Q-01 I'm interested in getting into the mortgage industry. Where and how do I begin?

A-01 Well, you came to the right place… it all begins with training… wherever and however you can obtain it! If you know the type of job you intend to seek (i.e. loan officer, processor, underwriter, etc.), this helps us provide the correct learning solution.

For example, if you wanted to be a loan officer, then part of your learning solution should cover sales and marketing techniques, how to create a business plan, and time management techniques. To be a processor, you need to learn the details about a number of Federal and State disclosure laws, and, of course, the techniques of processing.

Technical training on loan products (i.e. FHA, VA, and conventional loans) would be a necessary part of your learning solution; however, not all lenders offer all loan products. So, what technical training you'll need depends on the types of loans offered in the community where you intend to work.

We strongly suggest that you begin down the learning path by taking one of our "Intro" classes, which is offered Online, in a "live", interactive format, or you can select the course in a correspondence format - what we call "home-study."

Information on all LT.C classes may be found at the tab labeled "Classes."

Q-02 How do I become a Loan Officer (LO) - or Loan Processor (LP) - or an Underwriter (UW)?

A-02 As mentioned above, we strongly suggest that you begin down the learning path by taking one of our "Intro" classes, which is offered Online, in a "live", interactive format, or you can select the course in a correspondence format - what we call "home-study." This course provides the basic information you need to know about the mortgage industry, loan products, industry jargon, and an overview of the different job duties.

At the conclusion of this training, you'll be in a much better position when seeking employment… you'll be better prepared to ask the right questions and interview the employer, rather than the other way around!

Q-03 Do I need some sort of degree or license to work in the mortgage industry?

A-03 There are no Federal Laws that specify requirements to work in the mortgage industry. Nor is a college degree required for any of these positions. There are, however, licensing requirements for loan officers in most States, and there are standard steps that most people follow as they move into the LO and other positions.

Loan Officer (LO): The position of Loan Officer is typically a commissioned sales job. Many lenders will hire someone to be a LO with no experience or training. Again, your State Law may require licensing, so ask a local lender or the proper state agency for the specific requirements… States that do require licensing typically require certain mortgage-related classes to be completed, and the passing of a state-monitored exam. Additionally, continuing education credits may be required after licensing.

Loan Processor (LP): Processing jobs are typically based on some type of salary and possibly bonuses. Many companies will hire someone without experience or training; however, it is most common for someone to be hired first as a Set-Up (data-entry) person, Assistant LP, Receptionist type of position. Working closely with a processor, learning about processing tasks and company procedures, enables you to move into the actual LP job.

Underwriter (UW): Most Underwriters start out in processing types of positions, and after several years of experience of working with files and guidelines, move into a Jr. Underwriting position - with a Sr. Underwriter checking their work. Then, when a Jr. Underwriter demonstrates proficiency, is promoted to a full Underwriter.

LT.C classes help give people the skills and confidence to be proficient in each of these positions.

Q-04 Where can I make the most money?

A-04 Each position has the potential for very good Income. As in any industry, the commissioned sales person (LO) generally has the greatest potential for earnings based upon their effort. Processors and underwriters typically work on a salaried basis. Underwriters on the whole are usually paid more than Processors; however, many companies pay Processors a bonus that could provide a substantial boost to the base salary… bonuses are usually based upon the number of "closed" loan files they handle. Starting salaries, and bonus programs, vary greatly between mortgage companies, and different regions of the nation.

Q-05 I want to do everything… is that all right?

A-05 Although most of the time, separate people perform the tasks that are inherent to each position, it is not uncommon for a Loan Officer to process a portion, or all, of his/her own file. Performing both tasks may generate extra compensation; however, the downside is that it makes it difficult to handle as many transactions.

There are conflict-of-interest concerns if an LO or LP underwrites his/her own loan file. So, it is highly unlikely that a lender would allow an LO or LP to perform underwriting tasks… because of the possibility of the commission or bonus becoming more important than the Risk Assessment of the loan file.

Q-06 Where can I make the most money?

A-06 Each position has the potential for very good Income. As in any industry, the commissioned sales person (LO) generally has the greatest potential for earnings based on effort and closings.

Beside effort and closings, the LO's earning will depend on several factors… market conditions, offered loan programs, average mortgage amount, and commission split.

Processors' salaries are typically less than underwriters; but, with a bonus plan, total compensation could be quite high. Beginning salaries for processors typically run in the $1200 to $1500 a month (higher in some areas of the country)… with experience and expertise, the month salary moves into the $3000 - $4500 a month range. A beginning underwriter's salary is in the $2500 - $3000 range (higher in some areas of the country)… with experience and expertise, the range moves into the $4000+- category. Underwriters with an FHA CHUMS ID Number are in demand across the country, and are in a position to negotiate a very good compensation package!

Q-07 How many classes do I need to take to get a job?

A-07 LT.C classes are not "required" in order to get a job in the lending industry. They are, however, recognized by the mortgage industry as quality educational programs and very beneficial in preparation for a job interview and the job ahead.

Completion of Mortgage-related training classes that are indicated on your Resume also shows that you are interested in obtaining the skills necessary and are motivated to learn.

LT.C provides a complete curriculum of study in each job area that is designed to take the attendee from the Introduction of that job to detailed instruction in policies and procedures required to be successful. We recommend that you take all of the classes in your chosen job area.

Q-08 Does the LT.C class - "FHA Direct Endorsement Underwriting Training" - qualify me to underwrite FHA loans?

A-08 No… this class is designed to prepare you to perform underwriting tasks on FHA loan files. The actual qualifying process is between your lender-employer and FHA, as follows:

  • To begin underwriting FHA loans, you must first be a full-time employee of an FHA-approved lender.
  • The employing lender is responsible to determine that you are "ready" to underwrite FHA loans (LT.C training helps you with the "readiness test"),
  • The employing lender is responsible for requesting from FHA a CHUMS ID Number for you… obtaining your personal CHUMS ID Number makes you eligible to begin underwriting FHA loans.

Q-09 What is a CHUMS ID Number?

A-09 A CHUMS ID Number or Computerized Home Underwriter Management System Number is the ID Number that is assigned to a specific Direct Endorsement ("DE") Underwriter, and is required when validating an FHA Underwriting decision. In other words, every eligible DE underwriter has a personal CHUMS ID Number. A CHUMS ID Number (referred to as simply CHUMS Number) is obtained via THE FHA Connection (see Q-12), and is requested by the employing lender, and is issued by FHA.

Q-10 How do I get qualified to be a DE Underwriter?

A-10 See Q-8 and Q-9.

Q-11 What happens to my CHUMS ID Number when I change employers?

A-11 A CHUMS Number belongs to the DE underwriter. When you change employers, the last employer is suppose to contact FHA (via The FHA Connection) and notify FHA that you are no longer employed with them. The new employer, in turn, advises FHA that you're now with them - you're ready to go! Often, however, the last employer fails to make notification to FHA… and because you're only eligible to underwrite FHA loans for one employer at a time, The FHA Connection will issue an error message. You may need to prompt your last employer to communicate with FHA to get things cleared up!

Q-12 What is THE FHA Connection?

A-12 The FHA Connection is an Internet-based system that allows FHA-approved lenders to have real-time access to several of FHA's systems over HUD's Internet system for the purpose of originating and servicing FHA loans. Access to the system requires an ID and password.

Q-13 I want to open an FHA Lending Department and originate FHA Loans…. what are the steps?

A-13 There are basically two different directions a company can take to originate FHA loans… either as a Mortgage Broker or as a Mortgage Lender/Banker.

  • Mortgage Broker: As a mortgage broker, you can establish a relationship with HUD/FHA either as an "FHA Approved Correspondent", or as an "FHA Approved-Net Branch".
    • To become an FHA Approved Correspondent, you need a "sponsoring lender" to initiate the application process. The approval process involves an Application, Fees Requirements, Minimum Net-Worth requirement, and several other items. The process typically takes several months to work through the system. Upside: you retain your broker independence, and you can have more than one sponsor (after the approval process has been completed) to whom you can send FHA loans for approval and funding.
    • To become an FHA Approved-Net Branch, you need to establish a relationship with one (and only one) FHA approved-lender/banker. Upon completion of the "branch-approval process", your operation becomes a branch office of the lender, and you become an employee of the lender/banker. Upside: Ability to originate FHA loans fairly quickly. Opportunity to access employer-related perks… medical insurance, retirement program, vacation plans, etc.

  • Mortgage Lender/Banker: If your company is an actual Mortgage Lender and wants to originate, underwrite, fund, and service FHA Loans, there is a strict approval process established by HUD/FHA. The approval process includes a Application Form, review of: Minimum Net-Worth requirements, Staffing requirements, Minimum Warehouse-Line-of-Credit-Letter, Secondary Market Investor-Approval Letter (Fannie Mae, Freddie Mac, or Ginnie Mae), and Loan Servicing Expertise or a Sub-Servicing Agreement with an FHA-approved Sub-Servicing Company.

    If the company desires to underwrite FHA loans under the Direct-Endorsement Program, there is a two-step approval process, as follows:

    1. Become an FHA-Approved Lender (Mortgagee)… done by submitting above items to FHA… this enables the lender to originate and process FHA loans, but the underwriting must be done by a FHA staff underwriter - this is referred to as the "Prior-Approval Process". After FHA's loan approval, the lender may fund and close the loan.
    2. Become an FHA-Approved DE Lender (Mortgagee)… by submitting above items to FHA, along with documentation that the lender has in its employ an eligible FHA DE Underwriter (possessing a CHUMS ID Number). Be aware that FHA imposes a "probationary period" on new FHA DE Lenders, in that the first number of "Test" case files must be prior reviewed by FHA staff before the lender can fund and close the file. In most instances, fifteen (15) is the number of test cases that must be reviewed before the company is "released from probation", and everything can be accomplished internally.
  • · LoanTrainer.com, through its Consulting Program, can provide guidance to a company throughout the various approval steps, as well as provide the needed training for all staff members in order to ensure they have the needed skills and confidence to make them, and the company, successful.

    Additional Questions??
    Email your unanswered questions to: ask@LoanTrainer.com.