The wholesale market is due for a significant increase in the near future, an industry executive has said.
Louis Amaya, co-founder and president of iServe Residential Lending, a California-based mortgage company with 30 branches, has told MPA wholesale lending will be returning in strongly within the next couple of years.
"I think that, in general, the market is going to switch back to the wholesale market in the next two to three years. Wholesale is the cheapest way to do business," Amaya said.
Amaya said that as the mortgage market normalizes, origination business is set to shift back toward wholesale, and eventually correspondent business. While he conceded that the market had been difficult for brokers, he said those still in business had likely found some stability.
"If you have survived as a broker at this point, it probably means they are doing good quality business. If you aren’t already attached to a banker, it’s likely you will stay in business," Amaya said.
But some brokers who are producing low volumes may still have to become bankers, he said.
"For specialized brokers, for instance, a small broker that focused on FHA
loans, you might be in a tight spot. FHA
used to be the non-prime giant, but after it raised its fees and minimum net worth requirements [to be an FHA
-approved lender], small FHA
lenders may have to move to banking."