"That was attributable to a combination of nonbanks being more aggressive, both in terms of rates and underwriting, and large banks pulling back slightly in the conforming markets," Editor Guy Cecala said.
The leaders in nonbank growth were names like Quicken and Penny Mac as well as other smaller nonbanks, like Charlotte, North Carolina-based Movement Mortgage.
"Our building actually sits in the shadow of a Bank of America headquarters building, and we've been able to gain number one purchase market share in that city inside of five years by offering great service to homeowners," said Casey Crawford, CEO of Movement Mortgage, which he founded in 2007.
Movement's angle is a promise to borrowers that it can close a loan in eight business days, the fastest the federal government allows. It fulfills that promise by approving borrowers before they even apply for a loan.
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"The market is extremely tight, unbelievably tight right now, and many finance buyers are competing with cash buyers," Crawford noted. "If you want to be able to compete with cash buyers, you have to have surety of close, and sellers want to know that you've been pre-approved up front."
The promise worked for Shaya and Yehudis Kohn in Pikesville, Maryland. They already owned a home, but needed to make a fast offer on a move-up home that they knew would sell quickly.
"I knew that if this house went on the market there was no way I would ever get it, so I bought it before it even went on the market," said Shaya Kohn, who was able to secure a loan through Movement immediately.
Like smaller banks, nonbank lenders can offer more personal service. For today's crash-strapped, sensitive borrowers, that, too, is a selling point.
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"They literally held our hands every step of the way, helped us over every bump along the way," said Yehudis Kohn.
Nonbank lenders are gaining share rapidly in the mortgage purchase market, but big banks are still doing a swift business in loan refinances. While the biggest lenders, Wells Fargo and JP Morgan, reported huge drops in mortgage originations at the end of last year, that was primarily due to higher interest rates that caused refinance volume to plummet.