Reflecting the housing industry’s headwinds, just 16 mortgage lenders and brokers made the annual list of Inc. Magazine‘s 5,000 fastest-growing private companies in the U.S. for 2023. It’s a sharp decline from 2022, when nearly 70 mortgage lenders and brokers were named.
The companies are U.S.-based, privately held and independent as of Dec. 31, 2022. Additionally, each business had a minimum revenue of $190,000 in 2019 and $2 million last year.
The top mortgage lender on the Inc. 5000 list was VA Wholesale Mortgage, which specializes in offering home loans to veterans and active duty military members. Founded in 2019, the Virginia-based lender saw a 2,230% three-year growth rate.
Zap Mortgage (no.294) placed second among the mortgage lenders, growing 1,915% in the past three years. Trius Lending Partners (no.678), InstaLend (no.769) and American Mortgage Mortgage trailed with a three-digit three-year average growth.
Companies that debuted on the Inc. 5000 list notably relied on tech or niche products to generate volume.
InstaLend is a tech-enabled real estate loan lender that provides capital to residential developers through streamlined technology and automated workflow, according to its website.
Freerateupdate.com – which ranked sixth as the fastest-growing mortgage lender on Inc. 5000 – is a mortgage broker and partners with other lenders to generate leads for VA, FHA, purchase, refi and personal loans.
At a time when refis dried up and loan officers are in desperate need of deals, some loan officers are leaning into buying leads — from companies including Zillow, Realtor.com and Freerateupdate.com.
Non-qualified mortgage (non-QM) wholesale lender AD Mortgage scooped up origination volume largely due to the improvement in tech that ultimately helped it gain market share from competitors, Max Slyusarchuk, CEO of A&D Mortgage, previously said in an interview with HousingWire.
The lender developed its proprietary loan origination software, servicing software, pricing engine and customer relationship management system last year pivoting from using a third-party mortgage tech software systems.
“We continue investing in tech while it’s not that crazy busy. We are doing a lot of research and development in it and artificial intelligence,” Slyusarchuk said. “We believe that this is the time of opportunity because the rates can go up, but sooner or later, they will start coming down.”
Only one top 25 HMDA lender by origination volume made the Inc. 5000 list. in 2023. CrossCountry Mortgage, the country’s 11th-largest lender per HMDA, ranked 3,020 with an average three-year growth of 172%.
The mortgage industry is still rightsizing following nearly two years of historically low rates.
An average independent mortgage bank (IMBs) and mortgage subsidiaries of chartered banks lost $534 in Q2, according to the Mortgage Bankers Association (MBA).
It’s a big improvement from the $1,972 loss per loan in Q1 2023. Including both the production and servicing business lines, 58% of retail mortgage companies were profitable in Q2, up from 32% in the previous quarter.
With mortgage rates currently north of 7%, there’s a rate lock-in effect in which homeowners are reluctant to give up their existing low rates and take on a new mortgage with higher rates.
While loan officers have said 5% would be the magic rate that would get homeowners to move, the MBA doesn’t expect the average 30-year fixed rate mortgage to drop below 5% until 2024.
| Rank | Company | Growth (3-yr Avg.) | HW Media Category |
|---|---|---|---|
| 252 | VA Wholesale Mortgage | 2,230% | Mortgage Lender |
| 294 | Zap Mortgage | 1,915% | Mortgage Lender |
| 678 | Trius Lending Partners | 869% | Mortgage Lender |
| 769 | InstaLend | 766% | Mortgage Lender |
| 997 | American Mortgage Mortgage | 594% | Mortgage Lender |
| 1,273 | Freerateupdate.com | 464% | Mortgage Broker |
| 1,472 | AD Mortgage | 392% | Mortgage Lender |
| 1,649 | NXT Mortgage | 341% | Mortgage Lender |
| 1,700 | ASTAR Home Capital | 329% | Mortgage Lender |
| 2,524 | Griffin Funding | 216% | Mortgage Lender |
| 2,829 | MortgageDepot | 188% | Mortgage Broker |
| 3,020 | CrossCountry Mortgage | 172% | Mortgage Lender |
| 3,552 | RCN Capital | 139% | Mortgage Lender |
| 3,590 | Freedom Mortgage | 136% | Mortgage Lender |
| 4,196 | New Western | 106% | Mortgage Lender |
| 4,209 | The Everest Equity Company | 105% | Mortgage Broker |
| Source: Inc. 5000 – 2023 |
