If you haven't heard yet, Carteret Mortgage announced they are closing their doors. Of all the net branch organizations, this was the one I respected the most. Trust me - I was a net branch for four years. The founder of the company said they simply ran out of money.
I believe the net branch model is one that will not last this mortgage crisis. There are just to many cowboys out there running free with the title of branch manager. Regardless of the regulations, forms, and policies you have in place, the model just doesn't work. You simply cannot hold the string tight enough and police the branches effectively. Carteret however is leaving the industry with it's head held high. I think they just made a smart business decision. Don't believe you have seen the last of Mr Weinstein. He is one smart man. He built an empire and was well respected compared to many of the other net shops.
I anticipate a few of the other big net branches to tumble. It is always horrible news when people are without work, but maybe a few more of these are what the mortgage industry has in store for itself to be able to make a correction. You see, these loan originators get 85%, 90% sometimes 100% of the fees. How can a company pay that much mony and still have enough handle the bad loans and buy backs the cowyboys create. Not to mention any RESPA, State or Federal violations.
God bless the many unemployed mortgage originators and office staff. Find yourself a nice home to lay your head. Don't just demand 90% pay splits but look for a company with values that can weather the storm. The going split for originators has dropped to 50% in the DC / Baltimore area. That is what any company that will weather this storm pays anyway. I have run the numbers over and over, if you do not net X amount each month, eventually you will die. The net branch model kicked butt when originations were up because the company made a per loan fee typically. With loan volume down, it is now harder to pay the bills.
If your a victim to a layoff to due your company being shut down and you are a talented loan officer - do me a favor stay the course.... you were meant to be here and will reap the rewards in a few years..........
for more info on Carteret shutting down click here Carteret will shut it's doors
I for one am sad to see them go. Some of the other net shops I could not say the same about but this one kind of hurts...... anyone with comments or predictions regarding the net branch model - let's here you!
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