The mortgage industry has consolidated over the years and more consolidation is ahead as rising interest rates trigger a shrinking refinance business that forces out some companies, especially those that aren't diversified. Even so, the industry will still be fairly fragmented. The reason for the consolidation is simple: More companies will decide it's time to sell after the refinancing business drops off, said Vicki Wagner, credit analyst at Standard and Poors. That will be especially true among companies that don't service loans or have other sources of revenue. "Most companies tend to rethink whether they want to stay in the business, given the lower production and lower profitability that follows," Wagner said. Do you think consolidations will start happening in the mortgage industry? Consolidation after a major refinance market is part of the cycle, Wagner said. The loan sector consolidated in 1993-94 and 1998-99 after those periodic refinance booms ended. Today's mortgage industr...
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