“Today, just five banks, all Too Big to Fail, control 83.2% of the U.S. mortgage market and about 90% of U.S. mortgages are insured or guaranteed by the federal government: FHA, VA, Fannie Mae, and Freddie Mac. That’s not a free and fair marketplace, it’s a mortgage lending oligopoly tacked on to a government mortgage insurance business…

…And how could it be “safe and sound” for Wells Fargo alone to control nearly 40% of all U.S. mortgages, when history shows time and again that it is a risky and volatile business?”, Mike Perry, former Chairman and CEO, IndyMac Bank

Excerpt from February 2015 Mortgage Industry Newsletter:

  • Bank of America reported mortgage originations of $11.6 billion for the 4th quarter, but I looked up their numbers from Q4 2010 and they did $84.7 billion then, an 86% drop. Here are the numbers for the big originators, then and now, all in billions. The bottom row shows how much their volume has declined since 2010.
Wells JP Morgan U.S. Bank BofA Citi Flagstar
Q4 2010   $128.0 $50.8 $19.6 $84.7 $21.8 $9.2
Q4 2014   $  44.0 $23.0 $10.4 $11.6 $  6.7 $6.6
Decline    -65.6% -54.7% -46.9% -86.3% -69.2% -28.2%

The table below shows the fourth quarter market share for these six lenders. Wells Fargo and J.P. Morgan have a 58.2% market share between them, and these six lenders control 88.9% of the market.  When I started in the business, people always commented on what a fragmented industry it was, with no single lender even approaching 5%.

Wells J.P. Morgan U.S. Bank BofA Citi Flagstar
38.2% 20.0% 9.1% 10.1% 5.8% 5.7%

Posted on February 11, 2015, in Postings. Bookmark the permalink. Leave a comment.

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