NEW YORK (CBSMiami) – Big banks are walking away from low-income homebuyers, leaving “non-bank” financial institutions to fill the gap.READ MORE: Miami GP To Join F1 Calendar From 2022 In 10-Year Deal
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.READ MORE: Hollywood PD Investigating After Body Found In Burning Car
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.MORE NEWS: FEMA-Funded Vaccine Sites To Resume Administering First Doses Of Pfizer Vaccine With J&J Shot Paused
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.