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.
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.)
