Wholesale About to Bloom?

The headline sounds crazy. Loan brokers are on their backs, right? Well, not necessarily. If you've been reading the coverage in National Mortgage News and Origination News you know that wholesale (broker) lending as a percentage of the overall business has been rising – not by much but at least it's going in a positive direction (11% market share at last check.) But the nation's surviving brokers are organized and have at least two trade groups to do their bidding in Washington: The National Association of Independent Housing Professionals, the National Association of Mortgage Brokers. Earlier this week NAMB had an audience with Consumer Financial Protection Bureau chief Richard Cordray and we're told things went well, but the new regulator didn't exactly promise the group any major changes in the LO compensation rule, at least not yet. But wholesale will rise again for this one reason: retail lending – especially in weak origination years – costs too much for depositories to put up with it for very long. And that's a widely known fact. Wholesale works like this: you don't deliver, you don't get paid. One other thing: it appears all the 'bad actors' in the brokerage sector have left, probably for good. Licensing and testing is good for one thing at least.