Net Branch best business model for mortgage professionals

Why is a net branch the best business model for most mortgage professionals?

One of the reasons is that current and pending legislation is making it harder for small independent mortgage shops to survive.

As our mortgage lending environment continues to change more mortgage lending professionals are switching to the net branch business model because of the ability become part of a much larger company and still have the flexibility manage their day as an entrepreneur.

New net worth requirements from HUD, higher E&O costs and requirements, higher employee costs, fewer loan programs, and fewer investors all make running a small independent shop more difficult and being part of a national company offering net branch opportunity more attractive.

The non origination costs for an independent mortgage office can be a huge drain on their budget.

By non origination costs I mean anything that is not directly related to generating business. Compliance, payroll, accounting, licensing, equipment, office space, etc. Its a long list of tasks and responsibilities.

Joining a larger company is a cost effective way to leverage these costs. If the owner / manager handles all of these responsibilities they are taking time and energy away from loan production. Being part of a larger company that has a system in place for handling these administrative tasks frees up the managers time to focus on income producing - business development activities.

If you would like to know more about our net branch partner program visit our Frequently Asked Questions page.

HUD is increasing upfront MI - Net Branch notice

HUD just release this important reminder about upfront mortgage insurance premiums.

From HUD:
Lenders are reminded that effective for FHA loans for which the case number

is assigned on or after April 5, 2010, FHA will collect an upfront mortgage

insurance premium of 2.25 percent. This policy change will increase premiums

for purchase money and refinance transactions, including FHA-to-FHA credit-

qualifying and non-credit qualifying streamlined refinance transactions. For

more detailed information on this premium increase, please see Mortgagee

Letter 2010-02 at:

http://www.hud.gov/offices/adm/hudclips/letters/mortgagee/files/10-02ml.pdf

Lenders should make every effort to order case numbers early in the week of

March 29, 2010, since it is possible that case numbers requested on Friday or

Saturday may not be assigned prior to April 5, 2010, and therefore, be

subject to the higher premium.