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Nonbank Mortgage Market Share Continues Climbing

Non-bank home lenders continued to gain in home lending market share at the expense of banks. Credit union share also widened.

Overall residential loan originations during the third quarter from U.S. financial institutions and non-banks were approximately $340 billion.

Business inched up from the previous three-month period, when mortgage production
came in at around $330 billion.

But activity slowed from the third quarter of last year, a quarter that saw roughly $520 billion in home lending activity.

During the nine months ended Sept. 30, there was in the neighborhood of $940 billion closed.

Third-quarter 2014 activity reflected $156.9 billion in loans funded by banks and thrifts that had in excess of $0.010 billion in quarterly production and more than $1 billion in assets, according to data provided by the Federal Deposit Insurance Corp.

That put bank market share at 46 percent. Bank market share has fallen almost every quarter since the first quarter of last year, when it was nearly two-thirds.

Bank production slipped from $163.9 billion three months earlier and tumbled from $317.7 billion a year earlier.

The latest quarter for banks included
$89.8 billion in retail production and $67.1 billion in wholesale lending — though some of the wholesale activity is already reflected in credit union, non-bank and bank retail numbers.

Credit union originations were $32.5 billion, according to data reported by  Callahan & Associates, putting credit union market share at around 9 percent. While credit union share has been steady this year, it had been as low as 5 percent in the first-quarter 2013.

Credit union volume was more than $29.5 billion in closings during the second quarter but short of the $35.8 billion in the second-quarter 2013.

Third-quarter 2014 credit union production included $26.9 billion in first mortgages and an estimated $5.6 billion in other real estate lending.

Finally, non-bank originations climbed to $155.0 billion from $137.5 billion in the second quarter and $168.8 billion in the third quarter of last year. The volume was based on numbers reported by the Conference of State Bank Supervisors.

Non-bank market share was 45 percent, steadily rising each quarter from less than a third in the third-quarter 2013.

More than a
third of second-quarter 2014 non-bank volume was refinance.

Non-bank purchase financing, meanwhile, has climbed for two consecutive quarters from less than $60 billion in the first quarter to almost $100 billion in the latest period.

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