US lenders originated fewer mortgages in Illinois in 2022 compared to the prior year amid a broader drop in funded mortgage loans.

Mortgage originators funded 263,673 mortgage loans amounting to $71.62 billion in the state, compared to their funded 513,166 mortgage loans amounting to $133.75 billion in 2021, according to the Home Mortgage Disclosure Act data collected by S&P Global Market Intelligence.

The decline in funded mortgages was not exclusive to Illinois as the overall value of funded mortgage loans fell more than 40.6% year over year to $2.840 trillion in 2022. Higher rates hammered home lending activity in 2022, and with the mortgage market staying challenged, some lenders are reducing staff and trimming their exposure.

The Illinois mortgage loan approval rate of lenders was 53.6%, down from 58.6% a year ago, and their unapproved applications totaled $53.05 billion, versus $86.26 billion in the previous year.

Top mortgage originators in Illinois

All but one of the top 20 mortgage originators in Illinois logged a year-over-year decline in funded mortgage loans in 2022.

Guaranteed Rate Inc. led the group with a market share of 7.12%. It reported $5.10 billion in funded mortgages in Illinois, a 55.0% drop from $11.33 billion in 2021, and its loan approval rate fell 12.2 percentage points to 55.9%.

JPMorgan Chase & Co. ranked second as it originated $4.13 billion in mortgages in Illinois, compared with $9.59 billion in the previous year. Rock Holdings Inc., the parent company of Rocket Cos. Inc., nabbed the No. 3 spot with $2.29 billion in funded mortgages, versus $5.88 billion a year ago.

The mortgage industry faced excess capacity and falling demand at the same time in 2022, Rocket CFO Brian Brown said on the company's fourth-quarter and full-year 2022 earnings call.

"We've seen players across the industry struggle to adjust to the volatile environment, facing liquidity issues, retrenching or exiting the industry altogether," Brown said.

UWM Holdings Corp.'s funded mortgages in Illinois fell 38.0% year over year to $2.14 billion in 2022.

During the year, UWM saw "the best mortgage companies separate even further from the rest of the mortgage companies remaining" amid higher interest rates, Chairman, President and CEO Mathew Ishbia said on the company's fourth-quarter and full-year 2022 earnings call.

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Wells Fargo & Co. logged $1.39 billion in funded mortgages in the state, versus $3.73 billion a year ago. In January 2023, the company announced it will exit the correspondent lending business and plans to slash the size of its mortgage servicing portfolio to simplify its home lending segment.

Bank of Montreal was the only originator on the list that logged an increase in the value of funded mortgages year over year. The bank's funded loans in 2022 amounted to $963.2 million, compared with $918.9 million in the prior year, and its loan approval rate rose 1.7 percentage points to 47.2%.

Of the companies on the top 20, three are based in Illinois: Guaranteed Rate; Wintrust Financial Corp., which originated $1.69 billion in mortgages in the state in 2022; and First Centennial Mortgage Corp., which reported $780.5 million in funded mortgages.