Whether you work for an independent mortgage bank, a credit union, a broker, or a bank, LOs are more than “Loan Originators.” One estimate that you could start with is 1% originator, 40% child psychologist, 10% psychologist, 20% financial planner, 10% cop, 10% legal consultant, 9% “other”: mortgage and real estate compliance expert, accountant, driver, home repair, appraiser, computer expert, last one out at night take out the trash person, etc. Veteran originators will tell new people in our business something like, “If you think you can just originate loans in this industry without cross education, leave it early.” But what does make a good LO?
Whether a client is a first-time buyer or a seasoned real estate investor, they want to work with a loan officer who has the skills, knowledge, and dedication to make the process as smooth as possible. A loan officer works with people and their finances. A great loan officer knows how to communicate clearly and effectively, and explore alternatives. Whether it’s explaining complex loan terms, guiding clients through the mortgage process, or providing updates, communication is key to building trust. When faced with competition from internet lenders, or AI, this is where LOs can shine.
Solid originators use the tools that their companies or counterparties provide and eventually become experts. No borrower wants to go to an LO who says, “Uh, I don’t know.” They stay up to date with the latest mortgage products, interest rate trends, regulatory changes, and software their company offers. This knowledge allows them to offer the best loan options to their clients.
Home loans are complex, and missing or incorrect information leads to problems. A detail-oriented loan officer helps prevent mistakes, ensures the loan process stays on track, and fixes problems immediately.
But wait. Before we go down the, “A Scout is trustworthy, loyal, helpful, friendly, courteous, kind, obedient, cheerful, thrifty, brave, clean, and reverent,” path, know that some of these traits do apply to top loan officers, or any individuals who are successful in their field. As do emotions. Loan officers understand the emotional side of the process and are empathetic to their clients’ concerns and needs. 2026 has led off with a lot of uncertainty, politically, economically, and globally, and LOs need to be able to work with their clients.
Of course, organizational skills are critical to managing deadlines, ensuring all paperwork is in order, and keeping the loan process moving smoothly. So is adaptability, which can include many things: programs, rates, borrower credit profiles, interest rates, regulatory environments… the list goes on and on.
But for any lender which is in the retail space, whether distributed retail, or with a call center, or a “broker shop,” the question constantly arises, “Are good LOs made, or born that way? And if they are made, what is the best way to do so in a cost-effective, timely, efficient manner?” And when they are trained, what is the best way to compensate them?
Let’s start with the second question first. As long as anyone can remember, loan officer compensation is a simple matter of basis points of production. The number of basis points, of course, varies based on business (credit unions and banks are traditionally less than brokers and independent mortgage banks) as well as lead source. Pay structures generally range from 35-125 basis points.
The point of compensation, besides paying a living wage, is to incent the employee to push toward the goals and objectives of the company, and other compensation methods and ideas are gaining in interest. For example, some lenders have insurance divisions, or the owner of the mortgage company also owns an insurance company. When the LO refers a client to the insurance company, they may receive a small annuity for as long as that borrower uses the insurance company. Or if the company is retaining servicing, and the borrower is not delinquent, the LO may receive a small amount every month or a share of the servicing income.
Training LOs (and AE, for that matter) should be a priority for every lender. The days of the large bank training programs appear to be over or at least diminished greatly. New originators are often paired with an experienced LO. Companies have trainers, especially when it comes to software, or loan programs. Sessions are held once a week for training, either on the available loan types, advances in AI, or tools that the company offers to LOs. Webcasts are often offered whereby panels of the company’s top LOs answer questions or give advice. Are there niche products that work particularly well? Are there useful twists on old sales pitches? What strengths of that particular lender work?
Building customer and business relations is critical to being the best loan officer. Every good LO will say that being a great mortgage loan officer goes beyond knowing how to crunch numbers or explain loan terms. It’s about communication, trust, and a desire to help clients achieve their homeownership dreams. A good compensation program oriented with the goals of the company, strong communication skills, industry knowledge, attention to detail, and solid training will help employees dealing with borrowers… and never go out of style.
