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The Growth in Nonbank Lenders Continued in 2020

Refi demand surged last year, but banks started tightening their credit standards as nonbank lenders aggressively courted buyers and existing homeowners.

NEW YORK – 2020 was a record year for the mortgage industry as low mortgage rates fueled a wave of refinancings and home purchases. But not all mortgage lenders shared in that surge in activity.

An early analysis of Home Mortgage Disclosure Act data shows that nonbank lenders claimed more market share in 2020 as banks tightened up their credit more during the pandemic. ComplianceTech, Polygon Research and RiskExec provided a recent analysis of preliminary 2020 HDMA data, which factors in 5,400 institutions and more than 25 million records.

Independent mortgage banker Quicken Loans held its top position in the single-family rankings for 2020 lending based on dollar amount, while United Wholesale Mortgage replaced Wells Fargo for the number two spot. Wells Fargo and JPMorgan Chase fell to the number three and number six spot, respectively.

The following are the top five single-family lenders by dollar volume and units, according to the preliminary 2020 data analysis:

1. Quicken

Loan count: 1.14 million

$ volume of loans: $313.4 billion

2. United Wholesale

Loan count: 560,798

$ volume of loans: $182.8 billion

3. Wells Fargo

Loan count: 319,429

$ volume of loans: $126.9 billion

4. LoanDepot

Loan count: 294,467

$ volume of loans: $100.5 billion

5. Freedom

Loan count: 389,146

$ volume of loans: $99.2 billion

While loan originations grew last year, the gains were uneven among borrowing groups. For example, originations for white and Asian consumers were up more than 50% last year, but those gains were lower for Hispanic applicants (46%), Native American borrowers (40%), and Black households (38%), according to the analysis.

“There’s a lot happening [that could potentially be driving the trend], whether it be approval from the lender in terms of credit quality, or the level of equity and whether or not it’s undervalued,” Maurice Jourdain-Earl, co-founder and managing director of ComplianceTech, told the National Mortgage News.

Source: “Top Mortgage Lenders of 2020, According to Early HMDA Analysis,” National Mortgage News (April 9, 2021)

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