Can a New Mortgage Loan Originator Effectively Work From Home?
Through my responsibilities of offering NMLS exam preparation to prepare future mortgage loan originators (MLOs) for successful navigation through the NMLS national mortgage licensing exam and beyond, I also administrate an NMLS test prep Facebook group. As this group’s administrator, I am regularly inundated with people asking how, once they pass the NMLS exam and secure their license, they can find a job as a mortgage loan originator through which they can work from home by simply calling employer-provided leads.
I thoroughly understand how the preference for working from home became a bi-product of the COVID-19 pandemic. I also and completely relate to how the prospect of originating countless mortgages from the comfort of one’s home office may sound appealing. But let me make this clear! If you’re one of those future mortgage loan officers who envisions securing your mortgage originator license and immediately originating loans from home, sorry not sorry! Reality, if nothing else, is going to abruptly burst your bubble. I might as well be the one to do that first! But not without also offering valuable guidance.
In 2003, I was tasked with the responsibility of establishing a mortgage broker branch out of my home office through which I would work remotely as a division of a mortgage brokerage located 80 miles away. The sky seemed to be the limit since their primary means of generating business was from endless internet leads of which I was promised my share. Within a month and a half from the day I hung my branch’s shingle, I closed it down and eagerly accepted a much more realistic position with a completely different company. And I was an experienced loan originator at that time.
Imagine you’re a potential borrower desiring to explore a mortgage. To “find the best lender,” you enter your contact information into a mortgage leads website. Within a minute of submitting your inquiry, you can count on your phone ringing. From the mortgage loan originator’s perspective, no later than ten minutes from the time a consumer submits a mortgage lead, the likelihood of that lead’s conversion drops to less than 5%.
By the time that I received those coveted leads from the company for which I opened a branch, they were just over a week old. Their pathway of origin went first from the lead source provider to my company’s corporate headquarters. From there they were funneled through to the branch, and then finally to the loan originator. It’s no surprise that I was unable to close even one transaction from these leads. Of the few inquirers I successfully contacted, just about all of them were thoroughly unqualified for mortgage financing. The lesson to learn here, therefore, is that one should never base the foundation of one’s mortgage loan origination business plan on internet leads unless the loan originator is thoroughly dedicated to working these leads within two to three minutes from the prospective borrowers submitting them.
Additionally, no new mortgage loan originator should ever expect or be permitted to work remotely in the beginning of his or her career because every new loan originator needs to be thoroughly trained. And there is no possible way that this critical training can be effectively and adequately accomplished through a remote work environment. Adequate training requires the rookie MLO to consistently be physically present among others from whom he or she can learn.
The appropriate prerequisite to a successful career in mortgage loan origination always requires the new MLO to shadow a more-seasoned professional and learn from his or her best practices. Could you imagine how effective a police officer would be if, the day after graduating from the police academy, she was assigned to patrol on her own? That would prove disastrous. Just like a rookie police officer needs to be appropriately trained by a seasoned training officer, the MLO should never expect (or even want) to hit the ground running without first receiving effective, hands-on, one-on-one, interpersonal training. Especially since ignorance can never be used as an acceptable excuse for violating state or federal regulations.
If a rookie MLO were to violate a law simply because he or she was new and inexperienced, his or her limited tenure would not immunize him or her from sanction. Similar to how a brand new driver is held accountable if he or she violates a vehicle and traffic law, the brand new MLO will also be held criminally or civilly liable for violating a law or regulation. It simply makes sense for all new MLOs to be properly trained before “hitting the streets.”
It’s perfectly understandable just how appealing the prospect of originating loans from the comfort of one’s own home may seem. But, quite frankly, originating in that capacity is far from realistic in the beginning of one’s career. Once an MLO develops a healthy referral source base, a robust book of business, has some experience under his or her belt, and can effectively manage his or her time to cultivate new business, then, and only then, should he or she consider working from home.