Reflecting the challenges faced by the housing industry, a mere 16 mortgage lenders and brokers have secured their positions on the annual list of Inc. Magazine’s 5,000 fastest-growing private companies in the U.S. for the year 2023. This marks a significant drop from the previous year, 2022, when almost 70 mortgage lenders and brokers were included on the list.
The featured companies are all U.S.-based, privately held, and independent as of December 31, 2022. Moreover, each entity has demonstrated a minimum revenue of $190,000 in 2019 and $2 million in the preceding year.
The leading mortgage lender on the Inc. 5000 list is VA Wholesale Mortgage, specializing in providing home loans to veterans and active-duty military members. Founded in 2019 and based in Virginia, this lender has achieved an impressive three-year growth rate of 2,230%.
Securing the second spot among the mortgage lenders is Zap Mortgage (ranked at no. 294), having achieved a remarkable growth rate of 1,915% over the past three years. Following closely are Trius Lending Partners (no. 678), InstaLend (no. 769), and American Mortgage Mortgage, with all showcasing a three-digit three-year average growth rate.
Prominent among the companies making their debut on the Inc. 5000 list are those that leveraged technology or specialized products to amplify their performance. InstaLend, for instance, operates as a tech-enabled real estate loan lender, facilitating capital provision to residential developers through streamlined technological processes.
Freerateupdate.com, securing the sixth spot in the list of fastest-growing mortgage lenders on the Inc. 5000, functions as a mortgage broker that collaborates with other lenders to generate leads for a range of mortgage categories, including VA, FHA, purchase, refinance, and personal loans.
In the midst of reduced refinancing opportunities and the pressing need for loan officers to secure deals, some loan officers have turned to purchasing leads from various companies, including Zillow, Realtor.com, and Freerateupdate.com.
Non-qualified mortgage (non-QM) wholesale lender AD Mortgage succeeded in increasing its origination volume, predominantly attributed to technological improvements that enabled the company to gain a competitive edge over its rivals. Max Slyusarchuk, CEO of A&D Mortgage, emphasized that the company’s investment in proprietary software, pricing engines, and customer relationship management systems facilitated this growth.
While navigating through an environment of fluctuating interest rates, it’s worth noting that only one top 25 HMDA lender by origination volume secured a place on the Inc. 5000 list for 2023. CrossCountry Mortgage, positioned as the 11th-largest lender according to HMDA rankings, landed at the 3,020th spot, showcasing a commendable average three-year growth rate of 172%.
The mortgage industry continues to adjust its scale after nearly two years of historically low rates. According to the Mortgage Bankers Association (MBA), an average independent mortgage bank (IMB) and mortgage subsidiaries of chartered banks reported a loss of $534 per loan in Q2. This marks a significant improvement from the Q1 2023 loss of $1,972 per loan. Furthermore, 58% of retail mortgage companies, encompassing both production and servicing lines, managed to achieve profitability in Q2, a notable increase from the 32% reported in the previous quarter.
With current mortgage rates surpassing 7%, homeowners are demonstrating a rate lock-in effect, choosing to retain their existing low-rate mortgages rather than embracing new mortgages with higher rates. Despite the hopes of loan officers for a rate of around 5% to stimulate homeowner activity, the MBA predicts that the average 30-year fixed-rate mortgage will not fall below 5% until the year 2024.
Inc. 5000 – 2023 Rankings:
- 252: VA Wholesale Mortgage – 2,230% Growth (3-yr Avg.) – Mortgage Lender
- 294: Zap Mortgage – 1,915% Growth (3-yr Avg.) – Mortgage Lender
- 678: Trius Lending Partners – 869% Growth (3-yr Avg.) – Mortgage Lender
- 769: InstaLend – 766% Growth (3-yr Avg.) – Mortgage Lender
- 997: American Mortgage Mortgage – 594% Growth (3-yr Avg.) – Mortgage Lender
- 1,273: Freerateupdate.com – 464% Growth (3-yr Avg.) – Mortgage Broker
- 1,472: AD Mortgage – 392% Growth (3-yr Avg.) – Mortgage Lender
- 1,649: NXT Mortgage – 341% Growth (3-yr Avg.) – Mortgage Lender
- 1,700: ASTAR Home Capital – 329% Growth (3-yr Avg.) – Mortgage Lender
- 2,524: Griffin Funding – 216% Growth (3-yr Avg.) – Mortgage Lender
- 2,829: MortgageDepot – 188% Growth (3-yr Avg.) – Mortgage Broker
- 3,552: RCN Capital – 139% Growth (3-yr Avg.) – Mortgage Lender
- 3,590: Freedom Mortgage – 136% Growth (3-yr Avg.) – Mortgage Lender
- 4,196: New Western – 106% Growth (3-yr Avg.) – Mortgage Lender
- 4,209: The Everest Equity Company – 105% Growth (3-yr Avg.) – Mortgage Broker
Source: Inc. 5000 – 2023