Mortgage Brokers Getting All Time Low Of Origination Market Share


National Mortgage News reported last week in a survey recently completed, mortgage brokers are now only receiving 18.9% of the orignation Q3 market place. This paltry percentage of originations is an all-time low figure. Mortgage broker market share reached almost 80% just a few short years ago.

Mortgage Broker Demise Premature

The report hypothesized the reason for the decline of Q3 mortgage broker market share was the closing of many of the major bank wholesale operations as well as more than a handful of thrifts, like IndyMac. The report went on to speculate bank retail was now the “dominate” channel for residential mortgages.

This is all true, but don’t count out the mortgage brokers just yet. There are reasons behind the numbers and as usual, they can be misinterpreted quite easily.

The real reason the numbers are skewed in favor of banks currently is because the only lending being done right now is FHA lending. Prime conforming loans, those loans mortgage brokers excel in delivering is completely dead right now while all the “subprime turned FHA” is as hot as pistol.

So if you look at it that way, it’s not that the public has turned it’s collective back on the mortgage brokers…although I’m sure the banking industry would love to promote that idea…it’s that the “smart money” is taking a breather. Savvy borrowers who have choices are choosing not to borrow mortgage money right now…and that’s no reflection on mortgage brokers personally or professionally.

Combine that with the only active part of the mortgage origination market being those folks who don’t have choices…the resetting ARM borrower with bruised credit. This borrower HAS to refinance or face losing his home when the ARM resets.

Where can he turn?

Well HUD, FHA, and everyone else who should know better, turned FHA into a subprime dumping ground months ago. So FHA will refinance that subprime loan with few questions asked.

Who can do FHA loans?

Banks can (virtually all are FHA approved)…but not most mortgage brokers…that’s who.

So it’s really no surprise that the current market share is shifting in favor of the banks. It is only a temporary shift in market demand that will hopefully return to normal once the prime credit customers (the lion’s share of the market over the long term) come back into the market.

The Market Needs Brokers

If banks want to boast about “pushing out” the mortgage brokers, it’s a false argument but I’ll let them have it. Consumers rule in this market and mortgage brokers have done better for the consumers than banks over time.

I just hope this non-stop legislative battle to eradicate mortgage brokers doesn’t take it’s toll before prime mortgage demand rebounds. I can’t imagine leaving the average consumer in the hands of five or six mega-banks for mortgage money.

If that happens mortgage rates and fees will rocket out of control needlessly. Mortgage brokers are a “check-and-balance” against mega-bank excesses. If they die, the whole idea of competition keeping down costs gets tossed right out the window.

To that end, I proclaim…”Long live the mortgage broker side of the industry”.

What do you think?

About Author

Rob K. Blake, a 15 year veteran of the mortgage industry, is a renowned public speaker, author, and former radio talk show host. His blog,, is dedicated to educating mortgage consumers, mortgage providers, and investors about both mortgage and housing markets.


  1. Ciao and greetings from Italy, I am Mario a Realtor from Rome, grazie for posting such interesting information, for me is appropriate as now the Real Estate and Mortgages is the same similar situation in Europe and indeed very relevent to the Real Estate at this moment Market here in Italy

  2. This was a very interesting article. I’ve been a wholesale mortgage senior account executive in southern california for 15 years. I sell wholesale rate mortgage loans to brokers. Their will always be a need for mortgage brokers regardless how dim the market become. Due to the current status of the economy, this has been a reality check for many borrowers in america. Borrowers are now more savvy, inquisitive, and determined to get the best deal. Many borrowers are becoming aware of the specific duties of a mortgage broker. Brokers have lower overhead expenses than most direct lenders (banks) and relationships with hundreds of private lenders with numerous of loan programs for a borrower to fit. This is where the broker come to surface. Direct lenders are limited to program options and have very strict underwriting guidelines for loan approval, due to the fear of a bad decision. Their are hundreds of wholesale private lenders and private investors with low overhead and seeking broker assistance to capitalize on the average to below average credit market. What the broker must do is inform the public, advertise their specific services in comparison to a direct lender. Their are tons of borrowers prepared to listen, learn and proceed but do not know the source to obtain this valuable information. My personal recommendation to all brokers, please subscribe to, it’s a free subscription. This is a national publication of wholesale commercial and residential lenders nationwide and abroad advertising non-traditional loan programs not available with a direct lender (bank). It’s a hardcopy 11×17 colorful magazine that will arrive to you via mail. This publication is targeted to the mortgage broker. You will be amazed as to the quantity of wholesale lenders and private investors available today with millions to loan. Many of these lenders may be unfamiliar, but that’s okay, this is what differentiates the broker from the direct lender. Hope this helps!

Leave A Reply

Pair a profile with your post!

Create a Free Account


Log In Here