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The mantra "grow or die" is uttered at strategic crossroads by mortgage originators large and small taking stock of their options and examining their next best step.
To grow a business efficiently without costly missteps requires tough evaluations and sometimes the help of a mentor, consultant or a successful business model. A relatively new business model introduced to the mortgage industry in the mid-90s, is the franchise or branch network operation.
The branch network model establishes a business relationship between small, or mid-size brokers and lenders and a regional or national volume seller of loans. The arrangement allows both to grow their businesses.
The entrepreneurial appeal of being one's own boss is particularly strong for some brokers. But the daily drone of keeping a business operation going, particularly back office chores can be more demanding and less rewarding than anticipated.
What makes a mortgage professional successful, said Mark Collins, chief executive, America's Mortgage Broker LLC, "is their ability to schmooze well." They enjoy interacting with people, relish the challenge of sales and the creation of origination channels. But running a mortgage operation includes overseeing all the underwriting, processing, and accounting tasks that keep deals moving to completion. This means time is taken away from originations, which is what most mortgage brokers do best.
Providing Support
One advantage parent lending companies offer independent brokers is performing most or all of the back office functions.
Although the range and type of support varies between companies, most parent companies provide branch network partners with health or hospital coverage, a retirement plan, training programs, accounting and payroll functions, secondary marketing services and profits distributed after expenses are paid.
Without using brick and mortar, a national lender can extend the company's loan purchase and sales reach with preexisting offices and technology savvy mortgage operations across the country at low cost. Of course, they are not looking for dead wood. Parent lending companies set different standards for joining a branch network affiliation...