Nonbank mortgage lenders continued to take market share in 2020 by nearly doubling originations from the previous year.
Quicken Loans LLC retained its spot as the No. 1 mortgage lender with $313.41 billion in mortgages in 2020, more than double $141.64 billion of loans in 2019. UWM Holdings Corp. leapfrogged Wells Fargo & Co. to take the No. 2 spot as its volume of funded mortgages increased by 69.4% from the previous year. Across the top 10 mortgage lenders in 2020, seven were nonbanks.
In total, nondepository institutions originated $2.625 trillion in mortgages in 2020, almost double of $1.370 trillion in the previous year, according to newly released Home Mortgage Disclosure Act data collected by S&P Global Market Intelligence. Effective July 1, 2020, the threshold for HMDA reporting increased to at least 100 covered closed-end mortgage loans in each of the two preceding calendar years, up from 25 mortgages per year.
Across all lender types, total mortgage originations in 2020 increased 64.4%, largely driven by a refinancing boom as mortgage rates fell below 3%.
During a call to discuss first-quarter earnings, UWM Chairman, President and CEO Mathew Ishbia said the company is "well-positioned" to not only be the No. 1 wholesale lender but also to be the No. 1 overall mortgage lender in the U.S.
"As our competitors all guide to do less volume in [the second quarter], we're guiding to do more volume because we're going to take market share and grow. We win in a purchase environment. We win in these environments. Our cost to originate, our technology gives us a differentiator," Ishbia said, according to a transcript.
Jefferies analyst Ryan Carr wrote in a June 23 report that UWM is "uniquely positioned" to take advantage of wholesale channel expansion, noting that the company is the largest wholesale lender with a 26% share.
Meanwhile, Henry Coffey, a Wedbush Securities analyst, wrote in a June 14 report that he expects UWM to continue gaining market share into 2023 but that competitive pressures in the wholesale and correspondent channels should weigh on gain-on-sale margins. In particular for UWM, the Wedbush analyst noted the company's recently announced price match guarantee to its network of brokers would have a "small but noticeable" margin impact. With the expected growth in market share, Coffey increased the price target on the company but downgraded the rating to "neutral" on valuation.
"The steps taken by [UWM] to defend and build market share in the wholesale channel have not been without their controversy, but in our view, are expected to be successful," Coffey said.
The biggest mover among the largest nonbank mortgage lenders in 2020 was AmeriSave Mortgage Corp., whose mortgage originations increased 393.5% year over year to $24.27 billion. Other big movers included Freedom Mortgage Corp., whose originations increased 247.4% to $99.24 billion, and Home Point Financial Corp., whose originations rose 226.3% to $41.08 billion.