Nonbank Lenders Originate Two-Thirds of All U.S. Mortgages. Here’s Why

Nonbank lenders, mortgage companies that are not banks or credit unions, originated 64.2% of home purchase loans in the United States in 2025, against 30.1% for banks, according to the National Community Reinvestment Coalition’s analysis of full-year 2025 HMDA data, published July 2026. That’s almost two-thirds of the market, down slightly from 66.1% in 2024, but still a wide lead over banks that traces back to 2016, when nonbank origination first surpassed bank origination. Tomo Mortgage is one example of this category: a nonbank, direct-to-consumer online lender.

Quick Answer:

• Nonbank lenders (independent mortgage companies, not banks or credit unions) originated 64.2% of home purchase loans in 2025, against 30.1% for banks, per NCRC’s analysis of full-year HMDA data. That’s a slight pullback from 66.1% in 2024, but still almost two-thirds of the market.
• “Nonbank” is broader than “online-direct.” It includes wholesale and correspondent lenders that originate through brokers, not just direct-to-consumer digital lenders like Tomo Mortgage. There is no separately reported figure specific to online-only origination share.
• Nonbank origination first surpassed bank origination in 2016 and has held the lead since, according to Cato Institute research.
• Borrowers moved to nonbank and online lenders largely for speed, lower origination cost, and digital convenience, not lower rates specifically.

Nonbank, Bank, and Online-Direct: These Are Not the Same Thing

Three terms get used loosely in coverage of this shift, and conflating them overstates or understates different lenders’ actual position.

A bank or credit union is a depository institution: it takes deposits and can hold mortgages on its own balance sheet.

A nonbank lender, also called an independent mortgage company, is not a depository institution. It typically funds loans with short-term warehouse lines of credit and then sells most of them to investors, often Fannie Mae or Freddie Mac. Nonbank is a funding-and-regulatory category, not a distribution channel. It includes large wholesale lenders that originate through third-party mortgage brokers, correspondent lenders that buy closed loans from smaller originators, and direct-to-consumer lenders that work with borrowers directly online.

Online-direct lenders, like Tomo Mortgage, Rocket Mortgage, and Better, are nonbanks, but they are a specific subset: consumer-facing, digital-first, no branch network. The 64.2% figure below measures the nonbank category as a whole. There is no separately reported government or industry figure that isolates the direct-to-consumer online slice of that number, so it would be inaccurate to describe it as an “online lender” share specifically. Nonbank is the accurate, sourced category; online-direct is a claim about a narrower group within it.

The Current Numbers

Loan Type	2022 (CFPB)	2023 (CFPB)	2024 (NCRC)	2025 (NCRC)
Home purchase	60.2%	63.1%	66.1%	64.2%
Refinance	62.1%	67.1%	67.3% (cash-out)	Not yet broken out separately

CFPB published the 2022 and 2023 figures directly in its Summary of 2023 Data on Mortgage Lending; that was the last year CFPB released an equivalent narrative summary. Since then, CFPB has released only raw loan-level HMDA data, and the National Community Reinvestment Coalition has published the breakdown CFPB no longer does, most recently in July 2026 using full-year 2025 data: banks originated 30.1% of home purchase loans, mortgage companies 64.2%, with credit unions and others making up the remainder. That is down slightly from 66.1% in 2024, the first year-over-year dip in nonbank purchase-loan share since the 2016 crossover, worth watching rather than assuming the climb continues indefinitely.

A January 2026 report from the Community Home Lenders of America (CHLA), a trade association representing independent mortgage banks, puts the figure much higher: 84% of all single-family mortgage loans. That number isn’t directly comparable to the figures above. CHLA’s own report attributes it largely to nonbank dominance in government-backed loan types specifically (90% of FHA loans, 95% of VA loans, 95% of Ginnie Mae issuance), not to a broader all-loan-type share, and it comes from an advocacy group representing the lenders being measured.

A separate, more narrowly scoped data series from the Urban Institute’s Housing Finance At A Glance chartbook tracks nonbank share of agency originations only, meaning loans sold to Fannie Mae, Freddie Mac, or insured by Ginnie Mae, which also runs higher than the figures above because it excludes bank-held portfolio and jumbo loans, a segment where banks still lead.

How Nonbank Lenders Took the Lead

Nonbank origination was a minority position for most of the 2000s. According to Cato Institute research by former FHFA Director Mark Calabria, nonbanks made close to a third of mortgage originations by dollar volume at the peak of the 2006 housing boom, then saw their share collapse after the 2008 financial crisis, when nonbank mortgage lenders failed at a disproportionate rate due to their dependence on short-term funding.

The rebound started around 2012. The 2012 National Mortgage Settlement and increased federal enforcement under the False Claims Act pushed large banks to pull back from FHA lending and mortgage servicing, both of which carried more compliance and reputational risk for a household-name bank than for a less visible nonbank. Nonbank servicing share alone went from 7% before the settlement to 24% the year after. By 2016, nonbank origination surpassed bank origination for the first time. From 2010 to 2020, nonbanks roughly doubled their share of Fannie Mae, Freddie Mac, and FHA lending specifically. Banks have retained a stronger position in market segments the government-sponsored enterprises don’t touch, particularly jumbo loans.

Why Large Banks Have Pulled Back

The 2023 numbers above weren’t just nonbanks growing; large banks actively shrank their mortgage businesses that year. Wells Fargo, once the nation’s top mortgage lender with $201.8 billion in volume in 2019, announced in January 2023 that it would exit the correspondent lending channel and shrink its mortgage servicing portfolio, refocusing on existing bank customers instead. Its correspondent channel had represented about 40% of its funded mortgage volume through the first nine months of 2022.

Wells Fargo wasn’t alone. According to HousingWire, Wells Fargo, JPMorgan Chase, and Bank of America collectively originated about $80 billion in mortgages in 2023, down from nearly $218 billion in 2022, a $138 billion decline. JPMorgan Chase’s originations fell 46% year over year to $35 billion; Bank of America’s fell 56% to $19.4 billion. Some of that decline reflects a slower housing market overall, with higher rates and limited inventory suppressing volume industry-wide, but a meaningful part of it reflects banks deliberately reducing their exposure to a business they viewed as carrying more regulatory and reputational risk than it was worth relative to their other lending lines.

Why Borrowers Are Choosing Nonbank and Online Lenders

Three factors show up consistently in why borrowers move away from traditional bank mortgages, beyond simply following where banks stepped back.

Speed. The mortgage industry averages 42 days from application to close, according to the ICE Mortgage Technology 2025 Origination Insight Report. Online-direct lenders like Tomo Mortgage average faster closing speeds, largely by replacing manual underwriting queues and branch handoffs with digital document upload and automated underwriting decisions.

Cost to originate. Independent mortgage companies spent an average of $12,209 to originate a single loan in 2025, compared to $16,320 at depository banks, a gap MBA’s cost-to-originate data attributes largely to lower overhead and more standardized, technology-driven origination processes at nonbanks. Lower origination cost doesn’t automatically mean a lower rate for any individual borrower, but it does give nonbank lenders more room to compete on fees.

Digital-first borrower expectations. Borrower behavior has shifted toward researching and starting the mortgage process online before ever speaking to a loan officer. In an Ellie Mae borrower survey, 92% of recent borrowers said they researched mortgage options online before contacting a lender, compared to 57% of borrowers who had gotten a mortgage five to ten years earlier at the time of that survey. Online-direct lenders built their entire process around that expectation from the start, rather than adapting a branch-based model to add a digital layer on top.

Nonbank Lenders Face the Same Regulatory Oversight

Nonbank status affects funding structure, not regulatory accountability. Nonbank mortgage lenders are licensed state by state through the Nationwide Multistate Licensing System (NMLS), subject to Consumer Financial Protection Bureau oversight, and bound by the same federal lending laws as banks: the Real Estate Settlement Procedures Act (RESPA), the Truth in Lending Act (TILA), and the Equal Credit Opportunity Act (ECOA). A lender being a nonbank says nothing about whether it’s well-regulated or reputable; it only describes how it funds and holds the loans it originates. Tomo Mortgage’s own licensing can be verified through NMLS Consumer Access or the CFPB’s complaint database.

Where Tomo Mortgage Fits

Tomo Mortgage is a nonbank, direct-to-consumer online lender, offering conventional, FHA, VA, and jumbo purchase loans and refinancing with $0 Section A origination fees and a close time of 12 to 21 days against the 42-day industry average. It sits inside the nonbank category described above, specifically in the online-direct segment of it, rather than the wholesale or correspondent channels that make up a meaningful share of nonbank origination overall.

Frequently Asked Questions (FAQs)

What percentage of U.S. mortgages come from nonbank lenders?

64.2% of home purchase loans in 2025, according to NCRC’s analysis of HMDA data, against 30.1% for banks. That’s a slight dip from 66.1% in 2024, but still almost two-thirds of the market.

Is a nonbank lender the same as an online lender?

Not exactly. Nonbank describes how a lender is funded, it doesn’t take deposits, not how it reaches borrowers. It includes wholesale and correspondent lenders as well as direct-to-consumer online lenders like Tomo Mortgage. There is no separately reported figure for online-only lenders specifically.

Are nonbank mortgage lenders regulated?

Yes. Nonbank lenders are state-licensed through NMLS, overseen by the CFPB, and subject to the same RESPA, TILA, and ECOA requirements as banks.