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   ARTICLE   |   From Scotsman Guide Residential Edition   |   May 2007

Creating an Educated Industry

Mortgage professionals of all levels must take heed of the importance of education and training

In the past few years, an increasing number of state regulators have recognized the need for and importance of education in the mortgage industry.

The average loan originator enters the mortgage industry with little or no formal training, yet is trusted to help consumers make major financial decisions. And although some states have educational requirements, most are minimal and ineffective. In fact, in some states, individuals who don’t want to meet the requirements can avoid them by working for exempt institutions, such as banks.

Some states also allow individuals who are licensed in other sales-related professions to skip education and licensing requirements altogether and not have to demonstrate that they have the skills or knowledge to work in the mortgage industry. Even many experienced mortgage professionals are lacking when it comes to knowing and understanding federal and state regulations, as well as mortgage products.

Further, many mortgage companies hire loan originators and leave it up to them to wing it. These organizations don’t require any additional training other than what their state may require. In most cases, the employees don’t pursue additional education on their own.

How can any organization expect to maximize its efforts if it doesn’t have educated employees? Fortunately, there are several solutions that mortgage professionals across the board can implement to increase the level of education in the industry. By adopting these solutions, they will enhance our industry’s reputation and professionalism.

First, every mortgage company should implement some type of training program, whether in-house or via a third party (e.g., through lenders’ online training). Considering all the available resources — the Internet, books, CDs, trade magazines, newsletters, etc. — there’s no reason for loan officers to not receive or have access to proper training.

Second, federal and state legislators must continue to pass laws that require everyone entering the mortgage industry to be properly trained and licensed, regardless of their past professions. They should at least be required to pass an examination before entering the field.

Further, everyone in the industry must take a stand to ensure that all mortgage professionals are well-trained individuals who can provide consumers the quality of service they deserve.

Similarly, mortgage associations should continue to organize and fight for stricter standards in the industry. This will help secure a future of well-trained mortgage professionals.

Finally, mortgage educators should work with all the entities in the industry to implement standards and guidelines to ensure mortgage professionals are receiving quantifiable education. They can do this by providing quality education that exceeds the industry requirements.

Poor or no training is a major cause of job dissatisfaction for many new loan officers. Without adequate training, they are prone to making many mistakes, earning less income and providing inadequate service to consumers.

Loan officers are expected to be proficient in sales. Past success in another sales profession, however, does not guarantee success in the mortgage industry.

Mortgage training has many facets that must be conquered. First, new loan officers must conquer mortgage terminology, then they must conquer the numbers, the products, the regulations, sales skills and many other areas to get comfortable. This process could take years without some intense and ongoing training.

Training is not to be taken lightly. Although many companies do not make it a priority, training should be priority No. 1 on the list of things to do when a new loan officer comes on board. The process should start from day one with company leadership explaining the importance of training —whether through the company, self-training or a third party — to new loan officers. If your organization doesn’t have a training program in place, encourage new loan officers to take online training courses.

Education is the key to a better industry. Educated mortgage professionals will save consumers money, save their employers money, reduce consumer and employee turnover, increase their income and raise mortgage-industry standards and professionalism to a higher level.


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