Mortgage Industry Increasingly Concentrated Based on NMLS Stats

The number of state licensed mortgagerncompanies licensed through the National Mortgage Licensing System (NMLS) wasrnessentially unchanged in 2013 but the number of mortgage loan originatorsrn(MLOs) and especially the number of licenses they held saw substantialrngrowth.  NMLS issued its 2013 AnnualrnReport on Tuesday which showed that the number of mortgage companies holdingrnlicenses decreased by 2 percent to a total of 16,178 entities during the yearrnalthough the number of licenses held by those companies increased by 4 percentrnto 34,998.  The number of companyrnbranches also increased, up by 6 percent to 19,976 and the licenses held by thernbranches went up by 17 percent to 38,595.</p

The number of licensed mortgage loanrnoriginators (MLOs) increased by 8 percent and the number of licenses they heldrnshot up 28 percent.  At the end of the fourthrnquarter there were 130,311 MLOs nationwide holding 331,351 individual licensesrnor an average of 1.8 licenses each. </p

The growth in MLOs was nationwide.  Every state had a net increase in the numberrnof MLOs holding their licenses but the increasing numbers of MLOs were cuttingrna smaller pie.  Mortgages originated byrnstate licensed MLOs declined significantly in Quarters 2 and 3 as thernrefinancing boom retreated.</p

NMLS said thernstate licenses it manages are approvedrnfor a calendar year and onrnDecember 31, a significant number of themrnare not submitted for renewal and become expired. Thisrngraph shows the monthlyrnnumber of approved MLO licensesrnover the past three years. Total MLO licenses haverngrown both year over year and throughout the year from 2011 torn2013.</p

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Many of the statesrnthat saw the largest growthrnin the numbers of MLOs were thernsame states which adopted the Uniform State Test,rnwhich streamlined the addition of new licenses for MLOs who work inrnmultiple states.  The largest net growth in the numbers of MLOsrnwas seen in South Dakota, up 112 percent, North Dakota with a net increase of 106rnpercent, and Iowa, up 90 percent.</p

There was also arnbig increase in the reach of MLOs.  Thernnumber of MLOs who were operating in only one state increased by 3 percent inrn2013 while the number who were operating in 10 or more states went up by 52rnpercent. </p

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Mortgagernoriginations reversed course in the last two quarters of 2013.  The number of originations had doubled duringrn2012 due mostly to refinancing.  With thernexception of an uptick in the second quarter, originations by state-licensed companies’rndeclined throughout 2013, almost entirely due to decline in refinance transactions.</p

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The 258 companies</bthat operated in more than 20 states had the largest share of loanrnoriginations, accounting for 46 percent of the total while the thousands that operatedrnin only one state had only a 20 percent share.   </p