The majority of home-purchase lending is now done by independent mortgage companies, like Quicken Loans, according to analysis by Federal Reserve Board researchers of data collected under the Home Mortgage Disclosure Act (HMDA) and matched with FDIC Call Reports, writes Michael Neal for the National Association of Home Builder’s Eye on Housing blog.
Non-bank consumer lenders can include pools such as hedge funds and they also include specialty finance companies such as auto finance companies. Technically, for the purposes of mortgage lending, the largest non-bank lenders include credit unions and independent mortgage companies. However, generally, references to non-bank mortgage lending denote independent mortgage companies and not credit unions
Mortgage lending by banks and independent mortgage companies fell over the 1995 to 2000 period. This decline was offset by an expansion in mortgage lending by affiliated mortgage companies. However, over the 2000 to 2010 period, the share of mortgage lending by banks and independent mortgage companies began to grow while the share of mortgage lending at affiliated mortgage companies collapsed. During this period, the share of home purchase mortgage lending at banks consistently exceeded the portion done by independent mortgage companies.
By 2010, banks accounted for half of all home purchase mortgage lending. However, in the years since 2010, the share of home purchase mortgages originated by banks began to decline while the proportion of home purchase lending at independent mortgage companies continued to expand. By 2014, the share of mortgage lending at independent mortgage companies eclipsed that of banks.