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FANNIE MAE AND FREDDIE MAC JJAN.U- AFERBY. 22001188
the propensity to re nance, especially among borrowers that are likely to bene t from it. We nd no evidence that FinTech lending is more risky.
Going forward, we expect that other lenders will seek to replicate the “FinTech model” characterized by electronic application processes with centralized, semi-automated under- writing operations. However, it is unclear whether traditional lenders or small institutions will all be able to adopt these practices as these innovations require signi cant reorganization and sizable investments. The end result could be a more concentrated mortgage market dominated by those rms that can afford to innovate. From a consumer perspective, we believe our results shed light on how mortgage credit supply is likely to evolve in the future.
Speci cally, technology will allow the origination process to be faster and to more easily accommodate changes in interest rates, leading to greater transmission of monetary
policy to households via the mortgage market. Our ndings also imply that technological diffusion may reduce inef ciencies in re nancing decisions, with signi cant bene ts to U.S. households.
Our results have to be considered in the prevailing institutional context of the U.S. mortgage market. Speci cally, at the time of our study FinTech lenders are non-banks that securitize their mortgages and do not take deposits. It remains to be seen whether we nd the same bene ts of FinTech lending as the model spreads to deposit-taking banks and their borrowers. Changes in banking regulation or the housing nance system may affect FinTech lenders going forward. Also, the bene ts we document stem from innovations
that rely on hard information; as these innovations spread, they may affect access to
credit for those borrowers with applications that require soft information or borrowers that require direct communication with a loan of cer. We leave these issues for future research. (The Role of Technology in Mortgage Lending, Andreas Fuster, Matthew Plosser, Philipp Schnabl, and James Vickery, February 2018; The Hill, Sylvn Lane, 02/22/18)
Quicken Loans, home of the “eight-minute” online mortgage called the Rocket Mortgage, has passed Wells Fargo as the number one lender in the U.S. In the fourth quarter of 2017, Quicken loans originated $25.1 billion of mortgages versus Wells Fargo’s $22.91 billion—a “remarkable feat for a nonbank to beat a big bank,” according to HousingWire’s Kelsey Ramirez.
“Achieving the #1 market share of all mortgage lenders is an exciting accomplishment, but we are even more inspired that we reached this signi cant milestone, while at the same time delivering
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