One of the key functions of the housing sector is mortgage lending. The biggest players in the home loan market are well-known banks like Wells Fargo and Chase as well as well-known nonbank mortgage lenders like loanDepot and Rocket Mortgage.
These businesses and other financial organizations are required by federal law to provide reports regarding the mortgages that applicants apply for. These reports are made available to the public through the Home Mortgage Disclosure Act (HMDA) database and are anonymised to remove any personally identifiable consumer data.
A big, reputable mortgage provider can be something to take into consideration when you’re looking for a mortgage. These lenders frequently offer additional services that smaller lenders might not, like expedited service, a larger range of loan products, and reasonable interest rates.
Largest Nonbank Mortgage Lenders
When a customer is ready to apply for a mortgage, banks are frequently their first choice. After all, companies like Wells Fargo and Chase are well-known.
However, you have other options if you want to borrow money for a house besides banks. The tables below demonstrate how many nonbank lenders provide mortgages totaling billions of dollars annually.
Largest Nonbank Mortgage Lenders in the U.S. by Volume
It’s important to note that Home Point Financial is not accepting loan applications, and it will not be listed among the best lenders in the future. On May 1, 2023, Home Point announced the sale of its origination division. On May 10, 2023, Mr. Cooper consented to purchase the outstanding shares of the company, subject to regulatory clearance.
What’s the Difference Between a Lender and Nonbank Lender?
Of course, one kind of lender is a nonbank lender. Since nonbank lenders might not be as well-known as your go-to big-name bank, they have to work harder to win over clients. Nonbank lenders usually use different underwriting guidelines and offer different loan products than banks in order to do this.
Furthermore, banks can focus on credit cards or personal loans when there is less demand for home loans because they have alternative revenue streams. Mortgages must still be sold by nonbank mortgage lenders.
How Nonbank Mortgage Lenders Compare to Bank Mortgage Lenders
Here are four examples to help you understand the similarities and differences between mortgage lenders that are not banks and those who are.
- As of July 2023, United Wholesale Mortgage provides four different kinds of bank statement loans. Well-qualified self-employed borrowers may be able to borrow up to $3 million with a debt-to-income (DTI) ratio of up to 90% with the aid of these loans. To assist more borrowers in being eligible for loans, UWM also has a 1% down scheme.
- Guaranteed Rate offers bank statement loans, foreign national loans, physician loans, interest-only loans, renovation loans and jumbo loans.
- Nearly all conventional, FHA, VA, and USDA mortgage types are available from Flagstar Bank. Within these wide, “safe” categories, certain banks provide fewer possibilities. Lenders are aware that they can get their conventional conforming loans off their books by selling them to Freddie Mac or Fannie Mae. Furthermore, a government guarantee serves as partial support for the agency loans.
- Guaranteed Rate’s offers and PNC Bank’s were comparable. PNC creates low down payment, physician, and high-net-worth jumbo loans without the need for private mortgage insurance (PMI).
How To Apply for a Nonbank Mortgage
A subset of nonbank lenders operate as wholesale lenders, which means they get their loans from bankers and mortgage brokers. You will need to go via a mortgage expert in order to apply for a mortgage from United Wholesale Mortgage on your own. The expert, who is typically a broker, can also compare bids from various lenders to determine which one can provide you with the best loan conditions.
You can’t do that as a bank lender. If you apply to Chase, you will either be approved for a mortgage by Chase or denied.
The majority of significant nonbank lenders start loans via a mix of correspondent, retail, and wholesale channels.