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During the housing meltdown, non-banking mortgage lenders got a bad rap. Ameriquest Mortgage, Countrywide Financial, and other players that are now defunct were thrust into the limelight.

They were revealed as organizations that offered high-priced and risky loans to subprime borrowers who had poor credit. More reputable nonbank lenders are now staging a comeback, attempting to shed this bad reputation.

Some nonbank lenders still provide high-risk loans featuring huge interest rates. Others sell basic fixed or adjustable rate mortgage loans that are less expensive than those offered by large banks.

Quicken Loans, LendingTree, and other organizations in the second category are gaining momentum through two new Washington lobbying groups.

Several nonbank lenders report an increase in the middle income customer base. These borrowers are finding themselves unable to obtain a loan from another source.

Guaranteed Home Mortgage President David Wind reports that total loan value has increased 15 to 20 percent for his company this year. He believes that more wealthy customers are turning to nonbank lenders due to stringent bank underwriting standards.

Nonbank lenders are often smaller and carry lower operating costs than major banks. This enables them to offer interest rates about 0.125 to 0.375 percentage points lower than major banks.

These lenders use their line of credit with large banks or money from private investors to fund home loans. As of late 2009, 914 nonbank lenders existed in the U.S., according to the Federal Financial Institutions Examination Council.

The Community Mortgage Lenders of America and Community Mortgage Banking Project lobby groups were established in 2009. They promote interests of nonbank lenders, helping to improve the image of these organizations with consumers.

Many nonbank lenders offer loans backed by Federal Housing Administration insurance or provide conventional mortgages. They are not scam artists like some companies that offer payday loans or bad credit auto financing.