Traditional Banks Aren't Providing Home Loans Like They Used To

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NEW YORK (CBSMiami) - Big banks are walking away from low-income homebuyers, leaving "non-bank" financial institutions to fill the gap.

In fact, the nation's largest mortgage lender isn't a bank at all.

A new report from the Consumer Financial Protection Bureau highlights a decline in low and moderate-income borrowers. In 2009, low and moderate-income earners made up 36.6 percent of borrowers. That figure sank to 26.3 percent by 2017.

There are a number of factors.

Rising housing costs have priced some people out of the market and the federal government's crackdown on subprime lending following the financial crisis.

But the new data shows a surprising shift in who is lending. Low interest rates and high regulatory costs have pushed big banks away from the mortgage business leaving independent mortgage companies -- or "non-banks" -- to pick up the slack.

Last year, Quicken Loans, an online non-bank, passed Wells Fargo as the nation's highest volume lender.

Experts worry that non-banks are often relatively new and privately owned which makes it difficult for them to assess risk and absorb losses when the market takes a downturn. They feel the shift away from traditional lenders could increase volatility in the mortgage market.