Bank Watch

Bank of America drops to 4th place for mortgage originations

While Bank of America’s overall mortgage origination volume fell in 2014, bank spokesman Terry Francisco said the lender has grown its market share for mortgages used to buy homes by 40 percent since 2013. That year, the bank restructured its mortgage operations to put more emphasis on loans for home purchases, he said.
While Bank of America’s overall mortgage origination volume fell in 2014, bank spokesman Terry Francisco said the lender has grown its market share for mortgages used to buy homes by 40 percent since 2013. That year, the bank restructured its mortgage operations to put more emphasis on loans for home purchases, he said. Bloomberg

Bank of America has dropped to fourth place on a widely watched ranking of mortgage market share, as the Charlotte-based bank experiences a decline in home loan dollar volume being felt across the mortgage industry.

The bank’s U.S. market share fell to 4.4 percent last year from 4.8 percent the year before, as the total amount of home loans it made sank to $54.5 billion from $89.8 billion, according to the report released earlier this year by industry publication Inside Mortgage Finance.

Bank of America lost its third-place position to Detroit-based Quicken Loans, underscoring the increasingly formidable competition banks are facing from nonbank lenders.

Guy Cecala, publisher of Inside Mortgage Finance, said nonbanks are picking up business as big banks pull back from mortgage lending and focus more on the profitability of their home lending operations rather than loan volume.

Quicken is among nonbank lenders boosting their market share. The online lender is now the top nonbank mortgage lender in the U.S.

Eight years ago, before the mortgage and financial crises, Quicken wasn’t even among the top 25 mortgage lenders, according to Inside Mortgage Finance. Last year, Quicken’s market share rose to 4.8 percent from 4.2 percent a year earlier.

“They’re definitely picking up business,” Cecala said. “If you ask Wells and Bank of America who they’re watching most closely in terms of competitors, they’ll say Quicken.”

Wells Fargo remains the nation’s biggest mortgage lender, while JPMorgan Chase & Co. remains the second-largest. The Inside Mortgage Finance report is based on loans made to buy homes and refinance existing home loans.

While Bank of America’s overall mortgage origination volume fell in 2014, bank spokesman Terry Francisco said the lender has grown its market share for mortgages used to buy homes by 40 percent since 2013. That year, the bank restructured its mortgage operations to put more emphasis on loans for home purchases, he said.

Over the past two years or so, lenders have struggled to grow mortgage originations after rising interest rates sent demand to refinance mortgages plummeting. That has cost lenders a sizable amount of revenue as mortgages to buy homes have not been enough to offset the drop in refinance activity.

Industrywide, refinancing volume dropped 54.8 percent last year, while purchase-mortgage volume was down only 3.6 percent, according to Inside Mortgage Finance.

Top five mortgage lenders

Here’s a look at the nation’s biggest in 2014 and their market share, according to industry publication Inside Mortgage Finance:

1. Wells Fargo, 14.6 percent

2. JPMorgan Chase & Co., 7 percent

3. Quicken Loans, 4.8 percent

4. Bank of America, 4.4 percent

5. U.S. Bancorp, 3 percent

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