The mortgage crisis has clobbered the market share of the biggest lenders in the country, and that could be a good thing.
When Dinosaurs Ruled the Earth
As recently as 2010, the country’s five largest mortgage lenders controlled a whopping 2/3 of the market, according to Inside Mortgage Finance, and borrowers who didn’t drop neatly into their little boxes were largely out of luck. That went double for those who were underwater and needed the HARP program to refinance.
So much business concentrated in the hands of a few huge companies also had a chilling effect on competition for your business. This became apparent when industry analysts discovered that lender profit margins were unusually high, and they concluded that rates did not come down as much as they could have because lenders were operating at capacity with no incentive to reduce prices.
2012 was the Year of the Little Guy
By 2012, …