Prior to the subprime mortgage crisis, consumers in the United States funded their spending with credit cards, mortgage financing and home equity loans, causing aggregate household debt to rise over the five years to 2007. Amid heavy debt accumulation, banks and lenders increased their activity, selling mortgages and debt instruments on the secondary market. This strategy helped banks and lenders diversify risk and facilitate lending by using proceeds from mortgage-backed securities (MBSs) and other sales to underwrite new loans.
With lower income from mortgage interest, however, industry revenue is expected to fall over the five years to 2016. Strict regulation, rising interest rates and continued deleveraging will moderate demand, and the industry's recovery will likely be slow due to the continued uncertainty surrounding GSEs. Consequently, industry revenue is forecast to rise at a relatively subdued annualized rate over the five years to 2021.
The industry comprises nondepository operators that specialize in lending activity. Unlike banks and other traditional lenders, industry participants do not rely on deposits to issue loans. Instead, nondepository operators provide lending services by selling securities, such as bonds, notes and stock or insurance policies, to the public. In addition to direct lending, industry operators also generate income by securitizing and selling mortgages and other loans on the secondary market.
This report covers the scope, size, disposition and growth of the industry including the key sensitivities and success factors. Also included are five year industry forecasts, growth rates and an analysis of the industry key players and their market shares.