20 Jul, 2022

Purchase loans up, refinancing loans down in 2021; approvals in same ballpark

By Zoe Sagalow and Gaby Villaluz


Home purchase loans were up in 2021, while their approval rate during the year remained flat at 58.5%, compared to the prior year.

Refinancing loans trended down with the exception of cash-out refinancing loans that were up year over year, according to S&P Global Market Intelligence data based on recently released Home Mortgage Disclosure Act information. The approval rate for refinancing loans also inched down to 58.3% in 2021, compared to 58.9% during 2020.

The Home Mortgage Disclosure Act requires lenders to report information about the home loans for which they receive applications or that they originate or purchase. Regulators and the public can use this information to monitor whether financial institutions are serving the housing needs of their communities.

Loan purposes

Refinancing loans remain to be the largest category with 5.7 million funded loans in 2021, compared to 6.7 million funded loans in 2020. The second largest category was home purchase loans, of which there were 5.4 million. Lenders recorded 3 million cash-out refinancing loans with an approval rate of 58.1%, up from 2.2 million funded loans in 2020.

SNL Image

Top mortgage originators

UWM Holdings Corp. was the top home purchase mortgage originator with $87.34 billion in funded loans and a market share of 1.83%. Rocket Mortgage LLC and Wells Fargo Bank NA were tied at second place with 1.31% market share each. Other originators had less than 1% market share, starting with JPMorgan Chase Bank NA at 0.97%.

SNL Image * Download a template to compare a bank's financials to industry aggregate totals.
* View U.S. industry data for commercial banks, savings banks and savings and loan associations.
* Download a template that can generate a bank's regulatory profile.

UWM Holdings also recorded the largest year-over-year change in funded loans at 103.2% among the top 20 institutions by home purchases. Its loan approval rate was 81.8% in 2021. The next largest year-over-year increase in funded loans was 69.5% at Home Point Financial Corp., which had a 59.7% approval rate.

SNL Image

Top refinancing originators

A similar group of companies had the greatest market share of refinancing mortgage origination. Rocket Mortgage had the most at 3.22%, followed by UWM Holdings with 1.63%, Freedom Mortgage Corp. with 1.60% and Wells Fargo with 1.56%.

However, Better Mortgage Corp. had the largest year-over-year growth in funded loans at 79.3%, followed by Home Point Financial with a 64.1% increase year over year. Their loan approval rates were 61.1% and 62.4%, respectively.

SNL Image

Top cash-out refinancing originators

Rocket Mortgage had the largest market share among cash-out refinancing mortgage originators at 2.51%. UWM Holdings had the second-largest market share, 1.29% and loanDepot.com LLC had the third-largest market share at 0.80%.

Again, Better Mortgage had the largest year-over-year change in funded loans among the top 20 institutions in cash-out refinancing, a substantial spike of 29,443.4%. PennyMac Loan Services LLC had the second-highest change at 248.1%. Their approval rates were 51.9% and 36.2%, respectively.

SNL Image

Mortgage outlook, potential new regulations

Lenders are bracing for a drastic slowdown in mortgage activity as the Federal Reserve is raising its policy rate to fight inflation and as mortgage rates are spiking.

The Consumer Financial Protection Bureau requested public comment on its plan to review the effectiveness of the rules implementing the Home Mortgage Disclosure Act. The consumer agency said it would focus its assessment on institutional coverage and transactional coverage, data points, the benefits of the new data and disclosure requirements, and operational and compliance costs. The assessment report is expected by January 2023. The Home Mortgage Disclosure Act rule was last changed in 2020.