Magazine article Mortgage Banking

Wholesale Mortgage Lending Online Is Growing

Magazine article Mortgage Banking

Wholesale Mortgage Lending Online Is Growing

Article excerpt

RETAIL MORTGAGE LENDING IN THE UNITED States may be a larger distribution channel than wholesale mortgage lending, but wholesale lending exceeds retail lending in terms of loan volume conducted online, according to a study conducted by Needham, Massachusetts-based TowerGroup.

The study, Wholesale Mortgage Lending: Online Lending Adoption, Lender Segments and Technology, noted that online wholesale lending grew from 15 percent of total mortgage loan origination in 2001 to 20.5 percent in 2004, while online retail lending grew from 3.5 percent to 7.3 percent during the same period.

The lending systems that support online wholesale mortgage are a recent and still-evolving information technology (IT) product category. They include Web-site hosting, loan product and price management, and third-party settlement services, according to study author Craig Focardi, research director of the Consumer Lending research service at TowerGroup.

"Wholesale lending systems have become mission-critical systems for virtually all wholesale lenders, regardless of size," Focardi wrote in the report. "TowerGroup expects online wholesale lending to continue growing, especially among midsized lenders, independent of lending cycles driven by interest rates. …

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