Sunday, October 14, 2007

Mortgage Net Branch Opportunities

Mortgage Net Branch Opportunities -- (Primary Residential Mortgage, Inc.) -- The subprime mortgage meltdown has left many mortgage originators in need of a source of funds for their borrowers with less than prime credit. Mortgages insured by the Federal Housing Administration are increasingly filling that gap, but getting through government requirements to obtain FHA lender approval remains arduous.

To avoid dealing with these requirements alone, many of the 50,000 displaced mortgage professionals are seeking mortgage net branch opportunities, and several such companies are being created to meet this demand. By operating under the umbrella of a net branch company, originators can take advantage of the parent company's back-end support. Services typically include accounting, marketing, underwriting, shipping, and closing; more importantly, net branch companies often have the skilled professionals, the necessary licensing, and the asset requirements necessary to originate FHA loans.

However, loan officers are finding that these fly-by-night net branch companies, while boasting the ability to originate FHA loans, lack the experience and resources to help them through the process.

"Most of these new mortgage net branch operations do not have the systems or experience to support mortgage net branch originators in a retail net branch environment," says Dave Zitting, President and CEO of Primary Residential Mortgage, Inc., which has been a HUD/FHA Direct Endorsement lender since 1998. "We've spent the last 9 years perfecting these systems with the help of over 200 branches nationwide."

In August, Primary Residential Mortgage, Inc. added 3 large net branches to its network. The company is continuing to expand its reach, and is in the process of hiring 35 new employees to offer the high level of support demanded by its increasing volume.

ABOUT PRIMARY RESIDENTIAL MORTGAGE, INC.

Headquartered in Salt Lake City, Utah, Primary Residential Mortgage, Inc. (PRMI) was founded by Dave Zitting, Jeff Zitting, and Steve Chapman in 1998. Since its inception, PRMI has evolved from a four-person business to a nationwide multi-billion dollar mortgageoperation with 800 employees working in approximately 200 Net Branches in 47 states. Branches operate under the PRMI brand or as DBAs as part of the Divisional Joint Venture and Consortium Partner programs. Serving all segments of the market, Primary Residential Mortgage , Inc. is a privately held, debt-free company that focuses primarily on traditional loan products. Licensed in Arizona, Alabama, Arkansas, California, Connecticut, Delaware, Florida, Georgia, Hawaii, Idaho, Illinois, Indiana, Iowa, Kansas, Kentucky, Louisiana, Maine, Maryland, Massachusetts, Minnesota, Mississippi, Montana, Nebraska, Nevada, New Hampshire, New Mexico, North Carolina, North Dakota, Ohio, Oklahoma, Oregon, Pennsylvania, Rhode Island, South Carolina, South Dakota, Tennessee,Texas, Utah, Vermont, Virginia, Washington, Wisconsin, and Wyoming.


Mortgage Net Branching Opportunities , Marketwire

http://www.marketwire.com/mw/release.do?id=778104

Tuesday, October 2, 2007

Some First Magnus Managers Lost Assets

'Net' branch leaders say lender kept their funds
By Christie Smythe
arizona daily staR
Tucson, Arizona | Published: 09.27.2007
advertisementSome of the former employees of Tucson-based First Magnus Financial Corp. had much more money on the line than a twice-monthly paycheck when the mortgage lender filed for bankruptcy last month.
Managers of so-called "net" branches, offices that were operated using managers' funds, said that when First Magnus filed for bankruptcy, it took possession of accounts, holding more than $100,000 in some cases, that were rightfully theirs.
"Unfortunately, they were using our money and basically stole it," said Sue Marshall, a net branch manager in Modesto, Calif., who said she had $118,000 in an account under First Magnus' control.
First Magnus spokesman Gary Baraff said the company does not use the term "net branch," but that its retail branches were operated under "varying compensation structures."
"From our point of view, they were all just retail locations," he said.
Many of the company's 277 retail branches nationwide were established as net branches, said Greg Frost, owner of a net branch called Frost Mortgage in Albuquerque, who also acted as a trainer for First Magnus branch managers. Net branches included some Charter Funding and Great Southwest Mortgage locations, he said.
The arrangements might also have violated some regulatory standards, including those set by the U.S. Department of Housing and Urban Development and the state of Arizona.
Unlike regular branch managers, who are simply employees, First Magnus net-branch managers were on the hook for office expenses, including rent, equipment, furniture and payroll, according to a net-branch agreement forwarded by a former manager. The net-branch managers were also responsible for paying fees to First Magnus for originating loans and for administrative expenses. In exchange, the managers got to keep the profits from the branch, a portion of which had to be kept in First Magnus accounts, former managers said.
Not only did the managers lose access to those funds when the company filed for bankruptcy, they also found that some checks written against those accounts had bounced, leaving the managers to repay those debts with personal funds.
Frost, whose mortgage business includes several offices and 31 employees, said he paid about $125,000 to cover bounced checks and his employees' wages. Frost said he lost more than $1 million that was kept in his First Magnus account.
Darrell Giannone, a net-branch manager in California, said he has paid $650 after checks bounced, and expects he will have to pay about $4,000 more. At the time of the bankruptcy filing, he had about $110,000 in a branch account.
"In my opinion, and the way it was expressed to us, it should never be in jeopardy," Giannone said about his branch account. "It's income earned."
Baraff said he could not confirm whether the branch agreement sent by a former manager was valid without its being reviewed by the company's legal staff. All branches were overseen by First Magnus, he said.
Net branches draw scrutiny
Mortgage industry experts said net branch arrangements have proliferated over the last decade or so as companies have looked for ways to expand with minimal expense. The arrangements also help attract top-notch talent, experts said, because they allow managers to profit from the branches' success.
"After it's all said and done, it's getting to participate in the net profits," said Bill Anastopoulos, president-elect of the Arizona Association of Mortgage Brokers.
But some state and federal regulators object to the arrangements because the branches may lack direct oversight by a parent company and have a higher potential for fraud, industry experts said.
In Arizona, mortgage lenders are not permitted to assign licenses to branch managers and allow them to operate autonomously, according to a regulatory alert issued by the state Department of Financial Institutions in 2006. HUD also prohibits lenders from offering government-backed loans at nonapproved locations, which might include net branches, according to the agency's Mortgagee Approval Handbook and a 2000 agency letter clarifying prohibited branch arrangements.
In 2006, both the state Department of Financial Institutions and HUD found First Magnus' Great Southwest branches violated net-branching regulations.
Funds may be hard to recover
Financial documents filed with the bankruptcy court on behalf of First Magnus do not appear to include branch managers as creditors. Baraff said he was not able to determine by Wednesday evening how the funds were accounted for.
In August, Tucson-based First Magnus abruptly stopped funding loans, laid off most of its 5,500 employees nationwide and filed for Chapter 11 bankruptcy protection without issuing the former employees final paychecks. The company plans to be liquidated.
Some industry experts said the legal concerns about net branching might make it difficult for the managers to recover funds in their accounts, regardless of what their branch agreements state. The branch profits might be considered assets of First Magnus, said Amy Swaney, past president of the Arizona Mortgage Lenders Association.
"It's going to be something that goes to court," she said. "The bottom line ... it's going to be a difference of opinion as to whose money that is."
Read more stories and download PDFs about First Magnus at go.azstarnet.com/firstmagnus
● Contact reporter Christie Smythe at 434-4083 or at csmythe@astarnet.com

http://www.branchpartner.com
http://www.azstarnet.com/dailystar/203308

Mortgage Net Branch Opportunities Proliferate as FHA Volume Rises.

SALT LAKE CITY, UT – OCTOBER 1, 2007 (Primary Residential Mortgage, Inc.) – The subprime mortgage meltdown has left many mortgage originators in need of a source of funds for their borrowers with less than prime credit. Mortgages insured by the Federal Housing Administration are increasingly filling that gap, but getting through government requirements to obtain FHA lender approval remains arduous.


To avoid dealing with these requirements alone, many of the 50,000 displaced mortgage professionals are seeking mortgage net branch opportunities, and several such companies are being created to meet this demand. By operating under the umbrella of a net branch company, originators can take advantage of the parent company’s back-end support. Services typically include accounting, marketing, underwriting, shipping, and closing; more importantly, net branch companies often have the skilled professionals, the necessary licensing, and the asset requirements necessary to originate FHA loans.


However, loan officers are finding that these fly-by-night net branch companies, while boasting the ability to originate FHA loans, lack the experience and resources to help them through the process.


"Most of these new mortgage net branch operations do not have the systems or experience to support mortgage originators in a retail branch environment" says Dave Zitting, President and CEO of PRMI, which has been a HUD/FHA Direct Endorsement lender since 1998. "We’ve spent the last 9 years perfecting these systems with the help of over 200 branches nationwide"


In August, Primary Residential Mortgage, Inc. added 3 large branches to its network. The company is continuing to expand its reach, and is in the process of hiring 35 new employees to offer the high level of support demanded by its increasing volume.


ABOUT PRIMARY RESIDENTIAL MORTGAGE , INC.


Headquartered in Salt Lake City, Utah, Primary Residential Mortgage, Inc. (PRMI) was founded by David Zitting, Jeff Zitting, and Steve Chapman in 1998. Since its inception, PRMI has evolved from a four-person business to a nationwide multi-billion dollar operation with 800 employees working in approximately 200 Branches in 47 states. Branches operate under the PRMI brand or as DBAs as part of the Divisional Joint Venture and Consortium Partner programs. Serving all segments of the market, Primary Residential Mortgage , Inc. is a privately-held, debt-free company that focuses primarily on traditional loan products.