As it could be explained below, net branches are a variety of affiliates and full-scale companies. In a net branching arrangement, a mortgage company will hire affiliates and allow them to behave as brokers or representatives. Here, the main mortgage company would negotiate and agree upon terms that will permit the subsidiary office to sell its products in a manner that would be more advantageous to both sides.
Net branches have several advantages over traditional mortgage banking companies. For just one, the firms have lower overheads than conventional banks. Which means that they cannot need to endure the additional operational costs that larger companies face. For another, a mortgage net branch has lesser overheads than larger companies because it generally does not need a large space for operating a branch. Thus, even if the franchise offers lower service rates, a larger space for a company would be more advantageous than a small franchise office.
Net branches also work well for smaller home loan offices as they may accept many loan officers under one business name. By choosing to call themselves brokers, many loan officers are freed from having to cope with many loan officers working in just a single business name. Consequently, there's a dramatically lower possibility of conflicts of interest. Underhanded practices by loan officers can cause lots of bad publicity for a mortgage company.
Many companies which are set around run Net Branch offices do so as affiliates to large mortgage companies. As a result, it's not uncommon for these companies to be needed to recruit employees in-house, or have strict guidelines about who they will allow to take up a Net Branch. Some companies elect to hire experienced Net Branch employees and train them in the basic principles of how to work the offices. They might also decide to recruit from the same companies that offer the mortgage companies making use of their wholesale partners. In this way, the Net Branches can utilize the same workers to deal with their Net branches. It is up to the master of the franchise to decide how extensive their Net Branches' support staff should be.