MORTGAGE GLOSSARY

MORTGAGE BROKER

A mortgage broker helps connect borrowers with lenders to secure a home loan. Mortgage brokers can use their own funds or provide the proper paperwork to various lenders for underwriting and approval. Brokers offer borrowers multiple loan options, fast turn-times, and a personalized experience and helps them every step of the way.

Licensed Mortgage Loan Officers, also known as Mortgage Loan Originators, are representatives of a mortgage broker or other financial institutions who are properly licensed by State regulators authorizing them to work with consumers to obtain a mortgage loan.
A person who obtains a loan from a lender in order to finance a home.
All mortgage loan officers/originators must be licensed as an MLO, which involves completing 20 hours of pre-license education courses (some states also require additional state specific coursework), passing an exam, and a credit and background check. The MLO exam contains both a national and a state-level component. Once an MLO license is obtained, continuing education credits are needed on an annual basis.
NMLS is the system of record for maintaining non-depository, financial services licensing or registration information from state agencies, including the District of Columbia. While the NMLS itself does not grant or deny license authority, it is the official system for tracking state licensing information for companies and individuals.
Credit bureaus collect and maintain consumer credit information. All loans require a tri-merged credit report, which is a single report that merges the data from all three CRCs (Equifax, Experian, and TransUnion).
LOS is critical technology that automates the loan process from application to approval. LOS systems manage loan products, provide insight into each transaction, and help reduce compliance risk.
The MCR is a report that reflects mortgage activity and financial information of loan production for each MLO. Companies that hold a state license or state registration are required to complete a MCR on a quarterly basis through NMLS.
A compensation plan describes the terms governing how a licensed loan officer is compensated for loans they originate.
Transitional Licensing provides MLOs with Temporary Authority to originate loans for up to 120 days while working to fulfill state licensing requirements after transitioning from a traditional bank to a nonbank.
Wholesale lenders are financial institutions that fund home loans by partnering with independent mortgage brokers for client interaction. While the mortgage broker originates the loan, the wholesale lender is responsible for approving and funding the loan.
Retail lenders include banks, credit unions, mortgage bankers, or other institutions that lend money directly to borrowers.
Origination is the multi-step process that a borrower must go through to obtain a home loan. Pre-qualification is the first step in this process where a loan officer obtains the necessary paperwork and information needed to start the loan process.
Compliance is the process of developing a compliance management system for reviewing and following all applicable federal and state rules and regulations governing the mortgage origination process.
A business plan is a strategy document outlining the intended goals of the business, and the methods and time frame needed to achieve these goals. Business plans are normally required to attract investors, secure loans, and recruit employees.
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