Market Share Among Top Mortgage Lenders Rising Rapidly

April 7, 2009 No Comments »

top five

It’s clear that mortgage lending has been decidedly retail-centric lately, what with all the hundreds of wholesale mortgage implosions and the warehouse lending crisis.

It seems the only players in town these days are some of the largest U.S. banks, like Bank of America and Wells Fargo, to name the most dominant.

And new data from suggests that the top mortgage lenders are benefiting from this lack of competition, and increasing market share at a rapid clip as a result.

Last year, residential mortgage fundings totaled about $1.6 trillion, and the top five lenders accounted of 56.3 percent of loan originations.

A year earlier, the top five held less than half (46.1 percent) of the $2.65 trillion market, and between 42 percent and 45 percent from 2002 to 2006.

This year, the top five lenders are expected to swallow up nearly two-thirds (63 percent) of the $2.6 trillion residential mortgage market.

That means plenty of business for Wells Fargo, the top originator in the fourth quarter of 2008, and close rival Bank of America; each company originated about $50 billion during the quarter.

If anything, it’s really a two-horse race, as the pair saw volume of $24 billion and $22.8 billion, respectively, in January, beating out the next closest competitor by more than $13 billion.

JP Morgan Chase and CitiMortgage also stand to benefit as the third and fourth largest lenders, but the fifth is a tougher one to call, it could be SunTrust, ResCap, or U.S. Bancorp.

Regardless, the mortgage market is getting a lot less crowded at a time when loan volume is expected to rise back to record levels, which may explain the super-long underwriting turn times.

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