Non-bank lenders are the leaders in the mortgage race



Last year was a record year for Americans who took out mortgages. And How Wall Street Magazine As reported on Tuesday (June 22), most of these mortgages came from non-bank lenders.

These lenders issued 68 percent of all US mortgages in 2020, up from 58.9 percent in 2019, the highest recorded market share and largest annualized growth in six years.

According to the news agency, the number of mortgage lenders who do not accept deposits or offer other banking services has grown over the past decade. Since 2016, non-bank lenders accounted for over 50 percent of the market, and by the end of 2020, seven of the top 10 US mortgage lenders were non-bank firms.

COVID-19 kicked off an era of “cheap money” that has fueled the growth of these lenders, according to the magazine. Meanwhile, average rates on 30-year mortgages fell below 3 percent for the first time ever, driving home sales and refinancing boom to $ 3.78 trillion in home loans.

Banks did not participate in this boom, avoiding all but the most reliable borrowers, the vision of the crash of 2008-2009 is still fresh in their minds. Firms such as Quicken Loans have stepped in, with loans from the country’s largest mortgage lender more than doubling last year.

As PIMNTS As reported earlier this year, the pandemic has also changed the way clients view the mortgage process.

The crisis has intensified the industry’s need to catch up with consumers using digital tools. Many buyers looking for loans do not just prefer to do the process virtually: they expect it from lenders, including those who provide mortgage and home loans.

“Digital natives rely on technology to gather information on their own terms, act as the primary method of communication and play a huge role in the overall process,” said Tim Elkins of PrimeLender. “Most of today’s consumers expect the instant digital convenience they are accustomed to from large online retailers and service providers, regardless of their generation.”



About the study: AI In Focus: The Bank Technology Roadmap is a research and interview-based report that looks at how banks are using artificial intelligence and other advanced computing systems to improve credit management and other aspects of their business. The guide is based on a survey of 100 banking executives and is part of a larger series on assessing the potential of AI in finance, healthcare and other sectors.


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