The rise to dominance in Federal Housing Administration lending by non-banks continued in 2015, as just two banks made the top 20 ranking, Home Mortgage Disclosure Act data show.
For 2014, there were four banks in the top 20, but Bank of America and JPMorgan Chase Bank fell out last year, leaving just Wells Fargo Bank and Flagstar Bank as the only banks in the top 20.
Wells retained its runnerup position to Quicken Loans last year, but Flagstar fell three spots, from fourth to seventh.
Quicken dominated the 1,670 firms that made FHA loans last year. Its $14.2 billion in volume was more than twice Wells’ $6.8 billion. Quicken captured a 5.85% share of last year’s FHA market, with Wells taking 2.8%.
Nationwide, lenders originated $243 billion in FHA product, up smartly from 2014’s $141 billion. That represented 13.2 percent of a national total of $1.85 trillion and a jump of more than 70 percent over 2014, when it had 10.2 percent of a total market of $1.4 trillion. (Purchased loans are not included.)
Rounding out the top five FHA lenders for 2015 are Freedom Mortgage Corp., which at $6.6 billion was just behind Wells Fargo, loandepot.com at $4.6 billion, and Stearns Lending at $4.1 billion.
The data come from reports run on LendingPatterns™, the HMDA database of ComplianceTech, a fair lending and technology firm based in McLean, VA.
About 57 percent of FHA origination dollars, and 61 percent of loans, went to whites last year. About 31 percent of FHA loans went to minorities, and 32 percent of origination dollars. Hispanics got the most FHA funding, followed by Blacks.
FHA origination dollars skewed toward purchase mortgages last year, at 64 percent, while refinancings made up 35 percent and home improvement loans accounted for 1.2 percent. Nationally for all loans those totals were 51 percent purchases, 45 percent refis, and 3.4 percent, home improvement loans.
Loan amounts were considerably smaller than the national averages, with a first lien loan averaging $198,000 and a subordinate lien $22,000. The national averages were $261,000 and $65,000.
Not surprisingly, since FHA and Department of Veterans Affairs loans are packaged into GNMA securities, Ginnie Mae was the largest investor in FHA loans, at 49 percent of dollars granted. Non-agency investors were second, at 45%, while about five percent of FHA dollars weren’t sold and remained on lender portfolios. Fannie Mae and Freddie Mac do invest in FHA loans, but only in very tiny amounts.
Upper income borrowers got the most FHA dollars in 2015, at 29 percent, but this was much smaller than the national average of 56 percent. Low- and moderate-income FHA borrowers were higher than the national average, at 24 percent combined, which matched middle income borrowers, also at 24 percent. FHA lending specializes in mortgages to first-time and low-mod borrowers.
Not all FHA lending is conforming, though, as it has a viable jumbo lending program. Last year 12 percent of loan dollars went to jumbo mortgages, with 87 percent in the conforming range.
Spreads were reported at 1.89 percent for FHA first liens and 6.5 percent for seconds. However, only 14 percent of lenders reported spreads.
(Mark Fogarty is a journalist and analyst who has been covering the mortgage industry for more than 30 years.)