Earlier this week, Housingwire.com announced that mortgage originations by the nation's largest four banks fell 20.4% in 2011 to a combined $717 billion from $902 billion in 2010.
To put that decline of $180 billion by the largest 4 banks in perspective, the United States government stepped in for AIG and pledged $180 billion; Japan's estimated tab at rebuilding after the earthquake is estimated at $180 billion; an earlier report by the National Center for Policy Analysis said that over $180 billion could be removed from the US Healthcare system and improve efficiency at the same time; from The Nature Conservancy which quoted Rob McDonald as saying ”One study estimated that the world will have to spend $180 billion a year to meet its urban water needs". So $180 billion is HUGE.
Furthermore, as noted in a Federal Housing Finance Agency report in July 2010, "consolidation in the single-family mortgage origination business continued in 2010. According to Inside Mortgage Finance Publications, the top 25 lenders’ share of all originations grew from 86.5 percent in 2009 to 89.1 percent in 2010 (Figure 28). However, the top ten originators increased their share of originations a little more, from 73.7 percent in 2009 to 75.6 percent in 2010. A bit larger still was the growth in the share of the top five originators, which increased from 61.7 percent to 63.7 percent. Bank of America, Wells Fargo, JPMorgan, Citigroup, and GMAC were the top five mortgage originators in each of the past two years."
Michael Hobbs, PahRoo Appraisal & Consultancy
The FHFA paper was prepared by Andrew Leventis, Valerie Smith, Jesse Weiher, and Ken Lam of the Office of Policy Development and Research under the supervision of Austin Kelly and Robert S. Seiler, Jr. Peter Alex, Joshua Foster, Hanna Nguyen, and Alison Wardle provided research assistance.
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