Mortgage Loan Originator (MLO) Licensing Practice Test 2025 - Free MLO Practice Questions and Study Guide

The distinction between an independent contractor loan processor and an in-house loan processor primarily revolves around their employment structure and the scope of their work. Independent contractors have the flexibility to work for multiple brokers or lenders simultaneously. This means they are not tied to one specific organization and can offer their services across various clients, which allows for a diverse experience and potentially greater income opportunities.

In contrast, in-house loan processors are typically employed by a single organization or lender. Their role is dedicated to processing loan applications exclusively for that company, thus becoming an integral part of the lending team. This employment model often provides stability and benefits that independent contractors may forego in exchange for flexibility.

Given this context, it's clear that the ability of independent contractors to work for multiple brokers distinguishes them from in-house processors, who are confined to the organization that employs them. The other options either misinterpret the roles or present inaccuracies regarding licensing and engagement in loan processing activities.