PHH Mortgage to Expand Wholesale Presence

PHH Mortgage, a retail-heavy lender, plans to increase its presence in the broker/wholesale channel, according to Jerome Selitto, president of its parent company. In an interview with American Banker, Mr. Selitto said the broker market is an "opportunity that was too large for us to ignore." He noted that, "Looking at price competitiveness and the types of products that were in the channel, we did not feel historically that was our sweet spot," he said. "But that has changed now. A lot of players are out of the market completely. It's not as price competitive as it once was, and the mix of products is different." According to figures compiled by National Mortgage News and the Quarterly Data Report, just 4% of PHH Mortgage's production is sourced through loan brokers. Roughly 79% of its fourth quarter fundings were retail related with the balance coming through correspondent originators. Industry-wide, wholesale lending through brokers accounts for just 13% of originations, according to NMN/QDR, down from a peak of about 30% three years ago. While some firms have exited the channel outright or severely cut their presence in it, others are entering the sector because they only have to compensate the broker if the mortgage actually closes, making it a more cost effective way of originating loans.