Q4 Business Was Dismal for Mortgage Lenders

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The largest mortgage lender last year did more than twice as much new business as the next biggest player. In the final three months of 2013, almost all mortgage bankers saw a sharp drop in originations.

In 2013, residential loan originations were down more than 14 percent compared to 2012. That finding was based on Mortgage Daily’s Mortgage Origination Survey and an analysis of earnings data at mortgage-related firms.

Statistics reported by Fannie Mae, Freddie Mac and the Mortgage Bankers Association indicate that industry-wide residential loan originations were $2.106 trillion in 2012.

Using Mortgage Daily’s data in conjunction with the numbers from the three organizations, estimated 2013 U.S. production was $1.809 trillion.

Behind the drop in mortgage production was an increase in interest rates. Conforming 30-year fixed rates increased from 3.666 percent at the end of 2012 to 4.808 percent by the end of last year, according to the U.S. Mortgage Market Index from LoanSifter and Mortgage Daily.

Wells Fargo & Co. maintained its stranglehold on the No. 1 lender spot, closing 19 percent of all home loans last year.

The five-biggest mortgage lenders were collectively responsible for 43 percent of last year’s activity.

Originations By Lender (in billions)

Lender 2013 2012
Wells Fargo $351.0 $524.0
JPMorgan Chase & Co. $167.6 $182.2
Bank of America Corp. $89.8 $78.7
U.S. Bank Home Mortgage $84.9 $103.9
Quicken Loans Inc. $78.9 $70.0
Citigroup Inc. $58.0 $58.5
PHH Mortgage $52.4 $55.6
Flagstar Bancorp Inc. $37.5 $53.6
PennyMac Mortgage Investment Trust $31.7 $22.0
BB&T Corp. $31.6 $33.1

Among all lenders, loan volume was down 37 percent between the third and fourth quarters, according to Mortgage Daily’s data. That put fourth-quarter originations at roughly $270 billion.

The top-five rankings for the fourth quarter were the same as full-year 2014 rankings.

The only company among firms tracked by Mortgage Daily to report an increase from the third quarter was Stonegate Mortgage, where business was up nearly 2 percent.

Stearns Lending Inc. reported the biggest decline from the third quarter: 79 percent.

The top-five concentration for the fourth quarter was almost 42 percent.

Originations By Lender (in billions)

Lender Q4 2013 Q3 2013 Q4 2012
Wells Fargo $50.0 $80.0 $125.0
Chase $23.9 $41.1 $51.6
BofA $13.5 $24.4 $22.5
U.S. Bank $12.7 $21.5 $28.0
Quicken $12.6 $17.0 $25.1
PHH $9.5 $14.8 $14.4
Citi $8.3 $14.5 $16.8
Flagstar $6.4 $7.7 $15.4
PennyMac $6.0 $8.0 $10.2
Nationstar Mortgage LLC $5.5 $8.0 $3.1

U.S. mortgage production by all lenders is likely to retreat 14 percent in the first quarter based on the Mortgage Market Index.

Mortgages outstanding finished last year at $9.869 trillion, according to data from Fannie.

Wells Fargo serviced 19 percent of outstandings as of Dec. 31, the biggest market share of any servicer.

The market share of the five largest servicers was 45 percent.

Three servicers that have seen massive growth in their servicing portfolios are Nationstar, where its portfolio, including investment loans, increased to $393 billion from $203 billion at the end of at 2012; Ocwen Financial Corp., which expanded its portfolio to $465 billion from $204 billion; and Walter Investment Management Corp., which reported a portfolio of $230 billion as of Dec. 31, 2013, versus $77 billion one year earlier.

Servicing Portfolios By Lender
(in billions – includes investment loans)

Servicer Portfolio as of 12/31/13
Wells Fargo $1,829
Chase $984
BofA $810
Ocwen $465
Nationstar $393
Citi $388
U.S. Bank $293
Walter Investment $230
PHH $227
Cenlar FSB (as of 9/30) $183


Mortgage Daily Staff


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