Loan officer training: know the basics

Loan officer is one of the most widespread positions in the mortgage industry and fulfills vital functions in firms across the USA. While the journey to becoming a loan officer includes registering for the National Mortgage Licensing System and Registry (NMLS), the education does not stop there.

Being a mortgage loan officer can be challenging and requires in-depth expertise and multi-tasking skills. This is where loan officer training can come in handy, whether you train while you get your NMLS or after you have secured a position.

In this article, we will look at ways you can deepen your knowledge and expertise. Here is everything you need to know about loan officer training.

What does a loan officer do?

To become a mortgage loan officer, you must be knowledgeable about different loan types offered by the financial institutions they represent. These loan types should include conventional mortgages and commercial mortgages, and government-backed loans like Federal Housing Administration (FHA) loans and Veterans Affairs (VA) loans.

Mortgage loan officers essentially collect their clients’ financial information—including earnings and debts, among others—to determine if the prospective borrower qualifies for a home loan. In other words, as a loan officer, you advise clients on the best mortgage options for them based on their financial situation and long-term goals.

After gathering the initial financial information, loan officers work with borrowers to complete the home loan application and submit the application to underwriting. Loan officers then follow up, when needed, on any more information required or requested from the underwriters. They then communicate the decision to the borrower.

For the loan officer, this part of the process includes:

• Calculating the home loan amount
• Determining the loan program/interest rate
• Estimating closing costs and prepaids
• Evaluating the loan file
• Providing federal disclosures
• Preparing the closing documents

How do you get loan officer training?

After you become a licensed mortgage loan officer, you will want to get some training on everything from how to handle job duties to how to generate clients. Luckily, there is a plethora of loan officer training options available to you. These options include training in:

• Taking a loan application
• Reading a credit report
• Understanding a good faith estimate
• Getting pre-qualification for a home buyer
• Understanding debt ratios
• Interpreting income and asset statements

Added training in these areas is important whether you are new to the profession or have many years of experience. Loan officer training is an ideal way to stay up to date on the latest developments in the industry, whether you work for a commercial bank, credit union, or other financial institutions.

Let’s look at three popular online courses geared toward loan officer training:

1. Loan officer boot camp
2. Certified mortgage processor
3. Certified mortgage underwriter

In this section of our article, we will break down what each course entails, so that you will know what to expect:

1. Loan officer boot camp

Loan officer boot camp is offered through the National Association of Mortgage Processors (NAMP). At a cost of $995, the loan officer boot camp covers a variety of key mortgage processor training areas. It consists of several instructor-led training modules, plus an exam at the end.

This online program typically takes 24 hours to complete. Because there are bookmarks that allow you to stop and restart when you need, you do not have to complete this course in one sitting.

Here is a look at just some of the module titles and the learning items covered in each:

Loan Processing 101-The Basics

• Loan cycle
• Processor duties
• Loan documentation

Advanced Loan Processing-Real World Lessons

• Overtime, bonuses, and commissions
• Seasonal and salaried income
• Appraisal review

Mortgage Underwriter 101-The Essentials

•  Loan programs
• Underwriting tools
• Credit report review

Calculating Income, DTI, and LTV Workshop

• Hourly wage and salary wage calculations
• Social security and pension calculations
• PITI, PITIA, housing ratio, total ratio, and payment shock calculations

2. Certified mortgage processor

The certified mortgage processor is a certification program also offered through NAMP. Upon successful completion of this program, which includes an exam, you will earn a Certified Master Loan Processor designation.

At a cost of $1,495, this certification training program covers several key mortgage processor training areas. It also consists of instructor-led online training modules plus an exam at the end.

This online program typically takes 30 hours to complete. Like the loan officer bootcamp, you can bookmark your spot when you stop and restart. This means you do not have to complete the course in one sitting.

Here is a look at some of the module titles and the learning items covered in each: 

Fair lending and equal opportunity laws

• Purpose of Fair Lending laws and regulations
• Federal Housing Act
• Home Mortgage Disclosure Act overview
• Equal Credit Opportunity Act

Tax return analysis workshop

• Income calculation formulas
• Personal tax return forms and schedules
• Business tax return forms and schedules

FHA/VA processing

• Overview of FHA and VA programs
• Case numbers
• Maximum mortgage limits
• AUS recommendations

Mortgage Underwriter 101-The Essentials

• Loan programs
• Automated versus manual underwriting
• Underwriting tools and guidelines

3. Certified mortgage underwriter 

Offered through the National Association of Mortgage Underwriters (NAMU), the certified mortgage underwriter course is a certification program. Completion of this program, which means passing an accompanying exam, means you will earn a Certified Master Loan Underwriter designation. At a cost of $1,495, this certification training program covers numerous mortgage processing areas and consists of instructor-led training modules and an exam.

This online program typically takes 30 hours to complete. Like the loan officer bootcamp and the certified mortgage processor program, you can bookmark your spot when you stop and restart. This means you do not have to complete the course in one sitting.

Here is a look at just some of the module titles and the learning items covered in each: 

Due diligence

• Manual income, credit, and appraisal underwriting
• Writing up compensating factors
• Identifying red flags

Fair lending and equal opportunity laws

• Protected classes
• The purpose of fair lending laws/regulations
• Understanding and avoiding lending discrimination
• How to remain in compliance

Appraisal review workshop

• Appraisal purpose/responsibilities
• Appraisal section review
• Credit report review

Tax returns analysis workshop

• Loan programs
• Underwriting tools
• FHA, MPR, and MPS

NOTE: In each of these courses, there are many more modules you must complete. This is simply a snapshot of a few of the things you can expect.

Mortgage loan officers are essential to the mortgage industry, helping families and business owners along their way to buying the home that will make their dreams come true. While there are stresses that come with the job, there are also many perks and benefits. Remember: the more knowledge you have, the better off you—and your clients—will be.

If you're truly interested in becoming a mortgage loan officer, take the time to look at the mortgage professionals we highlight in our Best of Mortgage section. Here you will find the top performing mortgage professionals, including mortgage loan officers, across the USA.

Know the difference between loan processors vs underwriters here.

Have experience with loan officer training? Let us know in the comment section below.