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Who's who in wholesale 2005: countrywide once again emerged as the top firm out of this annual ranking of wholesale and correspondent lenders.

Last year saw mortgage banking activity hold steady, no volatility up or down. Primary market origination activity froze at $2.9 trillion in 2005, per the Mortgage Bankers Association (MBA)--virtually the same as the year before. Overall, it was the second-best $2.8 trillion. [??] Though mortgage volume held pat, there were many other ups and downs: Housing market statistics were up; margins were down; credit scores and down payments fell; and speculation, risk, loan-to-value (LTV) ratios and the number of loan products were all up. [??] In my view, although in no specific order, the major industry developments of 2005 were: 1) the continued expansion of nonprime markets; 2) further margin pressure due to excess capacity; 3) the travails of Fannie Mae in its ongoing accounting (and now fraud) scandal; 4) record housing starts and home sales; 5) the continued absence of interest-rate volatility; 6) the change in management at four of the nation's six largest mortgage lenders; and 7) continued industry consolidation. [??] Over the 18 years that I have been writing this annual serial article, the data have been obtained through voluntary surrender by the surveyed firms. Short of a handful of sub-prime lenders and a few others, including Ohio Savings Bank (Cleveland), Golden West Financial Corporation (Oakland, California), Mortgage IT Inc. (New York) and GMAC Mortgage Group Inc. (Horsham, Pennsylvania)--several of which do not participate consistently--this survey captures all of the largest prime and alternative-A wholesale lenders.

Firms that are strictly retail, such as CTX Mortgage Co. LLC (Dallas) and Regions Mortgage Inc. (Cordova, Tennessee), aren't included in the survey. As a result, several large lenders that might appear on a roster of top-10 retailers aren't included in the data.

Although this survey in the past has focused exclusively on prime wholesalers, more and more nonprime volume is seeping into the numbers. That is because more and more originations are nonprime.

Alt-A production is defined in different ways by different people. Wholesale Access defines it as reduced-documentation programs. Others define it by credit scores, and still others use both documentation and credit. When defined in its broadest terms--documentation and credit--the combination exceeds 50 percent of origination activity. So by one of our firm's definitions, more than 50 percent of total originations were non-prime in 2005--half of that 50 percent (the nonprime) being conforming (agency), 20 percent subprime and the balance alt-A. In any event, all market observers agreed that the nonprime world has grown dramatically since 2003.

One result of this is that the data contained herein are a hodgepodge of what is being submitted for the survey. For example, Countrywide Financial Corporation (Calabasas, California) includes all of its production--prime, alt-A, subprime and home-equity--in the numbers it provides for this article. However, this is not always the case (although it is ultimately where we hope to get in the years ahead).

Miamisburg, Ohio-based National City Mortgage Co.'s production numbers, on the other hand, do not include the volume of its sister company (First Franklin Financial Corporation, San Jose, California)--which amounted to a not-inconsequential $29 billion in 2005--or the volume of National City Home Equity (Cleveland), another separate subsidiary. Still, an analysis of these data offers a good overview of the wholesale business and industry trends.

For a second straight year, volume data were solicited from several of the large subprime wholesale lenders, such as Argent Mortgage Co. LLC (Irvine, California), New Century Mortgage Corporation (Irvine, California), Impac Mortgage Holdings Inc. (Newport Beach, California) and Option One Mortgage Corporation (Irvine, California). All declined to participate and provide data to be included in this article.

Gone from 2004's roster are Guaranty Residential Lending Inc. (Austin, Texas) and PHH Mortgage Services (Laurel, New Jersey). Also, this year GMAC-RFC (Bloomington, Minnesota) appears as Homecomings Financial Network Inc. (Petaluma, California).

New to this year's list are American Mortgage Network (AmNet) (San Diego), Indymac Bank (Pasadena, California), LoanCity (San Jose, California) and Fifth Third Bancorp (Cincinnati). All but the latter company specialize in the nonprime market.

There was modest merger-and-acquisition (M & A) activity in the mortgage arena in 2005--for the fourth consecutive year. In 2005, Wachovia Securities LLC (Richmond, Virginia) acquired AmNet and American Home Mortgage (Melville, New York) purchased assets from Waterfield Financial Corporation/Union Federal (Fort Wayne, Indiana). American Home's broker division operates as American Brokers Conduit (Melville, New York) and appears in the wholesale channels under that name.

Figure 1 is an alphabetical roster of the surveyed lenders and their wholesale production volumes in 2004 and 2005. Wholesale is defined as indirect production, because it comes in through outsourcing to non-employees of the lender, via mortgage brokers (table funding) or correspondents (closed-loan purchases). Retail--the third and oldest production channel--is defined as originations written exclusively by employees of the lender, mainly loan officers and telemarketers.

Given no change in market size year-over-year and average existing-home price appreciation of 13 percent last year, the number of mortgage transactions declined. This reduction in units is what further heightened competition (demand) for a declining supply of mortgage loans.

Figure 2 ranks firms by 2005 volume and shows the change in their production year-over-year. Total wholesale volume for the 28 firms rose 19 percent last year. The increase was only partially due to the inclusion of several new firms that weren't included last year. In 2004 there were 26 firms surveyed, versus 28 in 2005.

2005 versus 2004

Following tradition, let's look first at the wholesalers that showed the largest year-over-year advances. The seven fastest-growing firms were American Brokers Conduit, up 111 percent; Taylor, Bean & Whitaker Mortgage Corporation (Ocala, Florida), up 70 percent; First Magnus Financial Corporation (Tucson, Arizona), up 67 percent; AmNet and Indy-Mac, both up 66 percent; SunTrust Mortgage (Richmond, Virginia), up 58 percent; and EverBank (Jacksonville, Florida), up 52 percent.

The five firms that grew their volume by 20 percent to 50 percent included Wells Fargo Home Mortgage Inc. (Des Moines, Iowa), up 46 percent; U.S. Bank Home Mortgage (Bloomington, Minnesota), up 45 percent; Countrywide Financial Corporation (Simi Valley, California), up 37 percent; Fifth Third Bancorp, up 36 percent; and Homecomings Financial Network, up 24 percent.

Six firms grew wholesale production by less than 20 percent last year. They included First Horizon Home Loan Corporation (Irving, Texas), up 19 percent; Aurora Loan Services Inc. (Littleton, Colorado), up 13 percent; Washington Mutual (Seattle) and Green Point Mortgage Funding (Novato, California), both up 6 percent; Branch Banking & Trust Co. (BB & T) (Wilson, North Carolina), up 4 percent; and ABN AMRO Mortgage Group Inc. (Ann Arbor, Michigan), up 1 percent.

Because total origination activity was unchanged in 2005, any firm that grew volume last year outperformed the market.

Nine of the firms in the survey saw their wholesale production volumes decline last year. Ranked by size of the drop, from largest to smallest, were: HSBC Mortgage Corporation (Buffalo, New York), off 57 percent; National City, down 21 percent; Flagstar Bank (Troy, Michigan) and LoanCity, both down 20 percent; Wachovia Mortgage Corporation (Charlotte, North Carolina), down 17 percent; Bank of America (Charlotte, North Carolina), down 12 percent; Chase Home Finance (Edison, New Jersey), down 10 percent; Waterfield Financial Corporation/Union Federal, off 7 percent; and CitiMortgage Inc. (O'Fallon, Missouri), off 2 percent.

Of the 10 fastest growers last year, only three--Countrywide, Wells Fargo and Indymac Bank--were among the roster's 10 largest wholesalers. This compares with the six firms that were among the fastest growers that ranked between 10th and 20th largest. Included here were SunTrust; American Brokers Conduit; Taylor, Bean & Whitaker; First Magnus; AmNet; and U.S. Bank.

By comparison, only two of the eight smallest firms on our list were among the 10 fastest-growing wholesalers last year--EverBank and Fifth Third. However, both are still quite small, originating less than $300 million per month.

Meanwhile, three of the 10 largest wholesalers recorded year-over-year declines in 2005--Chase, CitiMortgage and Bank of America. This compares with two firms in the next tier down (the 10th to 20th largest) that experienced declines from 2004--National City and Flagstar. Among those ranked 21st to 28th, four firms recorded declines last year--HSBC, LoanCity, Wachovia and Waterfield Financial Corporation/Union Federal.

Thus, it is among the smaller wholesalers on the listing where the greatest number of no-growth firms is concentrated. Nonetheless, 13 of the 28 firms included grew as fast or faster than the 19 percent average increase for the group as a whole.

Twenty-one firms on the rankings produced $10 billion or more of wholesale volume in 2005, while 15 exceeded $20 billion, six exceeded $50 billion, three exceeded $100 billion and one came in just dollars short of $337 billion. To be included among the big 10, more than $26 billion in wholesale needed to be produced last year.

The king of the hill was Countrywide, which produced $336.5 billion in wholesale volume in 2005. As in 2004, Countrywide led the scoring, this year by $153 billion more than the second-best performer. Wells Fargo, which originated $183.5 billion in 2005, recaptured its runner-up spot. Wells Fargo's volume rose by $58 billion from its 2004 level. Occupying the third spot was Washington Mutual, which produced $145.6 billion. In fourth place for a fourth consecutive year was Chase, which originated $64.5 billion. Again rounding out the top five was CitiMortgage, at $58.5 billion.

The sixth-largest wholesaler last year was Aurora Loan Services, with $51.5 billion. Retaining the seventh through 11th positions were GreenPoint at $40.9 billion, ABN AMRO and Indymac at $40.6 billion, Bank of America at $26.5 billion and National City at $26 billion. GreenPoint, Indymac and ABN AMRO ended the year in a near-dead heat, so it should be interesting to watch their performances this year.

The only new firm in one of these spots was Bank of America, which replaced Flagstar. In 2004, Bank of America and Flagstar were within $200 million of each other.

In the 12th through 16th positions were SunTrust, American Brokers Conduit, Flagstar, Homecomings and Taylor, Bean & Whitaker. While SunTrust and Homecomings were ranked in this same group one year earlier, two of the other three were newcomers--American Brokers Conduit and Taylor, Bean & Whitaker, which produced $24.9 and $19.2 billion, respectively. A firm could have produced as much as $19 billion and still not have broken into the top 15 in 2005.

In the 17th spot was First Horizon, at $18.3 billion. About $2 billion behind was First Magnus, ranked 18th, at $16.5 billion. The next-largest was AmNet, producing $14.9 billion. U.S. Bank and HSBC rounded out the top 21, originating $14.4 billion and $10.3 billion, respectively. In 2005, First Horizon moved down one position, First Magnus rose one, U.S. Bank slipped one and HSBC dropped seven positions. Overall, there was only minor position shuffling from the prior year.

Rounding out the top 28 spots were Irwin Mortgage Corporation (Fishers, Indiana) at $9.5 billion, LoanCity at $6.5 billion, Wachovia at $4.4 billion, Waterfield Financial Corporation/Union Federal at $3.9 billion, EverBank at $3.2 billion, BB & T at $2.6 billion and Fifth Third at $1.9 billion. Five of the seven were within two positions of where they stood a year earlier.

Figure 3 splits wholesale activity by channel, either table-funded/broker or closed-loan/correspondent. Of the $1.24 trillion of total wholesale production for the surveyed firms, 51 percent was broker business and 49 percent was correspondent production. This is the fourth straight year in which table-funded volume exceeded closed-loan volume, but by the narrowest margin ever.

Note that activity is much more diffused in the broker channel, where all 28 surveyed firms participate. Six firms don't even offer a correspondent program and another seven produced less than $3 billion through the channel in 2005. Indeed, only nine firms bought more than $10 billion of closed loans, while 19 firms produced $10 billion or more through table funding.

One firm--Countrywide--again showed its dominance over both the correspondent and broker channels. In both, the company did nearly twice as much volume as the next-largest firm in 2005.

The top 10

The top-10 wholesalers are included and ranked in Figure 3. What follows is a brief overview of their purchased production, along with their rankings for servicing and in subprime lending.

At $336.5 billion, Countrywide was the largest wholesaler in our 2005 ranking by nearly $153 billion. It retained its first-place status for a third consecutive year. Table funding accounted for about 30 percent of its wholesale production. It is the nation's largest servicer and third-largest subprime lender, per National Mortgage News' (NMN's) Dec. 31, 2005, ranking.

Wells Fargo, with about $183 billion of production, was the second-largest wholesaler--its first year in that position since 2002. About 28 percent of its purchase business came through the broker door, compared with 72 percent from the correspondent channel. Wells Fargo is the nation's second-largest servicer, per the NMN listing.

Washington Mutual, at $145.6 billion, was the third-biggest wholesale producer last year. About half (46 percent) of its third-party production came through correspondent lenders. According to NMN, Washington Mutual was the third-largest servicer and the seventh-largest sub-prime lender.

Chase ranked as the fourth-largest wholesaler in 2005 with $64.5 billion of production, its fourth year in that spot. Brokers accounted for 78 percent of its wholesale production. Chase continued its push back from its traditionally strong correspondent program. Per NMN, Chase was the fourth-largest servicer and 19th-largest subprime lender last year.

At $58.5 billion, CitiMortgage was ranked fifth-largest wholesale producer. It held that same position in 2004. About 77 percent of its purchased volume comes from the correspondent channel. The company ranked as the nation's fifth-largest servicer and 12th-largest subprime lender, per NMN.

Aurora, at $51.5 billion, was the sixth-largest wholesaler in 2005. About 76 percent of its business came from the correspondent channel. The company focuses on the alt-A market, where it was ranked the nation's largest alt-A lender in fourth-quarter 2005, according to NMN. It was not ranked among the top servicers or subprime lenders.

GreenPoint ranked seventh for the second straight year, with volume of $40.9 billion. Approximately 90 percent of its production came from brokers. The company is best known for its reduced-doc programs. It does not do subprime lending or rank among the biggest servicers.

Earlier this year, GreenPoint's parent, Melville, New York-based North Fork Bancorporation Inc., was acquired by McLean, Virginia-based Capital One Financial Corporation, the credit-card company.

ABN AMRO and Indymac were tied for the title of eighth-largest wholesaler, each with $40.6 billion of production. Broker accounted for 72 percent of ABN AMRO's wholesale production, ranking it the sixth-largest table funder. ABN AMRO is the nation's eighth-largest servicer, per NMN, but does no subprime lending.

Indymac also originated $40.6 billion of third-party business last year. Almost 70 percent of its wholesale business came from mortgage brokers. The company, which is not a top-ranked servicer or subprime lender, specializes in alt-A originations.

Bank of America was ranked ninth-largest wholesale producer at $26.5 billion. All of its purchased production came from table-funding mortgage brokers. Last year it set up an alt-A conduit and restarted a correspondent program. Bank of America was the sixth-largest servicer, per NMN. It does not do subprime lending.

National City, producing $26 billion, was the 10th-largest wholesaler in 2005--one position below where it stood a year earlier. Slightly more than three-quarters of its activity involved brokers. It was the nation's ninth-largest servicer last year, according to NMN. National City's sister company, First Franklin, was the ninth-largest subprime lender.

Top table funders

Figure 4 ranks 2005's top-10 table funders. Countrywide led the pack at $103.3 billion, $17 billion above its year-earlier rank and $4 billion above its prior record high in 2003. The company has held the top spot in five of the past six years. Ranked second was Washington Mutual, with $79.2 billion of broker production, up 8 percent from the prior year. Wells Fargo was third-biggest table funder at $51.8 billion. Wells Fargo pushed Chase out of that position this year.

Chase Home Finance was ranked fourth in 2005 with $50.4 billion, up 7 percent from its year-earlier production level. GreenPoint ranked fifth largest at $36.8 billion, $3.2 billion ahead of the prior year. All of the firms in the big-five advanced year-over-year.

Ranked sixth in broker originations was ABN AMRO at $28.8 billion. It also ranked sixth in 2004. Indymac was seventh-largest, with $28.1 billion. Ranked eighth in table-funded business for 2005 was Bank of America at $26.5 billion, down one spot from the previous year.

American Brokers Conduit ranked ninth at $24.3 billion--seven spots above 2004 and up $12.5 billion, or 106 percent, from that year's volume. Holding the 10th spot was National City, with $20.4 billion, $7 billion below its 2004 production volume. There were two new entrants to the list of the top-10 broker wholesalers--Indymac and American Brokers Conduit. They replaced CitiMortgage and Flagstar.

In the aggregate, table-funded business for the top-10 totaled $449.6 billion in 2005, an 11 percent increase from 2004's level. ABN AMRO, National City and Bank of America lost share in 2005 to Countrywide, Washington Mutual, Chase, Wells Fargo and GreenPoint.

Top correspondent lenders

Figure 5 lists the 10 largest closed-loan buyers for 2005 among surveyed lenders. Again in the top spot is Countrywide with $233.2 billion of production, up 46 percent from the previous year. Nearly $102 billion behind was Wells Fargo with $131.7 billion in volume, but 76 percent above 2004's mark.

Ranked third with $66.4 billion of correspondent business was Washington Mutual. Its closed-loan activity was essentially unchanged from its year-earlier position.

CitiMortgage was the fourth-largest buyer of closed loans in 2005, the identical position as the prior year. It purchased $44.8 billion, about $2.7 billion more than in 2004. Aurora, with $38.8 billion of correspondent production, ranked fifth, the same position it held in 2004.

Unchanged ranking-wise was Chase at $14.1 billion, the sixth-largest closed-loan buyer last year. Its volume fell $8.7 billion, or 61 percent. Ranked seventh was Indymac at $12.5 billion. ABN AMRO posted the eighth-largest correspondent volume for 2005 at $11.8 billion, up 28 percent from the previous year's level. SunTrust ranked ninth-largest at $11.7 billion, up one spot and $3.7 billion, or 46 percent, from one year earlier. Rounding out the ranks of the top 10 was Flagstar with $8.1 billion. It had ranked three spots higher in the prior year.

Total volume for the big-10 correspondent lenders was $573.1 billion last year, nearly $145 billion, or 33 percent, ahead of 2004's pace. Out of the 2005 roster was GMAC-RFC and onto the list was Indymac.

Top retailers

Figure 6 lists the top-10 retail originators among the lenders surveyed. The largest retail lender among this group for 2005, as for the past decade, was Wells Fargo. Volume totaled $208.9 billion, nearly $55 billion ahead of the second largest firm and up 41 percent from 2004. At $154.4 billion, Countrywide was ranked the No. 2 retailer, the same spot it held in the prior year.

Third-largest was Washington Mutual with retail volume of $103.2 billion, about $8 billion below its year-earlier level. The No. 4 retailer was Chase, with $84.5 billion. Its volume was unchanged year-over-year, as was its ranking. Bank of America, the fifth-ranked retail originator at $60.3 billion, maintained its 2004 position despite increasing its volume by nearly $7 billion, or 13 percent, last year.

The sixth-biggest retailer on our list was Wachovia at $53.3 billion, up 12 percent from the prior year. With retail volume of $32 billion was National City, ranked seventh for a third consecutive year. First Horizon was ranked eighth, with volume of $24.7 billion, 18 percent above its 2004 level. Ranked ninth was SunTrust at $21.9 billion, 57 percent above its previous year's tally. Occupying the 10th spot was American Home Mortgage, which originated $20.2 billion of retail business last year, 80 percent above its year-earlier showing.

Total volume for the top-10 retailers was $763.4 billion, nearly 17 percent above 2004. Following two straight years in which there were no new entrants into the ranks of the top-10 retailers in our survey, 2005 saw Wachovia, SunTrust and American Home jump onto the list, replacing PHH, CitiMortgage and ABN AMRO.

Channel and product composition

Figure 7 shows total mortgage production separated by channel for the 28 surveyed firms. In 2005 the largest slice of the pie was retail, accounting for 43 percent of production. It was followed by table-funded at 31 percent, which was followed by closed-loan at 26 percent. Compared with 2004's channel distribution, table-funded and closed-loan production were up and down one percentage point, respectively, while retail was unchanged.

Note that retail volume for those surveyed overstates results from a larger sample size because of the concentration of retail among the top-three firms. Business is more broadly dispersed in the broker channel. Since 2002, retail share as measured in Figure 7 has risen by five percentage points, broker dropped by four and correspondent slipped one percentage point.

Do not conclude from the pie chart that overall broker market share was 31 percent in 2005. Unfortunately, broker originations leak into both the correspondent and retail channels, but especially correspondent, where Wholesale Access estimates that more than half of correspondent volume actually comes originally from brokers. In retail, we estimate that one-quarter of applications are broker-driven, meaning a loan officer at a brokerage took the loan application from the borrower.

Figure 8 lists the top-five bulk-servicing buyers for 2005. Chase again took top honors at $34.4 billion. Second-placed Indymac was far behind at $15.8 billion. CitiMortgage was the third-largest bulk-servicing buyer at $8.4 billion. ABN AMRO was ranked fourth at $7 billion and was followed by BB & T at $1.1 billion. Only Chase remained from 2004's top-five list. At $66.7 billion, the group of five firms purchased only about one-half of the prior year's bulk volume.

Figure 9 shows annual wholesale production volumes among our surveyed firms since 1998. Last year's wholesale volume was the second-best ever, behind only 2003's record level. The 28 lenders' wholesale share of total origination activity rose from 34 percent in 2004 to 45 percent last year. Thus, as a group the firms gained market share in wholesale in 2005.

Each lender surveyed was asked for the percentage of refinances in their annual volume. Figure 10 breaks out refi and purchase-money business for the past six years. In 2005, refi volume held at 50 percent, its lowest point since 2000. Meanwhile, purchase-money business remained at its highest level since 2000.



Key wholesale trends

At the start of this article, I mentioned seven major developments that occurred in the mortgage market last year. Because Shakespeare had it right when he wrote "past is prologue," I will close by briefly discussing the implications and spillover effects from these developments. They affect the market, the industry, individual firms, employees of those firms and everyone touched by mortgage finance.

The growth of the nonprime business remains a potentially risky proposition, in my view. Given numerous economic and financial vulnerabilities in the domestic economy, putting too many homes into the hands of too many marginal credits seems worrisome to this observer.

At a recent luncheon sponsored by our local mortgage bankers association (the Greater Cleveland MBA), the Freddie Mac speaker pitched one program--Home Possible[sm]. It is a program that offers mortgages of up to $200,000 to would-be homeowners who have a $500 down payment (and little else qualification-wise).

Nonprime now accounts for at least 50 percent of aggregate origination activity. The $64,000 question is: To what extent will the regulatory guidance pending for so-called non-traditional mortgages affect the production of these products going forward? Not lost on anyone is that the wholesalers with substantial nonprime production were the firms with the biggest gains last year--namely Countrywide, Wells Fargo, American Brokers Conduit, Indymac, SunTrust and Taylor, Bean & Whitaker, to name several.

Meanwhile, margin pressure continued for lenders for a second straight year. There is simply too much capacity in the industry. The pressure was evident across the channels and product spectrum.

Subprime margins that averaged 300 basis points in 2003 are about half that today. Alt-A margins are around 100 basis points, down from 150 basis points in mid-2004. According to Wholesale Access' latest production revenue and expense benchmarking, prime margins in 2005 were down to 24 basis points in broker, 9 basis points in correspondent and 50 basis points in retail vs. 80, 44 and 145 basis points, respectively, in 2003. The bottom line is it is difficult to make a buck in mortgages in today's market.

The third big development was the continuing problems at Fannie Mae. But will Congress act to rein in the government-sponsored enterprise (GSE)? Fannie Mae's market share dropped from 36 percent in 2003 to 22 percent last year, thus allowing non-agency (private-sector) share to rise 16 points to 53 percent.

A fourth significant development was the continued strength in home sales last year. For existing homes, the seasonally adjusted annual rate (SAAR) was 7 million units, and for new homes the SAAR was 1.3 million. Both are near-records, respectively the second- and third-best sales years ever.

The fly in the drink is that home prices have spiraled out of control for most would-be buyers in many hot markets. In California, for example, the median home price was $523,150 at year's end. At this amount, only about 10 percent of California households can afford the median-priced home.

Stability in the note and bond markets was another important development. Rates for 30-year fixed-rate mortgages (FRMs) held in a narrow range in 2005, largely within 5.75 percent and 6.25 percent. This was the second year of benign volatility in interest rates and, most interesting, it came despite monetary policy tightening throughout the year, which raised short-term adjustable-rate mortgages (ARMs) to within 100 basis points of FRMs.

A sixth key development was the change in management at four of the nation's six largest mortgage banks. Bank of America, CitiMortgage, Chase and Washington Mutual all got new presidents or chief executive officers--or both--in 2005. How this shakes out remains uncertain, but three of the four firms announced earlier this year that they were integrating their prime and subprime operations. Because most firms still have separate operations, it will be interesting to see how unification affects their production, staffing and cost structures, as well as the industry overall.

A final development--a long, ongoing one--is industry consolidation. It continued in earnest, as our data indicate. If we tally total volume in all channels, the sum for 2005 was $2.16 trillion for the surveyed firms. Using MBA's estimate of $2.9 trillion for total origination volume last year, the 28 surveyed firms included accounted for 77 percent of aggregate origination activity. The big-three--Countrywide, Wells Fargo and Washington Mutual--accounted for $1.13 trillion, or 41 percent of 2005's total. By comparison, the big-three accounted for 30 percent in 2004.

Measured by channel among those surveyed, the top 10 in broker accounted for 72 percent (of the total), the top five for 51 percent and the top two for 29 percent.

In correspondent, the top 10 accounted for 94 percent, the top five for 85 percent and the top one for 38 percent. In retail, the top 10 accounted for 89 percent, the top five for 71 percent and the top three for 54 percent. These numbers indicate clearly the consolidation occurring in mortgage banking--a trend not dissimilar to that found in other mature industries.

As always, it will be interesting to see what 2006 ushers in for the mortgage banking business.

Tom LaMalfa is a managing director with Wholesale Access Mortgage Research and Consulting Inc., Columbia, Maryland. Wholesale Access is a research. advisory and publishing company specializing in mortgage banking topics. It conducts annual production revenue and expense benchmarkings, does market structure studies and publishes statistical reports about mortgage finance. LaMalfa can be reached at
Figure 1 Wholesale Volume for 2004 and 2005, Ranked Alphabetically ($

Company 2004 2005

ABN AMRO Mortgage Group Inc. 40.1 40.6
American Brokers Conduit (ABC) 11.8 24.9
American Mortgage Network (AmNet) 9.0 14.9
Aurora Loan Services Inc. 45.4 51.5
Bank of America 30.0 26.5
Branch Banking & Trust (BB & T) 2.5 2.6
Chase Home Finance 71.3 64.5
CitiMortgage Inc. 59.9 58.5
Countrywide Financial Corp. 246.5 336.5
EverBank 2.1 3.2
Fifth Third Bancorp 1.4 1.9
First Horizon Home Loan Corp. 15.4 18.3
First Magnus Financial Corp. 9.9 16.5
Flagstar Bank 30.2 24.3
Homecomings Financial Network Inc. 18.6 23.0
GreenPoint Mortgage Funding 38.5 40.9
HSBC Mortgage Corp. 23.8 10.3
Indymac Bank 24.5 40.6
Irwin Mortgage Corp. 9.0 9.5
LoanCity 8.1 6.5
National City Mortgage Co. 33.1 26.0
SunTrust Mortgage 16.3 25.7
Taylor, Bean & Whitaker Mortgage Corp. 11.3 19.2
U.S. Bank Home Mortgage 9.9 14.4
Wachovia Mortgage Corp. 5.3 4.4
Washington Mutual 137.1 145.6
Waterfield Financial Corp./Union Federal 4.2 3.9
Wells Fargo Home Mortgage 125.6 183.5
TOTAL VOLUME 1,040.8 1,238.2


Figure 2 Wholesale Volume for 2004 and 2005, Ranked by 2005 Wholesale
Volume ($ Billions)

Rank Company 2004 2005 Change

 1 Countrywide Financial Corp. 246.5 336.5 37%
 2 Wells Fargo Home Mortgage 125.6 183.5 46%
 3 Washington Mutual 137.1 145.6 6%
 4 Chase Home Finance 71.3 64.5 -10%
 5 CitiMortgage Inc. 59.9 58.5 -2%
 6 Aurora Loan Services Inc. 45.4 51.5 13%
 7 GreenPoint Mortgage Funding 38.5 40.9 6%
 8 ABN AMRO Mortgage Group Inc. 40.1 40.6 1%
 8 Indymac Bank 24.5 40.6 66%
 9 Bank of America 30.0 26.5 -12%
10 National City Mortgage Co. 33.1 26.0 -21%
11 SunTrust Mortgage 16.3 25.7 58%
12 American Brokers Conduit (ABC) 11.8 24.9 111%
13 Flagstar Bank 30.2 24.3 -20%
14 Homecomings Financial Network Inc. 18.6 23.0 24%
15 Taylor, Bean & Whitaker Mortgage Corp. 11.3 19.2 70%
16 First Horizon Home Loan Corp. 15.4 18.3 19%
17 First Magnus Financial Corp. 9.9 16.5 67%
18 American Mortgage Network (AmNet) 9.0 14.9 66%
19 U.S. Bank Home Mortgage 9.9 14.4 45%
20 HSBC Mortgage Corp. 23.8 10.3 -57%
21 Irwin Mortgage Corp. 9.0 9.5 6%
22 LoanCity 8.1 6.5 -20%
23 Wachovia Mortgage Corp. 5.3 4.4 -17%
24 Waterfield Financial Corp./Union Federal 4.2 3.9 -7%
25 EverBank 2.1 3.2 52%
26 Branch Banking & Trust (BB & T) 2.5 2.6 4%
27 Fifth Third Bancorp 1.4 1.9 36%
TOTAL VOLUME 1,040.8 1,238.2 19%


Figure 3 Wholesale Volume for 2005, Separated by Production Channel ($

Rank Company T-Funded Correspondent

 1 Countrywide Financial Corp. 103.3 233.2
 2 Wells Fargo Home Mortgage 51.8 131.7
 3 Washington Mutual 79.2 66.4
 4 Chase Home Finance 50.4 14.1
 5 CitiMortgage Inc. 13.7 44.8
 6 Aurora Loan Services Inc. 12.7 38.8
 7 GreenPoint Mortgage Funding 36.8 4.1
 8 ABN AMRO Mortgage Group Inc. 28.8 11.8
 8 Indymac Bank 28.1 12.5
 9 Bank of America 26.5 0.0
10 National City Mortgage Co. 20.4 5.6
11 SunTrust Mortgage 14.0 11.7
12 American Brokers Conduit (ABC) 24.3 0.6
13 Flagstar Bank 16.2 8.1
14 Homecomings Financial Network Inc. 16.3 6.7
15 Taylor, Bean & Whitaker Mortgage Corp. 19.2 0.0
16 First Horizon Home Loan Corp. 16.3 2.0
17 First Magnus Financial Corp. 16.5 0.0
18 American Mortgage Network (AmNet) 14.7 0.2
19 U.S. Bank Home Mortgage 7.2 7.2
20 HSBC Mortgage Corp. 7.8 2.5
21 Irwin Mortgage Corp 5.5 4.0
22 LoanCity 6.5 0.0
23 Wachovia Mortgage Corp. 3.2 1.2
24 Waterfield Financial Corp./Union Federal 2.9 1.0
25 EverBank 3.2 0.0
26 Branch Banking & Trust (BB & T) 1.0 1.6
27 Fifth Third Bancorp 1.9 0.0
TOTAL VOLUME 628.4 609.8


Figure 4 Top 10 2005 Table-Funded Volume ($ Billions)

Rank Company TF-Broker

 1 Countrywide Financial Corp. 103.3
 2 Washington Mutual 79.2
 3 Wells Fargo Home Mortgage 51.8
 4 Chase Home Finance 50.4
 5 GreenPoint Mortgage Funding 36.8
 6 ABN AMRO Mortgage Group Inc. 28.8
 7 Indymac Bank 28.1
 8 Bank of America 26.5
 9 American Brokers Conduit (ABC) 24.3
10 National City Mortgage Co. 20.4


Figure 5 Top 10 2005 Correspondent Volume ($ Billions)

Rank Company Correspondent

 1 Countrywide Financial Corp. 233.2
 2 Wells Fargo Home Mortgage 131.7
 3 Washington Mutual 66.4
 4 CitiMortgage Inc. 44.8
 5 Aurora Loan Services Inc. 38.8
 6 Chase Home Finance 14.1
 7 Indymac Bank 12.5
 8 ABN AMRO Mortgage Group Inc. 11.8
 9 SunTrust Mortgage 11.7
10 Flagstar Bank 8.1


Figure 6 Top 10 2005 Retail Volume for Wholesale Lenders ($ Billions)

Rank Company Retail

 1 Wells Fargo Home Mortgage 208.9
 2 Countrywide Financial Corp. 154.4
 3 Washington Mutual 103.2
 4 Chase Home Finance 84.5
 5 Bank of America 60.3
 6 Wachovia Mortgage Corp. 53.3
 7 National City Mortgage Co. 32.0
 8 First Horizon Home Loan Corp. 24.7
 9 Suntrust Mortgage 21.9
10 American Home Mortgage 20.2


Figure 7 2005 Production Channel Composition

Table-Funded 31%
Closed-Loan 26%
Retail 43%


Note: Table made from pie chart.

Figure 8 Top Volume in Bulk Acquisitions in 2005 ($ Billions)

Rank Top Five Companies in 2005 Bulk Acquisitions

1 Chase Home Finance 34.4
2 Indymac Bank 15.8
3 CitiMortgage Inc. 8.4
4 ABN AMRO Mortgage Group Inc. 7.0
5 Branch Banking & Trust (BB & T) 1.1

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Article Details
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Title Annotation:Residential Production
Author:LaMalfa, Tom
Publication:Mortgage Banking
Article Type:Market share report
Geographic Code:1USA
Date:Aug 1, 2006
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