Who's who in wholesale 2006: here's our annual story on the top wholesale and correspondent lenders. Last year was a year of many stories in the wholesale lending space

Mortgage Banking, June, 2007 by Tom LaMalfa

In the 11th through 15th positions were ABN AMRO, Bank of America, Homecomings Financial, Ohio Savings Bank (now AmTrust Bank) and First Magnus. Only Homecomings Financial remained in this fivesome from a year earlier. Of the others, ABN AMRO and Bank of America moved down the roster, Homecomings Financial and First Magnus moved up, and Ohio Savings Bank reappeared after a one-year hiatus from our listing.

Ranked 16th for 2006 wholesale volume was Flagstar at $16.2 billion. Less than $100 million behind was U.S. Bank, also at $16.2 billion. The next largest was National City, producing $15.8 billion last year. American Mortgage Network (now re-named Vertice) and First Horizon rounded out the top 20, originating $14.2 billion and $14 billion, respectively.

Rounding out the final three spots were Wachovia at $4.6 billion, BB & T at $2.7 billion and Fifth Third at $2.3 billion. All three saw volume rise modestly--less than $400 million--from the prior year.

Figure 3 separates wholesale activity by channel, either table-funded/broker or closed-loan/correspondent. Of the $1.2 trillion of total wholesale production for the surveyed firms last year, 50.6 percent was broker business and 49.3 percent was correspondent volume. This is the fifth straight year in which table-funded production exceeded closed-loan volume--but by the narrowest margin ever.

Note that activity remains considerably more diffused in the broker channel, where all 23 surveyed firms participate. On the other hand, in the correspondent channel, three of our surveyed firms don't purchase closed loans and another seven acquired less than $3 billion last year. Only nine firms of those surveyed bought more than $10 billion of closed loans, while 18 firms produced $10 billion or more through table funding.

Unlike 2005, when Countrywide dominated both wholesale channels, last year saw Wells Fargo creep past Countrywide in correspondent channel volume.

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 nonprime lending.

At $280.8 billion, Countrywide was the largest wholesaler in our 2006 ranking by nearly $42 billion. It retained its first-place status for a fourth consecutive year. Table funding accounted for about 34 percent of its wholesale production. According to the 2007 Mortgage Market Statistical Annual (MMSA), published by Inside Mortgage Finance Publications, Countrywide was the nation's second-largest servicer in 2006 and third-largest subprime lender.

Wells Fargo, with about $239 billion of production, was the second-largest wholesaler--its second year in that position since 2002. About 21 percent of its purchase business came through the broker door, compared with 79 percent from its correspondent channel. Wells Fargo is the nation's largest servicer and ninth-largest subprime lender, per the MMSA listing.

Washington Mutual, at $116 billion, was the third-biggest wholesale producer last year. About 57 percent of its third-party production came through mortgage brokers. The company has the best balance between the two types of purchased production of any firm in the big-10; however, last year it closed its correspondent business. According to MMSA, Washington Mutual was the third-largest servicer and the fifth-largest alternative-A lender.