Summary
Mortgage banking
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Extract
Wholesale giants.
The executives who run mortgage banking's 10 largest wholesale operations, share their ideas, insights, expectations, hopes and concerns about business past and future.
Wholesale mortgage banking, correspondent lending, third-party originations, purchased production - call it what you will - this form of mortgage banking has grown dramatically in recent years. It's gone from accounting for little more than 5 percent of all production activity a decade ago to encompassing as much as 70 percent of all originations in the past three years. Nowhere is this growth more evident than among the giant mortgage companies that operate national loan-acquisition programs. Scorecard As Figure 1 indicates, the nation's 10 largest wholesalers purchased $117.9 billion in 1994. Total purchased production for last year was $239.7 billion for the 86 wholesalers whose volumes are tracked annually by Wholesale Access, a research data base for wholesale mortgage banking. Aggregate origination activity last year totaled $742 billion, according to HUD gross mortgage flows data. The 10 largest companies collectively purchased $159.1 billion in 1993, and their volume declined by 26 percent in 1994 (see "Who's Who in Wholesale," Mortgage Banking, December 1994). By comparison, total originations declined 25.8 percent from 1993 to 1994. The message is that wholesale held its own. In fact, despite the shrinking market, three companies experienced increased activity: GE Capital Mortgage, Fleet Mortgage Group and Chase Manhattan Mortgage. The players Top-ranked Countrywide Funding Corporation, Pasadena, purchased $21.1 billion in 1994. Though $17.9 billion below 1993's total, it kept 1993's largest company in the top spot for wholesale lending. With $19.5 billion of purchased production, Prudential Home Mortgage Company, Inc., Clayton, Missouri, held the second spot. The third-largest producer was GE Capital Mortgage Corporation, Raleigh, at $12.1 billion. GE's volume grew from $7.7 billion in 1993. Norwest Mortgage, Inc., Des Moines, was the fourth-largest company with $11.5 billion of purchased production. Production at the company declined 13 percent in 1994 from the previous year. FIGURE 1 1994's Top 10 Wholesalers Purchased Production ($ in Billions) Percent 1993 1994 Change Countrywide Funding $39.0 $21.1 -46 Prudential Home Mortgage 36.0 19.5 -46 GE Capital Mortgage 7.7 12.1 +57 Norwest Mortgage (1) 13.3 11.5 -13 Fleet Mortgage Group 8.9 10.1 +13 North American Mortgage 11.4 9.8 -14 Chase Manhattan Mortgage (2) 6.5 9.7 +49 Chemical Residential Mortgage (3) 10.9 9.0 -17 BancBoston Mortgage 11.7 8.0 -33 GMAC/Residential Funding 13.7 7.1 -48 TOTAL $159.1 $117.9 -26 (1) Includes Independence One, which was acquired in June 1994. (2) Includes American Residential, which was acquired in August 1994. (3) Includes Margaretten Mortgage, which was acquired in May 1994. Source: Wholesale Access Ranked fifth in purchase activity was Fleet Mortgage Group, Inc., Columbia, South Carolina. Its volume was $10.1 billion, up from $8.9 billion in 1993, a 13 percent increase. With $9.8 billion of purchased production, North...See the full content of this document
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