The short answer: Yes, most mortgage loan officers are exempt from overtime pay under federal law.
That means if you’re a loan officer, you usually won’t earn time-and-a-half for working more than 40 hours a week. Instead, your income is primarily commission-based.
What the Law Says
In 2010, the U.S. Department of Labor (DOL) issued an Administrator’s Interpretation clarifying that:
- Mortgage loan officers who spend most of their time selling or soliciting loans are considered “exempt” employees under the Fair Labor Standards Act (FLSA).
- This means they are not entitled to overtime pay, even if they regularly work more than 40 hours per week.
- The classification applies whether they work in an office or remotely.
Source: U.S. Department of Labor – FLSA Overtime Guidance
Why Are Mortgage Loan Officers Exempt?
Loan officers are considered sales professionals, and sales jobs are often treated differently under labor laws. The logic is:
- Their earnings are based on commissions.
- They control their own success by closing more deals.
- Income potential is unlimited—so overtime rules don’t apply.
→ Read more: Is a mortgage loan officer a good job?
What This Means for Loan Officers
- No overtime pay: You won’t get extra money for late nights or weekends.
- Commission drives income: Your paycheck grows only when you close more loans.
- Performance-based career: The more effort you put in, the higher your income.
This makes being a loan officer both challenging and rewarding—perfect for self-motivated professionals.
Hourly Worker vs. Mortgage Loan Officer Income Model
Category | Hourly Worker (Non-Exempt) | Mortgage Loan Officer (Exempt) |
| Base Pay | Hourly wage (e.g., $20/hour). | Commission per loan (0.5%–1% of loan size). |
| Overtime | 1.5× hourly rate after 40 hours/week. | No overtime pay (exempt under FLSA). |
| Schedule | Fixed shifts (40+ hours/week). | Flexible—set your own hours. |
| Earning Potential | Limited by hours worked (max ~60 hrs/week). | Unlimited—income grows with number/size of loans closed. |
| Monthly Earnings Example | $20/hour × 40 hrs/week = ~$3,200/month (+ overtime if any). | Closing 3 loans at $300,000 each = ~$4,500–$9,000/month. |
| Annual Income Example | ~$38,000–$45,000 with overtime. | $70,000–$120,000+ depending on production. |
| Career Growth | Small raises, capped hourly increases. | No cap—top producers regularly make 6 figures. |
Hourly workers earn more only if they work more hours. Loan officers, however, earn more by closing more loans—not by clocking in extra time. That’s why most mortgage loan officers are exempt from overtime: the career is built on performance, not hours.
→ Read more: Average Mortgage Loan Officer Salary in the U.S. Revealed
Why Loan Factory Makes It Worthwhile
If loan officers can’t earn overtime, they need a platform that maximizes commission income. That’s where Loan Factory stands out:
- Keep 100% of your commission (only pay $595 admin + $500 processing if in-house).
- No monthly fees—so you don’t lose money on desk or tech charges.
- Free MOSO platform: CRM, LOS, pricing engine, borrower app, and marketing automation all included.
- 240+ lenders so you always offer clients the best rates and programs.
- Company leads in 42 states, so you’re not stuck prospecting on your own.
- Mentorship from Thuan Nguyen, America’s #1 Loan Officer, to help you scale faster.
So, are mortgage loan officers exempt from overtime? Yes—under federal law, most loan officers are classified as exempt sales employees. That means your income depends on commissions, not hourly wages.
At Loan Factory, that’s actually good news. With 100% commission, no monthly fees, and free AI-powered technology, your earning potential is unlimited.
Join Loan Factory today and see why more than 2,000 loan officers have already made the switch.
FAQs – Are Mortgage Loan Officers Exempt from Overtime?
