BY OCTAVIO NUIRY, MANAGING EDITOR BIG BANKS CEDE MARKET SHARE TO NONBANKS
At $26 trillion, the American housing market is the largest asset class in the world, bigger than the U.S. stock market, according to The Economist . And the banking industry’s $13 trillion in total loans is the engine that drives the U.S. housing market, according to ATTOM Data Solutions. But since Congress passed the Dodd- Frank Wall Street Reform and Consumer Protection Act in 2010, big U.S. banks have slowly withdrawn from the mortgage market as they face scores of new federal
rules, billions of fines for misconduct and more regulation (the Dodd-Frank Act is 2,319 pages long). Increasingly, nonbank mortgage lenders — sometimes called “shadow banks” — have overtaken U.S. commercial banks to grab a record slice of the government and conforming loan markets, after the heightened regulatory environment and billions of dollars in fines forced retail lenders out of the U.S. home loan market.
nonbank Quicken Loans. Wells alone issued $43 billion in residential mortgage loans in the first quarter of 2016, according to The Wall Street Journal. But Wells Fargo’s market share is shrinking, largely due to the rise of nonbank lenders like Quicken Loans, Caliber, loanDepot. com and others. Wells is not the only retail bank that has been pulling back from home loans. Bank of America, Chase, Citibank, and U.S. Bank have downsized their market
Wells Fargo is the biggest lender by far, doing nearly twice the volume of No. 2
ATTOM Data Solutions • P1
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