'I will open my world to you and help you accomplish your goals and be there side by side' is Kevin Harrington's sweet promise as he pitches for more Loan Broker Network sign-ups. Loan Broker Network is a DFY program by Shark Tank’s Kevin Harrington and lead generator, Philip F. Smith. The goal of this program is to develop ‘loan middlemen’ who earn by connecting loan seekers to lenders. Inside Loan Broker Network, students get
A DFY mortgage and loan brokerage system,
support from a 100-member team,
exclusive access to Facebook groups,
lead gen training from Philip Smith and,
invitation to the mastermind class, virtual, and in-person.
Loan Broker Network is made for aspiring loan brokers who want a done-for-you and automated business. Beginners and experienced loan brokers have equal opportunities here. The program is not a scam. Phil has been generating loan leads for over 2 decades, so he's probably good at what he does. And Kevin is a big investor with over $400 million net worth.
Kevin Harrington is dubbed as the “infomercial godfather”. He aired the first infomercial advertisement in 1985, launched over 500 products, and has over 24 company investments. Kevin is one of the OGs of ABC network’s Shark Tank. A reality show where budding entrepreneurs pitch their business innovations to investors, the “sharks”, who either partner with them or invest in their business. Kevin is quite a controversial figure. He faced a 120-page lawsuit for an alleged involvement with InventureX and Ideazon. Two crowdfunding companies that attract new business owners, using Kevin Harrington and O’Leary (the other Shark Tank Kevin) as their fictional executives. Harrington’s defense said he was only paid to do the videos for these companies and is not an active investor or a partner.
Loan Broker Network and the DFY Brokerage Business Model
Partners Phil and Kevin have expertise that works well together. Kevin is a loan shark while Phil is a lead gen expert. Loan Broker Network is a done-for-you business. This means you're provided with everything you need when setting up, and you get support from LBN's team. But, Loan Broker Network is not the perfect business opportunity that it promises. Kevin has a questionable reputation because of his lawsuits. There are also complaints from students online that are left unanswered, and they don't give a refund. The program costs $597 upfront, which is quite reasonable. But there's a "fast track" upsell that costs $3,000 to $5,000. It's not clear how exactly they fast-track your business success with this additional charge.
How can you make money as a loan broker? There are two ways: through upfront commission and from ongoing commission that lasts until the maturity of the loan. Loan brokers make from 0.5 to 2.5 of the principal amount. Federal law caps loan broker fees at 3%. Brokers can only receive commission from either the borrower or the lender (not from both).
Becoming a loan broker isn't easy. Some states may require a loan broker's license. For example, the California Financing Law requires brokers to get a license through the Nationwide Mortgage Licensing System (NMLS). According to the Department of Financial Protection and Innovation (DFPI), brokers who apply for a license should maintain a $25,000 net worth, obtain a $25,000 surety bond, and pass the criminal history check with no history of fraud.
There are a ton of responsibilities that come with loan brokerage. It includes evaluating prospective borrowers, assessing loan applications, and matching borrowers with the right lenders. In case the loan is denied, the broker finds financing alternatives and informing the client of the outcome of their loan application. Seems like a lot to handle for under 3% income potential. And that’s just for one client. Imagine doing these for tens and hundreds. If their loan is denied? Your effort is as good as nothing.
The global loan brokerage size is $260 billion this year, growing at a compound annual growth rate (CAGR) of 15.7% from 2022 to 2031 (10-year period). Loan Broker Network has a promising offer for anyone who wants to explore this billions-worth market. It can be worth it if your state doesn't require a license. But, if it does, you'll have to get one from NMLS. It will not cost more than $5,000 and covers the processing and application fees, criminal background check fees, and credit report fees. You may also be required to take 20 to 40 hours of classes as required by your state or from an NMLS-accredited provider.
Overall, Kevin Harrington's Loan Broker Network is not beginner-friendly. The business model is much more complex than what they're willing to divulge. Becoming a lead generator just like Phil Smith is a better alternative. It's easier to learn, has fewer responsibilities, and you don't need a license to start.