Broker Expert: Just 15,000 Firms Left by Year-end

Wholesale Access chief David Olson, who has made his living studying the loan brokerage sector, believes there will be just 15,000 firms left by yearend, a stunning 72% decline from the sector's peak back in 2005. "I know of brokers selling car insurance and doing loss mitigation work," said Mr. Olson in an interview. "A lot of them are looking for something to do." He said upcoming regulatory changes -- including yield spread premium constraints, and loan officer registry requirements -- are making it more difficult for these third-party independent salesmen to survive. He said some of the nation's top lenders including Bank of America, Chase, and Wells Fargo, show a decreasing interest in broker-related research. Still, he believes that in time the sector could revive to some degree. "They'll come back because it eventually will become too expensive for banks to keep loan officer-related employees on their payroll," he said, adding that brokers "are a form of outsourcing. It's always cheaper to outsource." Wholesale Access is based in Columbia, Md.