The mortgage brokerage share of loan originations dipped to 58 percent in 2006, according to a preliminary tabulation of last year's production activity by Wholesale Access Mortgage Research and Consulting of Columbia, Md.

The small decline in market share from 63 percent of total loan volume in 2005 "could change" by the time Wholesale Access releases its final tabulation, depending on the size of firms yet to be counted in the annual survey, the firm's Larry Pearl said.

But it seems highly unlikely that the share could jump back to the 69 percent benchmark that was recorded by the firm as recently as 2004.

Nevertheless, Wholesale Access founder David Olsen said brokers "still dominate" the market, largely because they "do a better job for less."

"Brokers do it cheaper and they do it better," Olsen said at the National Association of Mortgage Brokers annual convention in Seattle, where the preliminary results of the study of 2006 loan production were released.

Borrowers "continue to go to mortgage brokers because they do a better job," he said. Their "customers are happier with them."

The preliminary reading is based on 791 of the 1,000 long-form surveys Wholesale Access intends to collect from brokers.

Based on a total loan volume of $2.8 trillion, as estimated by the Mortgage Bankers Association, brokers accounted for $1.64 trillion worth of mortgages last year, with the retail side of the business accounting for the other $1.17 trillion.

Olsen said his company now counts 53,000 brokerage firms, down from 54,000 in 2005 but the same number as in 2004.

The count includes 3,500 net branches, or 6.5 percent of the total. That number has "increased considerably" in the last two years, Olsen told a convention session, and is likely to continue to grow -- "possibly at a faster rate" -- because government regulations continue to become more and more restrictive.

One of the problems Wholesale Access has with its survey is defining when a broker has gone out of business. Lots of firms "go into hibernation" when refinancing start drying up, Olsen said. "A lot of them are refi specialists; they know no other game."

But if a broker answers his phone or does at least one loan a year, the company counts it as being in business.

The typical firm has seven employees, according to Pearl -- one manager, five loan officers and a processor. The median age of the company is 6.5 years, but generally there is only one office.

The mean volume per firm last year was $32.4 million, according to the preliminary figures. That's down from $34.5 million in 2004 and $38 million in 2002.

"Firms are getting smaller," Olsen said. "Brokers are working longer hours and doing a lot more work."

The survey also found that there are fewer new firms in the business, and more and more brokers are working full time at the trade. It also shows more brokers with higher educations, including many with masters degrees.

"That's a good trend," Olsen commented. "They are no longer selling cars one day and mortgages the next."

Published: July 18, 2007

Use of this article without permission is a violation of federal copyright laws.

When Lew Sichelman first started writing about housing in 1969, he was the youngest real estate writer in the country. Now, 37 years later, he's one of the oldest -- and most decorated. He has been rated the top housing columnist in the country by the National Association of Realtors as well as by his peers in the National Association of Real Estate Editors. Indeed, NAREE has recognized his work on numerous occasions. One year - due to his advancing age, he can't recall which one - he earned top honors in the annual NAREE Journalism Contest in three out of the four major writing categories. It was the first time one writer has won so many NAREE awards in a single year. Known for his ability to make even the most difficult topics understandable, Sichelman also has been honored by the National Association of Home Builders and the Mortgage Bankers Association. He began providing in-depth coverage of and consumer-oriented information about housing and housing finance at the Washington Daily News, where he was real estate editor. He held that same position for nine more years at the Washington Star, which purchased the News in 1972. The Star, a so-called "writer's newspaper" which also had the misfortune of being an evening paper, was put out of its misery in 1981, and Sichelman, who had begun self-syndicating his column in 1978, decided to become a full-time columnist. Today, his column, "The Housing Scene," is distributed by United Media to newspapers throughout the country. He also is on the staff of National Mortgage News, an independent newspaper which is considered the bible of the mortgage business. And he writes for numerous other publications, including MarketWatch.com, where he answers readers questions once a week, Sports Illustrated (don't ask), RealtyTimes.com, BigBuilder and others. Sichelman is married, the father of five and grandfather of eleven.