Banks are clearly coming out of the mortgage lending crisis more quickly than their non-banking counterparts.
During the first half of 2010, the number of mortgage-related firms to close or fail jumped by more than a quarter from the same time last year. That increase, according to Mortgage Daily.com was driven by more by financial institution failures than by non-bank lenders.
Non-bank lenders are those that extend loans, securitize bank loans or otherwise play roles in the extension of credit, long-term or short-term. Two examples include bank holding companies and some private equity firms.
While bank and credit union failures have doubled compared to the first half of last year, non-bank closings fell by more than two-thirds during the same period.
From Jan. 1 to June 30, MortgageDaily.com tracked 109 mortgage-related failures and closings. That was a 27 percent increase from the first-half 2009.
Based on that analysis, this year’s bank failures will end up between 175 and 200 – indicating a significant drop between the first half and the second half, said MD publisher Sam Garcia.
The report, however, did not include Wells Fargo Financial Inc., which said this month that it plans to exit the mortgage originations business. The move is expected to impact 3,800 employees, many of whom work at the company’s Des Moines, Iowa subprime lending subsidiary’s headquarters.