Industry News

Mortgage brokers lose subprime share to retail, Internet lenders

Internet's share of subprime originations up 50% in first half of '07

Retail lenders like banks and direct Internet operations picked up a larger share of subprime loan originations in the first half of 2007, according to a survey of subprime lenders by the Mortgage Bankers Association. Retail lenders grew their market share of subprime first loans from 23 percent in the last half of 2006 to 36 percent in the first six months of 2007, the survey found. While mortgage brokers still accounted for the majority of subprime loan originations -- 58 percent, measured by dollar volume -- that's down from 72 percent in the second half of 2006. Some of that shrinking market share appears to have been lost to direct Internet lenders, who originated 6 percent of subprime loans in the first half of 2007 -- up 50 percent from the latter half of 2006, when 4 percent of subprime loans were originated over the Internet. The average loan amount originated over the Internet ($135,640) was smaller than those originated by mortgage brokers ($195,200) or retail lenders like ...