Pocket Watch Appraisals

How Mortgage Net Branch really is money

In recent years the issues we discussed net branches, and the advantages and disadvantages of this type of loan origination. I covered the reasons why loan officers decide out of their own, and what makes a net branch better than another. There are a myriad of choices and literally thousands to choose from! Ultimately, the factor the most important in any decision is deciding which company will best serve you if you can reach the level of success you deserve. If the company only talks about themselves, then you know who comes first! They do!

In evaluating net branches, I thought it was better let go or swimmers in a little secret. It is something that no one speaks and is one of the best kept secrets in the industry. Certainly, the branches Net will not say, but today I'll spill the beans. I'll tell you exactly how the net branches make their money, so you can better understand how you do yours.

Net branches make money two ways:

1. They make money from you, the loan officer.

OR

2. They make money from the bank.

Most often, a combination of both. Here's how it works.

Net branches can make money from you:

* Impose a processing fee to your house to make loans.

* Load a advance fee or joining fee monthly sum for doing business with them and be a part of their business.

* Charging a fee flat per file on each loan file that passes through them (different from the processing fee, it is usually listed as a lump sum and they waive any fees and give you 100% commission of the YSP, yield spread premium, the lender).

* Do you charge for the customer's credit reports, appraisals, etc. and make you eat the cost if the customer does not pay for these things from the beginning.

* Make you pay for your own training (they provide) or you attend pep rallies, or to purchase other "motivational" material. (I 'm not going to say what is, but I'm sure you've heard of them!)

* Tacking on other small administrative "expenses" here and there under mysterious names (if you've ever tried to decipher a phone bill and understand all the small charges, you know I mean, so be careful!).

Net branches make money by the bank:

* By taking a percentage of the division of the Commission final. So if you get 80% commission, they get 20% of the total take.

* Give you "in house" rate that leaves the lender sends, and it is the same increase and redistribution of you. They take a "mini" broadcast on every loan you do. In effect you are getting the prices retail rates and not wholesale lender. The net branch is to take a cut at the top of your YSP commission which you do not even see, because it is on the back-end by the lender. If they insist, you do not take their blood leaves the staff, watch out!

* "Kick-back and offers in nature for referring business to preferred suppliers, whether lenders, appraisers, title companies, etc. They can have a business relationship established with them. If that means lower costs, then it is for you. If costs are higher than what is Normally, you figure that is to pocket the difference?

* Basis points agreements in place with lenders, when a certain volume of lending, commissions and incentives to increase them (they are usually never passed on the loan officer).

Now, of course, the net branch is right to make money. They deserve to. After all, they help you get started in your own mortgage company. Companies can part or all of the above. This will be a combination of money from you and the lender's money. Finally, it is your to ask questions and determine how you and they will be paid.

What you are looking for is a net branch makes its first loan officers and goes the extra mile to help you succeed. Remember, if you make that kind of money you deserve and achieve your goals, the Directorate will be net also their achievement.

The next edition of weeks, I will quote some of the biggest names in mortgage net branching and with whom you should consider looking at before making a final decision.

About the Author

Rob Lawrence is ranked one of top national trainers in the mortgage industry. He is the currently the CEO of Battlecall.com, coaching, tools and resources to turn mortgage professionals into mortgage warriors. Visit http://www.battlecall.com for his free “Sink Or Swim” weekly newsletter, mortgage training, marketing advice and more! Jumpstart your career in the mortgage business, starting today.

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