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2013 Originations Estimated at $1.8T, Big Players Give Up More Ground

Despite a precipitous drop in fourth-quarter volume, origination numbers turned out stronger than expected in 2013--and analysts at ""FBR Capital Markets"":http://www.fbr.com/ say 2014 could be similarly surprising.


Industry data reviewed by FBR suggests origination volumes plunged from $460 billion in Q3 2013 to $305 billion in Q4. While disappointing, FBR says the decline ""was expected as interest rates meaningfully slowed refinance activity and spooked the purchase market.""

For the entire year, industry numbers point to a total of $1.8 trillion in originations, well above what many [COLUMN_BREAK]

analysts projected at the opening of the year. Given the current trend of declining mortgage rates and the Federal Housing Finance Agency's expected push to open credit availability at Fannie Mae and Freddie Mac, FBR says we might see originations in 2014 push to $1.3 trillion or higher--depending on how the next few months play out.

""All eyes remain on the spring buying season in order to get a sense of what full-year originations will look like,"" the firm said. ""As such, given that total volumes in 2013 ended up significantly stronger than original industry forecasts predicted, we continue to believe our ... consensus estimates are achievable.""

FBR's latest report also examines what last year looked like in terms of companies sharing space in the mortgage market. According to the company's findings, ""deconsolidation"" was the watchword of 2013, with the top four originators--Wells Fargo, JPMorgan Chase, Bank of America, and Citigroup--holding only about 34 percent of the market compared to 50 percent in 2012 and 62 percent as recently as 2009.

""This trend should continue as Wells Fargo and other money center banks cut headcount in their mortgage banks and narrow their focus to originating to core customers,"" FBR said. ""As a result, smaller originators are becoming a more meaningful part of the market.""


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