Frequently Asked Questions

Basics

How is an affiliate branch different from a traditional branch?
Affiliate branching is very much like traditional retail mortgage banking but with an entrepreneurial structure. An affiliate branch operates more independently while working as part of a reputable parent company having the resources to act as the office's safety net. The branch manager and all loan officers are Open Mortgage employees, however the affiliate branch manager has the autonomy to run their own branch operations including the hiring and firing personnel, processing, branch expenses and profits. An affiliate branch manager isn't confined to a base salary and gains the upside of profits generated by his or her efforts in building and managing the office.

Why choose an Affiliate Program?
If you ever dreamed of running your own business, of controlling your own career destiny, or of having financial freedom, those dreams can turn into reality when you become your own boss as an Affiliate Branch Manager. This is a very gratifying and financially rewarding opportunity for anyone with the spirit and attitude of an entrepreneur. You run your affiliate branch with autonomy, along with the support and systems of a company behind you.

After becoming an affiliate branch, YOU make the day-to-day business decisions. YOU choose your investors, and YOU name the prices on loans. You're in control. We make sure you operate within the state and federal laws, and within HUD guidelines.

Is Open Mortgage HUD approved?
Yes. Open Mortgage is a 'Full Eagle' with Direct Endorsement, meaning we have the highest level of HUD approval. Open Mortgage meets all regulatory requirements and conforms to those set forth in HUD Mortgagee Letter 00-15, regarding "Prohibited Branch Arrangements." We always aim to be in compliance with all rules and guidelines issued by HUD.

What kinds of loans can I do with Open Mortgage?
Open Mortgage is both a banker (correspondent lender) and a broker. We are licensed with over 30 lenders offering a vast array of products, such as conforming, FHA, VA, USDA, 2nds, jumbos, programs for investor properties, reverse mortgages, rural, condo, and manufactured homes.

Does Open Mortgage require I use a commercial office space?
You may work from a commercial office space or a HUD compliant home office, depending on the requirements of your state. An executive suite is acceptable for smaller branch operations. However we do prefer that all of our branches operate out of professional space. Offices must be clearly identified to the public and be staffed and equipped to deal with clients in a business-like manner. HUD requires the Company to pay expenses such as rent, phones, utilities, and equipment leases. These payments will be made from your branch account within Open Mortgage.

What states are you licensed in?
Open Mortgage is currently licensed in twenty-one states, including AL, AR, CA, CO, FL, IA, IL, IN, KS, LA, MI, MO, NC, NE, NM, OK, SC, TN, TX & WI. We continue to grow, bringing up new affiliate branches each month. Here is your opportunity to gain multi-state leverage and expand your market. If your state is not on our list, please contact us. If you qualify, we will investigate licensing in your state.

What's unique about Open Mortgage?
The book Good to Great, by Jim Collins, talks about a hedgehog concept—one simple idea around which a company is built. At Open Mortgage our one concept is—“The best place for a loan officer to work.' We provide this in several ways: by paying out 100% commission after the per file fee, having great lender pricing, supplying the best tools available, and providing a high level of marketing and business development tools. Affiliate Managers and Loan Officers are encouraged to think of themselves as a business and to take responsibility for their own success. Open Mortgage provides tools and a framework to make it possible.

What are the benefits of using CABO?
CABO includes components that address 5 key areas:
1) Automated tools for use during the loan process, including detailed analysis tools and frequent communication
2) Integrated loan cost and revenue accounting
3) Affordable outbound marketing including email campaigns and lead management tools such as call capture technology
4) Client-for-life post closing communication and CRM
5) Automated management metrics

These tools define a framework of processes that help our affiliate branch managers, loan officers and processors work efficiently and deliver a quality product. They also give our loan officers tools that are true differentiators when attracting Realtor partners and purchase-money transactions.

Getting Started

Do I qualify?
We look for experienced mortgage originators, managers or existing mortgage business owners. We set high standards to ensure that each affiliate branch is managed by professionals who are ethical and committed to ensuring their operations are in compliance with federal and state requirements, as well as to best meet their customers’ needs. Affiliated branch managers are required to have a minimum of two years experience as a mortgage originator. Our top-producing branch managers have at least five years experience in the mortgage banking industry. The Office Manager's responsibilities include hiring and training employees, solving daily issues at their affiliate branch, monitoring compliance of loan officers and maintaining relationships with lenders. Qualified applicants will also have current production, a HUD compliant office and a clean credit report.

What is the easiest way to get started?
Contact Phil Risch at 559-892-0930 or PhilRisch@openmtg.com to receive further information and begin the process.

How long does it take to get approved as an Affiliate Branch?
The approval process can move as quickly as you would like. Completion of a Branch Application Package, Branch Manager Employment Agreement and other required documentation and completing our interview process are part of our screening process for new offices. We strive to attract the "Cream of the crop", those mortgage professionals who are interested in providing superior service that is in compliance with all Federal and state requirements.

What are the fees to start an Affiliate Branch?
All fees to start an affiliate branch, such as rent and equipment, are the responsibility of the affiliate branch. HUD requires that Open Mortgage pay these fees initially, but they are recovered out of the affiliate branch account as the branch accrues profit.

Are there any net worth requirements to join Open Mortgage?
No, currently we have no net worth requirements. One of the benefits of becoming an affiliate branch of Open Mortgage is that it eliminates many of the net worth requirements of the various state and federal governing agencies. However, we do review your personal credit as an indicator of your success and ability to manage funds.

Do I need to create a business plan?
It is important to develop a business plan to clearly understand what your start up costs and ongoing budget expenses will be. This is the best way to ensure that you will become profitable in as short a period as possible. Open Mortgage is looking for entrepreneurial people who want to build, grow and manage a successful business.

What lenders are you signed up with?
Open Mortgage offers national lending solutions with over 30 lenders offering a vast array of products such as, conforming, FHA, VA, USDA, 2nds, jumbos, programs for investor properties, reverse mortgages, rural, condo, and manufactured homes. As a banker, we also work with several banks that purchase loans underwritten by Open Mortgage.

May I use my current investors if they are not on the list?
As you come on board, you will be asked to provide a list of your preferred lenders. If we are not approved with a specific lender you request, we will work with you to determine if your need can be met by one of our current lenders or investigate approval with that lender. In the current regulatory environment we encourage you to look at closing most of your loans as a banker.

What capital contribution is required by the Affiliate Branch Manager?
There is no upfront capital contribution required. However, there is a nominal set up fee to cover the expense of bringing on your affiliated branch, and a reserve account is established to cover a minimum of two months operating expenses. You have 3 months after signing on to accumulate this reserve.

Do you provide loan software?
Once you have been approved, you will be provided access to CABO to manage your office, pull credit access via the web, access several automated underwriting modules, automated valuation models, and our web-based loan-tracking system. We will administer all user names and passwords initially, as well as provide functionality assistance to the affiliated branch manager as needed.

What type of loan software do you require?
Any LOS that can interface with Fannie Mae 3.2, such as Calyx Point, Encompass, etc., may be used, as well as the LOS built into CABO.

Is education and/or training offered?
Yes. We strongly believe that education and training is vital for any business to succeed. You and your loan officers should be in the habit of taking trainings. Extensive training on use of CABO is offered each week by an experienced loan officer (and an Affiliated Branch Manager) on everything from CABO basics to correspondent lending to marketing with CABO. We also attend trainings and provide those materials to you and your loan officers on a variety of topics from building purchase business to working with first-time homebuyers. We provide training to affiliated branch managers on recruiting loan officers and developing incentive contests to increase production.

Compensation

How are loan officers compensated?
The affiliated branch manager determines loan officer commissions. When each loan closes, the funds, the complete loan file, and transaction sheet are submitted to the Company. After the loan file passes audit (to ensure completeness and accuracy), the transaction fee is deducted and the balance is available to the branch account (in accordance with the instructions from the Office Manager on the transaction sheet). Within 48 hours of confirmation of deposit, corporate accounting will remit the branch’s share of the revenue. In other words, when a loan closes the loan officer will be paid within 48 hours of deposit of funds and the loan file passing audit.

How are Affiliate Branch Managers compensated?
As the affiliate branch manager, you determine your loan officer commission splits. After deducting the transaction fee from funded loans all monies are paid to the loan officer and the affiliate branch managers accounts within 2 business days. The branch manager can accumulate funds, request bill payment or instruct corporate accounting to draw from those funds to pay him/herself.

When is the affiliate branch credited for the loan closing?
After a loan officer is paid, corporate marks the transaction as Closed. This signals CABO to sweep remaining funds to the branch account as discussed above.

Operations

What are your loan fees?
We charge a competitive flat per transaction fee. If you submit a correspondent loan to our Mortgage Banking Operation there is an additional single fee covering underwriting, warehouse fee, investor fees, etc.

Do you have miscellaneous fees?
Our fee structure is pretty simple. As discussed previously, we charge a per transaction fee for all loans. We assess a dba fee for those branches who want to use a dba, where allowed by each state. These fees are intended to cover our incremental costs under those conditions. As necessary, we will assess a re-audit fee if we continue to see the same problems when auditing a file, an example of this is not setting your PFC’s correctly so you can calculate the APR on the TIL.

Do I have to register brokered loans with Open Mortgage?
You do not have to 'register' the loan if you are brokering it out, but you will have to upload the loan after closing. One of the benefits of using CABO is the automated communications before, during and after the loan closes. We also use CABO to manage the costs associated with doing the loan and distributing payments to the loan officer and affiliated branch manager. After the loan closes, you must upload your closed files to CABO for auditing and storage. This enables us to maintain the compliance control required by government agencies and lenders.

Do I have to submit my loans to Open Mortgage Banking Operation?
No, you may submit your brokered loans to any of our approved lenders, or submit your correspondent loans to Open Mortgage Banking Operation for underwriting. We strive to allow you to manage your business as you have and continue to benefit from your established business relationships, but with better tools to manage your day-to-day operations.

Do I have to use your in-house banking?
You are free to broker out to any of our approved list of over 30 lenders, this earns you 100% commission minus the per transaction fee. You will receive preferred pricing and service for correspondent loans delivered to Open Mortgages Banking Operations. Correspondent loans are charged the per transaction fee plus a flat underwriting fee. Open Mortgage strives to have faster underwriting turn times than other lenders, and we usually do!

Can I process loans at my affiliate branch?
Yes, we do not require loans to be processed at our corporate office. As an affiliated branch manager, you may use a corporate processor for your branch or use corporate approved contract processors.

Can I originate loans in other states?
Yes, one of the benefits of Open Mortgage is the ability to originate loans in multiple states, provided proper licensing or loan registration is complete.

Can I keep my current business name?
Depending upon state laws, Open Mortgage allows dba’s. Nominal fees are charged monthly to cover the additional expense of the dba.

What training do you provide?
We provide training that will help you with the transition to Open Mortgage. We also offer you a program called QuickStart, which is designed to help you reap the benefits of CABO’s capabilities for loans you have closed in the past. These services cover everything from ordering business cards and stationary to converting accounts for providers such as FedEx and credit reporting bureaus to take advantage of corporate discounts. We have developed a formal training program to provide you with the education you need to begin using CABO in your every day business. We have also created a series of mini-movies to walk you through functionality in CABO.

What marketing support do you provide?
One of the benefits we provide to our affiliated branch managers and their loan officers is superior marketing support. Through CABO, we have developed automated marketing campaigns to previous clients, targeted Realtors and first-time homebuyers. We are continually developing new messages and communications for use in the company, as well as, rolling out new capabilities to help grow and support your business. Sales and marketing seminars are also given periodically throughout the year.

What about other areas of support?
We hire seasoned professionals as affiliated branch managers and will assist them as needed in the loan process from pricing, underwriting, closing, funding, to post- closing departments. In addition, we handle all the back-end duties such as, accounting, human resources, payroll, licensing and legal.

Who determines staffing levels, compensation, etc.?
The affiliated branch manager is responsible for these decisions in consultation with the Corporate Office. Remember as an affiliate branch, you manage your business.

How are affiliate branch expenses paid?
Bills can conveniently be paid using CABO to instruct corporate accounting which bills are to be paid out of the affiliated branch account. To the affiliated branch manager, it's online bill-pay.

Would I be 1099 or W-2?
Employee tax classification is dictated by the licensing in each state. If you plan to originate FHA loans you must be a W-2 employee. At this time, almost all of our offices are W-2.

Do you offer insurance?
Yes. We have a benefits package available.

Do you offer accounting and payroll services?
CABO is used to manage your accounting and pay your bills for running your business. We also provide payroll services for each affiliated branch.

Do you offer legal and compliance support?
Legal and compliance support is available through our corporate offices.

What if I want to terminate the arrangement?
Either party, Open Mortgage or the affiliate branch manager, can terminate the arrangement at any time with 15 days written notice.