What is a “Net Branch” mortgage company?

“Net branch” mortgage companies are mini franchises. The idea is that instead of actually opening your own mortgage shop, you join a company that allows you to open a “branch” in their name. The attraction for the owner, called a “branch manager” is the ability to operate under a “known name”, the ability to have a corporate shield to cover the manager’s liability, and the possibilty of circumventing state licensing laws.

Basically anyone that wants to open a mortgage company (with minimal experience) can give it the ole “college try.” If it doesn’t work out, they have not totally invested themselves and can walk away at any time. The corporation is ok with that because they get set up fees and monthly fees regardless of how much the branch does. And since the corporation is not repsonsible for the leasing of space, equipment, ect.. there is no real investment on the corporation’s part either.

These “net branch” mortgage companies are also not looked at favorably by most state banking commissioners. The North Carolina Commissioner of Banks does not like these types of setups at all. There are only a couple that the NCCOB are “ok” with in NC, and that’s only because they are based in North Carolina, therefore satisfy the licensing requirements often avoided under this setup.

My suggestion is to make sure the mortgage lender you are working with is a solid company. With so much on the line, you do not want to trust your most important financial decision to a “net branch” operator seeing if “this is for him.” That could leave you with a “Net Loss.”

Residential Mortgage Center is a full service, FHA approved mortgage company in Charlotte NC operating under a North Carolina mortgage lender’s license. And while we actually have four offices across NC, they are fully owned, operated and managed by Residential Mortgage Center, and are not “net branches”.

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