Over the past decade, the mortgage market hasn’t just contracted—it has fundamentally reshaped itself.
At first glance, the numbers suggest a broad slowdown. Total lenders declined by 29.2%*, while overall originations fell by 27.0%. But beneath that surface-level trend lies a more nuanced shift: a divergence between HUD reporters and the rest of the first-lien, owner-occupied mortgage market.
Non-HUD lenders bore the brunt of the contraction within this segment. The number of such reporters fell by 31.1%, and their origination volume dropped 48.2%. In contrast, HUD lenders proved far more resilient, with only a 16.5% decline in lender count and a 4.61% drop in originations.
The result is a meaningful transfer of market share within traditional first-lien mortgage lending.
In 2015, HUD lenders accounted for 48.6% of these originations. By 2025, that figure had risen to 63.5%, an increase of nearly 15 percentage points. Put differently, nearly two-thirds of first-lien, owner-occupied mortgage originations are now concentrated among independent mortgage companies.
Importantly, this shift was not driven by absolute growth, but by relative stability. While overall volumes declined, HUD lenders maintained a more consistent presence in the market, allowing them to capture share as other participants exited or scaled back.
This trend also points to increasing consolidation within this segment. Fewer lenders are originating a smaller pool of loans, and a growing portion of that activity is concentrated among HUD reporters.
These dynamics are significant, but they are specific to first-lien, owner-occupied mortgage lending. Depository institutions continue to play a major role in other areas of housing finance, notably 2nd lien home equity products, which are not captured in this analysis.
Within the traditional mortgage origination space, however, non-depository lenders have clearly expanded their role and influence over the past decade, becoming an increasingly dominant presence in this segment of the market.
*Note: All figures reflect originated, first-lien, owner-occupied, 1–4 family, and manufactured housing loans reported under HMDA.
If you have questions about the 2025 Modified LAR data or need help interpreting it, feel free to contact us online.