Mortgage Brokers, Origination Fees, Price Transparency and Competition

66 Pages Posted: 26 Sep 2012

See all articles by Brent W. Ambrose

Brent W. Ambrose

Pennsylvania State University

James Conklin

University of Georgia

Multiple version iconThere are 3 versions of this paper

Date Written: September 26, 2012


This paper examines the dynamics between mortgage broker competition, origination fees, and price transparency. A reverse first-price sealed-bid auction model is used to motivate broker pricing behavior. Confirming the model predictions, our empirical analysis shows that increased mortgage brokerage competition at the Metropolitan Statistical Area level leads to lower fees. The findings are robust to different measures of fees as well as different measures of competition. We also provide evidence that broker competition reduces mortgage origination fees on retail (non-brokered) loans as well. In addition, our results indicate that pricing complexity is an important determinant of fees, and increased broker competition is associated with a higher probability of a loan being priced with transparency. Our results suggest that mortgage brokers increase competition and lower fees in the mortgage market.

Keywords: Mortgage Brokerage, Competition, Subprime, Cost, Price Transparency

JEL Classification: G2

Suggested Citation

Ambrose, Brent W. and Conklin, James, Mortgage Brokers, Origination Fees, Price Transparency and Competition (September 26, 2012). Available at SSRN: or

Brent W. Ambrose (Contact Author)

Pennsylvania State University ( email )

University Park, PA 16802-3306
United States
814-867-0066 (Phone)
814-865-6284 (Fax)

James Conklin

University of Georgia ( email )

Athens, GA 30602-6254
United States

Here is the Coronavirus
related research on SSRN

Paper statistics

Abstract Views
PlumX Metrics