If you think you might enjoy earning an above-average income helping home buyers and homeowners obtain mortgage money, “Your Successful Career as a Mortgage Broker” by longtime mortgage broker David Reed explains the details. According to Reed, the average mortgage loan officer earns $76,000 per year, but those who make it to the top 5 percent of the industry earn more than $360,000 annually.
This career-planning book explains the three primary types of mortgage lenders: bank loan officers, mortgage bankers and mortgage brokers. Bank loan officers work for banks, savings associations, credit unions and other direct lenders. Mortgage bankers work for direct mortgage lenders who usually sell their newly originated mortgages into the secondary mortgage market.
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But mortgage brokers act as wholesale middlepersons between borrowers and the actual lenders who are usually banks, savings associations or mortgage bankers. Reed has worked for all types of home-loan lenders, but he clearly favors being a mortgage broker. He likes the idea of being able to offer mortgages from dozens of lenders rather than just working for one lender offering only a few loan programs.
Throughout the book, Reed explains how successful mortgage brokers work to obtain loan applications from borrowers, process those applications quickly, and then fund the mortgages for borrowers. Along the way, he introduces readers to the important “players” such as loan processors, underwriters, appraisers, closers and others. He repeatedly emphasizes why mortgage brokers must be especially kind to loan processors and underwriters who can make or break the transaction.
After discussing the key personnel involved in mortgage brokerage, the author shifts to the topic of getting started. Because all states now license mortgage brokers, he says the first step is to get licensed. The book contains a state-by-state license information contact list.
Then Reed shifts to explaining the details of how licensed mortgage brokers get established and shop for the best terms and interest rates for their clients. Along the way, the author emphasizes the importance of superb customer service to rapidly complete the loan origination and gain repeat referrals.
The first part of the book is necessarily filled with basic fundamentals about how the mortgage brokerage industry works and how to get started. Although Reed is very positive about the advantages of being a mortgage broker, he also is realistic about the work it takes to find borrowers and get them to do business rather than to go down the street to a competitor.
It’s hard to find a fault with the book, but one glaring omission was Reed’s failure to discuss the notorious mortgage “junk fees.” He lists typical mortgage fees such as discount fees (points), origination fee, processing fee, administration fee, document preparation fee, funding fee, underwriting fee, commitment fee and “anything else fee,” but he fails to explain how borrowers can negotiate these charges away, or which charges are legitimate and which charges lenders refuse to cancel.
Heavy emphasis is placed on getting established with wholesale mortgage lenders, determining the mortgage broker’s profit margin and becoming a top producer in mortgage originations. At the beginning, this is an average “how to be a mortgage broker” book, but the book’s second half becomes more practical, such as explaining tactics mortgage brokers use to raise their income, and improve marketing strategies.
Chapter topics include “The Mortgage Loan Officer and His Team”; “How Do I Get Started?” “Mortgage Banker vs. Mortgage Broker”; “The Loan Application and Process”; “Types of Mortgage Loans”; “Loan Prequalification and Approval”; “Loan Documentation”; “How Brokers Make Money”; ‘Marketing Yourself”; and “Marketing Secrets from the Pros.”
Having read several of David Reed’s excellent books about mortgages, I got the feeling he wasn’t “opening up” to tell readers what it is really like to be a mortgage broker. He hits the major points a beginner mortgage broker needs to know, but I kept waiting for his “insider secrets,” which never were delivered. Nevertheless, on my scale of one to 10, this superb book still rates a solid 10.
“Your Successful Career as a Mortgage Broker” by David Reed (AMACOM-American Management Association, New York), 2007, $18.95, 179 pages; available in stock or by special order at local bookstores, public libraries and www.Amazon.com.
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