Loan officer.....anyone do it for a living? Do you like it?

[ScottieK]

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Thanks for the replies.

The position I interviewed for would be for mostly new purchases and not refi's. The leads would be provided to me from a reputable source, that I'd rather not say right now, and yes, my split is a little less because the leads are given to me. They said that I'd make between 50 and 70 phone calls a day and that I'd be expected to close at least 2 loans a month by my 4th month. If I'm not, they said then this probably isn't the business for me.

About the whole "screwing" aspect, I don't look at it that way. The people that I would be calling went ahead and filled out applications for loans. It's not like I'm calling Joe Schmoe out of the blue. They showed some sort of interest in getting a loan. I'd talk to them a little bit, get their information, and present a quote. If they don't like it, it's totally on them to say no.

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Just know that you make your commission by either adding a thousands to their loan amount or by giving them a higher interest rate than they qualify for without telling them. Its your job to try to convince or trick them into letting you charge the most you can. You can go about that however you want, but the people who make a lot of money in this industry do many other under-handed things to bump their commissions. That isn't to say you can't make money and not screw people, but you will see, it is a very immoral industry. It probably won't be as bad if you are doing mostly new purchase, but you should be prepared to work with people doing this and be ready for plenty of pressure from them to do it yourself.

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True, but is charging more (either in interest or on the total amount of th loan) really that immoral? I look at it as just business and someone making a profit. I'm sure McDonald's could charge you less for a Big Mac but they want to make money. I wouldn't say charging me :insertpriceofBigMachere: for a Big Mac is immoral.

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This is part of the intense competition I mentioned. A loan officer's job is to make his clients happy and make money for himself. But clients (especially new ones) are usually looking at other banks to do business with, or are approached by other banks always willing to undercut your loan pricing and get the client to move their business away from you. That is somewhat immoral IMO, going after someone else's business....but it happens all the time in banking, and everyone does it or they are quickly out of business.

Some of a loan officer's commissions are made off the rate they charge their clients for loans, but I think most of the commissions are made off of cross-selling and fees. Another immoral part comes in when a loan officer decides to charge a certain client more, get them to borrow more than is necessary, or cross-sell them things they don't need...all in order to generate more commissions for himself. You are selling the convenience of money, and all banks have money, so you need to compete on terms, service, or both.

ScottieK

[johnnybeef]

Liquid,

I see how you can think that charging a bit more is immoral, but I have a slightly different view. If someone is a good salesman that provides top notch service and a great deal of value, then they should be charging more, and I don't like to think of that as immoral. I don't know you from Adam, so I can't use an example that hits close to home, so I will use my brother as an example. My brother Aaron is a cheap ass. He hates spending money, and will go to the end of the Earth to save a buck. That said, he is a Coke drinker. He probably goes through a 12 pack every two days. As most people know, there are many colas that are much cheaper than Coke. However, my brother the cheap ass would much rather spend the extra $2 per 12 pack (which leads to roughly $1 a day) to buy the Coke instead of the Wal-Mart brand cola. His reasoning? Coke tastes much better to him and he will gladly fork over the extra $365 per year to drink the good stuff. Salesman are very similar to colas in this respect in that they (theoretically) charge what they are worth.

Op,

I have been in the mortgage industry since November, and I absolutely love it. If you think about it, there are two primary reasons for one to love their jobs (at least 2 that I can think of.) The first is that it is financially rewarding, and the second is that they get to help people. Loan officers in todays market get to do both, and it is very rewarding. Now, with that in mind, it does take a special breed to be a salesman. You must have a thick skin, and be able to thrive in social situations. You have to have a genuine interest in others and you must be very competetive. You must be self motivated, and have the ability to find positives in every negative. It is a very tough profession, but the rewards are endless. Good luck with your decision!

Beef

[johnnybeef]

Scottie,

There are many things that can be done in any business that are immoral. You certainly have listed a few valid examples from the mortgage industry. However, morality lies in the salesman, not within the business. You mention that going after someone else's business may be immoral. If that were the case I think that capitalism would be in a lot of trouble.

[Bicycles_Biatch]

In the personal finance forum I have a post going with a couple hundred responses about being a loan officer / mortgage broker and the ups and downs.

If you are thinking about getting into it... PM me... lots to tell you.

P.S. You're getting in at a rough time.

[BWebb]

The competition factor can not be stressed enough. The market is pretty much saturated with tons of different lending institutions right now. At the same time, the real estate market is slowing down considerably and will likely continue throughout the year. Personally, I would not want to transfer into a field with tons of competition competing over fewer customers. Compare that to your current occupation of accounting, which is one of the most in demand professions currently. That's going to be a tough switch to make.

FWIW, I'm a commercial loan officer for a regional community bank. Similiar jobs, but much different markets that are serviced.

[SossMan]

FWIW, accounting is actually a very good background for a LO. You will be more qualified than 98% of the bozos out there just walking in the door.

[Bicycles_Biatch]

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FWIW, accounting is actually a very good background for a LO. You will be more qualified than 98% of the bozos out there just walking in the door.

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I agree... a stong base in number crunching will serve you well.

[liquidboss]

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Liquid,

I see how you can think that charging a bit more is immoral, but I have a slightly different view. If someone is a good salesman that provides top notch service and a great deal of value, then they should be charging more, and I don't like to think of that as immoral. I don't know you from Adam, so I can't use an example that hits close to home, so I will use my brother as an example. My brother Aaron is a cheap ass. He hates spending money, and will go to the end of the Earth to save a buck. That said, he is a Coke drinker. He probably goes through a 12 pack every two days. As most people know, there are many colas that are much cheaper than Coke. However, my brother the cheap ass would much rather spend the extra $2 per 12 pack (which leads to roughly $1 a day) to buy the Coke instead of the Wal-Mart brand cola. His reasoning? Coke tastes much better to him and he will gladly fork over the extra $365 per year to drink the good stuff. Salesman are very similar to colas in this respect in that they (theoretically) charge what they are worth.

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Good points here... I agree with you, a good LO should (and must) charge what they believe they are worth. If you are providing excellent service you deserve to be paid well. But in actual practice, a loan officer charges the most they can get away with. scotchnrocks' point is valid, you are going to charge a sucker a lot more than you are the savvy borrower, if you don't you are going to make a lot less money than your co-workers, as well as get bitched out by your boss. I was just warning OP that even if he has high morals and wouldn't do these things he better be ready for co-workers and managers to do it and attempt to pressure him to join in.

There are good loan officers out there, but as a whole it is a very immoral industry.

[DamitBob]

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FWIW, accounting is actually a very good background for a LO. You will be more qualified than 98% of the bozos out there just walking in the door.

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He might be the exception but most accountants are not good salespeople. This is a sales job. Networking, marketing, pounding the streets and the phone.

I just ended a 15 year job as a sales closer and start my training to be a LO this week.

OP, I have built a pretty extensive marketing plan if you would like my ideas, PM me. The first thing i'm doing is building a local chapter of Letip. Its a business marketing group. Loan Officers do well at these weekly networking sessions. BNI is another group that does a similar program.

Only one LO position is allowed in these groups (NO competition) so finding a local chapter with a spot is hard. Thats why i'm building a new chapter (they give you lots of support).

LeTip

[ScottieK]

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Scottie,

There are many things that can be done in any business that are immoral. You certainly have listed a few valid examples from the mortgage industry. However, morality lies in the salesman, not within the business. You mention that going after someone else's business may be immoral. If that were the case I think that capitalism would be in a lot of trouble.

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I don't have a problem with competition or good salesmanship. Clients have the right to shop around, even though banks typically don't like being played against one another in a bidding war. But there are ethics and laws, even in a capitalist market. The immoral business-chasing I was mainly thinking of was when competing banks undercut their competitors at rates that seem impossible to be profitable. Of course, they do this to get their foot in the door and eventually win all the client's business...kind of like a loss-leader in a supermarket. Is that ethical if it's unprofitable for the offering bank in the short run? It's hard to prove predatory pricing, since only the bank knows its own profitability threshhold and cost of funds. But that's how business is done in the banking industry.

Another one that crossed my mind is what happens when a loan officer leaves the bank. Who owns his client list? The client's loans don't follow the officer out the door. But naturally, the officer calls on his former clients to get them to move their relationships over to his new bank. I haven't made up my mind on whether that's unethical or not...relationships are a salesman's livelihood, but contracts belong to the business.

ScottieK