What Are the Top Mortgage Lenders in the USA?

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During the past several decades, the list of the most successful mortgage companies has been extremely fluid. Market conditions, consumer expectations and governmental involvement all play a roll in which companies are on top at any given time. However, the most successful lenders in the country tend to always hover at or near the top of the list, even in periods unfavorable to their specific business models. As a prospective borrower, knowing who the top mortgage companies are and why they are successful can be one of the key pieces of the information needed to make the best decision for your situation.

History

The top-tier companies in the mortgage industry, perhaps unlike most other industries, are in constant flux. Much of what determines success for a company in mortgages depends on cyclical trends such as government regulations and availability of capital. For example in a period of lax regulations and high availability of capital, such as the housing boom of the early 2000s, national wholesale mortgage lenders, such as Countrywide Mortgage and Greenpoint Mortgage, thrived. In times when it is tougher to raise capital on Wall Street, traditional lenders, such as banks, tend to rise back to the top of the list. Historically, because of the constant influx of deposits, banks have tended to be the more stable mortgage lenders.

Facts

Traditionally, and even in times favorable to wholesale lenders, the big banks such as Wells Fargo, Bank of America and Citibank tend to be at or near the top of successful lender lists. Bank of America has gone on to become perhaps the largest private mortgage lender in the nation with its acquisition of Countrywide Financial. In times of severe economic turmoil, Fannie Mae and Freddie Mac, because of their government backing, tend to become the largest mortgage lenders by volume in the nation. Although their loans originated through private banks, they agree to purchase loans that meet their guidelines from those partner banks after the transaction is complete. During the housing crisis that started in 2008, nearly 80 percent of the mortgages written in the United States were for Fannie or Freddie programs.

Geography

Although the largest mortgage lenders tend to do business throughout the United States, each can have more exposure and thus more success in certain regions as opposed to others. A good example of this can be found by looking at JP Morgan/Chase and Citibank. Although both companies did good business throughout the United States on a wholesale level during the housing boom, the bulk of the business from their retail arms came from the East Coast, where the main concentration of their banks had been. Another example of regional dynamics at play can be found by looking at the former Downey Savings and Trust. For more than 30 years, Downey was one of the top lenders in California, Arizona and Nevada, with almost no market penetration anywhere else in the United States. Similar examples can be found throughout the country in the form of long standing regional banks.

Identification

As a borrower seeking a mortgage, there are a number of items to look for when deciding on which top-level mortgage company to get your loan through. The easiest and most obvious items to check are their length of time in business and there track record of customer service. You will want to check to see how the company is capitalized. Where do they get the money? Is it a bank that funds their loans through a steady stream of deposits or are they reliant on continually scrutinizing and selling their mortgage notes to Wall Street in order to stay in business? Furthermore, it is important to ask whether the lender will continue to service your mortgage after funding or if they will sell the servicing contract to another entity, as often happens. Having answers to these simple questions can go a long way to choosing a stable lender to do business with.

Warnings

This section can be viewed as an expansion of the “Identification” section. This is because many of the red flags that you should be on the lookout for when choosing a lender can begin to pop up when asking the questions from the previous section. For example, in regards to company history and track record, one should be aware that in periods when the real estate market is strong, it is easy for new companies to acquire capital and begin lending. Many of these companies tend to disappear just as quickly as they came on the scene when the market slows down. The housing boom of the early 2000s saw a number of such companies show up, push bad loans on unsuspecting consumers, and then go out of business. These “turn and burn” companies tend to offer programs that are too good to be true with the real cost of the loan back loaded to appear after they have already made their money and left the scene.

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