Wells Fargo Nears 40% Market Share in Correspondent Purchases

Although Wells Fargo is in the process of exiting the wholesale channel, it continues to increase market share in correspondent lending where it now accounts for just over 37% of all loans purchased in the secondary (outside of Fannie Mae and Freddie Mac), according to new figures compiled by National Mortgage News and the Quarterly Data Report.

In 2Q, Wells’ share in that channel came to almost 37.5%, a new record both the company and the industry. A year ago the bank’s share in that channel was a more modest 21.8%.

Its next closest competitor in that channel is Chase, the mortgage unit of JPMorgan Chase, which bought $17.7 billion in loans to Wells’ $61 billion. (Chase had a 10.85% share.)

Since Wells threw in the towel on wholesale this summer, rumors have surfaced that the megabank might also quit or curtail its correspondent purchases, but so far the bank has shot down such talk.

NMN found that the nation’s top 30 correspondent buyers purchased $126 billion of loans in 2Q, a 76% gain from the same period a year earlier.

Small- to medium-sized lenders continue to complain about lousy “servicing-released” premiums paid by secondary buyers (such as Wells), which has spurred some shops to start servicing their own loans. However, new net worth requirements from Fannie Mae capping loan purchases from new clients could deter such plans.