What We're Hearing

We continue to hear unconfirmed reports about selected firms starting up either a wholesale unit or a correspondent division. As we noted recently, PennyMac, which started out as a vulture fund, has formed a mortgage conduit and is toying with the idea of table funding. The firms that are looking into correspondent and wholesaling tend to be midsized lenders with growth in mind. These firms likely see a lack of competition out there in these TPO channels and feel that despite all the recent (and coming) regulation of mortgage brokers and bankers that there will be plenty of opportunities. Of course, all these new entrants will be concentrating on the same loan types: Fannie Mae, Freddie Mac and FHA. What the market truly needs is a jumbo wholesaler. But don't hold your breath...