Nonbank mortgage share now tops 60%, CFPB finds in HMDA analysis

The share of mortgages originated by non-depository institutions climbed to nearly 61% in 2020 from a little over 56% a year earlier, according to Home Mortgage Disclosure Act data released by the Federal Financial Institutions Examination Council on Thursday.

The data distributed by the Consumer Financial Protection Bureau was in line with earlier private analyses of individual lenders’ HMDA reports that had shown some large nonbanks moving up in the rankings at the same time certain depositories dropped in the rankings.

The FFIEC data also confirmed that disparities in lending to racial and ethnic groups persisted in the past year.

The home-purchase loan denial rate for Black applicants rose to 17.2% from 16% in 2019; and to 11.2% for Hispanic borrowers from 10.8%. In addition, the 9.1% denial rate for Asian households was up from 8.6%. Only the denial rate for white applicants remained unchanged at 6.1%.

(The report noted that trends seen in the HMDA data were generally “similar” to previous years but that the numbers aren’t completely comparable given changes to the criteria for reporting institutions in 2020.)

The data also showed that more purchase loans were made to low- and moderate-income borrowers last year, but fewer refinances. The share of purchase mortgages that went to low-mod borrowers rose to 30.4% from 28.6%. In contrast, the share of refis fell to 19.3% from 23.8%.

The report also reflected a reduction in home equity lines of credit that has continued through the first quarter of this year. Open-ended loans decreased by 19% in 2020, according to the report.