Wholesale/Broker Channel Hits a New Low

The dollar amount of mortgages funded through loan brokers hit a new low in the second quarter in terms of market share — just 14.9% of all originations — according to new figures compiled by National Mortgage News. The newspaper found that wholesale lenders tabled funded just $87 billion in loans in the period out of a total origination pie of $583 billion. In the first quarter 2009 and fourth quarter 2008 brokers had a 15.5% and 15% share respectively. The results could indicate that wholesale/broker lending has stabilized at a low rate and is no longer falling off the cliff. Loan brokers' dominance of mortgage lending peaked in the fourth quarter of 2007 just shy of 30%. Many loan brokers see their business under attack by federal regulators who hold them responsible, in part, for the mortgage crisis because of the all the subprime loans they facilitated from 2002 to 2007. Loan brokers, in turn, blame wholesalers and Wall Street firms for creating subprime loan menus tailor made for certain securities and investors.