Mortgage Scene: Exploding the Myth of Broker Domination of Originations.(Brief Article)(Column)(Statistical Data Included)

The next time I hear some mortgage "expert" say that loan brokers control 60% to 70% of the residential market, I'm going to haul my ink barrel over to the National Association of Mortgage Brokers and start shooting.

Let's see if I can set the record straight: loan brokers DO NOT control 70% of the market or 60% for that matter. The number is closer to 30%.

Why am I so smart and how do I know this? I look at the numbers, production numbers, that is. According to the Quarterly Data Report, an affiliate of this newspaper, brokers account for 29.9% of the production market, not 60% to 70%.

The retail channel accounts for 39.7% of all industry production and the correspondent channel 30.4%. Add in the wholesale's 29.9% figure and that adds up to 100%.

Each quarter, the QDR's research team surveys the top 150 'A' paper lenders and top 75 subprime lenders to achieve a ranking of the top 100 in conventional and the top 50 in subprime. The survey asks that lenders breakdown production by the three channels: retail, wholesale and correspondent.

The top 100 account for 80%, more or less, of all loan production in the U.S. Wholesale lending entails the production of mortgages through loan brokers using "table funding." Correspondent lending entails the purchase of a loan (usually by a big fish like WaMu, Wells or Chase) after it has already been funded.

If the top 100 ...