Key facts
- Mortgage market competition is intense, described as a 'street fight'.
- Production and talent are shifting towards broker/nondelegated correspondent channels.
- Half of lenders experienced production shrinkage last year.
- A small cohort of 57 companies captured two-thirds of market production growth.
- Loan officers are moving from traditional banks and IMBs to nondelegated models.
- Nondelegated correspondent models allow operations with lender-like platforms while shifting costs and risks.
The mortgage industry is facing intense competition, with growth increasingly concentrating toward nondelegated lenders and brokers, according to executives speaking at HousingWire’s Mortgage Banking Summit. Rich Weidel, CEO of Princeton Mortgage, characterized the market as a "street fight," where production and talent are shifting away from traditional banks and independent mortgage banks (IMBs).
Data from RETR indicates that half of lenders experienced a net production shrinkage last year. However, a small group of 57 companies across all channels captured roughly two-thirds of the market's production growth, growing by more than $400 million over the past 12 months. Weidel noted that lenders are bifurcating into "capital winners" who use balance sheets for signing bonuses and "cost-to-produce winners" focused on reducing per-loan expenses.
Rick Roque, senior vice president of retail growth and M&A at NFM Lending, corroborated this trend, citing RETR data showing significant loan officer migration. Between January 1 and September 9, 17,438 loan officers moved, shifting approximately $6.8 billion in production. Independent mortgage banks lost 97 loan officers and $1.8 billion in production, while traditional banks lost 230 loan officers and $5 billion. In contrast, brokers gained 327 loan officers and $6.8 billion in production.
Roque attributed this momentum to the nondelegated correspondent channel, which allows teams to operate with a lender-like platform while outsourcing fixed costs and operational risks. James Deitch, co-founder and CEO of Teraverde, noted that banks typically have higher cost structures than IMBs and brokers, a factor that aligns with the observed loan officer migration.