Smaller lenders gaining clout in mortgage market

Smaller lenders touting more personalized customer service experience and local know-how have swooped in over the last few years to grab market share from giants such as Wells Fargo and Bank of America. Indeed, the 10 biggest lenders dominated with an 80 percent share of the primary mortgage market in 2010, according to a recent report from Fannie Mae. But as of the first half of 2013, their share had dropped to 60 percent of the market.

“What we’re seeing is the community banks and regional market lenders taking a larger market share of residential business,” Norman Koenigsberg, the president of Morganville, N.J.-based First Choice Loan Services, told the New York Times.

First Choice Loan’s loan origination volume mushroomed to $2.26 billion in 2012 from $1.2 billion in the previous year, Koenigsberg told the newspaper. Local knowledge becomes an even greater priority in specialized and cutthroat real estate markets such as New York City, he added. [NYT] – Hiten Samtani