How Net Branching Works

A mortgage net branch is like the extended arm of a top mortgage company. The mortgage market has grown exponentially in the past and the big fishes have been trying to carve their niche in the national market. The increase in competition has opened the doors for net branch companies.

What is a net branch?

A mortgage net branch is not a company; it is an arrangement through which an established mortgage company offers a franchise to a smaller mortgage company so that the latter can carry out business activities in a particular area. Let's look at an example to clarify this: Assume there is an established mortgage company named ABC and it is based in Texas. Now, it is looking to expand its operations to California and Florida, so it will search for potential partners. These partners will be given a franchise of the ABC mortgage company and they will be their mortgage net branch Florida or mortgage net branch California. The established mortgage company is known as the mortgage originator, while the franchise company is called the mortgage net branch. These net branches play an important role by letting the mortgage originators expand their market and maximize their profits. A mortgage net branch can be a complete company with a team consisting of branch managers, underwriters, and loan officers, or it can be just one single individual or mortgage broker running the business out of his home or virtual office.

A sound and complete process forms the backbone of the net branch operations and some companies also employ their mortgage net branch working models. These working models define the operation of a particular apex net branch and level the playing field for a small brokerage firm. A net branch can be compared to a turnkey solution project. The loan officer or branch manager is like an entrepreneur who can use the skills and backing of a major mortgage company or bank to capture the market. As a part of the deal, most mortgage originators provide all necessary assistance in the form of licenses, training, finances, etc.

One of the important factors that govern the net branch operations is licensing over multiple states. The mortgage originators always have nationwide licenses that help them to do business in any state. This helps in streamlining the entire operations of a net branch. The requirements of a license are quite expensive in some states and stringent in others. Hence, most small mortgage firms can't afford it. The licenses are controlled by the Housing and Urban Development code. Becoming a franchise means the net branch automatically gets a license that helps them to operate in that particular area with relative ease. For example, a mortgage Broker with a HUD Title II license can provide opportunities for Branch Partners in multiple states with ease.

An integral part of the mortgage net branch operation is the ability to be prompt with their services and to be able to understand a consumer need. It is not necessary that the consumer visiting your office requires a home mortgage; he/she may need a loan for education or for buying a car. The important factor as a net branch manager is whether or not are you able to identify that requirement. Once the requirement and need is identified, the net branch company can use their underwriters or their loan officers to satisfy the requirement.

Another important part of a net branch process is how you track LO's mortgage leads. Whether you are a branch manager or a LO/loan officer, you can either use CRM lead manager programs or software to track your lead or use the traditional way of record keeping. Every lead adds to the functioning of the net branch company, and regular monitoring will let you know what would be your next plan of action.

Net branch operations also include training, which is necessary for first timers as well as professionals. Trainings impart basic information on mortgages, various types of loans available, different types of clients, market conditions, competitors, and so on. The training strengthens the team and equips them to handle any situation. Training may also include information on FHA/VA governmental loan products, use of technology, and marketing strategy seminars.

Marketing Support is a primary function, without which the entire operation of the net branch will not be successful. There are some mortgage originators who provide marketing or sales leads to their respective net branch. Even so, every mortgage net branch company needs to have their in-house marketing strategy to gather leads and convert leads into customers.