Wholesale Production Down Almost 50% in 1Q

The table funding of home mortgages through loan brokers fell almost 50% in the first quarter, according to preliminary survey figures compiled by National Mortgage News and the Quarterly Data Report. Among lenders reporting so far, PHH Mortgage, Mt. Laurel, N.J., had the biggest year-over-year decline with 57%. NMN is still collecting surveys and the final results could change. However, it's no secret that loan brokers are under extreme pressure with the outlook for their business cloudy. Some elected officials and consumer activists would like to see brokers legislated out of existence. (One amendment to the financial regulatory reform bill would place a cap on yield spread premiums, a key source of income for brokers.) FHA commissioner David Stevens, though, sees a need for loan brokers and wants to see this industry sub-sector survive. Meanwhile, broker-funded originations (as a percentage of all loans produced) have been falling steadily since mid-2007. In the third quarter, table funding accounted for just 13% of originations, the lowest figure ever recorded by NMN/QDR. In 4Q, the broker market share rose slightly to 13.4%.