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Mortgage Originations Distribution 2

Delivered January 31, 2020. Contributor: Mik W.

Goals

To understand what % of originations come from 1) Banks 2) Credit Unions 3) Non Bank Lenders and 4) Mortgage Brokers and to identify historical trends over time. This is to inform company strategy and to gain a general understanding of the market.

Early Findings

  • "Independent mortgage lenders account for 44% of lending by the top 25 American loan originators. "
  • Mortgage industry statistics point indicate a growing shift toward non-bank lenders, which has led to a revival of independent lending companies. "These non-banks have risen from 9% market share in 2009 to near parity with banks. 5 out of the 10 largest mortgage lenders in 2019 were non-banks", with Quicken Loans being the largest.
  • "In 2017, 5,852 financial institutions (banks, savings associations, credit unions, and nondepository mortgage lenders) reported data under HMDA on about 12.1 million home mortgage applications. This total includes approximately 2.3 million applications that were closed by the lender as incomplete or were withdrawn by the applicant before a decision was made."
  • "In total, lenders reported approximately 7.3 million originations, down from 8.4 million originations in 2016."
  • "Banks collectively accounted for about 36.3 % of all reported mortgage originations and affiliates of banks accounted for another 3.5 %; independent mortgage companies, about 50.6 %; credit unions, about 9.7 %."
  • "Over the past few years, the share of loans originated by independent mortgage companies has risen sharply. In 2017, these lenders originated 56.1 % of first-lien owner-occupied single-family site-built home-purchase loans, up from 53.3 % in 2016 and just 35.0 % in 2010."
  • "Independent mortgage companies also originated 55.8 % of first-lien, owner-occupied, single-family site-built refinance loans, an increase from 52.2 % in 2016."

Summary

  • We were able to compile figures for the distribution of mortgage originations for 2017 (the most recent year available) for banks, credit unions, non-bank lenders, and mortgage brokers in the attached spreadsheet. In the spreadsheet, mortgage brokers were listed under "Independent Mortgage Company" as research found that many mortgage brokers work for independent mortgage companies.
  • The figures in the spreadsheet were based on data reported under the Home Mortgage Disclosure Act (HMDA), which summarized the 2017 HMDA data in mortgage and housing markets in a 2018 report. This appeared to be the most recent report available.
  • We were also able to identify some historical trends in mortgage originations as described above. Feel free to choose a proposal below or let us know if there are other data points that would be of interest.

Proposed next steps:

You need to be the project owner to select a next step.
We can do additional research to identify the top 25 entities (i.e. banks, independent/affilitated mortgage companies, or credit unions) that originated the most mortgages in 2017. We can identify the name of the financial institution, classification (i.e. independent/affiliated mortgage company, bank, or credit union), number of loan originations, and total purchases and put it in a spreadsheet.
An alternate research path we suggest is to identify 2-3 insights on Fintech and how it is gaining a share of the mortgage market.
We can also identify 2-3 three insights on Millennials, Generation X, and Baby Boomers and their impact on mortgage originations.