Category Archives: Real Estate

Branch Right – An Analysis

It is a new program that allows managers and loan officers to fulfill the wishes of their lifetime; to be their own bosses. Managers and loan officers can get a franchise opportunity from an existing mortgage company in the form of a “net branch”.

Mortgage companies typically offer these franchise opportunities to have a local presence for doing business in new territories. The franchise is given by the mortgage originator. The company that accepts the franchise is called the ‘mortgage net branch’. Like most franchise opportunities, this allows the originator to expand their business in other areas, while the franchisee has an excellent opportunity to create a profitable business or brokerage. click now

Mortgage professionals who want to run a net branch must first be licensed. While most license prerequisites fluctuate from state to state, the (HUD) Housing and Urban Development controls the aspects of licensing law. It is not uncommon for originators to prefer that prospects have at least three years of experience in the field of risk analysis, processing, originating, and other relative duties involved in retail mortgage operations.

Large mortgage companies who have candidates for opening a branch office, will conduct a written examination, in most cases. It is essential for potential managers to have superior communication skills, goodwill, and premises. The branch will have to dish out royalties to the originator, typically in the form of per file fees and possibly monthly fees for regular fixed costs for services coming from corporate. Branch managers can usually count on help with accounting, HR, benefits, legal and compliance coming from the parent company.

Everything is documented, and the net branch will have to complete a series of paperwork to get started. Parties considering starting a branch may have to relinquish their original identities because they would be operating under an already-established franchise name; this is the trade-off. However, some companies that offer a branch opportunity will allow new managers to retain their existing mortgage brands. Assuming the name and brand of the parent company isn’t absolutely necessary, so check with several companies if you’d prefer to retain your brand.

Originators would retain operational control. Therefore, experienced professionals and brokers would give pause to the concept of migrating their business under a parent company. If professionals want to make profits, the professionals have a viable option to cash in on the originator’s goodwill. These branch structures are expanding quite swiftly and overtaking the market at a phenomenal rate. Any professional can migrate to a branch situation with ease and security. It is not limited to a single person or company. A net branch is basically a license to operate under someone else’s brand and goodwill.