Although residential originations remain strong, the loan brokerage sector has been steadily cutting jobs since the spring, according to the U.S. Bureau of Labor Statistics. Industry players question the numbers.
Purpose and production channel matter in loan credit characteristics but the biggest difference maker is whether the mortgage has a government guarantee.
TD Bank was the top volume gainer among residential lenders in the second quarter but barely made the top 50 volume ranking in the first half of the year. Moral of story: the bigger you are, the harder it is to post huge percentage gains.
Mortgage brokers accounted for a record 14.8% of single-family business in the agency MBS market during the second quarter. Credit trends suggest sellers may have focused on the low-hanging fruit as production volume ramped up significantly.
Low revenues, high expenses and trend lines moving in the wrong direction are causing large bank-owned mortgage companies to underperform compared to independent mortgage banks in the retail space, according to a report by Stratmor Group.
Broker originations accounted for a growing share of first-quarter production in all three major mortgage products. United Wholesale accounted for the channel's growth.
A bird's-eye view suggests retail originations had higher credit scores and lower DTI ratios than loans produced by correspondents and brokers. But third-party originators generated lower-risk loans at the agency level.
So far, five major banks — Wells Fargo, JPMorgan Chase, Bank of America, U.S. Bancorp and Citigroup — have reported first-quarter results, including limited details about home lending. The bottom line: mortgage lending suffered at most, but not all.