Mortgage Loan Origination Activities
The origination chain
Origination runs from first borrower contact to funding and sale into the secondary market: inquiry and marketing → application intake → disclosures → processing (verifications, title, appraisal, insurance) → underwriting → clear-to-close → closing and disbursement → servicing transfer or sale. Know who does what. A licensed MLO takes applications, presents loan options, quotes rates and fees, and locks loans. Processors collect and verify documents. Underwriters approve or deny.
Traps candidates fall for
- Prequalification vs. preapproval. Prequalification is an unverified estimate based on stated information; preapproval is a verified underwriting review and is a conditional commitment, not a guarantee.
- A rate lock is not an approval. A lock protects pricing for a set period and says nothing about credit.
- Unlicensed activity. Quoting rates and taking applications are licensed acts. Letting an unlicensed assistant or a real estate agent "take the app" and paying that person per closed loan violates the SAFE Act and Texas licensing rules.
- Fee splitting. Paying a referral source a per-loan fee is a RESPA §8 problem regardless of the person's job title.
Rule of thumb
If a task affects the borrower's decision about price or terms, a licensed MLO performs it. If a task only gathers or verifies facts, an unlicensed processor may perform it, but not for per-loan compensation.
Worked example
An unlicensed marketing assistant quotes a borrower 6.25% APR, collects the 1003, and pulls credit while the MLO is out. Two licensed acts occurred (quoting terms and taking the application), and both are violations even though the loan later closed properly.