Net Branch Mortgages

Net branches mortgages allow a large company to expand its reach while benefiting from the resources of a small lender. These arrangements allow the larger player to expand without having to lease new premises, hire new employees, or market in a new area. Instead, the smaller lender already has the necessary tools and expertise to provide high-quality mortgages in the area, and functions as a franchise of the larger company. In addition, both the lender and the branch loan originator benefit from improved reputation and increased business from customers familiar with the larger mortgage company. Go here

Benefit From Any Conflict Of Interest

A mortgage net branch is relatively simple to set up. A loan officer can start a mortgage net branch with minimal initial investment. These costs can be passed through to the customer as a pass-through expense. In most cases, the cost of the parent mortgage company’s overhead is treated as an account receivable by the mortgage branch, which can be deducted from future earnings. A mortgage net branch will need to pay the rent and utilities and maintain payroll, and will have no other business names billed to it.

A net branch must pay employees on a W-2 basis and be an employee of the parent company. It cannot operate independently or have a separate bank account or P&L. However, the parent company must still oversee the branch, and must know who pays the bills and who leases properties. This ensures that the branch manager does not benefit from any conflict of interest. However, if the parent company does not pay their employees on time, it could result in a foreclosure.

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