Since the combined market share of the top 10 first-lien mortgage originators hit one-third five years ago, it has been declining and has now dropped below pre-crisis levels.
Analysis from CoreLogic [1] showed that 23 percent of mortgage dollars originated were concentrated in the top 10 first-lien originators as of August 2016, which is down from 33 percent in 2011 and from the bubble years share of 28 percent in 2006.
The analysis showed substantial movement among the top 10 first-lien lenders as far as highest market share; in all three years analyzed (2006, 2011, and 2016), Wells Fargo had the highest share. But the rise and fall of Wells Fargo’s market share has somewhat mirrored that of the top 10 first-lien lenders overall during that span. Wells Fargo’s share was 6 percent in 2006, then it had doubled up to 12 percent by 2011. By 2016, it had fallen back down to 6 percent.
Mortgage originations are up by approximately 22 percent from last year due primarily to the low interest rate environment but they may be inching upward. The MBA’s most recent data for the week ending on October 7, 2011, showed that refinance activity was down by 8 percent and mortgage applications were down by 6 percent from the previous week.
“Total originations year to date have been roughly even between purchase mortgages and refinances, but refinancing is expected to decrease over the next year,” CoreLogic Senior Economist Molly Boesel said. “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.”
Also of note, there were five nonbank lenders among the top 10 first-lien originators in August 2016 (Quicken Loans, Freedom Mortgage, loanDepot.com, Caliber Home Loans, and Guaranteed Rate), compared with four in 2011, according to CoreLogic.
So far in 2016, the top 10 first-lien lenders own 18 percent of the national purchase share and 27 percent of refinance share, down from 25 percent and 27 percent in 2011, respectively, and 28 percent in both categories for 2006, CoreLogic reported.