Mortgage Loan Originator - ANSWER -takes a residential mortgage loan application
and offers or *negotiates rates and terms* of a residential mortgage loan *for compensation
or gain*
-can describe a company, branch office, an individual or a mortgage broker.
Loan Origination Companies - ANSWER (employ individuals who serve as individual
loan originators)
-*both* the company and the people who work directly with consumers negotiating loans
must be licensed if the company is a non-depository institution
Individual Loan Originators - ANSWER (us after we take this course, prepare for exam
and pass the test)
-a person who takes a residential mortgage loan application and *offers or negotiates rates
and terms* of a residential mortgage loan *for compensation or gain*
Mortgage Brokers - ANSWER Loan originators who work independently of lenders.
-originate mortgages for the customer and find THEN find a lender to provide the loan. (can
also be companies or individuals)
-serve as a "middleman" between borrowers and companies
1
,-MLO's who sell their originated applications to companies
Person - ANSWER company, corporation, LLC, partnership, natural person, etc.
Natural Person - ANSWER an individual human being
Processor - ANSWER a person who works for a mortgage loan originator and *pro-
vided clerical functions*
-collecting documents
-verifying information with borrowers
Processor VS MLO - ANSWER a processor does NOT negotiate rates and terms with
borrowers and no special licensing is required for this role (unless they work for a company
as an independent contractor)
Underwriter - ANSWER works for the MLO.
-reviews loan applications to determine the risk associated with granting the borrower a
mortgage loan.
-paid by borrower as part of borrowers closing cost
-also not allowed to negotiate rates and terms with the borrower (and also not required to
be licensed unless they work for a company as an independent contractor)
Appraiser - ANSWER works independently of the MLO.
- provides service of determining property's value
2
,-determination can be provided in a variety of ways (physical visit to the property and by
comparing the home to similar properties.)
-the appraisal is often paid for by the borrower as part of the borrower's closing costs.
-follow guidelines of USPAP (Uniform Standards of Professional Appraisal Practice)
-licensed at the state level and may need to register or be licensed by local jurisdictions.
Title Agent - ANSWER -referred to as abstractors or title attorneys
- works independently of MLO's
-chosen by the borrower
-typically paid for in closing costs
- *they research the ownership associated with the property upon which the loan is made*
Real Estate Agent - ANSWER *independent party working on behalf of the
buyer/seller in a *purchase* transaction
-AKA realtor or real estate broker
-focus is sale of the property
Lender - ANSWER person/company that makes loans for real estate.
AKA *mortgagee*
3
, *it is not a requirement for lenders to write their own loans* although some do, such as
Quicken Loans (being a direct lender, we fund and originate the loans we write.)
Investor - ANSWER a person or organization that puts money into financial arrange-
ments, property etc. with expectation of achieving profit.
Regulator - ANSWER person/institution that supervises and controls a financial system
in order to *guarantee fair and efficient markets and financial stability.*
-both state and federal regulators
Customer - ANSWER someone who is in an *ongoing* process or relationship with a
financial services provider.
Consumer - ANSWER individual who may obtain financial services (they are shopping
around)
Simple Interest Rate (Nominal Interest Rate) - ANSWER *the fee or cost charged to the
borrower by the lender for the borrower's use of the lender's money*
-provided as a % of the principal amount
FORMULA: principal x interest rate x duration of loan (in years) = simple interest
Simple Interest Rate EXAMPLE - ANSWER Lender has a bag w/ $100,000 on it and the
borrower wants to use that $100,000 to buy something. the lender agrees to allow the bor-
rower to use that $100,000 for 5 years. At the end of the 5 years, the borrower must not
only repay that $100,000 but also 5% for each year of use of the money.
4
and offers or *negotiates rates and terms* of a residential mortgage loan *for compensation
or gain*
-can describe a company, branch office, an individual or a mortgage broker.
Loan Origination Companies - ANSWER (employ individuals who serve as individual
loan originators)
-*both* the company and the people who work directly with consumers negotiating loans
must be licensed if the company is a non-depository institution
Individual Loan Originators - ANSWER (us after we take this course, prepare for exam
and pass the test)
-a person who takes a residential mortgage loan application and *offers or negotiates rates
and terms* of a residential mortgage loan *for compensation or gain*
Mortgage Brokers - ANSWER Loan originators who work independently of lenders.
-originate mortgages for the customer and find THEN find a lender to provide the loan. (can
also be companies or individuals)
-serve as a "middleman" between borrowers and companies
1
,-MLO's who sell their originated applications to companies
Person - ANSWER company, corporation, LLC, partnership, natural person, etc.
Natural Person - ANSWER an individual human being
Processor - ANSWER a person who works for a mortgage loan originator and *pro-
vided clerical functions*
-collecting documents
-verifying information with borrowers
Processor VS MLO - ANSWER a processor does NOT negotiate rates and terms with
borrowers and no special licensing is required for this role (unless they work for a company
as an independent contractor)
Underwriter - ANSWER works for the MLO.
-reviews loan applications to determine the risk associated with granting the borrower a
mortgage loan.
-paid by borrower as part of borrowers closing cost
-also not allowed to negotiate rates and terms with the borrower (and also not required to
be licensed unless they work for a company as an independent contractor)
Appraiser - ANSWER works independently of the MLO.
- provides service of determining property's value
2
,-determination can be provided in a variety of ways (physical visit to the property and by
comparing the home to similar properties.)
-the appraisal is often paid for by the borrower as part of the borrower's closing costs.
-follow guidelines of USPAP (Uniform Standards of Professional Appraisal Practice)
-licensed at the state level and may need to register or be licensed by local jurisdictions.
Title Agent - ANSWER -referred to as abstractors or title attorneys
- works independently of MLO's
-chosen by the borrower
-typically paid for in closing costs
- *they research the ownership associated with the property upon which the loan is made*
Real Estate Agent - ANSWER *independent party working on behalf of the
buyer/seller in a *purchase* transaction
-AKA realtor or real estate broker
-focus is sale of the property
Lender - ANSWER person/company that makes loans for real estate.
AKA *mortgagee*
3
, *it is not a requirement for lenders to write their own loans* although some do, such as
Quicken Loans (being a direct lender, we fund and originate the loans we write.)
Investor - ANSWER a person or organization that puts money into financial arrange-
ments, property etc. with expectation of achieving profit.
Regulator - ANSWER person/institution that supervises and controls a financial system
in order to *guarantee fair and efficient markets and financial stability.*
-both state and federal regulators
Customer - ANSWER someone who is in an *ongoing* process or relationship with a
financial services provider.
Consumer - ANSWER individual who may obtain financial services (they are shopping
around)
Simple Interest Rate (Nominal Interest Rate) - ANSWER *the fee or cost charged to the
borrower by the lender for the borrower's use of the lender's money*
-provided as a % of the principal amount
FORMULA: principal x interest rate x duration of loan (in years) = simple interest
Simple Interest Rate EXAMPLE - ANSWER Lender has a bag w/ $100,000 on it and the
borrower wants to use that $100,000 to buy something. the lender agrees to allow the bor-
rower to use that $100,000 for 5 years. At the end of the 5 years, the borrower must not
only repay that $100,000 but also 5% for each year of use of the money.
4
