Wells Fargo, the second-biggest mortgage lender in the nation, continued to cede market share to nonbank rivals in the fourth quarter of 2020.

The lender originated $53.94 billion in the fourth quarter, a 12.5% decline from the prior quarter, when the bank originated $61.6 billion in mortgages. It also represents a not-insignificant decline from the $59.8 billion the San Francisco-based bank originated in the fourth quarter of 2019.

According to the earnings statement, Wells Fargo dropped slightly in its retail originations, to $32.2 billion. Its correspondent business fell to $21.6 billion in originations, from $28.8 billion in the prior quarter.

The bank serviced $856 billion in residential mortgages in the fourth quarter, a drop from the $917 billion in originated in the third quarter.

Wells Fargo also said that over 10,000 first-lien mortgages it services have deferred payments.

Amid record-high origination volumes, mortgage fraud risk is down – Here’s why

CoreLogic’s annual Mortgage Fraud Report found that the risk of mortgage fraud for the 12 months ending June 2020 decreased 26.3% year-over-year nationally.

Presented by: CoreLogic

Overall, the bank’s customer banking division posted income of $1.36 billion in the fourth quarter, a decline of 21%.

Wells Fargo’s top depository rival, JPMorgan Chase, originated $32.5 billion in residential mortgages, a 12.5% sequential gain. Unlike Wells, it grew its correspondent business from $8.3 billion in the third quarter to $12.4 billion in the final four months of the year.

Both banks, however, are losing market share to nonbank rivals like Rocket Companies and United Wholesale Mortgage, both of which have been on a tear over the past year.

Neither have released their fourth-quarter earnings statements yet, but Rocket is expected to greatly outperform Wells Fargo on originations. It originated $89 billion in mortgages in the third quarter, a record. UWM, which operates only in the wholesale mortgage, has been nipping at Wells Fargo’s heels. It originated $54 billion in mortgages during the third quarter.

A recent analysis by Inside Mortgage Finance found that IMBs were the servicers of $4 trillion of outstanding agency mortgage-backed-securities at the end of 2020. It gave IMBs a 56% share of the servicing market, shrinking the depositories’ share to 42.2%.