The use of credit scoring has made the loan evaluation process much simpler than in the past and even unnecessary in some cases. Credit scoring allows loan officers—particularly loan underwriters—to evaluate many more loans in much less time, thus increasing the loan officer’s efficiency. In addition, the mortgage application process has become highly automated and standardized, a simplification that has enabled online mortgage loan vendors to offer their services over the Internet. Online vendors accept loan applications from customers over the Internet and determine which lenders have the best interest rates for particular loans. With this knowledge, customers can go directly to the lending institution, thereby bypassing mortgage loan brokers. Shopping for loans on the Internet is expected to become more common in the future, especially for mortgages, thereby reducing demand for loan officers.
Although loans remain a major source of revenue for banks, demand for new loans fluctuates and affects the income and employment opportunities of loan officers. An upswing in the economy or a decline in interest rates often results in a surge in real estate buying and mortgage refinancing, requiring loan officers to work long hours processing applications and inducing lenders to hire additional loan officers, who often are paid by commission on the value of the loans they place. When the real estate market slows, loan officers often suffer a decline in earnings and may even be subject to layoffs. The same applies to commercial loan officers, whose workloads increase during good economic times as companies seek to invest more in their businesses. In difficult economic conditions, an increase in the number of delinquent loans results in more demand for loan collection officers.
Source: Bureau of Labor Statistics, U.S. Department of Labor, Occupational Outlook Handbook, 2006-07 Edition