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The Importance Of Net Branch Opportunities

October 5th, 2021 // Pearly Dean
mortgage net branch opportunity

What Are Net Branch Opportunities? This is a smaller outpost of a lending institution whereby loan originators operate under the license and supervision of the parent entity. 

Typically, mortgage branch operators within a net branch structure can supervise and manage the everyday activities of their business while avoiding most of the administrative challenges, expenses, and delays of acquiring their brokerage license. Based on the mortgage net branch structure, loan experts can originate transactions and keep all profits above and beyond the administrative and oversight fees of that parent company. 

Regardless of the flexibility that net branches provide to loan office operators, they’re still subject to all relevant jurisdictional laws and regulations controlling professional licensing and mortgage lending.

When it comes to mortgage net branch agreements, the specific details may differ. However, there are certain structures and services common to many relationships of this kind. Net branches generally originate their loans in multiple jurisdictions, such as critical high-volume areas, based on the parent company’s licenses. 

Arrangements usually note down the flat fee that needs to be paid by the branch for every loan file it submits, as long as a specific volume requirement is met every month. The method and timing of commission payments to such branch loan originators will be specified in a net branching agreement. Generally, the lenders and loan programs are worth considering for any mortgage professional contemplating net branch opportunities.

How Do Net Branch Opportunities Work?

Typically, mortgage net branch operations are launched by home loan specialists with extensive industry experience who are looking to expand their business within an existing licensee. Although most of the companies providing net branch opportunities also offer training to branch personnel, they usually want new offices to be managed by individuals with the capability to generate borrower leads. Potential net branch loan employees and officers must also have the necessary sound lending practices, and they’re subject to any registration and/or licensing regulations for every state in which they are planning to originate mortgages.

With any mortgage net branch arrangement, one of the crucial factors is the compliance assistance’ quality offered by the parent entity. Net branch structures are governed by rules that differ by jurisdiction and may pose considerable risk to branch operators, originators, and the actual parent company if unheeded. As a result, net branch contracts must specifically articulate the relevant rights and responsibilities of all parties regarding issues like overhead expenses, accounting, payroll, banking arrangements, equipment leases, and office logistics. Lenders providing net branch opportunities establish all-inclusive compliance departments that are usually charged with oversight of all local offices in order to resolve any irregularities that can place their license in jeopardy.

What Are the Benefits Of Net Branch Opportunities?

Because the mortgage net branch manager is supervising a branch of a mortgage-banking firm or a bank, one of the primary advantages is that the yield-spread premiums don’t have to be disclosed. Generally, FHA and VA mortgages can account for an increasing rate of mortgage loan volume since sub-prime products have disappeared. The approval to do such kinds of loans is costly, challenging, and time-consuming to get. 

A mortgage net branch manager usually has those licenses on the first day. If you’re dealing with a nationally or federally-chartered bank (which is rare) then you have the extra advantage of doing business nationwide, with nearly instant start-up capability and without needing to wait for costly licenses in individual states. Lastly, many mortgage net branch managers prefer to focus on originating (and often hate paperwork). Apart from offering routine items such as payroll and accounting, a reliable mortgage net branch company will also deal with compliance and regulatory obligations (i.e. audits) as much as possible; therefore, freeing the branch manager to perform their best job…originate mortgage loans!

Choosing BranchRight  

BranchRight is undoubtedly the best option for any broker because we are always prepared to help you succeed. We’re branching out not only to make your life easier but also to make it more rewarding with our net branch solution. Typically, we provide a compensation plan and benefits packages including access to a 401k contribution package. 

Since we dedicate ourselves to helping brokers, we ensure to deliver the most exceptional service possible because this is what matters most!

There are numerous reasons, as aforementioned, why you should consider opening a net branch account with your mortgage company. Besides being accessible nationwide, they lower operating costs and have enhanced revenue potential. Other mortgage companies can now enjoy these advantages with BranchRight, thanks to our technology-driven services that enable customers to apply online! 

Your reputation is everything to us! That’s why we want to do the right thing for you and we’ll always commit ourselves to offer our customers more and better ways to get loans closed. BranchRight focuses on helping you to build a successful business and ensuring that people know exactly who they can trust when buying or refinancing their home loan or any other financing requirements. 

Apply now or call us at 866-228-7703.