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SANTA ANA, CA-In an effort to increase its net branch operation by a factor of 10, California Mortgage Services here, a mortgage banker and loan servicer, has developed a system that returns 100% of loan commissions to its net branch operators upon origination of a new mortgage loan.
"Is it a typical net branch operation? Probably not," admits Bob Reyes, senior vice president of California Mortgage. "We tell our loan originators to take all of the money and do what they want with it. We tell them to go out there and build an empire," he said.
California Mortgage Services was started in 1964, controls a $3 billion servicing portfolio, and currently operates 10 net branches.
The company hopes to have 100 net branches in operation within the next 12 months.
In many net branch operations, the independent operator is responsible for most expenses incurred by the branch's operation and shares in any profit that is generated. In order to meet HUD guidelines for government loans, all personnel in the net branch must be employees of the parent company.
With both the branch manager and the home office responsible for separate branch expenses, the net branch system can require extensive accounting in order to determine...