The first month of 2011 brought us back to a familiar theme from last year as broker/wholesale endorsements outpaced retail in a down month for the industry overall. We saw this pattern several times last year, particularly as the industry volume growth tapered off in September and October.
- Broker/Wholesale endorsements for January came in at 2,413 units, up 9.3% from December but down 45.8% from a year ago
- Retail endorsements totaled 4,049 units, down 6.8% from last month but up 27.7% from last year
- Brokers contributed 37.3% of all units, up from 33.7% last month but down from 58.4% a year ago
The divergence between channels is particularly striking this month because Retail was entirely responsible for the industry decline. It’s way too early to attribute the weakness to BofA’s exit (we won’t see that effect until at least March or more likely April endorsements, so we can probably expect some bounce-back from Retail in February results if our client conversations are any indication.
Indeed, BofA has had its two best endorsement months since February 2010 as the chart below illustrates.
What’s most interesting is that broker/wholesale business has grown very little from the lowest levels in last years for BofA, while retail has recovered with the rest of industry. We’ve heard from several people in the industry that this directly related to the decision not to pursue certain types of broker/wholesale business, and whatever the cause the effect has been clear on this chart.
There was a wide divergence among other top 10 lenders in January, as Genworth and Urban both saw strong recoveries from what now look like hiccups in December, while Financial Freedom had the most notable decline to a multi-year low.
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