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Loan Officers and Counselors

(D.O.T.  186.167-078, .267-018, -022, -026)

Nature of work

Banks and other financial institutions need up-to-date information
on companies and individuals applying for loans and credit.
Customers and clients provide this information to the financial
institution's loan officers and counselors, generally the first
employees to be seen by them.  Loan officers prepare, analyze, and
verify loan applications, make decisions regarding the extension of
credit, and help borrowers fill out loan applications.  Loan
counselors help consumers with low income or a poor credit history
qualify for credit, usually a home mortgage.

   Loan officers usually specialize in commercial, consumer, or
mortgage loans.  Commercial or business loans help companies pay for
new equipment or to expand operations.  Consumer loans include home
equity, automobile, and personal loans.  Mortgage loans are made to
purchase real estate or to refinance an existing mortgage.

   Loan officers represent lending institutions that provide funds for
a variety of purposes.  Personal loans can be made to consolidate
bills, purchase expensive items such as an automobile or furniture,
or finance a college education.  Loan officers attempt to lower
their firm's risk by receiving collateral security pledged for the
payment of a loan.  For example, when lending money for a college
education, the bank may insist that the borrower offer his or her
home as collateral.  If the borrower were ever unable to repay the
loan, the borrower would have to sell the home to raise the
necessary money.  Loans backed by collateral also are beneficial to
the customer because they generally carry a lower interest rate.

   Loan officers and counselors must keep abreast of new financial
products and services.  To meet their customers' needs, for example,
banks and other lenders now offer a variety of mortgage products,
including reverse equity mortgages, shared equity mortgages, and
adjustable rate mortgages.  A reverse equity mortgage provides
income to the owner of the property, and is paid back either through
a conventional mortgage or in a lump sum.  A shared equity mortgage
allows a group of people to jointly own and be responsible for
payment of the mortgage.  Adjustable rate mortgages have a
fluctuating interest rate, commonly based on the interest rate paid
on government bonds a change in interest rates affects the
borrower's monthly payment.

   Loan officers meet with customers and gather basic information about
the loan request.  Often customers will not fully understand the
information requested, and will call the loan officer for
assistance.  Once the customer completes the financial forms, the
loan officer begins to process them.  The loan officer reviews the
completed financial forms for accuracy and thoroughness, and
requests additional information if necessary.  For example, the loan
officer verifies that the customer has correctly identified the type
and purpose of the loan.  The loan officer then requests a credit
report from one or more of the major credit reporting agencies.
This information, along with comments from the loan officer, is
included in a loan file, and is compared to the lending
institution's requirements.  Banks and other lenders have
established requirements for the maximum percentage of income that
can safely go to repay loans.  At this point, the loan officer, in
consultation with company managers, decides whether or not to grant
the loan.  A loan that would otherwise be denied may be approved if
the customer can provide the lender appropriate collateral.  Whether
or not the loan request is approved, the loan officer informs the
borrower of the lender's decision.

   Loan counselors meet with consumers who are attempting to purchase a
home or refinance debt, but who do not qualify for loans with banks.
Often clients rely on income from self-employment or government
assistance to prove that they can repay the loan.  Counselors also
help to psychologically prepare consumers to be homeowners and to
pay their debts.  Counselors frequently work with clients who have
no experience with financial matters.

   Loan counselors provide positive reinforcement along with the
financial tools needed to qualify for a loan.  This assistance may
take several forms.  Some clients simply need help in understanding
what information loan officers need to complete a loan transaction.
Most clients, however, need loans and grants for a down payment
sufficient to qualify them for a bank-financed mortgage loan.  Many
clients have been renting for years and want to buy their
properties.  While they have the desire to improve their lives
through home ownership, they frequently have little or no resources
for a down payment.  Other clients want to move to a safer and more
secure environment where, as owners, they can make decisions
regarding the property.  The loan counselor helps the client
complete an application, and researches Federal, State, and local
government programs that could provide the additional money needed
for the client to purchase the home.  Often several government
programs are combined to provide the necessary money.

   Loan officers and counselors are particularly busy when interest
rates are low, resulting in a surge in loan applications.

Working Conditions

Loan officers and counselors work in offices, but mortgage loan
officers frequently move from office to office and often visit homes
of clients while completing a loan request.  Commercial loan
officers employed by large firms may travel frequently to prepare
complex loan agreements.

   Most loan officers and counselors work a standard 40-hour week, but
may work longer, particularly mortgage loan officers who are free to
take on as many customers as they choose.  Loan officers and
counselors usually carry a heavy caseload and sometimes cannot
accept new clients until they complete current cases.  They are
especially busy when interest rates are low, resulting in a surge in
loan applications.

Employment

Loan officers and counselors held about 172,000 jobs in 1992.  About
7 out of 10 are employed by commercial banks, savings institutions,
and credit unions.  Others are employed by nonbank financial
institutions, such as mortgage brokerage firms and personal credit
firms.  Most loan counselors work for State and local governments,
or for nonprofit organizations.  Loan officers and counselors
generally work in urban areas where large banks are concentrated.

Training, Other Qualifications, and Advancement

Most loan officer positions require a bachelor's degree in finance,
economics, or a related field.  Most employers also prefer
applicants who are familiar with computers and their applications in
banking.  A mortgage loan officer is the exception, with training or
experience in sales more crucial to potential employers.  Many loan
officers advance through the ranks in an organization, acquiring
several years of work experience in various other occupations, such
as teller or customer service representative.

   Capable loan officers may advance to larger branches of the firm or
to a managerial position, while less capable loan officers and those
having inadequate academic preparation may be assigned to smaller
branches and find promotion difficult.  Advancement from a loan
officer position usually includes becoming a supervisor over other
loan officers and clerical staff.

   Most loan counselors receive substantial on-the-job training,
gaining a thorough understanding of the requirements and procedures
for approval of loans.  Some acquire this knowledge through work
experience in a related field.  In addition, accounting skills can
be very helpful.  Educational requirements vary some counselors are
high school graduates while others have a college degree in
economics, finance, or a related field.

   Like other workers, outstanding loan counselors can advance to
supervisory positions.  However, promotion potential is limited, and
many loan counselors leave for better paying positions elsewhere.

   Persons planning a career as a loan officer or counselor should have
good mathematical and communications skills.  Developing effective
working relationships with different people managers, clients, and
the public is essential to success as a loan officer or counselor.
They also must be able to clearly communicate the results of their
work, orally and in writing, to customers and management.  Loan
officers must enjoy public contact and be willing to attend
community events as a representative of their employer.

   Persons interested in counseling should have a strong interest in
helping others and the ability to inspire trust, respect, and
confidence.  Because loan counselors frequently explain the
complicated world of banking to clients who have never been exposed
to it, patience and an understanding of mortgage banking is
necessary to be an effective loan counselor.  Counselors should be
sensitive to their clients' needs and feelings.  Clients want to
improve their lives, and counselors must consider the importance and
pride they attach to home ownership.  Counselors should be able to
work independently or as part of a team.

Job Outlook

Employment of loan officers and counselors is expected to grow
faster than the average for all occupations through the year 2005.
As the population and economy grow, applications for commercial,
consumer, and mortgage loans will increase, spurring demand for loan
officers and counselors.  Growth in the variety and complexity of
loans, and the importance of loan officers to the success of banks
and other lending institutions, also should assure rapid employment
growth.  Although increased demand will generate many new jobs, most
openings will result from the need to replace workers who leave the
occupation or retire.  College graduates and those with banking or
lending experience should have the best job prospects.

   Loan officers are less likely to lose their jobs than other workers
in banks and other lending institutions during difficult economic
times.  Since loans are the major source of income for banks, loan
officers are central to the success of their organizations.  Loan
counselors typically have so many clients that a reduction in their
numbers would lead to a decline in the services provided to the
community.  However, job security is influenced by the spending
patterns of local governments.  Budget reductions could result in
less hiring or even layoffs of loan counselors.

Earnings

According to a salary survey conducted by Robert Half International,
a staffing services firm specializing in accounting and finance,
real estate mortgage loan officers earned between $25,000 and
$45,000 in 1993; consumer loan officers, between $27,000 and
$44,000.  Larger banks generally paid higher salaries than smaller
banks.  Some mortgage loan officers, who typically are paid on a
commission basis, earn considerably more.

   Based on limited information, most loan counselors earned between
$15,000 and $35,000 in 1993.  Local government employees in large
cities earned the highest salaries.

   Banks and other lenders sometimes offer their loan officers free
checking privileges and somewhat lower interest rates on personal
loans.  Loan counselors sometimes get awards for their service to
the community.

Related Occupations

Loan officers and counselors help the public manage financial assets
and secure loans.  Occupations that involve similar functions
include securities and financial services sales representatives,
financial aid officers, real estate agents and brokers, and
insurance agents and brokers.

Sources of Additional Information

   For information on job opportunities as a loan officer or counselor,
contact local employers banks, savings institutions, mortgage
brokers, personal credit firms, or your municipal government or the
local State employment service office.

   Information about a career as a loan officer may be obtained from:

   American Bankers Association, 1120 Connecticut Ave.  NW.,
Washington, DC 20036.