Nonbanks lost mortgage share but still dominated the market in '22

Depositories gained ground in housing finance overall in 2022 — just as they did in the top 10 rankings for that year — but nonbanks remain the main players, new national statistics from the Home Mortgage Disclosure Act confirm.

Nonbanks controlled 60.2% of the one- to four-family market during the year but higher rates that eroded loan volumes and a wave of industry consolidation reduced their share from 63.9% a year earlier, increasing that of their depository counterparts to nearly 40% from closer to 36%.

The share of the mortgage market held by nonbanks hasn't been this low since 2019, when it was 56.4%.

Overall, the mortgage market contracted by 2.63%, according to the snapshot of numbers from the HMDA's national data set that the Consumer Financial Protection Bureau and the Federal Financial Institutions Examination Council released Thursday.

The number of entities reporting into HMDA dropped to 4,338 from 4,460 and could fall further, depending on how much industry contraction is offset by new requirements that reduce the reporting threshold for banks regulated by the Office of the Comptroller of the Currency.

The new numbers released also show that the historically low share of purchase mortgages made to Black borrowers rose to 8.1% from 7.9% during 2022, when several Biden administration initiatives called for more equitable lending across racial and ethnic groups.

Denial rates, however, remained particularly high for Black consumers trying to achieve homeownership at 16.4%, compared to 11.1% for Hispanic households, 9.2% for Asian consumers and 5.8% for white loan applicants.