April 21, 2006
A little unfriendly exchange about net branching
This has been a great thread and extremely educational. I have not had the time to read every single post yet but incase this hasn’t been discussed, be very careful with the employment contracts these companies want you to sign. Most of them are so predatory and lopsided that they give every labor attorney an eternal erection.Needless to say I have had my share of crooked net branch employers. I successfully sued three (reputable) companies after they breached their employment contracts with me. I was able to do this only because I had made major changes to their “standard” contracts. I cannot name names because of the settlement agreements in place but I assure you they are amongst us on this very forum and even some on this very thread.BTW, FNMS’s contract is one of the worst ones I have seen but Global’s and Ameritme’s are just as bad. You might as well put on a pair of handcuffs and throw the key away for as long as they decide to pay you; but once there is a dispute (i.e. if they decide to change your pay plan) you can kiss your pipeline goodbye and look forward to their pathetic attempts at enforcing their non-compete or At Will clauses as a defense for not paying you on any loan that closes after termination.
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Whoa - whoa - whoa…hold on there…Why don’t you call me before you start bashing things you are unsure about. What law school did you go to?
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I got so sick and tired of the bull**** and crooked brokers with their dirty hands in my pockets that I got my own license. SOOO now I am a crooked broker. I would rather be a small broker than a large sucker waiting for someone to screw me when they feel the urge.Brandon, I was not bashing you or your company. I was simply saying what I thought about your contract. You really don’t need to go to law school to read a contract. In fact, I am willing to make you a bet. Post your contract on here and let me tear it apart. If I lose, you win. If you lose, I win. Deal?www.brokerwatchdog.com
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Wow… Here we go!!! Grab that popcorn and sit back a while…Ready!!!!!Set!!!!
Go!!!
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Brandon,As I said in my e-mail, no one is accusing you of being a “greedy so and so”. However, in any relationship, when the balance of power shifts too much in one direction, the likelihood of abuse increases tenfold. What you are saying is no different than a husband in Saudi Arabia telling his wife – “As long as you don’t cheat on me I will be nice to you; but god help you if you look at another man. I will kick you out on your ass with no money.” Sorry but I thought we got rid of feudalism a long time ago. This is not a nation of Lords and peasants where the lord gets to decide the peasant’s faith as long as everything is to his liking.No one is saying you or anyone should tolerate fraud or illegal activity by a branch manager but that doesn’t mean your contract should give you blanket immunity to do what you wish. If you are concerned about fraud then put that in the contract but don’t make it so vague so you could abuse your power in the event of a dispute. Perfect example is what Apex is doing to its loan officers. Just because there is a missing paper in the file, it doesn’t mean they should keep the money and not pay the LO. That is just bull***. But the way most contracts are drafted they give the net branch every right to screw around with the loan officers’ money, all in the name of compliance.
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____________________________________________ Watchdog,I have set a meeting with my attorney and we are going to review & change out policy on non-compete & pay releases to make the playing field more even. This is all to show you & this forum that I am a man of intergrity and Ameritime is different.I stand behind everything I say or do. I am trying to make ou industry better.
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I just wanted to thank you all for the wealth of information on this topic. I’m learning the process with netbranching as I go along because I did not know all the critical questions to ask before signing up with Apex. No fault of anyone but myself. My company is licensed as a broker in California. We are trying to expand to different states in our own name but need to NB for the time being as we slowly go through licensing in other states.The problem I am running into is the marketing (mailers and telemarketing) that we do in states outside of our home in Califonia. We have many LO’s that telemarket for us and I would love to find a net branch solution where we can have a DBA and use our existing name. If anyone knows of a NB company that allow this, I would love to know.Do all netbranch’s that market into other states use the name of the Netbranch parent (i.e like Apex or Ameritime, etc..).Perhaps partnering with an actual fed charted bank is a better solution for us??? I don’t know. I’ll have to do more reasearch. But, I’m learning as we go.
Thanks
Tony
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Brandon,That is good to hear. When I reviewed your contract there were about eight or nine sections that were totally unacceptable so I hope you really mean what you say and you will make all the required changes to make your contract at least as acceptable as that of Amstar and Apex (not that their contracts are perfect).I will hold judgment until you make the changes. But I hope you don’t mind me not holding my breath….It is just that I have heard these promises on public forums (good PR, etc…) a few times before; but at the end of the day the contracts were not much better.
______________________________________Watchdog,So basically my word is not good enough?? You must have been either a lousy loan officer, a horrible businessman or both, because it seems everywhere you went, you got burned. Are you sure it was the company?I am done with this thread & post. I have been honest and open from day one, but to stay on here and allow you to cast judgement on me and my company is wrong. Ameritime has one of the best names in the industry. You say its not personal, but now it is. You bash my company, my ethics & my intergrity…all with a smile.
Good day and good luck.
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julian is one smart cookie. thank god he’s on our side
___________________________________________Brandon, how can it be personal? I don’t even know you! But I am glad you are showing your true colors. A little too emotional for my taste. Would have hated to have signed one of your contracts.Midas, Send me your direct line and I will call you. But no toll free numbers please.Thank you all.www.brokerwatchdog.com
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Watchdog,
I’ve read practically the whole forum on Net Branches, and still cannot distinctly ascertain as to who I should sign with. I hear a “few” good stories and “lots” of horror stories of who to avoid. From this forum, I can’t even determine who Midas is or who he is with. Is it Apex Lending, Aapex Mortgage, or corebanc. I have a personal friend here in GA who’s signed up with Apex Lending. He seems to like it. Please give me your honest opinion of who you think is the best to sign with. What net branch opportunity is actually out there that is committed to staying compliant, is honest and ethical, offers a 100% with a file fee, fast processing / funding and a fast paychecks? ___________________________________________________________
As I said:“But the way most contracts are drafted they give the net branch every right to screw around with the loan officers’ money, all in the name of compliance.”No company should be allowed to sit on your money because of a missing piece of paper. If I have the missing document I will give it to them but if I don’t have it I am not going to manufacture it just to get paid. If something is missing and cannot be found then it is Apex’s tough luck. After all that is why they keep $600 per file. That should be more than enough to cover occasional fines. Alternatively, since they are sitting on the money, they can get off their behinds and go get/find the missing documents but they have no incentive to do that. Do they? They would rather have every file miss a document so they could keep 100% of the fees.www.brokerwatchdog.com______________________________________
Here here to watchdog. That was exactly my point. When some of these companies want you to pay a large fee to just open up a net branch, to me that sounds crazy; unless that is to set up the reserve account.They will advertise & say when could you ever open up a franchise for that cheap. He said to open a pizza shop would cost you 100k. Anyway, I don’t think he understands the concept of at will employment, or he just chose to ignore it.
Phu are you still around? Can I submit a couple trial loans through you guys?
Man. After much thought and research on this subject, I think I will just renew my brokers license and call it a day. The thought of contract disputes, not getting paid as promised (Duck), having someone “close” your pipeline and not pay you, then having them sue you for a non compete from a one sided contract sounds like as much fun as a trip to the dentist for a root canal without anesthesia. Was that the longest run on sentence you ever read? Time for more Vodka. I give up. Thanks for the “truth” though.
I have thought about opening a “Net Branch”, but now I’m positive I won’t. In 3-5 months I’m going to open shop in Florida, yes it costs money, and it takes time, but what use is it to me to have the ability to lend in States I don’t have a presence in? I like to meet my customers, and it’s been my experience customers like to meet their LO’s. I also think that as time goes on, the Government (Black helicopters) is going to find a problem with this situation, I.E. “using a netbranch to supercede the licensing requirements of the State”. It costs a “little” more to be fully licensed in a State, but i’ve never had a problem being paid by an actual lender. My check is there at closing, plus I have the added benefit of being able check the HUD-1 to make sure i’ll get paid. From what i’ve heard on this post, a netbranch L.O., like Duck has said, has a promise he’ll get paid, but it seems there are ways around that. I sincerely hope I haven’t pushed anyones buttons, or stirred up any controversy.
Nothing but love.
Elgin,
Sorry but you’re asking the impossible. If you can’t ascertain anything from all the information, links, dialogue (good or bad) and then apply it to your particular situation (which is going to be unique to YOU) then what good does a recommendation of someone saying “this net-branch is the BEST” going to mean? It’s still someone else’s opinion.
“BEST” is a relative term and really only applicable to you. Consider the fact that YOU’RE really conducting a job interview. Not the other way around. This forum is providing a means to help you in your fact-finding. Like a college research paper, you’re gonna have to check and compile many different sources to arrive at a place where you feel comfortable and ready to make a decision.
Hang out. Get involved. Ask more questions. Share what research you come up on your own because THAT is the KEY. Trust me, others WILL respond in time otherwise we wouldn’t have over 8000 “views” on just this discussion. It’s no different than the principal behind building website traffic.
Welcome and glad you joined the forum. Look forward to your future participation.
I have never, ever held anyones money. Its not right and I wouldn’t want that done to me. You can ask anyone involved with Ameritime. People have bills to pay and families to feed.
If a disclosure or something is missing, I don’t hold people’s money for ransom…we work together to get the issue resolved. It’s just not that big of a deal and it always gets done a lot faster that way.
If a company is holding your pay, I will bet they are having cashflow problems and are riding your money. Excuses…
As far as contracts are concerned, yes, they are in my best interests. What took me many years and a ton of cash to develop I am willing to give to you in 48 hours. If you are an intelligent, responsible individual then you have no worries. I have NEVER had to enforce my contract and honestly don’t want too because that means something horrible has happened and it could hurt everyone involved…serious fraud, embezzlement, etc… I have to have something to protect me and I think everyone would want that also.
I’m not a greedy, cut-throat business man. I didn’t start Ameritime to screw people over. I just want our industry to have a good name with good people. I am the only CEO of any large mortgage company that is on this board, so you can tell I am passionate about this industry. Owner, President & CEO - Call me. Net Branch Opportunities Available! Great programs that you can choose. Click on the “How it works” page of the site.
Watchdog,
From what you’ve shared here, either you’re talking from direct experience or you’ve been around long enough to see many of the pitfalls you speak of. I appreciate your list of “Caveats” because one can’t be too careful. On the other hand, and not to sound in defense of employers, what would you have them do? After all, they did hire the attorney’s to draw up the contracts you speak of. Wouldn’t it stand to reason that it would LEAN somewhat in their favor? In 20 years I’ve never seen a employment contract with a broker that I liked. Still, I signed. Plus, I pay an attorney to review any legal documents I’m considering so I can way the risks. There’s holes in any rules or regulations whether it’s local, state or federal. Whether it’s 1099 vs W-2, or compliance or some pencil pusher who has a #2 up there butt and thinks they can bully you or hold your broker check, right? It’s impossible to foresee everything. I don’t think you’re gonna find perfection anywhere. Like an IRS audit, if enough “red flags” are going off in your brain concerning a net-branch, hopefully there’s time to back away in time. Unfortunately, it’s like buying real estate, you can’t possibly know everything that’s gonna happen before you go into the water.
I suggest you got the makings of a great article and “checklist” when it comes to decision-making time in choosing a net branch. Maybe you could provide a “Top 10 List” like Letterman? (but in a more serious fashion, yes?).
I also like to see this conversation change gears so we don’t scare any more net branch providers away. Just my feelings on the matter and nothing personal.
Chez
In a newly-published book, a real estate attorney is taking a look at ethics in the mortgage industry.
“What Does ‘Right’ Mean?: Developing an Ethical Business Environment in the Mortgage Industry,” is a book by William Bost III, a partner at the North Carolina-based law firm Ragsdale Liggett PLLC in the business law department. His practice encompasses bank and non-bank financial services, mortgage banking, securities, mergers and acquisitions, real estate law, and corporate law.
Bost wrote the book to provide mortgage industry professionals assistance in developing an ethical framework in which to operate their individual and collective businesses. In the book, he assesses how ethical principles apply to the ever-changing mortgage business and suggests ways for businesses to benefit by clearly defining their ethical principles.
“No government is capable of promulgating rules that apply in all situations,” said Bost. “A determined person will always be able to find a loophole in a law or rule under which he may do something mean, self-serving, or dishonest. The truly ethical person is aware of the many ways he benefits from the order created by sensible laws, and does what he can to promote and maintain such order. Thus, acting ethically requires adhering to the spirit of the law, not just its clear provisions.” But Bost is not the only one seeking stronger ethics in the mortgage industry.
Mortgage industry: Police thyself
Timothy Fredrick of Florida-based Titan Lending says that “with government agencies across the country targeting mortgage fraud and abuse, it’s time industry leaders and associations kick self-monitoring and policing into high gear.”
Fredrick referenced the prosperous growth the mortgage industry has enjoyed in recent history, noting that the boom in loan volume brought a massive influx of professionals to the industry.
“As these wonderful things were happening, however, some mortgage professionals seemed to have lost sight of many of the principles that spurred this growth. There are grumblings about how out of control we have become, and they come from Capitol Hill, our local governments, consumer groups, industry partners and our own ranks. Did we forget why we are here?” Frederick asked.
He believes that “it is time that we all start to fight for our future. The problems are internal to mortgage bankers, mortgage brokers, banks and Wall Street. There are also problems with government and consumer understanding. We are all for making strides in reducing predatory lending, Real Estate Settlement Procedures Act violations and such. But we are destroying our credibility by allowing mortgage fraud to propagate freely.”
Further he says that Section 9 of the 1003, which lists penalties for providing false information, “used to be enough to scare anyone out of lying — mortgagor or mortgagee. But if you’re not originating government loans, little else can convince you that a little white lie won’t hurt anyone.”
Fredrick explained that Wall Street seeks recourse with lenders; lenders buy the loans back and then go after mortgage originators. Mortgage originators — including lenders, brokers and their employees — usually don’t have the capacity to repurchase the loans, and that’s the end of the story. “We all know that regulators and law-enforcers aren’t really putting anyone in prison. So what’s the worst that can happen?” he said.
“Essentially, it begins and ends with the loan originator. Loan officers can prevent nearly all fraud from occurring. But without proper motivation, prevention is last on the list of priorities. Unless fraud is detected, there are no real repercussions. There is also a great deal of money to be made; heck, loans are closing that wouldn’t otherwise close. Loan products and lender policies also seem to encourage fraud. Programs such as stated-income/stated-asset, no-income-verification and no-income/no-asset loans allow customers who don’t otherwise qualify to buy houses. These are great programs when used in the right spirit, and they promote low-income-housing goals and emerging-market growth. But they are often stretched to the extremes — by originators, not borrowers.
“We need to take a close look at why we are here and what we are doing,” Fredrick warned. “We also need to think about the long-term consequences of our actions. Consider a market in which all loan applications require upfront fingerprints (banks use them for check-cashing) and thorough background checks. Other things to consider are individual bonding of originators, notarizing initial loan applications and mortgage insurance for nonprime loans and second liens.”
He added that “enforcement actions, penalties and government sanctions are somewhat effective, but only in deterring people who are not ethically challenged in the first place. We need to educate the originators and borrowers. Stating an income that is not what you actually earn is fraud. Telling the borrower what to state is fraud, too. People not only need to know that what they’re doing is wrong but also what the consequences are. We need zero tolerance in this industry. Make yourself an expert. Read the regulations, take the classes and participate in the associations.”
