Most Home Purchase Mortgage Lending Comes From Independent Mortgage Companies

June 14, 2016

The majority of home purchase lending is done by independent mortgage companies such as Quicken Loans, an analysis by Federal Reserve Board researchers of data collected under the Home Mortgage Disclosure Act found.

In 2014, independent mortgage companies were accounting for 47 percent of home purchase mortgage originations, NAHB’s Eye on Housing blog reports. Other lender categories such as banks (both large and small), credit unions, affiliated mortgage companies, and independent mortgage companies were also analyzed. Banks account for the second largest total of home purchase mortgage lending at 40 percent, while affiliated mortgage companies accounted for 7 percent. Credit unions made up the smallest amount at 6 percent.

In the year 2000, affiliated mortgage companies had the highest share at 36 percent (a stark contrast to their current 7 percent share). Banks had the second highest share at 34 percent and independent mortgage companies were third at 29 percent.

Five years later, affiliated mortgage companies dropped to 35 percent while banks rose to 40 percent and independent mortgage companies grew to 33 percent.

It wasn’t until 2014 that independent mortgage companies actually eclipsed banks­­ after growing even with them in 2013. Part of this shift from banks to independent mortgage companies is at least partly due to, as Michael Neal writes, the impact of regulatory and judicial responses to the unsustainable pace of mortgage lending prior to the Great Recession. This caused many banks to shy away from mortgage lending, leaving an opening that needed to be filled, an opening that independent mortgage companies took advantage of.

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