What is a Net Branching Cooperative?

A Smarter Solution to Residential Mortgage Lending...

In the mid 1700s, English farmers and tradesmen realized that by sharing risk/reward/responsibility they could aggregate resources unattainable as standalone enterprises.

A practical motivation for the creation of cooperatives is at times described as "overcoming the curse of smallness,” and, sometimes, “avoiding the curses of too-bigness.”  By definition a cooperative is an association of a large number of smaller entities behaving as a large business entity in the market, reaping the significant advantages of economies of scale that are not available to its members individually.

Farming cooperatives, specifically, offer a useful model for the way Mann Mortgage operates.  A family farm may be too small to justify the purchase of a tractor or another piece of farm machinery for its own use. A cooperative provides a machinery pool to purchase the necessary equipment for the joint use of all its members as needed.

The farm’s small volume of production may put it in an unfavorable negotiating position with respect to intermediaries and wholesalers The cooperative serves as an integrator, collecting the output of small members and delivering it in large aggregated quantities downstream through appropriate marketing channels.

Similarly, smaller lending businesses are often at an operational disadvantage that would be overcome by being part of a larger organization.  The tools and support services required by a mortgage lending business are expensive, but the economies of scale created when those tools and services are acquired and managed centrally change the picture.

Mortgage lending is a natural candidate for the cooperative business model.  Mann Mortgage has literally built its business upon this model.