Nonbanks Thrive in Covid-19 Crisis Redux

In a recent post[1], we pointed out an acceleration in the trend towards an increasing share of deliveries of purchase mortgages to the GSEs. This trend continued with the release of June data earlier this month, so a deeper dive is called for. First, the trend is far more evident for deliveries to Fannie Mae than Freddie Mac:

Run Underlying Query

​Second, it is useful to look at the composition of lenders delivering to Fannie Mae:

Run Underlying Query

The decline in the overall bank share of purchase loans to the GSEs is largely due to a drop in purchase deliveries to Fannie Mae from Wells Fargo and JP Morgan, which remain the top two sellers by far in this category, despite their reported declines. In fact, these two institutions alone accounted for almost 63% of the 7.1% decline in the total bank share of purchase loan deliveries from banks to Fannie Mae.
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It is not immediately apparent what drove this outcome at the two lenders. Subtle changes in credit boxes and pricing can substantially impact production ​volumes at individual firms. But analysts can use these findings to inform their assessments of the strategies of particular institutions.

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​[1] https://www.recursionco.com/blog/nonbanks-thrive-in-covid-19-crisis