California regulators have found nonbank lenders are faring well in the state's strong housing market.
The state's Department of Business Oversight found Quicken Loans and other nonbanks originated 615,830 mortgages in 2015, 49% more than in 2014. The value of the nonbank loans rose 59% to $203.9 billion in California, one of the largest mortgage markets in the nation.
"The numbers are cause for encouragement, but not giddiness," DBO Commissioner Jan Lynn Owen said. "DBO will remain on guard against the bad underwriting and unfair business practices that crashed our economy and inflicted financial hardship on millions of Californians."
Nationally, mortgage originations from all sources grew 29% to $1.63 trillion in 2015, according to the Mortgage Bankers Association in Washington. Nonbanks' share of home purchase and refinance loans grew in 2014, largely at the expense of banks. Credit union shares of those loans grew at a slower pace.
The report released earlier this month was the first by the state agency for nonbanks governed by the California Residential Mortgage Lending Act, the largest of which is Quicken Loans. Those lenders originated 537,757 mortgages in 2015, 47% more than in 2014. The value of their loans rose 57% to $179.3 billion.
Residential mortgage lenders' business in California peaked in 2006 at $254.8 billion, but fell to a low of $38.6 billion in 2008, as the housing bubble burst and the economy fell into recession.
Companies under the Residential Mortgage Lenders law completed 16,246 foreclosures in 2015, down 3.6%. They serviced loans with an aggregate average principal of $766.2 billion in 2015, up 7%, according to company reports gathered by the agency since 2012.
"Nonbanks' share of the mortgage market has grown substantially in recent years, and California is no exception," Owen said. "That's why we thought it was important to start sharing this data with the public and policymakers."
Quicken Loans' $15.9 billion in California mortgages was followed by Pinnacle Capital Mortgage ($12.4 billion) and LoanDepot.com ($8.4 billion). Other companies under the Residential Mortgage Lending Act include Prospect Mortgage LLC, Caliber Home Loans Inc., Finance of American Mortgage LLC, Guaranteed Rate Inc., Nationstar Mortgage LLC, Ocwen Loan Servicing LLC, Pennymac Loan Services LLC and Stearns Lending Inc.
On June 30, the agency released similar data for nonbank lenders governed by the California Finance Lenders Law, which is designed for companies that do more than just mortgages. Those lenders originated 78,073 mortgages in 2015, up 62%, while their value rose 55% to $24.6 billion.
Comparable statistics for banks and credit unions within California were not available.
Nationally, banks and their subsidiaries originated 59% of the 8.7 million mortgages originated in 2013, compared with 33% by nonbanks and 8% by credit unions, according to Home Mortgage Disclosure Act data. The two largest lenders were the banks Wells Fargo with 819,000 originations and JPMorgan with 426,000 originations. The third largest lender was Quicken Loans with 376,000 originations. The largest credit union lender was the Vienna, Va.-based Navy Federal Credit Union ($75.2 billion in assets, 6.1 million members), ranking 15th with 57,000 originations.
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