What is the difference between a mortgage broker and a loan officer?
A loan officer works for a single lender, such as a bank, credit union, or mortgage company, and can offer only that employer's loan products. A mortgage broker is an independent intermediary who does not lend money and instead shops multiple lenders to find loan options for the borrower. Both roles are mortgage loan originators under federal law and must be licensed or registered, and brokers typically charge a fee of 1% to 2% of the loan amount, paid by either the borrower or the lender.
A mortgage broker is an individual or company licensed to negotiate loans between borrowers and lenders; a California real estate broker acting under Business and Professions Code 10131(d) solicits borrowers or lenders and negotiates loans secured by real property. A loan officer is an individual who works with borrowers on specific loans and must hold an MLO license or endorsement, sponsored by a licensed company or broker.
Sources: California DRE: MLO License Endorsement Information; California DRE: How to Obtain a Mortgage Loan Originator License (RE 19).
A mortgage loan officer, legally a "loan originator" in Florida, is an individual who solicits and negotiates mortgage loans and must hold an individual license. A mortgage broker is a company: Florida defines it as an entity conducting loan origination activities through one or more licensed loan originators it employs or contracts with. The loan officer works under a broker's or lender's company license rather than holding it personally.
Sources: Fla. Stat. 494.00312: Loan originator license; Fla. Stat. 494.00313: Loan originator license renewal.
A loan officer works for a single lender and can offer only that employer's loan products, while a mortgage broker operates independently and places loans with multiple lenders. In New York, a registered mortgage broker cannot make loans directly; the broker must place them with licensed mortgage bankers or exempt organizations. Under federal requirements, both loan officers and mortgage brokers are classified as mortgage loan originators.
Sources: N.Y. Banking Law § 590: Definitions; registration required; N.Y. Banking Law § 591-a: Application to register as a mortgage broker; fees.