Questions to consider when contemplating a branch partnership opportunityDavid Baackbenefits, partnership programs, branch profits, startup costs, different programs
For many mortgage broker firms, branch partnerships can be an
extremely rewarding and profitable way to succeed in today's
mortgage industry. There are many benefits to partnership programs
that allow top-producing individual loan officers or small to
medium firms to increase profits by reducing administrative costs,
obtaining licensing and granting access to numerous lenders and
programs. However, not fully researching the options you have when
choosing a partner can be detrimental to your business. Make sure
you ask yourself some of the following questions when you're
choosing a business partner:
What percentage of my branch profits will I receive?
What startup costs will I incur?
A quality company should not ask for any initial startup fees, nor
should it take a large percentage of your branch profits. Make sure
you find out exactly what you will be required to finance out of
your branch profits to determine your take-home percentage. Ask a
potential partner if they would be willing to create a reserve
account during the initial months of operation as a precautionary
What types of and how many different programs do you
The amount of programs and products offered will have a direct
impact on your pocketbook. Products/programs such as reverse
mortgages, Alt-A, Federal Housing
Administration/U.S. Department of
Veterans Affairs, construction, commercial, etc. will add to
your list of specialties, thus allowing for more business. If you
have already established working relationships with various
lenders, it will be beneficial to know if you can continue
utilizing those relationships or if the potential partner would be
interested in adding them to its list.
Do you have experienced support staff to help with
various administrative functions such as compliance, human
resources, information technology, marketing, payroll, processing,
The purpose of partnering with another mortgage firm should be so
that you can reduce time and cost spent on administrative functions
and focus more on doing what you do best closing loans. The more
administrative support available to you through your partner
branch, the more effective you will be in reaching your goals.
If I am interested in expanding my branch, what systems
do you have in place that will allow me to grow?
If you are looking to grow, offering employee benefits, such as
health/dental care, disability, flexible spending, 401(k), etc.,
will be a very useful tool in recruiting professional and
Am I permitted to speak to existing managers before
making a decision?
Speaking to other branch partners is an essential piece of your
decision-making process. Other managers will provide valuable
insight into the inner workings of their partner program and will
help you determine if you are the right fit. If you are not allowed
to speak with others, you should reconsider your interest in a
partnership, as this should be a red flag.
David Baack is director of business development for
Waukesha, Wis.-based First
Choice Mortgage. He may be reached at (877) 326-5626.