USA Home Loan Market Trends

Nonbank mortgage lenders offer similar services to those of traditional institutions but with lower down payments and fewer financial criteria. Because nonbanks operate without full banking licenses, they don't have to adhere to as many regulations as legacy banks, resulting in faster loan approvals and more flexible rates. Most nonbank mortgage lenders offer consumers two major services: home loans and loan refinancing. Home loans can include fixed loans, Federal Housing Administration loans, United States Department of Agriculture loans, jumbo loans, and reverse mortgage loans. Refinancing options offered by nonbank institutions often include lowering monthly mortgage payments and consolidating debt.

Nonbank lenders have gained a large footprint in the syndicated loan market, and their participation is now comparable with that of banks along important dimensions. The share of all loan facilities with nonbank involvement exceeds one-third. Around two-fifths of all nonbank lenders active in the syndicated loan market act as lead arrangers, a share similar to that of banks. Likewise, individual members of both types contribute comparable shares to the total syndicated amount on average and extend loans for similar purposes (e.g., working capital, debt repayment, or capital expenditure). That said, credit lines are more common among banks at origination, and term loans are more common among nonbanks.