgage Loan Originator?

Mortgage loan originators guide homeowners through the financial processes related to purchasing their homes. An MLO will:

  • Stay up-to-date on all financial loan options
  • Help clients identify and gather paperwork
  • Share all loan options and city programs that best serve clients
  • Manage detailed communication with other mortgage professionals

Life as a mortgage loan officer is a great fit for people who are detail-oriented and personable.

MLOs seek out every opportunity to help a client successfully navigate buying a home. By getting to know their clients, the MLO can use their market knowledge to help improve lives and their communities.

For someone who wants to become an MLO, it is a great idea to start by learning about the housing market in their area. This will ensure there is enough business in the state to support their new job.

Skills & Competencies Needed to be an MLO

The minimum skill set needed to be a successful MLO include:

  • Organizational skills
  • Interpersonal skills
  • Analytical/accounting skills
  • Computer skills

Mortgage loan originators are also required to comply with the Secure and Fair Enforcement Act (SAFE Act) enacted in 2008, mandating a licensing and registration system for MLOs nationwide.

The SAFE Act

Congress passed the SAFE Act to protect customers after the housing crash that same year. The act set up the Nationwide Multistate Licensing System (NMLS) to protect customers. It makes the residential mortgage industry more uniform by setting national standards for MLOs.

This licensing and registration database creates a central location for educational and licensure requirements, which helps persons become an MLO.

Nationwide registration requirements established by the SAFE Act include:

  • Identifying information: demographic, location, and background
  • 10 years of employment history
  • Disclosure of legal issues
  • Background check results
  • A unique identifying number

Thirty states have additional steps, including specific requirements and processes for each state the MLO wants to work in.

How to Become an MLO

Before getting the license to become an MLO, there are required educational courses. The pre-licensing education includes a minimum of 20 hours of classwork approved through the NMLS. The 20 hours of mandatory coursework include:

  • 2 hours of lending training for non-traditional mortgage market situations
  • 3 hours of federal laws and regulations related to residential lending
  • 3 hours of ethics and training in the identification of fraud and other fair lending issues
  • 12 hours of the traditional residential mortgage origination process, procedure, and best practices

State coursework includes, but is not limited to:

  • State laws and regulations
  • Additional ethics classwork and fraud prevention
  • Webinars and market-specific training

How to Maintain an MLO License

Once mortgage loan originators obtain their licensure, they are responsible for keeping up with their continuing education and renewing their licenses annually through the NMLS Renewal System.

The renewal period opens on Nov. 1 each year and lasts until Dec. 31. During this time, an MLO must show evidence of completing the 8 hours of continuing education courses. These continuing education courses include:

  • 3 hours of updated federal law and regulation training
  • 2 hours of ethics training and updates, including current fraud, customer protection issues, and fair lending concerns
  • 2 hours of updates and refreshers on the lending standards in non-traditional mortgage products
  • 1 remaining hour in miscellaneous training, which can include state and regional needs

The job of an MLO can be fulfilling and flexible. It doesn’t require a degree, but it does require some training and organization to maintain the license and be successful.

Become MLO Test Ready in Just 10 Days!

Our comprehensive 10-day training program was designed to guide and prepare aspiring MLOs to ace the NMLS exam on their first try, even if they are brand new to the industry. Through engaging learning experiences that incorporates repetitive learning, interactivity, tutoring, and pass-rate predictability exercises, you’ll feel prepared to pass the NMLS exam on your first try or we will let you retake MLO Test Ready for free with our Pass Guarantee.

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By |2023-01-19T19:26:01-06:00January 19th, 2023|Bank, Credit Union, Financial Services, Mortgage|Comments Off on How to Become an MLO: The All-You-Need-To-Know Guide