Don't count the mortgage brokerage sector out quite yet.
Brokers captured 11.4% of the origination market in the fourth quarter, the highest market share reading since the third quarter of 2010, according to exclusive survey figures compiled by National Mortgage News and the Quarterly Data Report.
NMN/QDR found that these third-party salesmen facilitated the production of $51.3 billion of home mortgages in 4Q compared to $29 billion in the prior quarter.
The improvement comes despite the fact that many megabanks such as Bank of America and JPMorgan Chase have exited the sector with others (Wells Fargo & Co.) cutting back. But although large banks are leery of brokers, smaller nonbanks appear to be entering the channel or at least expanding their presence, NMN found. For example, Cole Taylor Bank, Ann Arbor, Mich., increased wholesale production by 74% in 4Q.
“This appears to be a clear indication consumers are returning to the personalized service and competitive pricing offered by mortgage brokers,” said Marc Savitt, a past president of the National Association of Mortgage Brokers.
Savitt, who manages a small shop in West Virginia and also heads a broker/appraiser trade group, believes mortgage brokers are recapturing market share they lost after being made scapegoats for the housing crisis.
“Being the most highly regulated segment of the origination process, brokers give consumers a high comfort level,” he said. (Brokers and nonbank loan officers face state testing and licensing requirements that bank LOs avoid.)
Trailing the past six quarters brokers have posted market shares of 11.4%, 8.2%, 7.9%, 6.8%, 10.7%, and 11.8%, respectively.
The sector's market share peaked at almost 30% in 2007. (For a larger analysis see the upcoming weekly edition of NMN.)
