As published in Scotsman Guide's Residential Edition, December 2005.
With the Real Estate Settlement Procedures Act (RESPA) reform and field-compliance issues burgeoning, the flight to the "banking" side of the industry is accelerating. In fact, many mortgage brokers or individual loan officers often consider opening a "net branch" office of a mortgage-banking institution.
If you are seeking a branch-partnership arrangement with a mortgage banker, these are some of the advantages.
A turnkey solution: Overnight, smaller brokerages can level the playing field with larger banks. The broker can still continue as an entrepreneur while gaining the firepower of the larger mortgage bank, without the bureaucracy -- it's the best of both worlds.
Multistate licensing: Securing state mortgage licenses independently would take a broker many months and several thousand dollars. Larger mortgage bankers, on the other hand, are licensed nationwide or exempt from licensure. This can afford a broker an expanded universe of homeowners to serve. Mortgage bankers with the U.S. Department of Housing and Urban Development (HUD) Title II licensure can quickly open opportunities for their branch partners in multiple states.
One-hundred-percent commissions: Many experienced loan officers in brokerages, banks and credit unions earn only 35 percent to 75 percent of their originated yields. Many quality branch partnerships offer 100 percent of the origination fees and yield-spread premiums (YSPs). The difference in income can be dramatic.
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