NerdWallet chose some of the best non-bank mortgage lenders in a variety of categories so you can determine which one is right for you. New American Funding works with down payment assistance programs in 14 states, including California, Texas, Florida and Illinois. Veterans United offers VA loans with a down payment of only 0%. Veterans United has physical branches in just 17 states.
Continue reading your article with a WSJ membership. If you're using a Galaxy Fold, consider opening your phone or viewing it in full screen to better optimize your experience. The CFPB estimates that the 5,500 financial institutions that report under the HMDA account for about 88% of fixed-capital mortgages originated in the United States, or 8.1 million loans. Most mortgages are fixed-term mortgages; home equity lines of credit, or HELOC, are not.
Scroll down to see the full list of the top mortgage lenders by purchase origination. Among all the institutions reporting to the HMDA, the percentage of refinance mortgage originations that went to minority borrowers was 17.7%. While many lenders focus on originating purchases, only the Mortgage Research Center obtained more than 70% of its purchase loans declared by the HMDA. With so many potential borrowers unable to obtain a mortgage loan for an ordinary bank, many non-bank mortgage lenders have emerged that are offering financing opportunities to people who have been excluded from such typical lending institutions.
If you applied for a mortgage last year, you probably chose a non-bank lender instead of the bank where you keep your checking and savings accounts. However, an exceptional year for lenders brought little change to the list of the country's largest mortgage companies. In the boldest move, Freedom Mortgage jumped to third place, well above tenth place a year ago, underscoring the aggressive growth of non-bank lenders. One of the main reasons for this has been the withdrawal of banks that offer mortgages due to the number of regulations and compliance regulations that have made banks more hesitant when it comes to offering mortgage loans.
Traditional financial institutions, even those with active residential mortgage transactions, have largely been calling back. Both megabanks served borrowers with high mortgage balances, reflecting a focus on mortgages as part of their overall services to their best customers. The change highlights both the aggressive growth of non-bank lenders and the decline in the interest of some traditional banks in the origination of mortgages.