Posted by grapebed on 11/17/12 3:21pm
Msg #443791

How much $$$ on average do mortgage brokers earn versus NOTS

I have been asked by a couple of Mortgage Companies to consider joining their companies to become a Mortgage Broker.
I know that both professions are, in general, s***ty.

In May, I will complete my second year as a full time( 38+ hours a week) Notary in a medium size market. The average loan is probably around $165,000+/- $5,000. In a good week I earn after expenses $1,000. In a bad week, I earn after expenses $300. On average I earn, after all expenses, about $700 a week. The business continues to grow. My costly mistakes and bad decision making are shrinking ( thanks in part to this Message Board).

I am sure the brokers earn more. I am interested in the opinions of the long time experienced notaries. Do you regret not becoming a mortgage broker? Some brokers earn $150,000+ per year. That never happens in Notary land.

Is the notary business "easier" for lack of a better word? Thanks in advance for your thoughts and comments.

Reply by Lee/AR on 11/17/12 4:17pm
Msg #443794

Having done both...the notary biz is a whole lot less stress-inducing, imo. I completely understand why brokers go nuts at us when there is some table-issue (fumbled by a newbie)...they have a lot more hours, sweat & tears into it at that point than we will ever have. And, fwiw, I do know a very few notaries who do make that kind of money...and, yes, they work very hard for it, and, no, I'm not one of them.

Another thing to consider is that, as a broker, you won't have someone calling you on the phone to ask 'canudo?' You will need to find your own clients and spend some uncompensated time just to decide if what they want is doable. And I imagine the no-can-do's outnumber than the can-do's these days. Hopefully someone with recent broker experience will chime in. Why not try doing both and see how it goes? Brokers are commissioned and do not generally have a weekly payday.

Reply by ToniK on 11/17/12 4:25pm
Msg #443795

Well Im delving into that market as an addition to the notary biz. I like to have several fires going at once. But I cant help you on that question.

Reply by PegiT_MN on 11/17/12 6:12pm
Msg #443818

The Grass Is Definitely Not Greener.....

...over in the Mortgage Broker World......I can tell you that for a fact! I was a mortgage broker from 1999-2009, when there was money to be made in the profession. I owned my own mortgage company during part of that time, and I was very successful earning right at the six figure mark. I had very little overhead, I did not overcharge my customers like so many other brokers, and I gave my clients loans that made sense (no ARM's, negative am's, pay option ARM's, or interest only loans). The majority of my clients were good credit, 15, 20, and 30 year fixed rate kind of clients. I worked referrals only and I had a good run.....but I left that part of the industry in early 2009 when the housing market crashed, a lot of lenders went out of business, housing values plummeted, and all of a sudden the cost of doing business went way up. The cost of my mortgage license nearly tripled, there was the continuing education, surety bonds, and the fact that mortgage brokers had to be W-2'd employees and could no longer be 1099'd subcontractors. It took everything I had to get a loan through underwriting, I was hardly making any money, and I had to spend most of it on all these new fees the State of Minnesota was charging.

Many of my friends, colleagues, and employees also left the business and the ones that stayed in it told me that they regretted it and were looking to go elsewhere. Many left the mortgage business all together, and the ones that stayed in it went on to work for banks as loan officers, processors, and underwriters. Some even went on to become title closers and notary signing agents as did I. A lot of mortgage brokers went back into the car sales business where they had originally started. Yes.....a lot of mortgage brokers were once car salesman and when the housing market peaked they came over into the mortgage business to make the money.......they didn't even know a thing about mortgages. The big mortgage companies hired them because it was all about sales and these guys and gals had the ability to sell!

So here we are in 2012-2013, business is starting to pick up a bit, and all of these new mortgage companies are coming out of the woodwork thinking there is a lot of money to be made.......just like in the old days. Are they aware that big banking is phasing out the mortgage broker? The days of fees on the back end are over with? And here you are being asked by a couple of mortgage companies to consider joining their companies to become a mortgage broker. I can guarantee you that the days of $150,000+ per year are non-existant. You are going to work in a sweat shop sitting at some crappy desk with a telephone and you are going to be telemarketing all day to find your own business. Your bosses may or may not provide you a few leads here and there......but when you call those precious leads they have given to you......you are going to find that 1). Twenty-five other mortgage brokers have already called them. 2). They were just curious to see what rates were and clicked on the pop-up that came up on their computer screen.......they don't even own a house. 3). They are so upside-down in their mortgage there is no way in heck it is ever going to appraise out so you can get them a loan. 4). They have crappy credit. 5). They inquired about that over six months ago.........I could keep going......but I'm pretty much guessing you get the idea by now.

State statistics show that in the years 1999-2010, there were thousands and thousands of people that were mortgage brokers......now there are only a fraction of that left holding a mortgage license. That should tell you something right there. Here's another fact......Wells Fargo recently closed down their wholesale division. That is where brokers send their loans. No lenders to send your loans to.......no loans for your clients.......no money for you.

Don't let these mortgage companies entice you and lure you in saying how great it is and how much money you can make.......take it from me.......there is no money to be made.......for you that is.......they are the ones that are going to be making the money.........and you are going to be doing all the work.

Reply by anotaryinva on 11/17/12 6:40pm
Msg #443823

Thank you

You are the first, PegiTMN to address this issue I such a clear and concise way. I want to say thanks. I have toyed with the idea of becoming a LO but after reading your response I have finally let that notion go, thanks again for your detailed response.

Reply by Shoshana/AZ on 11/17/12 6:48pm
Msg #443826

I agree with Lee and PegiT. It's a dog-eat-dog world out there. I did it for a while. It's really high stress. It's not always about how much money you can make!

Reply by sigtogo/OR on 11/17/12 10:05pm
Msg #443854

Don't write it off-investigate! If I were younger I would!

I retired my brokerage business in 2008 due to some of the reasons mentioned here-costs going up, regulations increasing, banks squeezing out the brokers. BUT, it all depends on who you work for and what they offer for compensation. I would go with a local/regional bank or credit union.
Sure its stressful, but after working my A** off for a month and making what I would sometimes earn on one loan, I would say this work is certainly not less stressful. I enjoy this and I loved the lending business!

However, when you say: "I know that both professions are, in general, s***ty," I am not sure this would be a good fit! You would most certainly need a tiny attitude adjustment to be a successful LO.
JMHO

Reply by PegiT_MN on 11/17/12 10:32pm
Msg #443856

Re: Don't write it off-investigate! If I were younger I would!

"I would go with a local/regional bank or credit union."

The OP was asking about "mortgage brokers" in particular though........mortgage brokers don't work for banks or credit unions. They are two totally different entities. A mortgage broker is wholesale and a bank or credit union is considered retail. There is a big difference between the two.....and maybe the OP does not know the difference.....I am not sure about that.

You are correct about the local/regional bank or credit union aspect of it though. A lot more business is going on in the retail portion of this industry than in the wholesale portion.

I guess the original OP would first need to be aware of the difference between a mortgage broker (wholesale) vs. loan officer in a bank/credit union (retail) and then decide which area they want to pursue. That was a good point though sigtogo......and now they have two different avenues to research.

Reply by Claudine Osborne on 11/17/12 10:42pm
Msg #443858

Re: Don't write it off-investigate! If I were younger I would!

Pegi and the other that responded to this OP..What an awesome explintation! Thank You

Reply by Mike_D on 11/18/12 12:21am
Msg #443865

if you are actually a good broker/banker then its no comparison. they make WAY more money and many times dont have to deal with half the bullshit we do.

take it from me i have experience. I am currently active as a Loan Closer, Realtor, and Banker....

Reply by grapebed on 11/18/12 9:09am
Msg #443872

Now I am confused........

hmmm....now I am a bit confused....two competing answers. My gut tells me to continue to focus on Notary tasks and continue to grow the business. No, I won't make $150,000 a year.

The good news is that for the foreseeable future, the REFI industry will be robust. There aren't many industries right now that can make that claim

Even if the business does not grow, my income will increase by 20% just by eliminating the stupid costly mistakes made during the past 12 months. This MB has been very helpful in how to make wiser decisions.

Right now, I am scared to death about 2012 tax preparation.

Reply by NVLSlady/VA on 11/18/12 9:22pm
Msg #443942

Re: Now I am confused........

PegiT's post was the most "accurate picture" of what it takes to succeed in the mortgage banking business as a Salesperson. To be a mortgage Broker (thanks, Pegi for highlighting the two "animals"), you need flexibility to work with all the different products & lenders. Will such a middle-man be around for long, don't know?

Real life stories: The LO I sometimes do work for, confided to me recently that he had less than $xx (yes, a 2-figure no.) in his bank account; in fact, he'll contact me now & again to help "sell." Even with good leads, it's pretty tough for him. And he's been doing this a long time. Like Pegi said, when everyone (like here) is chasing after the same $1, .50 cents, or whatever, . . .

#2 Story: I developed a mortgage calculator and had one client who was a mortgage teacher for a Adult Education/ Career Development. She had her own mortgage company and did real well . . . until the "crash." She lost her company, had to take jobs she was less-suited for - like being on her feet as a drug store mgr - or that laid her off after several months (believe she said that was some kind of education co.) It was hard for her to get work in banks doing lending (maybe her background posed a threat). Long story short, her marriage fell apart, and she told me her husband "blamed her" for all that happened (she, like so many couldn't have "planned" a more complete demise).

Reply by Bear900/CA on 12/22/12 3:56am
Msg #447472

I agree with most all of the comments, and sorry for finding and posting on this thread late. Here are some additional considerations:

1. I feel like saying if you have to think about it, don’t do it. In part, loan origination requires some natural ability to see and make opportunity where others cannot. Yes, that is sales, and it is work. Combine it with the desire to help others before you help yourself is a first step. Training programs for sales and marketing techniques in loan origination are endless. The good ones are expensive. You will need a marketing budget.

2. That said, you DO have to think about it a lot.

3. Define mortgage broker. Define mortgage loan originator. How are they the same and how are they different? Google each state’s requirements for both and you will find HUGE disparities. Do some homework on say MN vs CA requirements and then check your own state requirements.

4. Regardless of what state you are in, if you are a loan originator with a non-depository company, you will most likely have to be licensed by the federal government as well as your state and take license exams for both (S.A.F.E. Act). This does not apply to depository bank originators who are not required to have any sort of license or formal education in real estate. This is a great disadvantage to consumers who need educated guidance and may be capitalized upon. It’s up to you.

5. Item 3 refers to a NMLS license (Google it) and requires FBI checks, credit checks, fingerprints, and background criminal checks. That lopped off quite a few and even many that qualified just got fed up with the over-regulation. That’s understandable.

6. WF and BA got out of wholesale lending which put no real dent in the broker side as most independents use a variety of top notch wholesale lenders. These are making a large comeback but are very tight in underwriting so if you don’t have the patience, skill or desire to work with them go to a bank.

7. Ethics, morals, integrity and honesty now reign. Those that don’t fit are gone or soon to be gone.

8. Non-bank loan origination requires more than a license and basic real estate education. There are fees and continued education to retain your NMLS (National Mortgage Licensing System and Registry) license. You must have on-going training in the (FACT Act) Red Flags Rule. You must be trained, tested and certified under the Financial Crimes Enforcement Network (FinCen) and learn the mandates for filing a Suspicious Activity Report (SARS), be registered with the BSA (Bank Secrecy Act) and trained in Anti-money laundering (AML). You must have policies and procedures in place to pass a CFPB (Consumer Financial Protection Bureau) audit who just last week hooked up with the Department of Justice. The CFPB is a 2,000 lb and growing gorilla. Learn it or die.

9. These are not made-up mandates. If you have been out of the broker business for as little as 5 months prior to this post you are out of the loop. These are National mandates for depository and non-depository institutions, except for NMLS which the CFPB is thinking about mandating for banks. Think originators will be safe at a bank in the near future?

10. Coming up next month (Jan 2013), more changes in loan officer compensation rules, and the CFPB’s proposed combining of forms such as the TILA and GFE, later possibly the HUD.

11. More coming on Safe harbor, QM and QRM. Eh? Right.

12. For today’s mortgage broker continued education is paramount and mandated. It’s costly. It’s difficult.

13. They do have a role that cannot be replaced by a bank. They can be more agile, offer a wider array of products from various wholesalers and focus on niche marketing if they desire.
What do you see from these facts? Mortgage brokering is becoming more professional as it should have always been. Its standards are so high that finding licensed and certified loan originators is difficult so there is a demand for them. Education requirements are the highest ever. The investment required is daunting and not for everyone and should only be considered for the long haul.

I agree. You should not become a broker. They make next to nothing. They are dinosaurs.

I hated that my client and his wife called me over to their beautiful house this week to celebrate their loan closing over a bottle of fine wine, but it just comes with the territory.