Besides intensifying the "too big to fail" problem, one side effect of the raft of failures and crisis-driven acquisitions has been the thinning out of competition across a range of financial services markets.

That has meant fatter margins for survivors.

The phenomenon has been pronounced in mortgages, where more than half of 2007's top 30 originators have been sold, acquired major mortgage operations or collapsed.

The effect on a standard measure of market concentration has been significant — but not enough to tilt the industry into an antitrust red zone, suggesting that there could be room for even further consolidation.

The mortgage origination market's score on the Herfindahl-Hirschman index — calculated as the sum of the squares of each company's share — jumped by more than 400 points from 2007, to about 1,025 in the second quarter, according to origination figures from National Mortgage News. That makes the market "moderately concentrated" (the boundary is 1,000), according to guidance from the government, but still far off "concentrated" territory of above 1,800.

Deals that increase HHI by more than 100 points in concentrated markets "presumptively raise antitrust concerns" among regulators.

In bank deals, an antitrust review typically focuses on deposit share in local markets, which serves as a proxy for the bundle of financial services that the industry provides, and is used to prescribe branch divestitures.

Still, the level of consolidation in mortgages has been stunning. Three of 2007's top 10 originators have been swallowed up by others that were already in the top 10: Countrywide Financial Corp. by Bank of America Corp., Washington Mutual Inc. by JPMorgan Chase & Co. and Wachovia Corp. by Wells Fargo & Co.

And the shake-up continued in 2009 with the failures of Colonial Bank (most of which was acquired by BB&T Corp. in a Federal Deposit Insurance Corp. deal) and AmTrust Bank (most of which was acquired by New York Community Bancorp Inc. in another FDIC deal), and the collapse of Taylor, Bean & Whitaker Mortgage Corp. Each of those casualties was among 2007's top 20 originators.

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