Brokers See a Small Gain in Market Share

Mortgage & Real Estate

Residential loan brokers increased their origination market share by more than a full point in the second quarter, a sign that the sector may be gaining some momentum.

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According to exclusive survey figures compiled by National Mortgage News and the Quarterly Data Report, these third-party salesmen accounted for 7.9% of all home mortgages originated in 2Q, compared to an all-time low of 6.8% in the first quarter.

The increase was accomplished with refinancings falling to 57% of production compared to 71% in 1Q.

Three years ago brokers accounted for roughly 20% of all U.S. originations, but amid the housing/mortgage recession, many firms stopped table funding loans over concerns about credit quality.

Although NMN/QDR found that brokers gained share, they did so in a declining origination market. All mortgage lenders (depositories and nonbanks alike) funded $291 billion of product in 2Q versus $353 billion in the first quarter.

Several megabanks continue to deemphasize wholesale lending with depositories such as Wells Fargo Co., suffering significantly production losses during the quarter.  Wells, for instance, table funded $2.9 billion in loans, a 50% decline from 2Q 2010.

Wells ranked second nationwide behind Provident Funding Associates, Burlingame, Calif., which originated $4.6 billion of product through brokers, a 9% increase, NMN/QDR found.

Moreover, according to interviews conducted by NMN, a handful of firms are looking to expand their wholesale operations. (For full analysis see the Monday weekly edition of NMN.)

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