Residential originations may have fallen by more than 10% last year, but don’t tell that to community banks that rely on Mortgage Solutions, a subsidiary of the American Bankers Association.
The 1,100 banks that use Mortgage Solutions increased their loan sales in 2011 by 24%, compared to the previous year.
“Over the past few years, we have seen a lot of mortgage business moving back to the community banks,” said Mortgage Solutions senior vice president Deborah Whiteside.
She noted that mortgage banking and brokerage shops have disappeared or reduced their presence in many markets. “Due to refinancings, volumes have been very high and our banks have been taking advantage of that,” Whiteside told National Mortgage News.
Mortgage Solutions partners with major investors to give ABA members a menu of channels to sell and broker loans. (The ABA subsidiary has a partnership with U.S. Bank Home Mortgage for members that like to broker loans.)
In terms of correspondent lending, Wells Fargo, Farmer Mac, Fannie Mae and Freddie Mac will purchase loans from members that want to close loans in their own name. “These programs help them compete from a price prospective,” Whiteside said.
The ABA estimates that Mortgage Solutions programs saved active banks $26.7 million in 2011, which averages out to $43,000 per institution.
