Nonbank Lenders Account For 68% Of Mortgage Originations

Oct 21, 2021

Nonbank lenders now make almost 70% of all mortgages in America. How has the market changed so much? What does it indicate may come next? 

The New Mortgage Lending Landscape

According to data from Inside Mortgage Finance, 68% of new mortgages are being made by nonbank entities. In fact, 7 out of 10 of the largest mortgage lenders in America are not banks, including the largest. 

That may be even more significant given that we’ve been hitting new mortgage origination records. With around $4T in new home loans made in 2020 and 2021.

Why The Shift?

Regulatory changes and slick positioning by entrepreneurs have certainly helped. Traditional banks have continued to refuse to change. Not only in terms of convenience and meeting new trends and technology, but perhaps even more importantly in terms of how they treat their customers. 

They don’t seem to have won any more points in terms of trust since the last crisis. Some of their moves at the beginning of COVID only cost them more of it. 

The Wall Street Journal reports that access to loans and underwriting by traditional banks has only tightened, hitting their most restrictive in 2021, since 2014. 

With investors making up 16% of the home purchase market and growing, these borrowers especially need alternatives. 

What’s Next?

Between supersized funding rounds of startup finance companies, and extravagant IPOs of fintechs, some are certainly questioning the sustainability of this trajectory.

While change is needed in customer service and convenience, those who have been around long enough may remember similar statistics in the run up to 2008, when mortgage brokers were responsible for around 60% of mortgage originations. 

This doesn’t mean a financial or housing crash is imminent, but it could be a leading indicator of a major pending consolidation in the originations space. Especially given that Freddie Mac has forecast an almost 50% decline in new mortgage loans being made in 2022. 


Nonbanks now originate more mortgage loans than banks. There’s no telling how long this will last this cycle. It does say a lot about the market and consumer trends though. Perhaps even more importantly for real estate  investors is that it means there are more financing options for them. And that for mortgage note investors, it is wise to be looking at how this may change where the best notes are to buy. 

Investment Opportunities

Find out more about investing in secured debt and real estate, go to NNG Capital Fund