What Is A Mortgage Loan Originator?
A mortgage loan originator, or MLO, guides mortgage applicants throughout the mortgage approval process, from preparing the loan application through closing. MLOs are licensed by state and national authorities, and they’re knowledgeable about all the different types of mortgages.
When you see the term “mortgage loan originator,” it can refer to a couple of different things. A company that does mortgage originations, like Quicken Loans®, is an MLO. A person who takes you through the process of originating a mortgage loan, from application to closing, is also an MLO.
People who are MLOs may work on behalf of a single company that originates mortgages, or they may be a mortgage broker who takes your application and works with one of several companies.
Since an MLO can be either a person or a company, it’s worth taking a minute to break down their unique roles.
Mortgage Loan Originator: The Person
One of the first people you talk to when you get a mortgage is likely to be a mortgage loan originator. They may also be referred to as a loan officer.
In some cases, this person is a mortgage broker. A mortgage broker will take your application and show you your options from several lenders so you can compare prices and servicing policies, for example.
A mortgage loan officer’s job is to guide you through the mortgage approval process. In a refinance, that might mean helping you with the paperwork, taking documentation and figuring out the loan amount and type that fits your goals.
In a purchase transaction, you want to get a mortgage approval (often called a preapproval) before you go shopping for a home to know how much you can afford. The MLO will be able to make that determination based on your credit, income and assets.
Whether it’s a purchase or refinance, the next step for the MLO after taking a complete application and collecting documentation is to get it through underwriting – the process of making sure that you qualify for the mortgage based on your finances as well as the type of property you’re getting.
Finally, the MLO will make sure that your loan gets to the closing table. It’s at this point that you reap the benefits of your loan, either in the form of a new house or the financial benefits afforded by a refinance.
It’s important to know that the responsibilities of an MLO may fall to one person or several people depending on who you work with. At Quicken Loans, you’ll get to work with several Home Loan Experts who are skilled in different stages of the process so that you get the highest-quality experience all the way through.
Mortgage Loan Originator: The Lending Institution
While the term mortgage loan originator can refer to the person originating your mortgage loan, it can also mean the institution responsible for funding that loan. In the mortgage industry, loans are made through either bank or non-bank lenders.
Some mortgage loans are funded by traditional banks who hold your checking and savings accounts, lines of credit and other investments. Meanwhile, non-bank lenders like Quicken Loans specialize in mortgages.
Regardless of which institution initially funds your loan, it’s probably not the end of the line. Very few banks or other lenders hold a ton of loans in their portfolio to collect payments over the life of the loan because they prefer to get money on a quicker basis to make more loans.
To help accomplish that goal, the majority of mortgage loans are backed by one of several major mortgage investors, including Fannie Mae, Freddie Mac, the FHA and the VA. Loans that meet these institutional investors’ standards are insured by them before being packaged into mortgage-backed securities and sold on the bond market.