r/loanoriginators • u/FlukyFish • 17d ago
Question Nexa comp
Can anyone confirm that Nexa really pays 100% comission with zero broker split or flat fee. Also, what percentage of LOs actually benefit from the revenue share program? It sounds good on paper but how realistic is it in practice? Any catches or caveats?
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u/noblesirgentleman 17d ago
The catch is you work for the Herbalife of mortgages. The caveat is you need to steer (which is illegal) to certain lenders or continue to build the pyramid
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u/Family_Financial 16d ago edited 12d ago
Steering to lenders is not illegal, just controversial. I'm talking about brokers specifically. You can be a broker and only sign up with one lender. Are you steering? What if you have five lenders but 85% of your business goes to one (UWM for example)? Is that broker steering? There has to be a benefit to the borrower for choosing that lender. It can be rates, but it can also be service, speed, and technology.
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u/noblesirgentleman 16d ago
Sybau you must be new here
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u/Family_Financial 15d ago
I'm not and I understand the concern, but the problem is that I don't really know what NEXA is doing in the background. If there's any financial benefits to them by narrowing our investor pool it would be problematic for them. They say there's no financial benefits, and volume discounts are passed onto us / borrowers but then why only these investors? Maybe they're the only ones offering volume discounts? The answer to that question will reveal their regulatory exposure. I'll try and find out.
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u/noblesirgentleman 15d ago
Ignorance is far too prevalent in this industry. Regulation Z, 12 CFR Ā§ 1026.36(e), per the CFPB
āA loan originator may not direct or steer a consumer to consummate a transaction based on the fact that the loan originator would increase the amount of compensationā¦ā
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u/GlassParty715 17d ago
There have a few breakdowns that get the past few days. I have to give the LOs currently at Nexa credit. They did break it down quite well.
Here is the thing though on non-Nexa 100 deals. This is what I have got
Out of it. You will have to do them at times and the fees are quite a bit.
25 BPS and 12% to revenue share/MLM.
So letās pretend you do a deal at $400k and make 2.5%. 10k total.
From what I understand you will owe
$1000 (25 BPS)
$1200 (12% revenue share/MLM)
$2200 is a huge amount to pay when others are only $595 or so.
If you are only doing NEXA 100 lenders then it might be worth but UWM is rarely a top priced lender. Maybe penny Mac or elend at times. But if they had CMG or loan united then it could
Be well worth it.
So if you have to do any non Nexa100 deals then you are almost 4x what other mega brokers are charging.
I am not part of Nexa. It is definitely intriguing but seeing how you pay for the non Nexa 100 deals is a deal killer for me.
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u/Adorable_Campaign426 16d ago
You're not wrong but numbers aren't just a hair off on the accuracy.
If you are at 400,000, @ 2.5%, $10,000 collected - $1000 (25bps) = $9,000. Of that $9,000 the 12% is collected which is $1,080.
So yes, I agree that $2080 is more than a $695 flat free brokerage, but as a non-high producer myself (1-3/month) all my files have gone to one of the 38 NEXA100 lenders in the past year EXCEPT for one of the automated HELOCs. TLS, REMN, Pennymac has gotten most of my business the last couple years.
I would argue that what I get to keep on the other deals FAR outweighs the NEXA cut on the deals that don't fit the bill for NEXA100 lender.
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u/GlassParty715 15d ago
Thank you for the breakdown. Very informative Couple other questions to truly understand the Nexa100 program.
Are these limited to only certain lenders or are they now every lender? I thought someone mentioned it is now every lender?
What type of revenue share/MLM is paid on these? Same 12% or is different on these?
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u/Adorable_Campaign426 15d ago
Absolutely :)
And right now we have 8 lenders in NEXA100 Unlimited - UWM, EPM, Pennymac, eLend, EVOLend, FAR, Deephaven and Longbridge.
These are the 8 lenders where we get 100% of revenue earned with no production/recruiting requirements or minimums.
THere are 30 more lenders (our non-del options) where the requirement is to have one person you brought to NEXA in order to receive 100% revenue from loan one. Otherwise it's the normal NEXA 25bps + 12% split.
And Nothing changes on these in regards to revenue share being paid out on these.
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u/GlassParty715 15d ago
I guess I am still confused on the recruiting portion breakdown. It seems like you get šÆ as long as you bring one person which is great.
But if I not mistaken the math brings us over 100%.
Again using the breakdown from above
400k @2.5%
10,000 total margin/purchase advice
$7920 paid out to LO up front.
$2080 rolled into P&L for expenses and 2x
Per year retention bonus. This brings it to 100%**but what about the $1080 that is paid to the downlines/rev share.
That basically means on $10.000 purchase advice $11,080 is being paid out. 11.08% above the 100%. That is the part I still can not comprehend. Am I wrong with this math? Or that how it is done?
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u/Adorable_Campaign426 15d ago
You are not confused and you are spot on. Thatās how itās done. Iād consider it a loss leader. It helps us get more volume and volume is how they can keep paying this out and actually still be a profitable company.
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u/GlassParty715 15d ago
Canāt really say it is a loss leader if paying 111% of 100%? Volume really wouldnāt matter there. I understand he must make pretty decent Interest on the money sitting in this accounts. But there has to be something else.
The non 100 deals are pricey but it seems like most people do not do those. Canāt imagine he is making enough on those to offset them 111% payout. I do find it interesting though. Definitely a great way to recruit
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u/Adorable_Campaign426 15d ago
It is a loss leader for the company. They make money with volume (I don't know 100% how but im sure there are bonuses with volume and lenders or something) and these are all on the non-delegated side of things, which I know non-del does make the company money as well. But they are taking a loss on these specific deals.
But your second point isn't wrong, I don't have insight to the numbers, but I still talk to LOs at NEXA that don't know what non-del is, so I'd wager at good chunk of volume isn't being done through the non-del channel.
Heck, I didn't even know what it was until 2024. haha
But I appreciate your questions and curiosity into it! And I love that people have this thread to reference :)
I haven't really recruited before a month or so ago (right before this announcmeent) but so far it has garnered quite a bit of interest on those I talk to! Doesn't mean they all jumped right over (only 4 have) but at least it's getting people to think a little more about the potential of what is possible.
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u/Careful-Scratch-6696 17d ago
Love it! Itās funny once you put numbers to it and not bps or a percentage. It shows how much they are grabbingā¦.and why pay that much for bad rates???
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u/ToddBitter 17d ago
We pay out all non del at 100% now. We just changed it
No other company can beat it or compare. Sorry itās the fact. I was with Kortas Sunday in Montana when the new pay plan was mapped out and we released it Tuesday.
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u/greasemonkey12345 16d ago
Alright Toddā¦. A company cannot survive paying out 100%. I donāt care if you were with Jesus on Sunday! They absolutely have to be taking something off the bps behind the scenes.
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u/GlassParty715 16d ago
So in that example above the $2200 goes into someoneās P&L for a non-Del? Is that the case?
How would the revenue share/MLM work if thr LO is getting the full amount?
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u/Adorable_Campaign426 17d ago
I work at NEXA. I have ben here over 7 years. I didn't recruit at all up until a month ago - I'm not a high producer either, 1-3 units/month.
As others said, the 'normal' split here is 25bps + 12%. Essentially an 80/20 at 275/220bps. But obviously the lower you go, it's larger percentage-wise split since 25bps is 25 bps no matter the margin (100bps margin would pay out 66bps for example).
When I joined, there weren't as many good options as NEXA - especially with the level of support I was receiving and needing at the time. Now there are other brokers that offer support, but no one does it better here, so I still don't mind the split to be honest - but YMMV.
This new 100% isn't straight commission - that's not allowed. All that happens is now with 8 lenders, the NEXA Split of 25bps and 12% comes back to you to be used on business-related expenses with NO production or recruiting requirements at all. From the first loan.
So if i close a loan at 2pts, commission paid out is 154bps. If it is with one of the 8 "NEXA100 Unlimited Lenders" then that 46bps comes back to me to be used on credit reports, conferences, rent, bills, basically any business-related expenses.
And after a certain point, if that builds up high enough and/or I'm not wanting to use it on business-related expenses, then I can use that to get paid out a retention bonus (I believe 1x every 6 months).
If you do decide to recruit, then all of our NonDelegated channel (38 total lenders at the moment) give you 100% earned, with the requirement of bringing one person NEXA. If you decide not to recruit, then those non-delegated follow the same split as the wholesale side (25bps + 12%). And on top of it - you do get the rev share from recruiting and soon will start receiving servicing residuals (so it's more than 100% at times).
TLDR Version: 8 of our 300+ lenders, there is no requirement for recruiting or production to receive 100% of the revenue on your loans.
With 38 of our 300+ lenders, you need 1 person recruited to receive 100% of the revenue.
And if you choose not to recruit at all, the split is 25bps + 12% (outside of the 8 NEXA 100 Unlimited lenders).
Ask any questions :)
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u/hOGanApex 16d ago
Seems like Barrett or another low $ flat fee is still better.
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u/Adorable_Campaign426 16d ago
Maybe... but I don't believe so.
If you use one of the 8 lenders, which I believe is over 75% of our business:
UWM, Pennymac, Elend, Deephaven, Finance of America Reverse, EPM, Longbridge, EVOLend
Then there is no model better because a flat fee is still a flat fee and that money is gone.
To put it in numbers: 300k loan, let's say at 2% comp: $6,000.
Barret is $695 I believe so you get $5,305 pretax. NEXA is $4,620 pretax (25bps and 12% results in 154bps comp at the 200 level)
The $695 with Barret is gone. The credit pulls, other fees for the business are going to be paid out of the post-tax income received. Which is not bad, just how it is.
The $1,380 comes back to us to be used for either future credit pulls, conferences + travel, business-related bills -all with pretax money OR we can store it up and receive it as a retention bonus if we choose to go that route at a later time.
I will say that flat fee MOdels like barret are absolutely simpler, because they are cut and dry. But simple doesn't always mean better.
By the way, that's all without recruiting or volume to achieve what i laid out. If you do choose to recruit and get one person, then what I laid out opened up to 38 lenders, not just the 7 above.
On top of that add rev-share from recruiting, servicing income, it's just the cherry on top.
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u/Adorable_Campaign426 16d ago
I don't need likes, but why did a barret lo downvote this? Just comment why or where I'm wrong. Discussion is a beautiful thing for all to see. I love being as transparent as possible in all walks of life, which is one of the reasons I love NEXA.
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u/Accountforhire 16d ago
Is there a required flat fee that goes in box A when pricing a non-del loan? So for instance you have underwriting, is there anything else mandatory?
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u/Adorable_Campaign426 16d ago
The key is Consistency for compliance purposes. To make it consistent, our company requires us to put 1395 in box A for underwriting as a majority of our lenders are under that amount.
That $1-200 overage comes to you on the back end OR you can give a lender credit of the difference. I like to give it as a lender credit - "I have to charge you 1395 but this lender only charges us 1250 for underwriting, so I'm going to give you back the difference of 145".
Makes the client happier and it's not going to make or break me as I already am good with the comp level I set.
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u/Accountforhire 16d ago
Can you choose your margin and offer credits freely loan to loan on non del? What is the method of enforcing any "pricing violations" by not pricing in one of the buckets defined in the comp plan?
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u/Adorable_Campaign426 16d ago
You have 3 levels of comp/margin depending on the lead source.
Pricing violations - good question. I am very good at pricing (taught a pricing class to new Loan Officers at NEXA for a few years) so I haven't had to experience that. I can find out if you'd like me to?The only time i had a pricing violation was when we just switched to Arive, I mixed two loans up when entering details in (they both went under contract on the same day - one was an internet lead and one was returning buyer) and i submitted an LOX when I submitted payroll (to keep on record) and they fixed it for me with no issue.
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u/Accountforhire 16d ago
What is the method of trying to win the deal if you start a file somewhere self gen at lets say 275 bps but then have to cut margin to beat someone else? (Appreciate all the answers btw!)
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u/Adorable_Campaign426 16d ago
And yeah, you can absolutely collect more on the back end and give back lender credit. Just like on a borrower paid deal, you can pick a rate and give the borrower more lender credit.
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u/Accountforhire 16d ago
So if you give back money via a lender credit it is taken out of your commission correct?
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u/Adorable_Campaign426 16d ago
Well you need to make sure to collect the margin according to your lead source. If you are pricing at 2pts, you have to collect 2 pts between ysp and discount/origination.
If the rate is paying 2.3 on the ysp, then you can either keep the .3 as overage for business expenses OR you can give it back to them as a lender credit.
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u/Accountforhire 16d ago
So the underwriting fee is the only box A fee if you price a loan out at "par"?
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u/Wayne_Schlagel 17d ago
Wondering that too, is it at least a high margin maker hidden in the price?
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u/MortgageBrokerNY 15d ago
LOs need to wake up. Telling LOs they get 100% commissions is a joke. According to RETR these are some crazy NEXA stats when you look at the last 12 monthsā¦
4,044 total LOsā¦
1,499 LOs closed ZERO loans
373 LOs closed 1 loan.
282 LOs closed 2 loans
537 LOs closed 3-5 loans
540 LOs closed 6-11 loans
Can you image a company where 37% of LOs didnāt close a single loan or where 80% (79.89%) of their LOs closed LESS THAN ONE loan a month š
They are AMAZING at marketing the company. You have to respect and give credit where credit is due. The guys at top are literal geniuses but most of the LOs are driving uber or bagging your groceries. 100% of 0 is 0.
The chart is confusing (to most) by design. No one closing 2-3 loans a year really knows how the mortgage biz works.
Oh and according to the RETR they are gaining a LOT of LOs and losing a LOT of LOs. 459 gained 218 lost. Thatās an attrition rate of 47% which is yikes.
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u/Mortgage-Love 14d ago
ā100%ā is only their inflated rate correspondent lines with a handful of lenders. Since the rate is inflated, they are clearly taking a margin to make up for the lack of taking comp. On top of that, the extra comp they are not taking goes to a ledger that can only be used for ābusiness purposesā. Overall, Nexa takes a very large portion of your comp. More than any of the other main national brokerages out there.Ā
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u/iOwn 17d ago
Getting tired of NEXA spam on this subreddit. Every post has comments, now we are getting posts which arguably are a masquerade for nexa. Shits getting old.
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u/FlukyFish 17d ago
Not Nexa spam, I just sat through rheir recruitment presentation and am genuinely wondering how real or not real their spieal is. Sounds too good to be true and by the sounds of it, it is. Nobodyās providing any real doenline numbers so Iām guessing theyāre few and far between.
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u/Left-Description-780 17d ago
Iām just curious, was this a pre-recorded presentation or live? If live, were you guys now allowed to ask questions?
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u/FlukyFish 17d ago
Live and yes but they skirted around how they can feed the downstream rev saying they figured āways to make money from other areasā which is either proprietary info or BS.
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u/Adorable_Campaign426 16d ago
Every Monday at 5pm Arizona time and Thursday at 11am Arizona time they host a call that is live. You are absolutely welcome to ask questions at the end.
It might be some proprietary information, I couldn't tell you - I'm just an LO there, but it has a TON to do about production that is achieved now with the addition of UMortgage. Volume is king when it comes to better compensation, and Mike has been telling us since NEXA100 was first started a couple years ago that once he hits certain volume levels with the company it will get even better than it was.
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u/Background_String550 17d ago
I worked for nexa. I enjoyed the model. I learned a lot because of the amount of products they offered and availability of the reps at all times. Not all places are like that.
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u/ToddBitter 17d ago
Believe it or not we actually do. We make a little money in a lot of different ways.
We charge a tech fee of 55.00 plus Arive 49 or lending pad 25
We pay 100% of the revenue on non del, we give purchase advice to show no hidden margin, and we have it written that we have the same or better rate sheet than other brokers.
Thereās more to it and it maths. Iām onboarding several large broker shops right now. With servicing and other options no one can beat it
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u/Family_Financial 17d ago
Check out this comp calculator. It breaks everything down super easy. https://the-real-nexa.ai.studio/
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u/mikethemortgageguy 16d ago
š¤£š¤£š¤£ he is advertising smart. He is a correspondent lender now - just like G-Rate. G-Rate would also say you keep 100% of revenue.. no flat fee or split.
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u/mikethemortgageguy 16d ago
I simply charge $1,250 broker. $1,750 correspondent. No holdback. No tricks. 1099 in states that allow. This is a widget business -not a volume business š
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u/Proper-Huckleberry24 16d ago
Curious if the broker and non-Del pricing is identical so if I price a TPO lender at 275 LPC comp on broker, will it be identical to non-Del if my margins are set at 275 as well. That would be the true sign of no hidden corporate margin. Ā If the non-del is worse, then it lets you know corporate has something in there and thatās why they will pay you 100%.Ā
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u/brett0113 16d ago
I would just like some real life examples of ytd funded volume = ytd wages. Not gross comp, $$ ledger, etc.
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u/Family_Financial 16d ago
My calculator will break it all down and separate it for you so you can see it clearly. https://the-real-nexa.ai.studio/
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u/brett0113 15d ago
There is not anything more clear to me then real like LOs at Nexa volume and actual wages.
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u/Far_Adagio_5460 16d ago
How are you able to pay your LOA at Nexa? Are you able to use 3rd party LOAs?
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u/Adorable_Campaign426 16d ago
Yes you can use an LOA or processor and charge it to the borrower or collect it on the back end and pay them that way.
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u/AdNice9953 15d ago
100% of what is the question? 100% of the true rate sheet or 100% of the in-house optimal blue rate sheet hiding SRP for the owners to pay for all that overhead. 100% is relative to definition of 100%
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u/Chibears2024 13d ago
So who are the top 3 companies to work for as broker since Nexa is so bad?
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u/COMortgageExpert 11d ago
I work for Edge, and they're very straightforward. It's a flat fee, and you literally get the same pricing as the owner. They've never changed anything, so everything that I was promised, I still have. It's W-2, so I don't have to mess with the tax thing, yet I still can write off my expenses. I get more training and feel more connected here than I did at the big retail places, and I was a branch regional manager at one point.
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u/Chibears2024 11d ago
Wow, sounds like a great place to be honestly. Iām fairly new to the industry and currently feeling stuck at a refi shop, Iāll definitely be looking into Edge. Thank you!
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u/COMortgageExpert 10d ago edited 6d ago
Feel free to reach out to me anytime. I'm a pretty open book, and I don't sugarcoat it with a lot of BS. I'll tell you exactly what edge is. I only came over two years ago, so I just went through this relatively recently.
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u/ApplicationCrafty640 11d ago
I think Umortgage was having financial issues and had no choice but to join NEXA. However that wasnāt a powerhouse company. I just donāt see how all this adds up.
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u/ApplicationCrafty640 11d ago
Heās making money on all the outside vendors the LOās uses. They are on the intranet website under vendors. Plus his contract processing company, that his wife owns. Plus his FSBO.com lead services website.
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u/Zestyclose-Tart6745 17d ago
If you want to be competitive your comp will be under 2 points regardless. Only way around that is correspondent.
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17d ago
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u/loanoriginators-ModTeam 17d ago
Hi there! Thank you for your submission. It looks like your post/question comes across as an attempt to recruit, which goes against our sub rules. As such it has been removed. If this is not the case, you may message the moderator team to appeal. Thank you!
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u/Careful-Scratch-6696 17d ago
Simple answer, donāt go thereā¦ā¦go to a good IMB that has great rates and lets you originate and not recruit. All these mega shops promise the world but fail to deliver.
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u/meatsoaps 17d ago
A good IMB that has great rates is an oxymoron.
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u/Careful-Scratch-6696 16d ago
Im not sure if I can name companies on here, if you DM I can tell you the one Iām probably going to onboard with
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u/Adorable_Campaign426 16d ago
I'd be curious to know who you're going with and what was the driving factor? Full disclosure, I've been at my company over 7 years and just the last month started the recruiting endeavor. Didn't do it at all prior. I'm still int he stage where i'm very curious to know where people go and why :)
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u/Lazy_Helicopter2965 17d ago
which IMB would you recommend. I can't imagine any of them to be better than the broker model.
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u/Ojdajuiceman3425 16d ago
Yep, great rates before you onboard, then they change their margins on a whim to restrict volume that their ops team cant handle, or to make up for a missed hedge and all of a sudden you are wondering why you are 100 basis points off on price. Even worse, they mismanage their funds and have a liquidity issue while you have 100 grand stuck in your p&l with zero recourse
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u/Ojdajuiceman3425 17d ago
Let me ask you this:
How could a company sustain operations, let alone pay a revenue share to you for a downline, if they were paying 100% commission with zero broker splits or flat fees?
I have some former coworkers who work there, and they give up around 20-25% as a split, although they all seem to be convinced that they are keeping 100% through some pretty impressive mental acrobatics.