Since banks have been reducing their residential mortgage production
, specialized non-bank companies have been stepping in to fill the void. And, according to the Mortgage Bankers Association (MBA), the non-bank companies’ share of mortgage lending is soaring.
Nonbank lending rose to 37.5% of the market during 2014, up from 14% in 2011, according to Inside Mortgage Finance
Average production volume was $417 million per company in the fourth quarter of 2014, up from $367 million per company in the fourth quarter of 2013. The volume by count per company averaged 1,769 loans in the fourth quarter of 2014 up from 1,641 loans in the fourth quarter of 2013, according to MBA data.
Non-bank lenders were also responsible for many of the industry’s hirings
during the fourth quarter of 2014. The fourth quarter total included approximately 228,200 mortgage jobs at banks. Credit unions employed 61,400, while non-bank mortgage employment was roughly 288,100.
tracked 6,651 mortgage layoffs and 2,952 mortgage hirings during the fourth-quarter 2014. Much of the hiring activity was at non-bank lenders and under the radar. Had the activity at the smaller firms been available -- there would likely have been a net gain in jobs reflected in the fourth quarter.
Since the housing crisis, the focus on high-quality loans has led to a tight credit market, especially among banks. The group has developed stricter standards in an effort to avoid recreating the scenario following the bust when they had to repurchase tens of billions of dollars of bad mortgages they sold.