Branching out

by Ryan Smith29 May 2014
In today’s post-QM environment, it’s getting harder and harder for originators to go it alone. Independent originators can’t just focus on writing loans – they have to worry about marketing, the fulfillment of continuing education requirements, and most of all, compliance.

With all that and more on the independent originator’s plate, the idea of joining a branch network is increasingly seductive to many mortgage professionals. And while being a lone wolf certainly has its appeal, branch networks offer definite advantages. From compliance to marketing and brand awareness, the support of a major corporate entity can mitigate a lot of the everyday headaches of the business and free up originators to do what they got into the industry to do – make loans.

“All regulation we’ve continued to see is forcing mortgage professionals to be more volume-driven than profit driven,” says Daniel Milstein, founder and CEO of Gold Star Mortgage Financial Group. “Freeing up a branch manager, a loan officer, a sales team, from administrative responsibilities gives them more time to sell in a volume environment. … You get complete support from A to Z. Most importantly, being part of a network, the back office is taken care of. It enables you to concentrate on sales instead of day-to-day administrative items.”
If you're looking for a branch network, check out MPA's comprehensive database by clicking here. If you're still deciding whether to make the switch, read on for more information!

So what are the advantages of joining a branch network? Last year, MPA asked originators to rank branch networks’ most important selling points on a scale of one to 10. Most originators thought underwriting support and quick turnaround time were the most important advantages a branch network could offer, while compliance and marketing also rated high on the list.

Underwriting, processing support and turnaround time

Getting loans approved quickly isn’t just good for the originator – it’s good for the customer. With that in mind, most originators thought underwriting support and turnaround time were far and away the most important considerations when looking at joining a branch network. And it’s here that being part of a network can deliver in spades.

By plugging directly into a branch network’s dedicated underwriting and processing team, originators can get loan approvals faster – and that makes their entire business run more efficiently. With that in mind, speedy underwriting and processing is a top priority for most branch networks.

“We have true 48-hour underwriting turn time and true 48-hour closing turn time,” says Frank Kuri, senior vice president for branch development at Residential Home Funding. “From the time that a loan is time-stamped in our LOS, it’s decisioned by an underwriter within 48 hours or less. And again, from the moment the loan is time-stamped in our LOS as released from underwriting, it's cleared to close within 48 hours.”

Compliance support

Of course, speedy underwriting and processing doesn’t matter if you run afoul of any one of the raft of new regulations that have been thrown at originators in recent years. Keeping on the right side of the new regs has become increasingly complex – and having a corporate compliance team at your disposal can be a lifesaver.
Taking the compliance anchor from around the necks of originators is one of the most important things a branch network can do, says Joe Ewens, executive vice president of production at Golden Empire Mortgage.

“We have an entire compliance department – including an on staff attorney – to support (originators),” he says. “For us, it’s trying to simplify (compliance) for the originator as much as we can to allow them to focus on originating loans.”


But does having a “home office” to take care of underwriting and compliance mean you give up your autonomy? One of the things an independent originator may relish about her business is being her own boss. Does joining a branch network destroy that sense of independence? Well, not necessarily, according to the experts.

“Obviously, we’ve got policies and procedures, but aside from those, (branch managers) have the autonomy to run the office as they see fit,” Ewens says. “There’s certainly freedom in terms of the hiring process for those people. ‘Who can I hire and when?’ tends to be driven more by the manager than the corporate office.  We’ve got some long-term branches that have been around 10, 15 years. I think that says a lot about the staying power of the company.”

There’s plenty of autonomy at Gold Star too, says Milstein – though he warns that every branch network is different in that respect.

“They can still manage day to day, but for the most part all our branch managers are also producers,” he says. “You can lead your sales team and let Gold Star handle all your back office issues.”

Technology, software and CRM support

One of the greatest advantages of joining a branch network is gaining access to the kind of cutting edge technology that may be beyond the reach of an independent operator.

Gold Star, for instance, has developed proprietary software that allows its real estate agent partners to log in and see the progress of any of their transactions in real time, eliminating the need for multiple phone calls between real estate agents and loan officers.

Residential Home Funding has also embraced technology as an efficiency booster. “We are completely paperless,” Kuri says. “We allow loan officers to disclose electronically and receive electronic signatures, which allows them to order the (Home Valuation Code of Conduct) appraisal the same day. We also have a fully staffed, in-house IT department.”

Technology support also allows branch networks to develop strategies to improve their service, Milstein says.

“Everyone talks about service and support,” he says. “Gold Star made itself accountable. Every service-oriented situation is monitored down to the minute. We can see how long it’s taking for a loan officer’s situation to be resolved. We can quantify it in real numbers.”

Marketing and brand awareness

It’s an old marketing axiom that if customers don’t know you exist, it doesn’t matter how good your product is. And marketing strategy doesn’t come easily to everyone – after all, there’s a reason companies pay professionals to do it. That’s why access to a branch network’s professional marketing team can make all the difference when it comes to generating business.

“We have a full-blown marketing department,” Milstein says. “We make it a one-stop shop. At the branch level you write the loans and follow our advice as you wish, and we take your business to the next level.”

Open Mortgage, one of the nation’s top reverse mortgage lenders, uses what founder and CEO Scott Gordon calls “super-charged old-school networking” – a combination of digital marketing and old-fashioned, feet-on-the-street marketing specials – to increase its branches’ profiles in their communities.

“You can’t live today and look around on the web and ignore social media,” Gordon says. “In the last year, we’ve really expanded what we’ve done with technology and social media, and used that along with traditional marketing to change how loan officers work.”

And Open Mortgage’s marketing specials – such as its current $500 credit to first-time homebuyers – help make their branches part of the community, says Vice President of Marketing Diane Creasy.

“We like helping people, and it engages the community and gives us something to talk about with the customers,” she says.

Training and education

Continuing education isn’t just a good idea in this industry – it’s an absolute requirement. Having access to a branch network’s continuing education programs can not only help originators keep current with state licensing requirements – it can provide them with real tools to grow their business.

“I think that’s the new norm,” Ewens says. “I imagine most companies will begin to do more and more training. We do a lot of that, from both a sales aspect and compliance. There are things we’re doing to make sure (originators) understand what they’re up against. It’s important for them to understand so they can explain it to the customer.”

Milstein – himself one of the industry’s top producers for over 10 years – stays intimately involved with training, personally mentoring his branch managers through frequent teleconferences. Gold Star also engages a professional coaching firm to help its branch managers and producers with both professional growth and work-life balance.

Choosing a branch network

Branch networks offer a lot of attractive benefits for mortgage professionals – but not every network is for every originator.

“There are over a hundred companies that offer branch opportunities,” Milstein says. “It comes down to the best fit for the candidate and the best fit for company.”

So if you decide to go the branch route, how do you choose the right network for you?

“I strongly suggest that anyone considering a retail branch opportunity to visit the companies they’re speaking with before making a decision,” Kuri advises. “Go out – even if you have to hop on a plane – and meet and greet. It's critical.”

And remember that just as you choose a branch network, the network also chooses you – and it would be wise to find out what the networks are looking for at the outset of your search. Residential Home Funding, for instance, asks applicants to have a minimum of three to five years of mortgage banking experience and has closing requirements of eight to 12 units per month.

Golden Empire, meanwhile, wants branches who’re doing at least $3m per month in volume, and branch managers who have a referral base and are operating in a purchase market.

“It’s less of the refi guy or the call center guy – that’s not the guy we’re looking for,” Ewens says. “For us, it’s more of the purchase market guy who has the tools to attract realtors and get business.”

Gold Star is looking for branch managers who’re hungry to better their skills and willing to take advice from experienced mortgage pros, Milstein says.

“Our greatest success stories are guys who come in willing to learn,” Milstein says. “Less than ideal are the guys who come in as lone wolves who aren’t willing to learn. If you’re willing to learn and you’re humble, we’ll help you take your business to the next level.”


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