An overview of the Sub-Prime Mortgage Lenders Market, not Prime Mortgage Brokers.

Other words to describe this market are non-prime and non-conforming
mortgages.  Trade jargon that is less likely to be used in the press
are B lenders or C lenders or non-agency lenders.  Long Beach refers
to their non-conforming loans as specialty home loans.

1. Size and growth of this market.
2. Breakdown between refinance v. purchases
3. Major competitors (top ten, if possible).  We have this data from
National Mortgage News, but we'd like to see if another source has
different data.
4. Emerging competitors to be monitored (lower in priority)
5. Opportunities and potential threats.  (As discussed above, we know
about the most obvious one, the change in interest rates.  What else
should be taken into account?)  Perhaps things like attitudes toward
home ownership, unemployment resulting in foreclosures, two income
families increases their ability to buy a home or to buy more
expensive homes,...)
6. Dynamics affecting this business, especially those outside the
industry.  (For ex.,, I've seen an article that non-US born ethnic
groups buy homes at a higher rate than those ethnicities that were
born here, which is surprising and therefore creates an opportunity.)

---

Clarification of Question by santabarbara-ga on 31 Dec 2003 10:03 PST

Sub-Prime is more commonly spelled Subprime.

1. Size and growth of the market.

According to HUD, there are 178 subprime lenders. The number has
dropped by 74 since 1999, due to bankruptcies and consolidations.
http://66.102.11.104/search?q=cache:Tt7iwc1R9GoJ:www.occ.treas.gov/workingpaper.pdf+%22subprime%22++%22%24213+billion+%22in+2002%22+&hl=en&ie=UTF-8
http://www.occ.treas.gov/workingpaper.pdf

According to National Mortgage news 
2004 - $190 billion (estimated)
2003 - $290 billion (estimated)
2002 - $241 billion.
2001 - $180 billion 
1999 - $160 billion
1994 - $40 billion
http://www.nationalmortgagenews.com/mid_demo/chap9.htm

According to Inside B&C lending
2002 - $213 billion
2001 - $173 billion
2000 - $138 billion
http://www.frbsf.org/publications/federalreserve/annual/2002/money.html

According to HUD and the Mortgage Bankers Association

2001 - $173 billion
2000 - $138 billion
1999 - $160 billion
1998 - $150 billion
1997 ? $125 billion
1996 - $90 billion
1995 ? $65 billion
1994 - $40 billion
1993 - $20 billion
http://www.brokerfundingsource.com/pdf/SFSG%20Investor%20Report.pdf

2002 ? $213 billion
http://66.102.11.104/search?q=cache:upQCcJS1KlMJ:financialservices.house.gov/media/pdf/110503gi2.pdf+%22subprime%22++billion+%22in+2002%22+&hl=en&ie=UTF-8

http://66.102.11.104/search?q=cache:XYC2R12L87wJ:financialservices.house.gov/media/pdf/110503sn.pdf+%22subprime%22++%22%24213+billion+%22in+2002%22+&hl=en&ie=UTF-8



--------------------------------------------------
2. Breakdown between refinance and purchase.
Refinancing accounts for 75% of subprime lending.
http://www.brokerfundingsource.com/pdf/SFSG%20Investor%20Report.pdf


-------------------------------------------------

3. Major competitors.

HUD subprime lenders.
The data is presented as an excel file. If you do not have excel
installed on your computer, an excel viewer can be downloaded at the
link given below.
http://www.huduser.org/datasets/manu.html

This report ranks the top subprime lenders for 2003 as follows:
Household
CitiFinanicial
Long Beach/Washington Mutual
New Century Financial
Ameriquest.
http://www.nationalmortgagenews.com/mid_demo/chap9.htm

This report gives the top 2001 subprime lenders as (source: National
Mortgage News):
Household
Citifinancial
WashMu
Option One
First Franklin
New Century
http://www.brokerfundingsource.com/pdf/SFSG%20Investor%20Report.pdf

A list for 1999 and 2000 from the Department of Housing and Urban
Development (HUD) is included in this report. It shows the market
share for each lender. The top 21 companies are listed.
http://66.102.11.104/search?q=cache:6czl8qNIjG4J:www.mortgagebankers.org/state_update/2002/nc/nc_study_0814.pdf+%22subprime%22+++ranked&hl=en&ie=UTF-8

-----------------------------------------

4. Emerging competitors.
This report looks at subprime borrowers. Fannie Mae and Freddy Mac are
reported to be increasing their subprime business.
http://www.huduser.org/Publications/pdf/subprime.pdf

Freddy Mac
http://www.freddiemac.com/news/analysis/ambankerlet.html

------------------------------------------
5. Opportunities and potential threats.

Changes in legislation.
http://www.bestofneworleans.com/dispatch/2002-05-21/commentary.html
http://www.alternet.org/story.html?StoryID=15703

Impact of North Carolina?s anti-predatory lending law.
http://66.102.11.104/search?q=cache:8WULdQpN5zwJ:www.mortgagebankers.org/industry/reports/03/NC_AntiPredatoryLaw_Impact.pdf+%22subprime%22++%22%24213+billion+%22in+2002%22+&hl=en&ie=UTF-8

Poor employment outlook in 2003 and 2004 is likely to lead to increase
in demand for subprime loans.
http://www.nationalmortgagenews.com/mid_demo/chap9.htm

------------------------------------------
6. Dynamics

Hispanics are nearly twice as likely to mortgage their homes through
subprime lenders than whites. This was true even for Hispanics in the
upper-income category which includes borrowers earning more than 120
percent of the U.S. median family income.
http://www.bizjournals.com/sanantonio/stories/2002/06/10/story3.html

Lower income African Americans receive 2.4 times as many loans as
lower income whites. Upper income African Americans receive 3 times as
many subprime loans as do whites with comparable incomes. For lower
income Hispanics the figure is 1.4 and for upper income Hispanics it
is 2.2 times.
http://money.cnn.com/2002/05/01/pf/banking/subprime/

This report looks at the situation in Texas and confirms the findings
that minorities have more subprime loans.
http://www.consumersunion.org/finance/minority-rpt1002.htm

According to the American Association of Retired Persons, New York and
Texas have the largest subprime loan penetration rates in the U.S.
This report also details the areas with the highest disparity rates
between whites and blacks and Hispanics.
http://www.consumersunion.org/consumeronline/pastissues/finances/minorities.html
http://tchr.state.tx.us/texas_study.htm



<Additional links:>

<Unequal burden in Chicago.>
<http://www.huduser.org/publications/pdf/chicago.pdf>


<Excel download>
<http://www.microsoft.com/downloads/details.aspx?FamilyID=4EB83149-91DA-4110-8595-4A960D3E1C7C&displaylang=EN>

<Search strategy:>

<"subprime"  billion "in 2002">

<://www.google.com/search?hl=en&lr=&ie=ISO-8859-1&q=%22subprime%22++billion+%22in+2002%22+>

<"subprime" market billion>
<://www.google.com/search?hl=en&lr=&ie=ISO-8859-1&q=%22subprime%22+market+billion>

<"subprime lender list">
<://www.google.com/search?hl=en&lr=&ie=ISO-8859-1&q=%22subprime+lender+list%22>

<"subprime lenders"  "competition from">
<://www.google.com/search?hl=en&lr=&ie=ISO-8859-1&q=%22subprime+lenders%22++%22competition+from%22>




<Hope this helps.>

Excellent Job! Thanks!