Who's who in wholesale 1996.

Author:Lamalfa, Tom
Position:Mortgage banking survey - Cover Story

Some very familiar names made the list of top wholesalers in 1996. These aces of wholesale thrived last year, helping to produce a 51 percent increase in purchased production over the previous year.

For the past nine years, wholesale access, a boutique mortgage research and consulting company, has annually collected, examined and shared information about wholesale lending activity with Mortgage Banking's readers. All production volume data is obtained from the individual firms.

This year, 51 lenders completed production volume surveys. Figure 1 alphabetically lists them along with their total wholesale production volumes for the past two years. The 1995 amounts represent the actual dollar volume of loans produced for the year. The 1996 figures were calculated by annualizing the production totals for the first six months.

We define "wholesale" broadly: whole loans that are purchased or acquired from other originators. For us the term includes loans originated in both the table-funded and closed-loan channels. Originators without warehouse lines, predominately brokers, depend on table funding. Under this type of transaction, the wholesale lender funds the loan. Closed-loan participants, frequently referred to as correspondents, fund their originations by drawing down funds from warehouse credit lines they establish and maintain with warehouse lenders.

Wholesale business is indirect production because the wholesaler doesn't deal directly with the borrower. Retail is considered direct production because the lender's employee deals face to face with the borrower.

Table-funded loans can close in either the wholesaler's name or the originator's. Many wholesalers allow their approved brokers to decide which method they prefer to use. Closed-loan transactions include assignments of trade (AOTs), co-issues, concurrent transfers and flow, the term used to describe the sale of individual loans. All these types of executions are included in the tables' volume numbers. Table funding is conducted only on a flow basis, loan by loan. (For a detailed review of the various secondary market transactions, see "Wholesale Commitments" in the September 1992 issue of Mortgage Banking.) Table-funded and closed loans are delivered against the full range of available commitments, from best effort to mandatories to forwards.

The listing of firms includes most of the major wholesalers nationwide. Since 1989 our company has followed wholesalers along with their programs, products, policies, procedures and people, formally. We have been monitoring this production sector on a less formal basis since the early 1980s.

Companies that are exclusively or quasi-retail aren't included in the roster - Home Savings or American Mortgage, for instance. The firms listed in the tables specialize in wholesale production but also may be large retailers. They are chiefly the large regional and the national firms. Only a handful of major players - Bank of America, Citicorp, Mellon Mortgage, National City Mortgage and World Savings - are missing from the list. Only A-market wholesalers are included. Subprime, or B-D market, wholesale lenders are not listed. Wholesale Access tracks these firms and their programs separately in The B-D Wholesale Directory.

The footnotes at the bottom of Figure 1 indicate recent developments at individual firms. Corporate name changes, acquisitions, inclusions and subsidiaries' parentage are included among the citations.

Figure 2 ranks the wholesalers surveyed by the size of their 1996 production. The volume of production for 1995 is also provided along with the percent of change in year-over-year volume. Overall wholesale production totalled $151.8 billion in 1995 for all companies as compared with $227.5 billion in 1996. This represents a 51 percent increase in wholesale activity compared with a 24 percent increase in aggregate originations (from $639 billion to $792 billion).

A major trend is the continued decline in the number of active wholesalers. Last year's article, creatively tagged "Who's Who in Wholesale 1995," listed 64 firms, 13 more than in 1996. The total lenders covered in 1996 were 35 fewer than in 1994. This market development and others is discussed in greater detail later in the article.

1996's gainers and losers

Let's begin by reviewing the wholesalers showing large increases or decreases in their production. Preeminent among the gainers were Waterfield Financial Corp. (Fort Wayne, Indiana), Citizens Mortgage Corp. (Atlanta), Harbourton Mortgage Co. LP. (McLean, Virginia), The Mortgage Authority, Inc. (West Bloomfield, Michigan), Crestar Mortgage Corp. (Richmond, Virginia), Centerbank Mortgage Co. (Waterbury, Connecticut), Sunbelt National Mortgage (Dallas), HomeSide Lending, Inc. (Jacksonville, Florida), Deposit Guaranty Mortgage Co. (Jackson, Mississippi) and Marine Midland Mortgage Corp. (Buffalo, New York). All 10 firms at least doubled their volumes from the prior year.

FIGURE 1 Wholesale Volume for 1995 and 1996 Ranked Alphabetically (in $ millions) Firm 1995 1996(*) AccuBanc Mtge. Corp. 3,022 4,310 Alliance Bancorp 223 166 Banc One Mtge. 638 1,062 Barnett Mtge.(1) 3,000 2,400 Centerbank Mtge. Co.(2) 1,170 2,412 Chase Manhattan Mtge. Corp.(3) 14,500 18,200 Citizens Mtge. Corp.(4) 240 922 Colonial Mtge. Co. 1,056 760 Comerica Mtge. Corp. 381 64 Commerce Security Bank 800 800 Commercial Federal Mtge. Corp. 500 600 Commonwealth United Mtge. 1,624 1,856 Corinthian Mtge. Corp. 835 1,300 Countrywide Home Loans, Inc. 24,930 32,642 Crestar Mtge. Corp.(5) 1,344 3,000 Crossland Mtge. Corp. 1,900 2,400 Deposit Guaranty Mtge. Co. 400 800 First Federal S&LA of Rochester(6) 1,778 2,236 First Franklin Financial 1,800 1,800 FlagStar Bank(7) 3,930 7,174 Fleet Mtge. Corp 10,683 20,206 GE Capital Mtge. Services, Inc. 4,900 9,000 GN Mtge. Corp. 1,500 2,200 GreenPoint Mtge. Corp.(8) 300 200 Harbourton Mtge. Co., L.P. 1,100 3,000 Headlands Mtge. Co. 1,400 2,200 HomeSide Lending, Inc.(9) 7,968 16,044 Inland Mtge. 1,514 2,586 InterFirst(10) 5,338 7,558 Knutson Mtge. Corp. Wholesale Div. 608 1,090 LaSalle Home Mtge. Corp.(11) 1,453 1,392 Marine Midland Mtge. Corp. 400 800 NationsBanc Mtge. Corp. 7,231 8,158 North American Mtge. Co. 4,184 5,840 Norwest Mtge., Inc.(12) 16,880 26,994 Old Kent Mortgage Co. 1,462 1,534 PHH Mtge. Services 2,667 4,242 PNC Mtge. Corp. of America 1,200 2,200 Principal Residential Mtge., Inc. 2,700 5,000 ReliaStar Mtge. Co. 844 1,184 Resource Bancshares Mtge. Group, Inc. 6,000 8,600 RSL Mtge.(13) 590 730 Sierra Western Mtge.(14) 1,100 632 Sunbelt National Mtge.(15) 1,700 3,420 Temple-Inland Mtge. Corp. 681 1,094 The Homestead Mtge. Co. 199 298 The Mortgage Authority, Inc.(16) 1,353 3,100 TransFinancial Mtge. Co.(17) 369 660 Washtenaw Mtge. Corp. 603 640 Waterfield Financial Corp.(18) 170 724 Weyerhaeuser Mtge...

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