Housing Trends: Mortgage Concentrations Have Fallen Below Pre-Crash Levels

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Top 10 Lenders Now Command Less Than 25 Percent of Total Volume

The market share of top lenders, which jumped just after the 2007-2009 recession, has fallen to levels below the ones that existed before the mortgage crash.

A 10-year retrospective shows that as of August of this year[1], the top 10 first lien originators controlled 23 percent of mortgage dollars originated, a substantial drop from 33 percent in 2011 and 28 percent in 2006.

As shown in the table, there was a lot of movement in the top 10 list, with the lenders exiting the top 10 shown in red and the lenders entering the top 10 shown in blue. Wells Fargo was the market leader in each of the three years reviewed, but its concentration went from 6 percent in 2006 to 12 percent in 2011 before returning to 6 percent so far this year.

Just four lenders (Wells Fargo, Quicken Loans, Bank of America and JPMorgan Chase) have concentrations of more than 1 percent this year to date. Six lenders had more than 1 percent of the market in 2011, and eight did in 2006.

Non-bank participation in the top 10 lists has increased from four lenders in 2011 to five this year (Quicken, Freedom Mortgage,, Caliber Home Loans, and Guaranteed Rate).

It is interesting to look at the purchase and refinancing splits of the top 10 lenders. Total originations year to date have been roughly even between purchase mortgages and refinances, but refinancing is expected to decrease over the next year. Details from the top 10 lender list may give a preview of which lenders would gain market share when rates rise and purchase mortgages dominate again.

Wells Fargo is evenly distributed between purchase and refinance mortgages, with a 6 percent market share in each. Freedom and are currently refinance specialists, with near zero national share of purchase mortgages and 2 percent of refinance mortgages apiece.

The top 10 lenders have 18 percent of the national purchase share this year, and 27 percent of refinance volume. That’s down from both 2011, when the top 10 had 25 percent of purchases and 37 percent of refinances, and 2006, where the top 10 lenders captured 28 percent of purchases and refinances.

[1] The 2016 originations are year to date as of August, while the 2006 and 2011 originations are for the full year.

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