Thursday, April 08, 2010
Do Loan Officers have to be licensed?
The initial part of learning how to become a loan officer is determining the loan officer licensing requirements in your state.
Loan officer licensing requirements vary by state. Currently, in many states, loan officer licensing when working for mortgage brokers is required, but not so if for loan officers who work in banks or credit unions.
Recent federal legislation requires that all mortgage loan officers be licensed. Licensing requirements include at least 20 hours of coursework, passing a written exam, passing a background check, and having no felony convictions. There are also continuing education requirements for mortgage loan officers to maintain their licenses. There are currently no specific licensing requirements for other loan officers.
According to The Bureau of Labor Statistics:
"Employment of loan officers is projected to grow 10 percent between 2008 and 2018, which is about as fast as the average for all occupations. Employment growth will be driven by economic expansion and population increases—factors that generate demand for loans. Growth will be partially offset by increased automation that speeds the lending process and by the growing use of the Internet to apply for and obtain loans. However, these changes have also reduced the cost and complexity associated with refinancing loans, which could increase the number of loans originated.
The use of automated underwriting software has made the loan evaluation process much simpler than in the past. Underwriting software allows loan officers—particularly loan underwriters—to evaluate many more loans in less time. In addition, the mortgage application process has become highly automated and standardized, a simplification that has enabled mortgage loan vendors to offer their services over the Internet. Online vendors accept loan applications from customers over the Internet and determine which lenders have the best interest rates for particular loans. With this knowledge, customers can go directly to the lending institution, thereby bypassing mortgage loan brokers. Shopping for loans on the Internet is expected to become more common in the future and to slow job growth for loan officers."