Loan officers and counselors guide individuals and organization through the process of financing homes, education and cars. They also work with businesses to help them secure start-up funds. Loan officers and counselors collect their client’s information, such as employment, salary and credit history. They then assess their client’s ability to afford the line of credit that they are attempting to secure. Loan officers and counselors also help their clients who have bad credit by analyzing their current situation and helping them to develop a plan to improve their credit in the future. The position of loan officer and counselor may be split into two different positions by some organizations, but for most financial institutions loan officers and loan counselors are one position.
The median annual wage for loan officers and counselors were approximately $54,800 in 2009. The lowest ten percent earned less than $30,000, while the top ten percent earned in excess of $107,580. The middle ten percen of loan officers and counselors is between $40,000 and $79,860. The industry in which the loan officer and counselor works also has a significant bearing on the median wages. Loan officers and counselors who were employed by the federal government had a median income of $69,070 per year, while those who were employed by management companies had a median income of $58,100 per year. Those who worked for non-depository credit inter-mediation companies made a median salary of $54,420 per year and those who worked for depository credit inter-mediation companies made $53,490 per year.*
*According to the BLS, http://www.bls.gov/oco/
How the loan officer and counselor is compensated depends on the organization they are employed. While some of them are paid a straight salary, most of them are paid on a commission based on the numbers of loans that they secure. Loan officers who are paid on commission usually have a higher salary than those who are paid a salary, and those officers who work for larger institutions generally make more than those who work for smaller institutions. Bonuses are usually given to those loan officers and counselors who secure a significant number of loans.
Job Description and Outlook
The primary job of a loan officer and counselor is to make sure that the client is creditworthy in order to sell him a loan. They determine this by pouring over the client’s collected information and sending it to the underwriter. The underwriter then determines whether the loan is approved or denied based upon the guidelines of the financial institution. If the requested loan cannot be approved by the financial institution, the loan officer and counselor will often look for other types of loans that may have a greater success of being approved by the underwriter. Many times a loan can be secured if the client has enough collateral in which to secure it. Collateral can be anything that has monetary value such as a car, home or stock options. If the client defaults on the loan, then the financial institution sells the collateral to pay off the debt.
Loan officers and counselors tend to specialize in one type of loan, such as mortgages, commercial loans or consumer loans. Mortgage loans include refinancing current mortgages or obtaining first time mortgages. Commercial loans are used by businesses to purchase equipment and supplies. Consumer loans include automobile and motorcycle loans, boat loans, home equity loans and motor home loans. Loans for education, unsecured lines of credit and credit cards also fall under the category of consumer loans.
Loan officers and counselors also work with clients who may have defaulted on their loans and may be having difficulty paying it back. They usually attempt to work out a payment plan that is agreeable to both the financial institution and the customer and help them avoid further collection attempts. Loan officers and counselors may also refinance a loan or adjust the terms of the loan in an attempt to offer lower payment to the client.
Employment of loan officers and counselors are expected to grow at a rate of ten percent between 2010 and 2020. This makes it’s growth about average when contrasted with other occupations. Growth in this industry will be driven by economic expansion and governmental regulation of the financial sector. This growth will be partially offset by automated processes that speed up the lending process and the growing use of the internet to obtain loans. These changes will also reduce the cost of loans, which will increase the number of loans originated.*
*According to the BLS, http://www.bls.gov/oco/
Training and Education Requirements
While it is certainly possible to work as a loan officer and counselor with only a high school diploma, most financial institutions require at least a bachelor’s degree in business. In lieu of a college diploma, some loan officers and counselors may obtain employment based upon their previous experience in the field.
Sales experience is also especially important in this field, especially among those loan officers and counselors who specialize in commercial or mortgage loans. Candidates must be highly motivated and have excellent communication skills. Prior experience in banking may also be needed for some advanced positions.
Loan officers and counselors who sell consumer of commercial loans do not require certification. Recent federal regulations however, have made it mandatory for all mortgage loan officers to be licensed. These loan officers and counselors must complete a minimum of twenty hours of coursework, pass an exam and a detailed background check. In order to maintain their license, mortgage loan officers have to keep their license current by taking continued education classes.
Mortgage Bankers Association (http://www.mortgagebankers.org/default.htm)
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