Although there are signs of life in the wholesale/broker sector, originations through this somewhat controversial production channel hit an all-time low in the first quarter, according to figures compiled by National Mortgage News.

Residential loans facilitated through table funding accounted for just 12.8% of the $329 billion in originations in the first quarter, down significantly from a peak of 28.2% three years ago.

Some lenders, including GMAC Mortgage and Bank of Internet, are showing a new willingness to use loan brokers or approach salespeople they used in the past.

Marc Savitt, a former president of the National Association of Mortgage Brokers who runs a small brokerage firm in West Virginia, said that, despite what the numbers say, he finds that more wholesalers are entering the market, not getting out.

"When I go to trade shows I see new firms with tables in the conference hall," Savitt said.

Savitt and other brokers are trying to stay optimistic about the future of their profession but are concerned about the pending regulatory reform bill, which could put restraints on yield-spread premium payments, a key source of income for third-party salesmen.

As wholesale declines as a channel, retail and correspondent production are gaining. In the first quarter retail lenders accounted for 47.5% of all loans produced with correspondent capturing the balance, 39.7%. Meanwhile, correspondent originators — nonbanks especially — are facing a dicey future in the wake of higher net-worth requirements from Fannie Mae, Freddie Mac and the Federal Housing Administration.

In the first quarter, loan production was somewhat weak, which was expected. The $329 billion of one-to-four-family loans originated was the lowest reading since the fourth quarter of 2008, the height of the nation's financial crisis. (In the fourth quarter of 2008 originations hit a 10-year low.)

Despite the news on fundings, mortgage lenders expect decent readings for the next two quarters but a poor showing at yearend.

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