HOUSINGNEWS REPORT
FEATURED ARTICLE
NONBANK SHARE OF MORTGAGE ORIGINATIONS
48.3%
50
46.0%
41.5%
40
30
23.4%
27.0%
20
18.9%
13.4%
10
10.5%
8.9%
0
2008
2009
2010
2011
2012
2013
2014
2015
2016
Source: Inside Mortgage Finance
frequently get prosecuted by the federal government under the False Claims Act , said Cecala. “For a variety of reasons, banks want to reduce their footprint in the mortgage market,” said Cecala, adding that government compliance costs have risen too. “It’s a direct result of the settlements with the federal government.” He said nonbank market share grew from 23.4 percent in 2008 to 48.3 percent in 2016. Cecala said that over the last few years, the Justice Department has sued scores of lenders for violating the False Claims Act on government-insured loans. Since 2010, banks in the United States have paid over $56 billion to settle Justice
Department fraud suits, according to The New York Times .
“The big banks have restricted their mortgage business,” said Cecala. “Instead, banks like Chase and Bank of America are making jumbo loans to more affluent borrowers. More than 50 percent of their business is jumbo loans.” While the big banks migrate to the jumbo loan market, they have left a void that is being filled by nonbanks and the federal government, said Cecala. Hoarding Excess Reserves Instead of making loans to borrowers, big commercial banks are depositing their trillions of dollars in profit into excess reserves with the Federal Reserve, according to Peter G. Miller, a syndicated real estate columnist and author of the “The Common-Sense Mortgage.” Miller said money lent to banks and other
Recently, Wells Fargo agreed to a $1.2 billion settlement , while SunTrust Mortgage settled for $968 million . Other federal government settlements include: First Tennessee Bank ( $212.5 million ), MetLife Home Loans ( $123.5 million ), Freedom Mortgage Corp. ( $113 million ), Branch Banking & Trust Company ( $83 million ), Franklin American Mortgage Company ( $70 million ), M&T Bank ( $64 million ), Regions Bank ( $52.4 million ) and Walter Investment Management Corp. ( $29 million ). Quicken Loans, Deutsche Bank, Barclays, Credit Suisse, Royal Bank of Scotland, UBS and HSBC are all awaiting their turn, The Wall Street Journal reports.
ATTOM Data Solutions • P4
Made with FlippingBook Online newsletter