Big Banks Scale Back Mortgage Lending, Study Reveals

Big banks are scaling back on mortgage lending. A new report from the American Enterprise Institute showed that large banks represent 33% of the home loan origination market, compared to 61% in November 2012. The report showed non-banks have picked up quite a bit of market share during this time period: 51% today, up from 24% two and a half years ago. The study said: 'This shift is due to the fact that non-banks compared to large banks are more thinly capitalized and more lightly regulated, generally face less reputational and litigation risk and tend to have a shorter term outlook.' Plus, some of the larger banking institutions that are regulated by agencies such as the Office of the Comptroller of Currency and the Federal Reserve, have been forced to take on less risk and are required to keep more capital on tap in case of a future financial crisis.