Branch partnerships: who is the right person for the job?Shachar Randpartnerships, branches
One of the biggest trends in the mortgage business these days is
the branch partnership. An increasing number of companies are
offering these opportunities, but questions remain. Can just anyone
open a branch partnership and be successful? Who is the right
person for the job? Here are some guidelines to consider:
In general, an individual should have at least three to five years
of experience as a loan originator to be considered a strong
candidate for a branch partnership. Two to three years of
origination experience is also acceptable, however, someone with
less than two years in the business should wait until they have
acquired more seasoning.
An individual loan processor or underwriter is not a good
candidate to take on a branch partnership, since sales experience
is necessary. However, they can be an ideal candidate to team up
with an originator to run an office.
Some mortgage companies require a branch partner to have a
minimum personal or business net worth of $50,000 to $100,000. This
is not always the case. For example, my company does not have a net
The best candidate for a branch partnership is the owner of a
mortgage brokerage that has been in business for two or more years
and has greater than $4 million in total closed monthly volume.
This broker already has an established referral base, knowledge of
investor guidelines and a proven record of managing an operation.
The business is already operating and the transition should be very
smooth. If the former owner can adjust to being part of a larger
company, the relationship could prove to be a win-win
The next best candidate for branch partnership is the owner of a
smaller mortgage brokerageone with less than $4 million in total
closed monthly volume. The experience running an operation is very
valuable and with the additional support from corporate
headquarters, this broker can grow quickly. The branch partnership
can be a major plus when obtaining licenses in other states.
Production will increase thanks to the ability to bank and not
disclose the yield spread premiums. This makes the life of a small
mortgage broker that much easier.
Experience managing your own operation is not a prerequisite for
becoming a branch partner. A top-producing loan officer with
greater than $5 million in total closed monthly volume can also be
a strong candidate. However, this individual needs to have a
realistic view of the business they're entering. Many such officers
believe that going into business on their own would enable them to
close more loans and make more money. This isn't always the case.
In fact, top-producing loan officers generally close less in their
first year as a branch manager than in their previous year. With
all their time spent running the office, they don't have the time
to close all of their business. The loan officer needs to be
closing $5 million or more per month in case he or she slips a
little in the first few months. This is not to say that a
top-producing loan officer isn't the best person for the job.
Actually, with a great referral base, the loan officer is probably
one of the best candidates for a branch partnership.
The Team Approach
If you do not fall into one of these categories, don't give up
hope. Two or more producing loan officers can form a formidable
team. This is a great way to make a move and start a branch
partnership. With more than one loan officer bringing in business
right away, it takes pressure off the team, so they can manage the
office more effectively. In fact, this combination has the
potential to out-produce all others.
The Interview Process
A candidate for a branch partnership should view the process as a
job interview. The parent mortgage company is seeking an individual
to become a manager of their firm. The process will begin with
background checks. In the second stage, the company will check the
candidate's references with attorneys and members of the investor
community. Finally, there will be an in-person interview. If all
goes smoothly, the applicant can expect the process to take 30 to
90 days, depending on the individual company.
While a lucrative opportunity, branch partnership is not for
everyone. If you have been in the industry for less than two years
and are only closing one or two loans per month, consider working
with a more experienced partner until you have built a strong
foundation of your own. In addition, branch partnership requires
strong organizational skills and the ability to multi-task, for
example, placing loans while still managing all back office
responsibilities. If you do not possess this skill set and are new
to the business, you are not a viable candidate for branch
partnership. In short: look before you leap.
With the right experience, a solid referral base, knowledge of
investor guidelines, managerial skills, a strong work ethic,
integrity and a great training program, branch partnership can
truly be the best road to success in the fast-growing mortgage
Shachar Rand is chief operating officer of Southern Star Mortgage
Corporation. He can be reached at (516) 712-4400 ext. 226 or