A financial analyst with FBR Capital Markets and Co. hasproduced a research report pointing to a strong market opportunityfor credit unions and other smaller mortgage issuers.

Paul Miller, managing director for FBR, wrote in the report thatat the end of the fourth quarter large banks were retreating fromthe mortgage market due to servicing issues and litigation, makingroom for smaller mortgage issuers to flourish.

“These issues have caused the large banks to allocate lesscapital to mortgage banking and have limited their ability tooriginate mortgages at the pace they have in the past,” Millerwrote in the research report. “This has created an opportunity forsmaller players to step up and fill the void while still attaininghealthy margins.”

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