Net Branch best business model for mortgage professionals

Posted on March 23, 2010, 10:06 pm, by NetOriginator and received No Comments ».

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.

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Mortgage Net Branch and New HUD Rules

Posted on March 5, 2010, 7:36 am, by NetOriginator and received No Comments ».

Are the people at HUD crazy?The title for this post should be “Are the people
at  HUD out of their fracking minds?”

HUD has extended the deadline for correspondent lenders (mortgage brokers) to provided their audited financials.

The big problem is that the extension period is useless. It’s a 30 day extension.

Since HUD has a proposed rule change in the works that will eliminate the approval for Loan Correspondents (Brokers) There is almost a 100% chance that  the financial audits will not be necessary.

Financial Audits for HUD are expensive and time consuming. They cost thousands of dollars and must be completed by a CPA.

Doesn’t any one at HUD know that it is tax season. Extending a deadline from March 31, 2010 to April 30, 2010 for work that a CPA has to complete will not help the Mortgage Broker  Companies one bit.

They are still going to have to pay to have the audits completed.

I can hear the call to the broker’s CPA – Hi Bob, Great news! HUD has extended the deadline to April 30 for our financials. Since they are preparing to eliminate the requirement you might not have to do them for me this year.

Bob laughs uncontrollably for 10 minutes and then tell the Broker that audits take 60 – 120 days to complete and since HUD as of today still says you have to have them you will have to pay for one even though HUD has said that the Audit will more than likely be unnecessary.

The NAMB brain trust was in DC last month. Did anyone at HUD bring up this extension idea with them for input? Does anyone at HUD know a CPA?  Does anyone at HUD know that it is tax season? Does anyone at HUD care?

Net Branch – HUD – FHA

I always welcome comments, questions, and subscribers!

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

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Texas Net Branch – Loan Officer and Branch Licensing Update

Posted on February 26, 2010, 9:23 am, by NetOriginator and received No Comments ».

Net Branch  Update for Texas – Big changes for mortgage loan officers and branch managers As Texas completes the transition to the NMLS.

The Texas Department of Savings and Mortgage Lending issued a statement about the departments new rules for considering information in a loan officers credit report as part of the application process.

The department could deny a loan officer license if you have any of the following on your credit report.

  • Bankruptcies filed within the last 10 years;
  • Current outstanding judgments (except judgments solely as a result of medical expenses);
  • Current outstanding tax liens or other government liens;
  • History of and current collection accounts;
  • Foreclosures within the past three years;
  • Three or more accounts more than 90 days past due;
  • Multiple Social Security Numbers attached to the individual’s name;
  • Consumer provided comments;
  • No credit history for the individual;
  • Credit items the individual is appealing, if noted in the report; and
  • Outstanding child support.

According to the memo credit scores will not be part of the decision but the department “may look at systemic, long-term financial irresponsibility as a reason to further investigate the information received before a final licensing decision is made. No single item listed above will serve as grounds for ineligibility, but several will cause further investigation and each decision will be made on a case by case basis.”

To read the memo CLICK HERE and read “Credit Check Processing through the NMLS – February 2010″

I always welcome comments, questions, and subscribers!

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

Texas Mortgage Net Branch Opportunity

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Mortgage Net Branch and The NMLS in 2010

Posted on February 19, 2010, 12:09 pm, by NetOriginator and received No Comments ».

This year, 2010 is the deadline for all states to become part of the National Mortgage Licensing system (NMLS).

Mortgage Net Branch Information Net Branch Managers should full understand the new rules and how they may change the way you operate your branch and how you hire new loan officers.

Many loan originators under their current state banking laws do not need to be licensed. Some states have only required loan officers who are mortgage brokers to be individually license while loan officer working for mortgage lenders were exempt from individual licensing.

With the new NMLS everyone – brokers and lenders will be required to be individually licensed. If you have been originating in more than one state you will have to have a loan officers license for each state and your office will also have to be licensed to operate in each state.

If you are hiring new loan officers for your branch you need to review the new laws to make sure that the prospective originator will qualify under the new rules.

As a net branch manager your compliance department at your national headquarters should also be able to help you with these issues. That is one of the benefits to being part of a national company. You have a full service compliance department to assist you.

Do not wait for the new laws to go into effect before you understand how they could change the way to operate your mortgage branch.

Click Here to visit the NMLS website to look up the new requirements for your state.

I always welcome comments, questions, and subscribers!

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

Mortgage Net Branch Licensing Information

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Big Changes for Mortgage Net Branch Managers in 2010 – Part 2

Posted on January 28, 2010, 12:31 pm, by NetOriginator and received No Comments ».

More about the big changes for mortgage net branch managers in 2010.

There is now a new 4 page GFE (Good Faith Estimate) and new disclosure rules to go with it. The new GFE has you disclosing the figures several different way to (in theory) help the borrower better understand the transaction.

The initial fees that you disclose are now locked in and you cannot change them. Meaning that if you disclose 2% fees on a $200,000 loan ($4,000) and the loan amount changes you are tied into the dollar amount that you disclosed not the percentage.  There is a very small margin of error on some of the fees, but for the most part they are locked in.

The initial fees you itemize on your Good Faith Estimate now must carry over to your HUD-I closing statement.

How you disclose YSP has completely changed. If you are closing the loan as a mortgage broker you will show the YSP as a credit to the borrower, then you will have the borrower sign a mortgage broker agreement  to pay you the YSP.

The YSP like other costs on the GFE cannot change later in the transaction without completely re-disclosing the loan.

There is some ongoing  discussion about how the YSP is disclosed. Bottom line if you are a broker the old method used in many state allowing you to state the YSP as a percentage range (o% – 3%)  and not counting it in the closing costs is no longer legal.

HUD has published a new Settlement Booklet that you must provide to the borrower(s) with in 3 days of the application date .  It covers both the new GFE and the new HUD-I statement. I have provided a link  to the new document.
Settlement Booklet

For branch managers and  loan officers the changing rules continue to make it more difficult to earn a living. The opportunity is in learning work within the new rules. Someone will close that next loan – will it be you!

I always welcome comments and subscribers!

If you would  like to know more about our net branch partner program visit our Frequently Asked Questions page.
http://www.netoriginator.com/NetBranchFaq.htm

mortgage net branch managers in 2010.

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