Bank Mortgage Originations Surge in Q2, Outpacing Industry Forecasts

Major financial institutions captured a larger slice of the mortgage market during the second quarter of 2026, reporting aggregate volume growth that significantly exceeded expectations. According to analysis by Keefe, Bruyette & Woods (KBW), a cohort of large banks generated $56.1 billion in mortgage volume during the period. This figure represents a robust 20.8% increase from the previous quarter’s $46.4 billion and a 20.1% rise year-over-year.

The collective performance of these banks stands in stark contrast to broader market projections. While banks experienced double-digit growth, the Mortgage Bankers Association had forecast a modest 3% rise in Q2 originations, and Fannie Mae anticipated a 9% increase. The data suggests that depositaries are successfully regaining market share from nonbank lenders, although analysts note it is premature to determine if this constitutes a long-term structural shift.

Individual bank performance varied within the group. Wells Fargo led the surge with a 42.9% quarterly increase, followed by Truist at 32.8% and Fifth Third Bank at 31.6%. Conversely, U.S. Bank was the only institution in the KBW sample to report a decline, with volume dropping 7.6% quarter-over-quarter.

Securitization data provides additional evidence of the divergence between banks and nonbanks. JPMorgan Chase, the largest bank securitizer in the dataset, saw production volume jump 29%. Among nonbank entities, results were mixed. Rocket Companies managed to outpace the overall market, with combined Ginnie Mae and GSE issuance rising 15%. However, other major players faced headwinds. UWM Holdings Corporation saw its total agency issuance slip by 2% during the quarter.

The report also highlights the potential influence of pending regulatory changes on bank behavior. Proposed updates to capital rules, expected to take effect this year, would lower risk weights on low loan-to-value, first-lien residential mortgages to as low as 20%. Additionally, the cap on mortgage servicing rights (MSRs) as a percentage of common equity would be removed. Analysts suggest that while these regulatory shifts may be on the minds of executives, more data is needed to confirm a causal link between the rules and the recent volume gains.

What to watch

• Implementation timelines for proposed capital rule changes regarding MSRs and risk weights.
• Third-quarter volume reports to determine if bank share gains are sustained.
• United Wholesale Mortgage’s strategies to reverse the 2% decline in agency issuance.

Source: original release