The tremendous competition in the mortgage market has led to net branch companies as the big mortgage banks are looking for space in the national market. A mortgage net branch is not a company as it was considered traditionally. It is the way an established mortgage company provides franchise to a smaller mortgage company or a new mortgage office to carry out business activities in a particular area. This helps small mortgage shops to expand their reach in the market and increase their profits and potential revenue.
A mortgage net branch can be a full company with branch manager, underwriters and loan officers. In some cases it might be a small office operated by a single individual known as the mortgage broker.
Net Branch Mortgage Broker
A net branch is equivalent to a franchise where the branch manager is the head and signs the lease and the payroll. He also signs for utilities and entity taxes and accepts the risks and liabilities that the parent company would accept. The parent company acts as the clearing house to fund mortgages. All mortgage programs are not the same. In this business there are over 200 banks and mortgage bankers and each of the programs are totally different.
In some of the cases the branch manager will be permitted to broker loans anywhere they want but in some instances this will not be allowed. Some get 100% commission while some have to split. Some are bankers and brokers while others are just brokers.
Net Branch Mortgage Lender
Today margins are being tightened and Net Branch Mortgage Lender are getting squeezed. In net branching model profitability could be controlled through compensation. Businesses can set their salaries and bonuses depending on the money coming in and the profit that the business can make. Mortgage companies are so strictly regulated that they cannot use the strategies to manage the margins of profit.
Lenders also do not have the power to set or change commission structures depending on overall performance of the business because of LO comp rules. Even if a loan starts moving south a lender cannot give loan pricing concession nor can he reduce or waive concession. It is not feasible to give such loans but it has to be done.
Net Branch Opportunities
Net branches do have opportunities that can be put to good use. Net branches are created by producers for people who can produce. If you admit to better pricing you can get more deals and offer rates that are lower and get more money. If you are quick in underwriting and clear it on the same day then more deals will come your way. When it comes to opening and closing of mortgage it should be done quickly to attract more customers.
Today there are mortgage bankers and Net Branch Companies programs with lending in many states. You have to take advantage of every loan that comes your way. Every loan deserves company’s attention.
Conclusion
To know more about net branch companies visit blueravengroup.com and you will know about the loans you can avail.
