• Ocwen27.59-0.45 -1.60%
  • Zillow125.91-5.06 -3.86%
  • Trulia53.13-2.46 -4.43%
  • NationStar34.02-0.80 -2.30%
  • CoreLogic27.52-0.44 -1.57%
  • RE/MAX29.63-0.66 -2.18%
  • Fannie Mae2.98-0.17 -5.40%
  • Freddie Mac3.00-0.18 -5.66%
  • Wells Fargo52.90-0.46 -0.86%
  • CitiMortgage53.04-0.44 -0.82%
  • Bank of America17.03+0.08 +0.47%
  • Lennar39.88-1.15 -2.80%
  • Auction.com0.00N/A N/A
  • Fidelity National Financial27.55-0.23 -0.83%
  • Black Knight Financial0.00N/A N/A
  • D.R. Horton21.37-0.58 -2.64%
  • PulteGroup18.33-0.49 -2.60%
  • AUDUSD=X0.8896N/A N/A
  • USDJPY=X108.5125N/A N/A
  • WP Stock Ticker
To show sotck chart
Home >> News >> Data >> Mega-Banks Edge Out Smaller Rivals on Mortgages
Print This Post Print This Post

Mega-Banks Edge Out Smaller Rivals on Mortgages

Mega-Banks Edge Out Smaller Rivals on Mortgages

Convening a hearing on Tuesday to address secondary market access for small lending institutions, both sides of the ""Senate Banking Committee"":http://banking.senate.gov/public/index.cfm?FuseAction=Hearings.Hearing&Hearing_ID=46124bbf-6c42-4ec4-b21b-256af568d234 converged on the issue to portray the mortgage lending industry as one dominated by large financial institutions.

[IMAGE]

In his opening remarks, ""Sen. Richard Shelby"":http://shelby.senate.gov/public/ (R-Alabama) said that mortgage lending is concentrated in a handful of banks. The ranking committee member cited research indicating that loan origination stemmed from three banks last year, even while 63 percent of all outstanding mortgages came from eight lending institutions. Committee chairman ""Sen. Tim Johnson"":http://johnson.senate.gov/public/ (D-South Dakota) called the mortgage system ""unsustainable.""

""Sen. John Tester"":http://tester.senate.gov/ (D-Montana) followed the comments by adding that ""the consolidation in the banking industry we've seen over the last 25 years or so is not healthy to the industry to the whole, and it's certainly not healthy for the consumers,"" according to ""_Market Watch_"":http://www.marketwatch.com/.

Swearing in five industry representatives as witnesses, the committee posed queries related to the 2008 financial crisis, which exposed a dearth of activity among smaller lending institutions and left systemically important financial institutions to buttress much of the credit supply.

[COLUMN_BREAK]

In his testimony, Christopher Dunn, EVP at the Massachusetts-based ""South Shore Savings Bank"":http://www.sssb.com/, recommended a sharp reduction in the role played by the federal government in housing finance and mortgage markets.

""One of the reasons that we lost a lot of our market share over the course of [the] last several years is the playing field is not level,"" Dunn said. ""A lot of that has to do with the back-and-forth regulations that are already in place"" at the federal level.

Dunn referred to the federal seizure of GSEs ""Fannie Mae"":http://www.fanniemae.com/ and ""Freddie Mac"":http://www.freddiemac.com/ during the 2008 financial crisis, following which the government began to buttress the two companies with over $138 billion in taxpayer funds.

According to ""_Market Watch_"":http://www.marketwatch.com/, the mortgage giants back nearly nine in 10 U.S. mortgages ├â┬ó├óÔÇÜ┬¼├óÔé¼┼ô numbers that the Obama administration tried to change by trying to replace ""Fannie"":http://www.fanniemae.com/ and ""Freddie"":http://www.freddiemac.com/ with one of three alternatives in February.

Members of Congress continue to rehash and introduce similar bills in the House, while the Senate remains silent on the issue.

Peter Skillern, executive director of the North Carolina-based ""Community Reinvestment Association"":http://www.cra-nc.org/, said that any conversion attempt aimed to offload the GSEs onto a private capital market would risk harm to communities and the ""housing market as a whole,"" adding that ""Fannie"":http://www.fanniemae.com/ and ""Freddie"":http://www.freddiemac.com/ ""are needed├â┬ó├óÔÇÜ┬¼├é┬ª for the stability of our nation's housing and finance markets.""

""Sen. Johnson"":http://johnson.senate.gov/public/ seemed to concur, saying that a plethora of reforms being floated ""could lead to bank concentration and unintentionally limited access"" for small lending institutions.

About Ryan Schuette

Ryan Schuette
Ryan Schuette is a journalist, cartoonist, and social entrepreneur with several years of experience in real-estate news, international reporting, and business management. He currently lives in the Washington, D.C., area, where he freelances for DS News and MReport.

Leave a Reply

Your email address will not be published. Required fields are marked *

*

You may use these HTML tags and attributes: <a href="" title=""> <abbr title=""> <acronym title=""> <b> <blockquote cite=""> <cite> <code> <del datetime=""> <em> <i> <q cite=""> <strike> <strong>

Scroll To Top