Wells Fargo and Bank of America Control Nearly Half of Mortgage Market

January 31, 2011 No Comments »

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The two largest mortgage lenders in the nation control nearly half of the residential mortgage market, according to Inside Mortgage Finance.

During the first three quarters of 2010, San Francisco-based Wells Fargo and Charlotte-based Bank of America accounted for 46 percent of the market.

That’s up from 28 percent back in 2008, before many industry players fell by the wayside.

In the third quarter, Wells Fargo was the top lender with loan origination volume of nearly $103 billion, followed by Bank of America with $74 billion.

Volume dropped off considerably in the third spot, occupied by Chase, to just $43 billion, and more than halved down to the fourth spot, occupied by Citi’s $20 billion.

However, the remaining banks are reaping larger profits, with profit as high as $1,000 per loan origination, compared to losses as high as $2,000 in the past.

Previously, banks would take losses upfront on expected loan servicing profits to more than make up the difference, but now most loans are quickly sold on the secondary market.

That brings us to risk retention measures currently being ironed out – Wells Fargo wants 30 percent down payments to avoid such requirements, which critics believe will allow the largest mortgage lenders to grab even more market share as smaller lenders are driven out.

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