More buyers are bypassing big, established banks and turning to a
growing subset of specialized lenders to obtain amortgage.
Last year, a “nonbank” called Freedom Mortgage originated $51.1 billion in home loans, more than Citigroup Inc. and Bank of America Corp., according to research from business news publication Inside Mortgage Finance.
Freedom has risen from being the 78th largest mortgage lender in the U.S. in 2012 to the 11th largest today.
Nonbanks have re-emerged since the last housing crisis and are taking more business from traditional banks, now accounting for 52 percent of U.S. mortgage originations—up from 9 percent in 2009—according to Inside Mortgage Finance.
Six of the 10 largest U.S. mortgage lenders today are nonbanks.
Larger banks have been pulling away from the general mortgage market and have placed a greater focus on consumers with more financial stability. Nonbanks tend to focus on serving first-time buyers and moderate-income families.
Nonbanks also tend to take short-term loans from other banks to fund their lending, and some industry analysts are concerned that these entities could overextend themselves—as many did a few years ago. “As long as the good times roll on, it’s fine,” Ed Pinto, co-director of the Center on Housing Markets and Finance at the American Enterprise Institute, told The Wall Street Journal.
“But all I can say is, we’re in a boom, and you cannot keep going up like this forever.”
Quicken Loans has emerged as the largest nonbank. The top mortgage lenders, by originations, for the first half of 2018 are:
Since the crisis, banks have pulled away from mass-market mortgages to focus on wealthier consumers.
Today, nonbanks like Freedomoften represent the only route for first-time buyers and moderate-income families to get a mortgage.
Post crisis regulations curb bank and nonbank lenders alike from making the “liar loans” that wiped out many lenders and forced a wave of foreclosures during the crisis.
What worries some industry participants is that little has changed about nonbank lenders’ structure.
While consumer advocates have voiced criticism of Freedom, some also say the company plays an important role in offering loans to minorities and moderate-income borrowers.
“They work directly with the clients to make sure that what they’re offering matches the clients’ needs,” said Andrea Haughton, director of homeownership at the nonprofit Community Housing Innovations, “while a lot of mortgage lenders just offer a product.”
Last year, a “nonbank” called Freedom Mortgage originated $51.1 billion in home loans, more than Citigroup Inc. and Bank of America Corp., according to research from business news publication Inside Mortgage Finance.
Freedom has risen from being the 78th largest mortgage lender in the U.S. in 2012 to the 11th largest today.
Nonbanks have re-emerged since the last housing crisis and are taking more business from traditional banks, now accounting for 52 percent of U.S. mortgage originations—up from 9 percent in 2009—according to Inside Mortgage Finance.Six of the 10 largest U.S. mortgage lenders today are nonbanks.
Larger banks have been pulling away from the general mortgage market and have placed a greater focus on consumers with more financial stability. Nonbanks tend to focus on serving first-time buyers and moderate-income families.
Nonbanks also tend to take short-term loans from other banks to fund their lending, and some industry analysts are concerned that these entities could overextend themselves—as many did a few years ago. “As long as the good times roll on, it’s fine,” Ed Pinto, co-director of the Center on Housing Markets and Finance at the American Enterprise Institute, told The Wall Street Journal.
“But all I can say is, we’re in a boom, and you cannot keep going up like this forever.”
Quicken Loans has emerged as the largest nonbank. The top mortgage lenders, by originations, for the first half of 2018 are:
Since the crisis, banks have pulled away from mass-market mortgages to focus on wealthier consumers.
Today, nonbanks like Freedomoften represent the only route for first-time buyers and moderate-income families to get a mortgage.
Post crisis regulations curb bank and nonbank lenders alike from making the “liar loans” that wiped out many lenders and forced a wave of foreclosures during the crisis.
What worries some industry participants is that little has changed about nonbank lenders’ structure.
While consumer advocates have voiced criticism of Freedom, some also say the company plays an important role in offering loans to minorities and moderate-income borrowers.
“They work directly with the clients to make sure that what they’re offering matches the clients’ needs,” said Andrea Haughton, director of homeownership at the nonprofit Community Housing Innovations, “while a lot of mortgage lenders just offer a product.”
Selling or Buying doesn’t have to be a huge undertaking, but it’s one where details really matter. When you’re working with real estate professional Carriene Porter of Precision Realty & Associates, you’re guaranteed to get the expertise and advice you need to Sell or Buy your home. If you prefer a more personal touch, CALL 801-809-9866 today.
#RealEstateForSale #Homeownership #UtahRealEstate #Mortgages
Source: Realtor.com
#RealEstateForSale #Homeownership #UtahRealEstate #Mortgages
Source: Realtor.com
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