Home Mortgage Disclosure Data Sheds Light On Market Activity

Credit unions achieved higher market share, funded more loans, and helped more consumers finance homes in most states, counties, and metropolitan statistical areas.

Americans submitted 14.87 million applications for home loans in 2011. In most states, counties, and metropolitan statistical areas (MSAs), credit unions achieved higher market share, funded more loans, and helped more consumers finance homes. Activity like this, which is reported through the Home Mortgage Disclosure Act and released by the Federal Financial Institutions Examination Council, sheds light on credit union and broader mortgage banking trends.

Highlights from this year’s HMDA data include:

  • Credit unions increased lending by dollar volume in 174 MSAs; nationally all institutions increased lending in just 55 MSAs.
  • By dollar amount, credit unions in the Washington, DC, MSA lent the most amount of money more than $3.0 billion.
  • 9 MSAs increased their market share by at least five percentage points.
  • Credit unions in La Crosse, WI-MN, have the highest market share of mortgage loans in the country 37.0%.
  • Credit unions in Cape Girardeau-Jackson, MO-IL, have the lowest market share in the continental United States 0.38%.
  • Johnson City, TN, posted the greatest increase in market share up to 13.4% from 2.1% in 2010.
  • In 25 MSAs credit unions provide at least $1 dollar in mortgage lending for every $5 in the marketplace; that’s a market share of more than 20%.
  • Credit unions out-loaned banks in 66%, or 258 out of 392, of metropolitan statistical areas.


Top 25 MSAs By Credit
Union Mortgage Market Share


National Trends Inform Local Perspectives

Local data helps individual credit unions set strategic goals, but they need the larger context as well. This is where a discussion of national averages is crucial, as it establishes a baseline for analyzing institutional performance within the industry.

Consumers submitted 968,000 of the nearly 15 million loan applications to their credit unions. That’s a 6.51% market share for applications. This is up from 5.89% in 2010 and nearly doubles the market share, 3.20%, from 2007.

Nationally, all reporting financial institutions funded slightly more than nine million or 47.7% of the 15 million applications. The percentage of approved applications that are eventually funded, or the close ratio, gauges organizational productivity, demonstrates the attitude and willingness of financial institutions to grant loans, and, to a lesser extent, shows the credit worthiness of applicants.


Credit Union Market Share
Of All Mortgage Loans


This high-level metric highlights a significant gap between credit unions and other reporting institutions. Credit unions approved 55.5% of applications. That’s 12.2 percentage points more than the national average. So why are credit unions more likely to approve loans? Does this suggest credit union standards are more relaxed than other financial institutions?

The HMDA database contains details on why loans were denied but not why they were approved, so the answers are unknown. However, according to 2011 HMDA data, the variance is not purely the result of underwriting standards. Of the more than 535,000 loans that credit unions funded, only 21.0% were purchase loans. That figure was 34.2% for the other institutions. Credit union loans were more likely to be refinances or home improvement loans. Presumably, having a home to improve on or refinance indicates a financial institution deemed the borrower worthy of a mortgage at some point in the past.

Where The Data Comes From


Mortgage Originations
by Reporting Agency


All lending institutions report public loan data through the Home Mortgage Disclosure Act. The data is tallied by state, county, and metropolitan statistical area (MSA) and released by the Federal Financial Institutions Examination Council. The release of this year’s data highlights the growing influence of the Consumer Financial Protection Bureau. In 2011, all institutions with more than $10 billion in assets reported this data to the CFPB, including Navy Federal, Pentagon Federal, and State Employees’ in North Carolina. For the HMDA analysis above, Callahan & Associates added the three institutions back into the credit union industry totals. The graph below, however, shows the shift in power caused by the CFPB: More than one-half of mortgage volume in the United States is originated by institutions that are under the oversight of the CFPB.

May 28, 2014

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