The mortgage market is essentially made up of purchase-money lending and refinance lending, with home equity lending sprinkled in.
Unfortunately, things changed pretty rapidly and now refinance business is drying up, forcing banks to replace it with purchase lending.
The problem is the home purchase business isn’t robust enough to make up for the once booming refinance sector, so some previously high-flying lenders are taking a big hit.
Today, National Mortgage News tweeted out an image of the lenders who rely most heavily on refinances to stay afloat.
Mortgage Investors Corp. Only Did Refis
Last fall, they announced massive layoffs and pretty much began winding down their entire business.
According to NMN, they had a 100% refi share in both the fourth quarter of 2012 and the fourth quarter of 2013, giving them the #1 spot.
Their volume fell from nearly $1.4 billion to just $265 million during that time, which explains why they had to make a quick exit.
They were followed by Embrace Home Loans (Rhode Island), which boasted a 71.4% refi share in the fourth quarter of 2013, down from 87.7% a year earlier.
As a result of the slowdown, their loan origination volume was essentially cut in half, falling from over $1 billion to just about $500 million.
Bank of America was third on the list; its refi share fell from 87.6% to 68.1% year-over-year, and production slid to just $13.5 billion compared with $22.5 billion in the fourth quarter of 2012.
Wells Fargo claimed the fourth spot with a refi share of 68%, down from 72% a year earlier. While those numbers don’t look too bad for the nation’s largest mortgage lender, volume plummeted from $126 billion to just $51 billion.
Rounding out the top five was Astoria Federal Savings, which saw its refi share fall from 86.9% to 67.6%. Loan volume dipped to $186 million from $332 million.
Top Refi Share in Fourth Quarter 2012
Top Refi Share in Fourth Quarter 2013
1. *Mortgage Investors Corp. – 100%
2. Embrace Home Loans – 71.4%
3. Bank of America – 68.1%
4. Wells Fargo – 68%
5. Astoria FS & LA – 67.6%
*The numbers from Mortgage Investors Corp. are estimates because the company did not disclose its refinance rates.
Expect the refinance numbers to keep dropping and dropping in 2014. And if you’re wondering why there have been so many mortgage-related layoffs lately, or where they might originate from, take a look at this list.
Of course, dwindling refi volume is just one issue, there are also massive layoffs in loss mitigation departments nationwide because fewer borrowers are missing payments and/or getting foreclosed on.
Finally, remember that real estate agents often determine which lender a borrower ultimately uses for their purchase loan, so buddy up.