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Net Branch Opportunities From Mortgage Right

October 27th, 2020 // branchright
mortgage net branches

Net branch opportunities are the solution to the challenges of running a successful business in the mortgage industry. This statement is particularly true for future mortgage brokers who struggle to raise funds to meet operational costs and acquire the needed work facilities.

Under such circumstances, one is sensible to choose going into a partnership with an established lender to work as a net branch like a Mortgage Right. The role of the minor partner is to help the mortgage lender raise sales of their mortgage products with each partner expecting to realize a percentage return from a sale.

Net branch opportunities operate on a model that presents a win-win scenario between a mortgage broker and the main lending company on a deal-to-deal basis.

The following are some of the advantages that endear net branches as popular business models for a mortgage broker and the mortgage company.

Pathway to Motivate Workforces

Large mortgage lenders can pool together large amounts of capital to fund operations. A brokerage that is in a net branch arrangement with the mortgage company benefits from trickled down funds and other employee packages such as health, dental, vision, and options for 401 (k).

Work operations are performed best in companies with a group of motivated employees. Committing a brokerage firm as a full-fledged net branch opens up opportunities for higher pay, improved work conditions and ability to attract, hire and retain quality employees. Additionally, a majority of qualified people will be keen to join the workforce of the net branch.

The wholesome changes passed on to a brokerage firm will directly benefit the performance and earning limits for both the mortgage company and the net branch.

Expanding Networks with Agencies

Big mortgage companies have greater resource advantages, reputation and an expansive networking experience than most brokerage entities allowing them to maneuver with greater flexibility and market control.   

The difference in reputation between a potential net branch and its larger mortgage partner is what fuels small brokerage entities to want to partner and tap into a larger pool of agency connections. The net branch can reach a higher number of customers thus increasing sales and scaling up business in the entire mortgage industry.

Additionally, the expanded network with customers will allow net branches to sell other types of mortgage products such as USDA loans, FHA loans, and regular ones as seen with Mortgage Right. Equally, potential customers are drawn to the net branch by the good reputation of the primary mortgage provider.

Access to More Marketing Platforms

Apart from having more resources, large mortgage companies have invested in superior in-house marketing resources that become available for use by a net branch. As you would expect, many large lenders operate and maintain effective digital marketing channels with massive audience.

The large lender allows the small brokerage company to utilize its marketing resources expectation the investment to increase sales and profits for both parties at the close of a mortgage sale deal.

For the small brokerage company, adopting advertising facilities, online channels and marketing strategies of a big mortgage company promotes their small entity’s competitive edge to a whole new another level.

While there are clear benefits for a net branch like a Mortgage Right that is in association with a big mortgage company, the not so obvious pitfalls in the agreement are things the parties need to be cautious.

They largely include:

How Legal is the Entire Partnership?

The law is very clear and firm when outlining how business should merge and carry out business particularly if you are operating a company in the United States.

There are specific necessities that have to be met prior to signing of a net branch agreement. It will be judicious to examine and understand the details of each requirement before signing off on the association.

It would be a great and terrible loss for any worker to get into a net branch partnership only for the agreement to be rendered illegal months later after having invested so much and executing many work assignments.

All Net Branches Deals are Different

You will need to understand each agreement for a net branch is different from another. This is because the large lenders retain control of how the net branch agreement will be executed to align to their business aspirations.  

Some of the aspects of variation between net branch agreements are centered on matters division of control rights between the two companies (who has control over what?), the employment structure of the employees in the net branch and how profits will be distributed between the partners.

Much as it is clear how your small company stands to gain form a net branch agreement with a major mortgage lender it is good to consider what you stand to lose when you commit to another company. I.e.  Values and other things you have accumulated over the years such as social capital.

Finally, Your Reputation Matters

It would be wrong to assume all lenders in the market have a good reputation. It would be a bad move and a huge loss of reputation to associate with some of the mortgage companies already with a bad image. The loss will be bigger if you have worked a lot to make a brand for you and your business over the years of operation.

In conclusion, always remember that net branches are a viable business opportunity but only when you invest time and commitment to due diligence to determine if the association is the best cause of action for both parties.