They go by many names, including mortgage bankers, mortgage counselors, etc. Although names are often interchangeable, it's important to remember the difference between a loan broker and a mortgage broker. The dictionary definition of a loan officer is a bank employee who helps potential borrowers obtain a loan. Loan officers are often referred to as mortgage loan officers, since they are the most complex and expensive type of loan most consumers encounter.
The loan officer is the direct contact for most borrowers who apply for a loan from a financial institution. Mortgage loans require a great deal of documentation because of the numerous federal, state and local regulations that govern them. The loan officer is responsible for collecting the appropriate closing documents for a mortgage or other loan. Loan officers know all the types of loans offered by the financial institutions they represent and can advise borrowers on the best options for their needs.
Loan officers must have a thorough knowledge of credit products, the rules and regulations of the banking industry, and the documentation required to obtain a loan. A loan officer is a representative of a bank, credit union, or other financial institution that assists borrowers in the application process. In fact, one of the reasons banks continue to have so many branches is that they need to put loan officers face-to-face with potential borrowers. The loan officer is responsible for the initial selection process and is unlikely to proceed with a request from someone who does not meet the lender's requirements.
The loan officer then passes the application to the institution's insurer, who assesses the creditworthiness of the potential borrower. If the loan is approved, the loan officer is responsible for preparing the appropriate documentation and loan closing documents. However, most loan officers help consumers and small business owners with a wide variety of secured and unsecured loans.
