Nonbank Lenders’ Dominance of Mortgage Industry Costs Homebuyers

For the full experience visit: Borrowers Turned to Nonbank Lenders for Mortgages — And It’s Costing Them

When Rosario Lopez was looking to buy her first home last year, she knew her financing options were limited. She had been paid in cash, working as a security guard in Los Angeles, and didn’t have W-2s. Her credit history was short. So she wasn’t surprised when her bank, Bank of America Corp., told her she wouldn’t qualify for a mortgage.

Lopez, a single mother with three daughters, looked elsewhere. She found Miracle Lender Inc., a San Fernando Valley mortgage brokerage that ...