Loan Originators Migrate Away from Banks

Mortgage News

Mortgage Daily Staff

                                                 June 12, 2014

Although the number of bank loan originators has fallen over the past year, an increase in state-licensed individuals more that offset the decline. A significant share of licensees in some states live in another state.

As of the first-quarter of this year, there were 506,985 individuals registered in the Nationwide Mortgage Licensing System.

Included in the number were registrants with state licenses and mortgage loan originators who worked at financial institutions and maintained an active federal registration.

However, the total was adjusted down by 3,585 to account for people that maintained both state licenses and federal registrations

The data was reported by the Conference of State Bank Supervisors.

NMLS registrations dropped from the final quarter of last year, when the adjusted number came in at 529,127.

But the count was up from the first-quarter 2013, when there were 504,772 NMLS registrants.

The latest figures reflected 117,674 state-licensed registrants with 297,645 licenses. State registrations increased from 112,970 loan originators with 252,555 a year earlier.

By far, California had more originators licensed than any other state: 38,020. But more than 10,000 of California’s licensees were located in another state.

Florida followed with 16,400 licensed originators, and nearly half were located outside the state. It was a similar situation in Texas, where 8,442 of the state’s 15,703 licensees operated from another state.

In Virginia, 10,576 originator licenses were in place, and the total was 10,367 in Washington. Pennsylvania had 10,267 licensed originators, while all other states had fewer than 10,000 licensees.

Another 392,896 mortgage loan originators employed by financial institutions held a federal registration.

Unlike state licensed originators, the number of federally registered originators retreated from the first quarter of last year — when there were 394,775. The disparity likely reflects the heavier layoffs that have taken place at banks over the past year compared to non-bank lenders.

The federal registry total included 229,817 originators employed by banks regulated by the Office of the Comptroller of the Currency, 87,022 who worked at institutions regulated by the Federal Deposit Insurance Corp., and 51,735 that originated for Federal Reserve Board-regulated banks.

In addition, 52,319 originators worked at credit unions, and 1,736 were employees of financial institutions regulated by the Farm Credit Administration.

California’s 41,775 federally registered originators topped all other states. Next was 25,569 in Texas.

There were 24,898 in New York, followed by 23,394 in Florida and 17,994 in Illinois.

A total of 25,486 companies were registered in the database. The total was adjusted down to reflect 96 entities that held both state licenses and federal registrations.

The company total reflected 15,246 firms that held 34,064 state licenses, tumbling from 16,145 companies in the prior report and 15,842 in the year-earlier report.

Another 19,493 company branches held 38,541 state licenses as of the most-recent period.

State-licensed companies reported nearly $100 billion in loan originations during the first three months of this year, tumbling from roughly $130 billion in the final quarter of 2013 and plunging 53 percent from the first-quarter 2013.

Despite the decline, production by state-licensed entities was still higher than each of the first three quarters of 2011.

Refinance volume has retreated each of the last three quarters, while purchase production has been down for two consecutive quarters.

In California, 6,452 companies were licensed — more than any other state. California revoked 13 licenses, terminated 664 licenses and saw 14 surrendered.

A distant second was 1,850 company licenses in Florida, where 26 licenses were surrendered, and 141 were terminated.

Next was 1,467 in Texas, which had 16 licenses surrendered and 120 terminated.

Colorado had 1,015 active company licenses, and all other states had fewer than a thousand companies licensed.

In addition, 10,336 financial institutions were included in the federal registry, fewer than 10,845 three months earlier and 10,551 a year earlier.

Data previously obtained from the FDIC indicate that banks generated around $248 billion in first-quarter originations.

Mortgage Daily estimates that roughly 809,000 people were employed in mortgage lending as of the first quarter. The total includes bank and non-bank employees.

Mortgage Daily Staff

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