The number of licensed loan originators in the state dropped sharply in 2010, while the mortgage broker sector continued to consolidate, according to figures compiled by the Massachusetts Mortgage Association (MMA) based on information provided by the Division of Banks.
From 2009 to 2010, there was a 31 percent drop in the number of mortgage broker companies and a 27 percent drop in the number of mortgage broker branches. The number of mortgage lender/broker branches increased 40 percent to 380, up from 272 a year ago.
The number of licensed loan originators also showed a steep decline – in 2009, there were 5,481 mortgage loan originators in the state. At the start of 2010, that number had dropped to 4,504, a decrease of 18 percent. Through Dec. 26, only 3,010 loan originators had completed or filed for a license renewal, a 45 percent decline from 2009 figures. There were 1,165 licenses who remained eligible to make such a request before the end of last year; it was as yet unclear how many of the 1,165 would have filed for renewal during the last week of the year verses how many had let their licenses lapse, MMA Chief Denise Leonard said.
The drop in the number of originators likely in part reflected decisions by many out-of-state companies to forego or reduce the number of their employees licensed to originate loans in Massachusetts, in order to cut down on testing and training costs. Since the beginning of 2010, mortgage brokers have been subject to a stiffer testing regimen to obtain licenses, including separate exams on both national and state regulations.
"While there has been some attrition, I’ve talked to other states and our numbers are certainly low compared to other states that have had 30 [percent], 40 percent decreases in pure loan officer licensees," said Leonard.
Many former brokers have also transitioned to loan officer roles at banks, which are not subject to the same licensing regime. The decrease in the number of offices coupled with this increase in the number of branches suggests that it’s consolidation rather than simple shrinkage which is the main trend affecting the industry right now, Leonard said.
"If you look at the combined [mortgage lender/broker] numbers they’re not as grave as looking at the company numbers, because they’ve increased their branches," she said.
