Quiz: How Well Do You Know Your Mortgage Competition?

Publically available data provides market intelligence to help credit unions compete.


Can you answer the following questions about your local mortgage market? If not, keep reading.

  • How many players are originating mortgages in my market?
    • Are there new entrants I don’t know about?
    • Is there opportunity where others have left the market?
  • What origination market share do I have?
    • So, how much room do I have to grow?
    • And is my market share growing or shrinking over the past 5 years?
  • How does my look-to-book ratio fair compared to my competitors?
    • Am I wasting resources processing applications that aren’t getting funded?
  • What are the trends in purchase vs. refinancing locally?
    • And what are the average loan balances?
  • What are the common reasons that competitors are declining mortgages in my market?
    • Am I missing an opportunity or risking a weakness I haven’t identified?
  • Are competitors holding the loans on their balance sheet?
    • If not, who are they selling to?

All of these questions can be answered using Home Mortgage Disclosure Act (HMDA) data, a publically available data set from the Federal Financial Institutions Examination Council (FFIEC). At the end of 2011, all depository institutions with $40 million or more in assets as well as private companies that lend within metropolitan statistical areas reported mortgage data to the Federal Reserve Board. The FFIEC then aggregates that data and releases tables and reports each October for the most recent year-end.

Callahan & Associates incorporates HMDA data within the Mortgage Analyzer component of its Peer-to-Peer financial analysis tool, making the data easily accessible. Credit unions can use HMDA data to gain valuable insight into their local markets, expand their perspective to inform stronger lending strategies, and identify unrecognized opportunities in the marketplace. To illustrate this, our analysts put together a brief case study on Cumberland, MD as an example of how any credit union can develop a better understanding of their local mortgage marketplace.

Case Study: A Deeper Look At Cumberland, MD

Cumberland, MD — located in western Maryland two hours outside of Baltimore and Washington, DC — is one of the country’s poorest metropolitan areas in terms of per capita income. In 2011, credit unions commanded 33.6% of the mortgage market by the dollar amount of mortgages funded. That market share is second only to La Crosse, WI.

Leading the way in mortgage market share in the Cumberland area is First Peoples Community Federal Credit Union ($318M, Cumberland, MD), which made 21% of all the area’s mortgages in 2011. Whereas large banks pulled back after the financial crisis, First Peoples Community stepped up and doubled its market share over the past five years. Other credit unions also nearly doubled their market share over the same time, going from 7.5% in 2007 to 14.0% in 2011. Combined, credit unions now comprise 35% of the total local mortgage market.

© Callahan & Associates | www.creditunions.com


Source: Callahan & Associates’ Peer-to-Peer Software

First Peoples’ origination market share is more than twice that of the next largest institution; however, the credit union must still be aware of its competition. The area’s banks — both national and local — continue to play a significant role in the local mortgage market. Quicken Loans and Wells Fargo are both in the top five institutions in terms of mortgage origination market share. Baltimore-based 1st Mariner Bank is also a strong player, commanding close to 4% of the origination market.

Credit unions can also look at market share in terms of total mortgage applications for the market. With this method, a credit union looks at the percentage of applications it took in for its market during the year. Using this metric, First Peoples again held the highest market share, processing more than 12.5% of all mortgage applications in 2011. But the strongest competitors in application market share are different from the origination market share leaders. The credit union’s primary competitors in terms of mortgage application are some of the largest banks in the country, Wells Fargo, J.P. Morgan Chase, and M&T Bank.

© Callahan & Associates | www.creditunions.com

Rank Institution  Number of Applications Total Approved Funded/
Market Share of Applications Market Share of $ Loans Funded
1 First Peoples Community FCU 373 370 99.20% 100.00% 12.53% 20.98%
2 Standard Bank Pasb 128 95 73.44% 98.95% 4.30% 7.33%
3 Quicken Loans 103 72 66.99% 95.83% 3.46% 6.12%
4 WELLS FARGO BK NA 220 100 36.82% 81.00% 7.39% 5.20%
5 MANUFACTURERS & TRADERS TC 164 90 53.66% 97.78% 5.51% 5.11%
6 First United Bank & Trust 158 109 62.03% 89.91% 5.31% 4.45%
7 Chessie Federal Credit Union 79 71 89.87% 100.00% 2.65% 4.00%
8 1St Mariner Bank 77 63 79.22% 96.83% 2.59% 3.80%
9 BRANCH BKG&TC 123 73 56.10% 94.52% 4.13% 2.90%
10 Allegany County Teachers Fcu 90 60 66.67% 100.00% 3.02% 2.29%
11 SECU MD 66 42 62.12% 97.62% 2.22% 2.26%
12 JPMORGAN CHASE BK NA 203 31 15.27% 100.00% 6.82% 2.24%
13 SUNTRUST MTG, Owned by SUNTRUST BK 48 30 58.33% 93.33% 1.61% 2.14%
14 ALLY BK 128 28 20.31% 92.86% 4.30% 1.77%
15 Kelco Federal Credit Union 30 30 100.00% 100.00% 1.01% 1.72%
16 Wepco Federal Credit Union 35 35 100.00% 100.00% 1.18% 1.70%
17 Corridor Mortgage Group, Inc. 26 16 61.54% 100.00% 0.87% 1.65%
18 BANK OF AMER NA 140 23 16.43% 100.00% 4.70% 1.51%
19 Phh Mortgage Corporation 27 17 48.15% 76.47% 0.91% 1.31%
20 The Bank Of Romney 20 16 75.00% 93.75% 0.67% 1.30%

Source: Callahan & Associates’ Peer-to-Peer Software

One way to obtain a higher origination market share is to improve the look-to-book ratio, which measures the percentage of applications an institution funds. As you can see in the above table, First Peoples funded 99.2% of its applications in 2011. The market’s other credit unions funded a combined 74.9% of applications. Banks and other companies funded only 43.9%.

The majority of mortgage originations today are a refinance for an existing mortgage. Credit unions processed three refinances for every purchase money application they received in 2001. The Cumberland market was slightly more favorable with roughly 60% of all mortgage originations being a refinance.

More than 50% of First Peoples’ originations were for a refinance; however, the credit union has also carved out a home improvement mortgage niche. In 2011, more than 23% of its mortgage originations were for home improvement compared to the 12.7% average for banks in the market and the 14.7% average for the total market.

© Callahan & Associates | www.creditunions.com


Source: Callahan & Associates’ Peer-to-Peer Software

Credit unions dont't have to rely on anecdotal evidence and instinct to learn what's happening in their local mortgage origination marketplace. All credit unions can benefit from analyzing publically available data from the FFIEC.

Mortgage Analyzer Scorecard


Click On Image For Full/Larger Version (pdf). Call (800) 446-7453 to obtain a copy of any credit union's scorecard.