Nonbanks made the majority of purchase mortgages in 2021

Lenders that aren’t depository institutions made nearly two-thirds of all traditional home-purchase loans last year, according to the Federal Financial Institutions Examination Council’s latest analysis of Home Mortgage Disclosure Act data.

At 63.9%, the overall nonbank share of first-lien, closed-end, purchase mortgages on site-built, one- to four-family homes was up from 60.7% a year ago, and represents a continuation of a general trend in recent years, a FFIEC report released Thursday shows. The findings are in line with an earlier analysis of last year’s HMDA data by Polygon Research showing that 2021’s No. 1 lender was nonbank Rocket Mortgage. 

Depositories’ participation in the mortgage industry tends to be more opportunistic because they’re more likely to have multiple financial product lines, whereas nonbanks are more often specialists.

The disparities that have created homeownership gap between different racial groups persist, but the analysis found that some underserved demographics’ mortgage lending shares showed minor improvements in the past year.

The share of traditional purchase loans made to borrowers in Hispanic households was 9.2%, compared to 9.1% a year earlier; 7.9% of these types of mortgages went to Black or African American borrowers, up from 7.3% 12 months earlier; and Asian households had a 7.1% home lending share market share, improving on 5.5% in 2020.

Home Mortgage Disclosure Act data undergoes regular weekly updates to allow for late or resubmitted filings, so later analyses like the council’s don’t always align with those done earlier in the year.