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Research Outline
Prepared for RenoFi T. | Delivered January 31, 2020
Mortgage Originations Distribution 2
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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.
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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
n
o
n
d
e
p
o
s
i
t
o
r
y
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applications that were closed by the lender as incomplete or were withdrawn by the applicant before a decision was made."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.
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