The MReport Webcast: Monday 10/6/2014

A new survey shows nearly one-third of community banks plan for their mortgage operations to come up short of last year as regulatory costs and challenges make the sector less appealing. Out of 884 community bankers currently active in the mortgage space, 31 percent expect their institution's residential mortgage holdings at the end of the year will be less than their level last year, according to findings released by the Federal Reserve and the Conference of State Bank Supervisors. Of those who anticipate reductions in the dollar value of their mortgage holdings, most pointed to increased regulation and compliance costs at the reason.

Some of the biggest rules affecting the mortgage sector at the moment include the qualified mortgage and ability-to-repay requirements. Though many lenders in the industry have announced their intentions to only generate loans that fit under the QM umbrella in response, 38 percent of community bankers said they're still making non-QM loans, but only on an exception basis. A further 26 percent voiced their willingness to lend outside the QM space in general, while 29 percent said they haven't strayed from the QM protections.

After giving a soft performance in August, the labor market came back strong last month. According to the latest monthly figures from the Bureau of Labor Statistics, the nation added 248,000 jobs in September, bringing employment growth back above 200 thousand after an unexpected drop in August. With the latest estimate, the government puts the U.S. unemployment rate at 5.9 percent, its lowest since July 2008. Despite the good news in September's report, the headline numbers mask a few less encouraging movements, the biggest of which is a drop in the labor force participation rate to 62.7 percent, the lowest rate in decades.