A mortgage loan originator (MLO) is a person or an organization that cooperates with borrowers to finalize a mortgage loan transaction. MLOs can include mortgage brokers, mortgage bankers, and other types of professionals. Mortgage loan originators generally work on new mortgages, hence the term “originator”.

However, sometimes original mortgages are sold into secondary mortgage markets; these transactions can often involve different professionals. On the whole, mortgage loan origination has to do with first-time mortgage transactions between the lender and the borrower.

What Does a Loan Originator Do?

Loan originators perform a variety and tasks with clients. Basically, their main duty is to finalize a mortgage transaction with the borrower in preparation for a home sales transaction. At the heart of it, loan originators are sales persons, and their task is to promote their mortgage product to clients and interested buyers. The MLO may perform tasks like:

  • Present different mortgage options to clients
  • Negotiate mortgage terms
  • Present standardized or customized mortgage contract agreements
  • Research a client’s financial background and home purchasing history
  • Give some advice to clients if needed
  • Finalize the mortgage loan transaction and approval

Lastly, loan originators may also engage in some other actions, such as light advertising or doing special presentations. This all depends on the individual professional’s practice, as well as company policies.

Can I Hold a Mortgage Loan Originator Liable for Losses?

Mortgage loan originators can sometimes be held liable for losses experienced by a mortgage borrower. This can occur if:

  • The loan originator engages in fraud or coercion in order to open or finalize the agreement
  • The loan originator violated ethical or professional conduct standards
  • A breach of contract was involved
  • The originator misrepresented information or details that were crucial to the agreement

In such cases, a private suit may be necessary against the originator. This can result in a damages award to resolve the dispute. In some instances, criminal charges can also arise.

Seeking Legal Help for Mortgage Loan Originator Laws

The laws governing mortgages and mortgage professionals often vary by region. You may need to hire a real estate lawyer if you need help with any type of mortgage or home loan issue. Your attorney can help guide you through the loan approval process and can advise you on your rights and options. Additionally, if you have any legal disputes, your lawyer can provide you with representation during a legal claim in court.