Following months of waiting, mortgage brokers can now add PennyMac Financial Services Inc. to their roster of wholesalers. With its entry, the fast-growing lender is poised to become a big player in the wholesale channel.
Back in
August 2017, the Westlake Village, California-based company revealed plans to launch a broker channel in the fourth quarter of last year.
PennyMac explained that broker margins are higher than margins in the correspondent channel —
which accounted for 91 percent of its total 2016 mortgage originations.
On Thursday, PennyMac announced that its broker-direct channel has now opened up. The business is headed by Kimberly Nichols.
Doug Jones, who is president of affiliate PennyMac Loan Services LLC, noted in the announcement that the channel will provide opportunities to grow business in attractive market segments like purchase-money and prime jumbo lending.
PennyMac said brokers will have “unprecedented access to data and the ability to pro-actively manage their pipelines” through its POWER platform. The platform will reportedly enable brokers to provide detailed, accurate and timely communication to prospective borrowers.
“We expect to leverage our leading market position to successfully grow our broker-direct platform and achieve a leadership position over time,” Jones stated.
PennyMac is well positioned to become a leading wholesale lender. In 2016, it claimed an 11 percent correspondent market share.
Data maintained by Mortgage Daily indicate that PennyMac was the sixth-largest mortgage originator in 2016.
Currently, United  Shore Financial Services LLC-subsidiary United Wholesale Mortgage claims the top wholesaler spot in the country.
Anthony Casa,
the founder of Brokers Rallying Against Whole-Tail Lending — or BRAWL –and President of Garden State Home Loans, called PennyMac’s entry into wholesale lending at a time when lenders are exiting the market “encouraging.”
But he cautioned the company about “whole-tail lending,”
where wholesale lenders generate more than 20 percent of their production from the retail channel.
“The mortgage broker community will not support PennyMac in any capacity if they plan on doing business as usual, we are united against whole-tail lending,” he said in a written statement to Mortgage Daily. “If they want to work with BRAWL on making changes to their business practices to protect and support mortgage brokers, we will gladly work with them, if not they are in for a wakeup call.
“The days of whole-tail lenders taking advantage of mortgage brokers and stealing their customers is over.”
