Mortgage Loan Originator vs Loan Processor: The Differences

By Ciprian Morariu Published: March 6, 2024

Mortgage Loan Originator vs Loan Processor

Real estate is a fast-growing, dynamic industry with numerous job opportunities and career paths. You can choose from sales and brokerage or the finance and accounting side of the real estate industry.  

One such exciting and lucrative career path in the real estate industry is in the mortgage loan industry. Mortgage loans are an indispensable part of the home buying process as most people prefer to avail of these loans.  

This is why mortgage loan officers or originators are in demand, despite the ups and downs and 

cyclical downturns in the industry. Did you know that you can make as much as $100K annually as a Mortgage Loan Officer in the US?

After going through this post, you will learn know about how to start a career in real estate as a mortgage loan officer or originator. 

Mortgage Loan Originator vs Loan Processor: Key Differences

Definition and Role of a Mortgage Loan Originator

An individual with a mortgage loan originator license (MLO) works with a lender to ensure that a potential borrower gets a loan. It is necessary for the MLO to first go through a mortgage licensing course before being awarded a license. This MLO online course is flexible and may be completed from anywhere at own pace.     

Typically, An MLO is employed by a lender to initiate the loan application of a borrower and advise clients till the loan is sanctioned.  

MLOs can either work with a lender or operate as a mortgage broker working with multiple lenders. 

The role of a mortgage loan originator is to assist homebuyers navigate the various stages of getting a loan. 

These stages include preparing the loan application, applying for a mortgage loan, and closing the loan. He/she is also responsible for keeping borrowers updated about their loan application and the stage of sanction.  

What is the Role of a Loan Processor

Many people often get confused between a mortgage loan originator and a mortgage loan processor. 

While these two career paths might sound or seem similar, they have a distinctive set of roles and responsibilities. 

A mortgage loan processor makes sure that all the formalities are fulfilled in the mortgage loan application process. 

They make sure that the mortgage loan application process is running smoothly and efficiently. 

A mortgage loan processor has to perform a diverse set of responsibilities, including the following:

  • Coordinate with mortgage loan originators, loan officers, and underwriters 
  • Review and process loan applications from potential borrowers
  • Work as an intermediary between banks, real estate agents, mortgage lenders and non-banking financial institutions
  • Assist borrowers in making informed decisions about mortgage loan options
  • Ensure regulatory and financial compliance by verifying all the submitted documents and paperwork
  • Suggest the most suitable and relevant mortgage plans to homebuyers
  • Educate potential borrowers about financial and mortgage payment terms
  • Provide seamless communication and timely updates between banks, financial institutions, agents, and borrowers 

A bachelor's degree in finance and accounting is required to be a loan mortgage processor. Additionally, two years of experience in this field is also preferred by most lending institutions to hire loan processors.  

The median mortgage loan processor’s salary in the USA is around $50K annually. 

However, with more experience and higher skills, you can expect to earn more than that as you progress through your career.

Key Differences Between Mortgage Loan Originator and Loan Processor

Let us take a detailed look at the key differences between loan originators and processors so you can easily decide which career option you are more interested in. 

Duties and Responsibilities of A Mortgage Loan Processor

Overview of Mortgage Loan Processor Duties

The primary duty of a licensed mortgage loan processor is to collect, review, and process mortgage loan applications. 

A mortgage loan processor can approve or reject a loan application, based on their discretion. 

A loan processor is typically employed in a bank or other financial institution. Their responsibilities include interviewing potential borrowers applying for a mortgage loan. They also help clients choose from various loan options and come to the most suitable decision.   

Typically, loan processors have the following set of duties: 

  • Collecting, processing, and managing loan applications
  • Interviewing loan applicants and evaluating their financial situation and creditworthiness
  • Helping loan applicants choose the most suitable loan payment plan or product
  • Analyzing and verifying financial documents and paperwork submitted for a loan application
  • Approving or rejecting mortgage loan applications
  • Monitoring the loan application status and working with loan officers and agents

Let us now take a look at these points in detail and understand what each of them means for a borrower. 

Document Verification and Validation

A loan application requires the submission of several financial and personal documents from the borrower's end.

A loan processor ensures that documents such as credit history and tax deeds provided by the borrower are accurate and updated.  

Moreover, a loan officer also advises borrowers to submit all documents related to the property, including the contract agreement.  

Communication with Clients and Lenders

A loan officer acts as a bridge between lenders and borrowers, working closely with them to complete the mortgage loan application process. 

Compliance with Regulations and Guidelines

A mortgage loan officer represents the interests of both the lender and the borrower. They ensure that all documents are compliant with the existing rules and regulations.  

Coordination with Underwriters and Closing Agents

A mortgage loan officer shares responsibilities with an underwriter or closing agent to either approve or reject a loan application. 

Mortgage Loan Processor Salary

Factors Affecting Mortgage Loan Processor Salary

What are the factors that determine a mortgage loan processor’s salary?  

The first is your educational qualification and the extent of your analytical skills and overall aptitude. Someone with a bachelor’s degree in finance and accounting will earn more. 

Second, if you work for a large firm or financial institution, your salary will be more than average. Banks and financial institutions also offer extra perks such as commissions, healthcare, and paid time off. 

Finally, your salary will depend on the value that you bring to the company you work for. This means if you can build a strong name and network in the industry, then you can easily bring more clients for your employer. 

Average Salary Range for Mortgage Loan Processors

On average, a mortgage loan processor can easily earn around $52K in a year. 

Mortgage Loan Officer Duties and Responsibilities

Overview of Mortgage Loan Officer Duties

A mortgage loan officer’s duties and responsibilities include the following areas:  

  • Determining and evaluating the financial needs of a homebuyer
  • Recommending the right mortgage products and promotional plans to borrowers
  • Screening, assessing, and analyzing various loan applications for eligibility
  • Interacting and interviewing clients for the successful completion of their loan application
  • Preparing loan application along with the required documents and paperwork
  • Ensuring compliance with the company’s rules and mortgage loan laws

Client Consultation and Application Processing

A loan officer is an experienced and skilled professional adept at providing consultation to borrowers and homebuyers. This includes informing the client about mortgage loan plans, payment terms, interest rates, and tax details. 

Loan Product Recommendations and Guidance

If you are interested in working as a loan officer, you must be aware of the latest financial products offered by your employer.  

In many cases, first-time homebuyers are not aware of the financial choices and decisions they can make. It is here that loan officers are a big help as clients are made aware of the various services available. 

These could include - flexible loans, credit cards, and personal loans among many others.