A growing share of loans originated by banks are coming through their wholesale/correspondent channel, according to the American Bankers Association's annual real estate lending survey.
While the wholesale/correspondent channel is responsible for a marked increase in production – up from 11.3% of all originations in 2009 to 13.6% last year – the retail channel has faltered, the survey found.
Although retail still originates the lions' share of loans made by the 178 institutions which took part in the latest study, its share dipped from 81.3% in 2009 to 77.6% in 2010.
Loans originated online also fell slightly, from 6.1% to 5.3%.
Of the 178 banks taking part in the survey, which was released at ABA's annual Real Estate Lending Conference in Baltimore, about half were commercial banks and half were savings institutions. About two-thirds were stock-owned, while the rest were either mutual banks or mutual holding companies.
The product mix at the respondent institutions also shifted somewhat last year, perhaps as a portent of things to come once new lending rules take effect. There was a marked drop off in 30-year fixed-rate loans: 57.8% in 2009 vs. 48% last year. Meanwhile, production of 15-year and other fixed loans increased – from 17.2% to 23% for 15-year loans and from 8.2% to 10.1% for "other" fixed loans.
However, adjustable rate lending was down across-the-board, except for 5/1 ARMs, which increased from 4.8% of the product mixed to 6.9%.
The mix among conforming, non-conforming, jumbo and FHA loans remained roughly the same last year, with conforming loans accounting for nearly 75% of every one-to-four family mortgages originated by the participating lenders.
Surprisingly, though, balloon payments were much more prevalent in 2010 than in past years. But such other features as pre-payment penalties, low documentation and piggyback were not as widespread. At the same time, even though these lenders say they have tightened their underwriting standards, they also reported making a slightly larger percentage of high loan-to-value mortgages.
Fewer banks retained the loans they made in their portfolios, with conduits and wholesalers taking a larger share of their production (nearly one out of every four) than ever before. Last year's largest aggregator, Wells Fargo, does not make this year's list of the Top Five Outlets, which is now headed by Bank of America, last year's No. 2 largest aggregator.
JPMorgan Chase is second, followed by U.S. Bancorp, BB&T and Ally Financial/GMAC. Both U.S. Bancorp and BB&T are newcomers to the list.
