Loan Officer

Financial Dictionary -> Loans -> Loan Officer

Most banks and financial institutions offer hundreds of different services to their customers and in today's every growing population it's not always feasible for them to negotiate loans or offer in depth advice to borrowers, with the same expert skills that a specialized intermediary could. A loan officer is a specialized middle man that is employed by the banks or other financial institutions to act on behalf of lenders and borrowers, bringing them together and arranging the most suitable service for both sides. In other words they are outsourced the work of finding borrowers and arranging loan services so the bank or financial institution doesn't have to.

The usual procedures that a loan officer undertakes for a lender include the marketing of the specific mortgage services (whether that be sorting out TV, newspaper or any other type of advertising), Checking up on the credit score and financial history of any future borrowers by contacting Credit Bureaus and other organizations for credit reports and data. (If a loan officer blatantly ignores a borrower's bad credit and offers a loan that does not suit them, they can be held liable by the bank). They also complete all the lender's forms and submit all the required information to the lender for oversight and storage.

For a borrower the general services a loan officer offers include giving in depth information and guidance in relation to loans in general, discussing the best loan options that would personally suit the borrower, explaining all the legal issues involved and setting out the terms for the loan. They will also help the borrower fill out any of the forms if they are having trouble. Again if false information is given to the borrower the mortgage broker can be held liable by the bank employing them.

Loan officer will work with all types of different loans including mortgages, although there are specialized mortgage brokers that deal specifically in mortgages, much the same way as a loan officer deals with other types of loans.

Loan officers commonly work on a commission basis or charge a fee for connecting a lender to a borrower.