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mnorris80
2432 Posts |
 Posted - 03/25/2006 : 1:55:00 PM
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And the list of questions I have is huge. Feel free to answer part of these if you have knowledge. I'm building a business plan for this and would like to make sure I have everything covered:
Net Branch vs. Signing Up with Lenders on My Own
Which is preferable? Obviously, doing a Net-Branch thing seems preferable. In fact, Midas sent me the information for Apex, and it looks impressive. One key piece of information that was missing was their lender list. My niche aound here really is doing A-paper loans. Do net-branch operations get the same sort of volume pricing bonuses that you would see in companies that just have one office? Actually, you would think they would get BETTER pricing than a stand-alone office because of the higher volume being sent in the name of that one company.
Do net branches always use correspondent pricing?
One of the big incentives for me going out on my own is that I could just do a few A-paper deals a month, and with pricing bonuses, I would be making plenty of income, especially in Missouri. Right now, I have to split 50% of the proceeds on deals I originate to my company. Apex appears to just charge you a flat-fee per file, if I'm not mistaken. So it's conceivable that I could charge half that fee to the borrower and then split the rest out of my YSP. The issue is that if I have to use correspondent pricing, I may lose some of my ability to compete with other local lenders.
Do any net-branch operations offer benefits packages?
As far as retirement goes, I've always done my own investing. Having said that, a group health insurance plan would be nice.
W-2 pay?
Frankly, I'd rather just be W-2 than deal with the headaches of 1099. I realize some of you are going to ask "why?", and the simple answer is that I'm lazy. Apex does W-2.
Working at home
Apex allows it, do most places allow it? I am comfortable enough with my ability to sell to not worry about having an office. Additionally, I am aware of all the requirements for properly securing files, etc. in my home.
DU/LP fees and Credit Report Fees?
Am I normally going to be billed for this, or does the company pay for these? Do most net-branch operations handle getting you set up with accounts for automated approvals from various lenders, or am I going to have to call about this.
Appraisers
Can I just use whoever I want?
Overnight Fees
If I need to be overnighting files, I expect I just pay for this myself, correct? We use DHL here at my current office, but I was sort of curious to know who everyone uses. Obviously, USPS is also another possibility.
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I'm sure I'm going to come up with more questions, so I'll put them in here as they come into my brain. Thanks for your help with this, everyone. I'm really excited about getting this done! |
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robcinoh
257 Posts |
Posted - 03/25/2006 : 2:03:36 PM
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Not sure that worked
try http://www.brokeroutpost.com/loans/brokers/forum/topic.asp?TOPIC_ID=26669  |
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redneck
342 Posts |
Posted - 03/25/2006 : 2:44:31 PM
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| matt, if you do a lot of conforming, make sure you check out the net branch pricing and u/w turntimes. i personally hate brokering A paper. i would much rather have inhouse u/w, docs, funding, etc. the other thing to look at is compliance. if you are going to have your own shop, you must have your house in order. you can be fined for not having a certain disclosure hanging to low on the wall. compliance is generally the biggest weakness that brokers have. that is why net branches pay big bucks for quality control and compliance. they rip your closed files apart until they are in full compliance. then they will release funds to you. you will pay all the bills either way you go-- credit reports, courier, lp/du. with a net branch w-2, you will also pay both sides of the w-2 taxes-- employer part and employee part. you will also pay the entire premium for health insurance-- it will not be split between you and the employer. typically, you can use any appraiser. if they do have an appraiser list, you can always have your appraisers added. make sure you read the fine print on every agreement. also, i saw a thread on this forum that mentioned an additional $300 fee on 80/20 loans with aapex. you might check that out if you do many 80/20s. again, i saw it on another thread-- i do not know for sure. hope this helps. |
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mnorris80
2432 Posts |
Posted - 03/25/2006 : 2:48:20 PM
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| The A-paper lenders I use are easy, and their pricing is awesome due to volume bonuses. The thing is this: I get a fair amount of these loans, but I have to split 50% of the fees to my current company. If I could just get all of the fees to myself, I'd need to close about 4 a month to make a very comfortable living around here. I'd probably even process all of them myself. |
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gfe
1203 Posts |
Posted - 03/25/2006 : 3:42:27 PM
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if you get into netbranching matt, you will soon regret it. there is a short honeymoon phase, then reality will set in.
take my advice for what it's worth, i've been involved in several different setups, and with an independant outlook that you have, you will be pissed off and miserable in no time. and at that point you will have to start all over again, and be right back here.
you will kick yourself for paying them for something that you don't need.
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mnorris80
2432 Posts |
Posted - 03/25/2006 : 3:44:05 PM
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| Well, dammit, there has to be a way to just do it myself, lol. I mean, all I need is internet access, a credit reporting agency, DU access, and about 4 lenders. Is that asking too much? lol! (It's probably asking too much, but I could always dream) |
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bayouguy
672 Posts |
Posted - 03/25/2006 : 3:47:50 PM
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Call me and I will help you weigh the options.
It just depends on what you want, what you need and what you can get. |
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bayouguy
672 Posts |
Posted - 03/25/2006 : 3:48:57 PM
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| Apex does W-2??? What? Stop the presses! They are 1099 only, right? |
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azbroker
2613 Posts |
Posted - 03/25/2006 : 4:22:49 PM
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Matt,
I went through that whole debate four months ago and just went and got my license. Nothing beats the title company handing you the check on the day of funding. Signing up lenders is easy and you will spend less on someone doing your books for you than using a net branch. I love the autonomy. |
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gfe
1203 Posts |
Posted - 03/25/2006 : 4:28:17 PM
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quote:
Originally posted by azbroker
Matt,
I went through that whole debate four months ago and just went and got my license. Nothing beats the title company handing you the check on the day of funding. Signing up lenders is easy and you will spend less on someone doing your books for you than using a net branch. I love the autonomy.
amen! and having your own name and reputation to build. it is well worth it |
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mnorris80
2432 Posts |
Posted - 03/25/2006 : 4:42:09 PM
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quote:
Originally posted by azbroker
Matt,
I went through that whole debate four months ago and just went and got my license. Nothing beats the title company handing you the check on the day of funding. Signing up lenders is easy and you will spend less on someone doing your books for you than using a net branch. I love the autonomy.
Am I not going to have to show large amounts of assets, etc. to get that done and sign up with lenders, plus pay fees for DU, credit reports, etc? I have no problem with paying the fees, but I'm a little clueless as to what lenders are going to require to let me get signed up with them. Guess I could talk to my current Interfirst rep about that. |
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corbanc
110 Posts |
Posted - 03/25/2006 : 5:19:14 PM
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| Matt, we offer 50 state lending, full benefits, w-2, around 30 in house lenders and around 120 broker lenders. Drop me an email or give me a call if you would like some info. Thanks corey@corbanc.com |
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gfe
1203 Posts |
Posted - 03/25/2006 : 5:33:09 PM
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quote:
Originally posted by mnorris80
quote:
Originally posted by azbroker
Matt,
I went through that whole debate four months ago and just went and got my license. Nothing beats the title company handing you the check on the day of funding. Signing up lenders is easy and you will spend less on someone doing your books for you than using a net branch. I love the autonomy.
Am I not going to have to show large amounts of assets, etc. to get that done and sign up with lenders, plus pay fees for DU, credit reports, etc? I have no problem with paying the fees, but I'm a little clueless as to what lenders are going to require to let me get signed up with them. Guess I could talk to my current Interfirst rep about that.
are you going to pay for it? yup! (about 20 bucks each) although, if you broker to someone, typically they will foot the bill if your pull through stays above 70% or so. this is no big deal
bcd lenders will just ask to see a lic, and you sign the borker agreement. takes about 10 minutes, you can submit loans with the agreement usually
a paper - they will pull credit probably, and ask to see the lic and you sign the broker agreement. takes 11 minutes and maybe 48 hours to get rolling
no matter WHAT you do you will be paying for credit reports. 10-15 bucks a pull.
HERE'S THE THING MATT... (and anyone else thinking about netbranching)
if you net branch you will pay all this things AND pay them a premium to be an employee! there is very very very little they will add to your business, that you cannot get on your own for less $$ and less hassle.
do whatever works for you, seriously. i was hardheaded, and didn't listen, year and a half later, we were on our own, and loving it.
you can't say no one told you though.
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azbroker
2613 Posts |
Posted - 03/25/2006 : 5:34:12 PM
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Matt,
You are going to be responsible for credit reports anyway. As far as assets, some conforming lenders have requirements but the four I use have great products and pricing. I know you like Wells and I am not sure about them but good credit is more important than assets. I don't have a ton of assets and I have yet to be turned down by any lender.
You also have to match your own payroll taxes with a net branch which is 8% too.
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MortgageTao
331 Posts |
Posted - 03/25/2006 : 6:17:59 PM
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Matt,
Steve (gfe) has pretty much said what it's all about. I can only add a few things, one is about Agency (A) lenders. Most, if not all, require you've been in business at least 2 years, they will pull your credit and the majority of them will want to see $1M in funded loans per month, or they will shut you off, Some will provide DU access for you, others will require you use thier Credit Reporting Services in order to use thier DU.
I suggest you find an AE who will sponsor you with Fannie and sign up for your run your own DU/DO/LP.
Do some research, if you haven't already, and find a lender that has most of the programs you use( A, Alt-A, A-) and target them for sponsorship. Find one or two others that will run DU/AUS for you and you should be good to go.
I will add one other thing, and I, personally, believe it is significant...Running your own business requires a TON af administrative work, filing quartely taxes, keeping your shop up to date on compliance, doing the accounting, etc.
When I owned my own business I found that the administration was a bear. I was good at what I did at the time, but terrible with the management and administration. That's just me, however I think it's something most individual contributors don't take into account when they strike out on thier own.
FWIW
Good Luck
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Loans4All
1082 Posts |
Posted - 03/25/2006 : 8:58:38 PM
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quote:
Originally posted by mnorris80
Net Branch vs. Signing Up with Lenders on My Own
MY ANSWER: If is a net branch is established, it only makes sense to leverage off its collective loan value and price incentives. SRP and other pricing incentives are earned not given away.
Do net branches always use correspondent pricing?
MY ANSWER: Nope. I work for a netbranch that does both mortgage banking and brokering, I pick my poison and persona for each deal.
Do any net-branch operations offer benefits packages?
MY ANSWER: Mine does; most don't and opt to pay out 100% instead.
W-2 pay?
MY ANSWER: That is a matter of personal preference; you are going to pay taxes, whether you pay them or your company pays them is your choice. I prefer to outsource this activity personally. W-2.
Working at home
MY ANSWER: My netbranch allows for it; but it is not for everyone. You need a strong work ethic to pull off the work at home gig.
DU/LP fees and Credit Report Fees?
MY ANSWER: FOC for me.
Appraisers
MY ANSWER: I can use any settlement provider I want, whether it be a lawyer, appraiser, etc.
_____________________________________
I'm sure I'm going to come up with more questions, so I'll put them in here as they come into my brain. Thanks for your help with this, everyone. I'm really excited about getting this done!
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Loans4All
1082 Posts |
Posted - 03/25/2006 : 9:00:46 PM
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| Here is a good reference of questions you should be asking any net branch operator; http://www.loanclosingsystem.com/article33.htm |
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BB
989 Posts |
Posted - 03/25/2006 : 9:30:46 PM
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Most net branch operations are going to have established relationships with many lenders and typically all you have to do is provide your branch licensing information. The one I am with has about 700 investors established.
If you are looking at doing a net branch understand that any benefits are paid out of your net branch gross income. For example you pay medical for the employee portion and the company portion comes out of your branch gross income. Same with 401k matching, etc. It’s a business and your branch is responsible for those expenses.
W-2 is required if you do any FHA loans.
Some net branch companies allow a home office the one I am with doesn’t. I am in the equivalent of an executive suite. Costs $440 per month.
The cost for DU and credit reports are minimal in the overall scheme of things. If you are closing four deals a month let's assume you have to run DU and credit on 10 transactions per month. Total cost $30 each for both DU and credit or $300 if you have to pay the whole bill. You can use the DU & LP tools from some lenders and they will pull the credit and there is no cost to you.
Pick any licensed reputable appraiser that your investor will accept.
You pay the overnight fees or pass them on to the borrower
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dgreco3
1964 Posts |
Posted - 03/26/2006 : 08:55:45 AM
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Hi Matt,
As a newly self-employed broker, I recommend it. The headaches are slightly different but equal in pain to working for someone else. I'm a pretty busy guy, don't need (but would take the right one) another LO to cover bills, I'm set up with 6 lenders (and counting) in the last 3 weeks and cleared with my credit agency to pull credit (they do have an onsite inspection process). It's the ultimate American dream. A net-branch is just another boob to milk (in my opinion) and goes against the reason I have a broker license. Risky? Sure, but I'm good. I don't think I'll get crazy rich or anything, I'll probably end up making the same income (I'm payinig myself the same split, the rest pays the bills) but why deal with other people's processes? The buck stops here. |
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mnorris80
2432 Posts |
Posted - 03/26/2006 : 11:52:48 AM
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| With that in mind, maybe I should look into what's involved with getting set up to run in Missouri. Also, if I'm running my own shop out of my home, can I do FHA? |
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Mark8076
145 Posts |
Posted - 03/26/2006 : 11:54:13 AM
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| Matt, Check carefully all the costs involved in Net Branching. I currently make 70% split on all income with my broker. Plus I have to pay a $95 office fee, and a $35 compliance service fee per loan. I thought getting 100% less a $495 per deal fee I would make a lot more money. But here's the catch--- here in Ohio I have to be paid W-2 and they would hold back their part of Social Security, state taxes, unemployment, and workers comp. So I'd really only get 86% less the $495 fee. On my average loan amount I'd actually be making the same or less! |
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jchiaruttini2003
775 Posts |
Posted - 03/26/2006 : 3:17:53 PM
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All good sound advice, Matt. I'm set up with Apex and maybe I'm still in the honeymoon phase, but I love it. BTW, no W-2 with Apex, only 1099. It's a good system though, I'm probably at about 85% profit on my deals, once my costs come out. That's for me working out of the house, I'll probably have an office by mid-summer, so that % will go down, but hopefully it results in a little more revenues. The netbranching with Apex has been a real no headache process. I have some compliance issues here, but most of that is easy solve stuff, they hold all the real liability with the closed files.
I don't know, it was easy to do this, and I don't know how much more profit I wouldhave by being a broker. Good luck |
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mnorris80
2432 Posts |
Posted - 03/26/2006 : 3:20:12 PM
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quote:
Originally posted by jchiaruttini2003
All good sound advice, Matt. I'm set up with Apex and maybe I'm still in the honeymoon phase, but I love it. BTW, no W-2 with Apex, only 1099. It's a good system though, I'm probably at about 85% profit on my deals, once my costs come out. That's for me working out of the house, I'll probably have an office by mid-summer, so that % will go down, but hopefully it results in a little more revenues. The netbranching with Apex has been a real no headache process. I have some compliance issues here, but most of that is easy solve stuff, they hold all the real liability with the closed files.
I don't know, it was easy to do this, and I don't know how much more profit I wouldhave by being a broker. Good luck
See? If I could produce those kinds of results, I'd be perfectly happy. Did they let you see their rate sheets before they signed up? Here in Missouri, local banks do not compete well against large wholesalers on either rate or the closing costs/settlement charges. As long as I can be in a situation to constantly beat rate, I will be perfectly happy. |
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blokk
563 Posts |
Posted - 03/26/2006 : 6:01:52 PM
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| I've never net branched, I bit the bullet and got licensed myself. I'd rather be responsible for my self than deal with others. |
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jeffg
1031 Posts |
Posted - 03/26/2006 : 6:42:18 PM
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Matt, go ON YOUR OWN! Take the necessary classes (8 here in CA) and get it done. Net branches----why bother? They'll offer you NOTHING but headaches!
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