UMortgage Launches Flat-Fee Broker Model
UMortgage has launched a new flat-fee business model for the independent mortgage broker channel. The company stated the move is designed to help brokers scale their businesses with a more transparent compensation structure. The new model also provides brokers with greater lender optionality and operational support.
- Under the new "GOBROKER" model, loan originators earn 275 basis points per loan while paying a $995 flat fee to UMortgage for each transaction. - The $995 per-loan fee is waived for the rest of the calendar year once an originator successfully funds 50 loans. - UMortgage has capped its own corporate margin at $49,750 per loan officer annually, after which the loan officer retains 100% of the revenue. - This new structure is a significant shift from the company's previous 50-basis-point corporate margin. For a high-producing originator closing 100 loans of $500,000 each, UMortgage's revenue is reduced from approximately $250,000 to about $49,750. - A key goal of this new model is to attract top talent and expand the company's sales force from around 213 loan officers to over 1,000 by the end of the year. - In addition to the flat fee, there is a $300 closing quality control fee and a 10% charge for administrative and payroll taxes per transaction. - The company is also offering a recruiting incentive of $500 per loan, with a cap of $25,000, for each new originator a loan officer brings to the company. - President and CEO Anthony Casa stated, "We're disrupting our own business, because we know this model puts the LO first and that's how everyone wins long term."
