Magazine article American Banker

Brokers' Share Hit 60% during the Refi Boom

Magazine article American Banker

Brokers' Share Hit 60% during the Refi Boom

Article excerpt

Mortgage brokers accounted for six out of every 10 home loans issued at the height of the refi boom, their trade group says.

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A newly released survey by the National Association of Mortgage Brokers shows how that industry became, in essence, a refinancing factory in 1993, churning out its greatest percentage of conventional loans in perhaps a dozen years. Normally, its market share is between 40% and 50%.

With mortgage volume now in a slump, though, the brokers have been hit hardest, with many of them slashing staffs sharply or simply closing up shop.

Thus, the survey demonstrates what most lenders had long suspected: that mortgage brokers take advantage of changes in the lending market better than any group of home-loan originators.

The survey also highlighted the growing importance of quality control and customer service, and anxiety over increased regulations.

As with others lenders, 1993 was a monumental year for mortgage brokers. Loan production soared as a result of low interest rates. And with their close proximity to borrowers, mortgage brokers cashed in on the craze to refinance.

The average mortgage brokerage outfit saw its business grow 30% in 1993, according to the survey.

Brokers increased their originations of every loan type in 1993. Conforming-loan originations jumped the most.

The 184 brokers in the survey group originated 42.3% more conforming loans in 1993 than the year before.

They also originated 18. …

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