When Nexa Mortgage announced its Nexa 100 program, a 100% commission product, in late May, social media was abuzz with emotion and confusion.
“Can someone explain this program to me as if I were a 5-year-old?” joked one broker in a Facebook group for mortgage lenders. Other commenters found the company's program “too good to be true.”
This may be in part due to the lack of details in Nexa's press release announcing the program, or it may stem from disbelief as to how a company could launch such a program and continue operating.
Either way, CEO Mike Cortas is pleased the program is getting attention — both good and confusing — and hopes the publicity will help his brokerage grow to a 5,000-strong team by mid-2025. (There are currently 2,580 sponsored loan officers, according to the National Multistate Licensing System.)
Prior to this program, of the 275 basis points received on a loan, 220 basis points were paid to the LO and 55 basis points to Nexa. With the Nexa100 program, 220 basis points will be paid to the LO and 55 basis points will be paid into a separate account to cover expenses like marketing, Cortas explained.
“Loan officers will receive their usual compensation and the remainder will be recorded in the ledger for business expansion,” Cortas said. “We have to comply with the mortgage law when it comes to loan officer compensation.”
Some brokers have called the program a “gimmick” because not 100% of the fees actually go into the LO's pocket. Stakeholders have also criticized how Nexa can stay afloat by rolling out the product, especially in such a tough lending environment.
Currently, to remain in the Nexa100 program, which is open to anyone until July 31, Cortas says loan officers must recruit, or at least try to recruit, other loan officers. “In order to stay in this program, I need you to help me grow. All I ask is that you have one loan officer that you have recruited into the organization,” Cortas says.
Cortas said he can afford some of the losses from his program because he siphons money from other sources, such as the insurance and charter jet businesses that LO uses, to stay afloat.Nexa's hangar business has been in the spotlight recently because of a dispute between Cortas and former partner Matt Grella.
Cortus also noted that the company has an “aggressive tax strategy” that has helped it save money: “You don't have to worry about that. You can just pay your loan officers more. They're the ones who end up paying the taxes,” he said.
But what the announcement doesn't mention about the Nexa100 program is that it's only open to LOs that do correspondent lending, according to a company employee who asked not to be named.
Nexa employees say the brokerage has partnered with three partner lenders for the program — United Wholesale Mortgage, Equity Prime Mortgage and MLB Mortgage — and that so far the rollout of the program has been confusing.
“Nexa has struggled with training on the transition to correspondent lending because it's a different type of loan and has different rules,” they said. “The company has been experiencing growing pains over the past month or so as it struggles to train LOs on how to do this type of lending.”
Cortas confirmed that the company uses the above companies for non-delegated correspondent lending.
“For Correspondent, there are no growing pains like the growing pains that come with rapid growth. We've managed our growth well, but there are always obstacles and we address them swiftly,” he added.
Cortas said feedback from the public was that the product was a “sham” and that “they must be overcharging their fees.”
“My interest rates are exactly the same as any other mortgage broker at these lenders. We have a tier 1 range, the exact same rates as a pure broker,” the Nexa CEO said. “When you don't understand something, you attack it. And that's normal in human history. That's what you do.”