Nonbank lenders could give serious boost to cooling housing market

In total, lenders provided $700 billion of home loans in the July-to-September quarter

National /
Oct.October 28, 2019 12:00 PM
Lenders issued the most mortgages in 14 years last quarter (Credit: iStock)

Lenders issued the most mortgages in 14 years last quarter (Credit: iStock)

The sluggish housing market could receive a nice jolt as mortgage rates continue to fall and lenders are originating loans at record levels.

Lenders issued the most mortgages in 14 years last quarter, providing $700 billion of home loans to borrowers between July-to-September, according to Inside Mortgage Finance, the Wall Street Journal reported.

Lower interest rates have led homeowners to replace their higher-rate mortgages for lower rate ones. Yet, home sales still declined 2 percent in September from August, according to data from the National Association of Realtors.

Economists say, however, that it can take a few months for lower mortgage rates to translate into new home purchases because people need time to look for a new home, the Journal reported.

Falling mortgage rates have also led to a jump in refinancings. Refinancing activity increased 75 percent from a year earlier in July and August.

Many of these home mortgages were originated by nonbank lenders such as Quicken Loans and loanDepot rather than traditional banks. Some economists and academics have warned about the potential risks poised by nonbanks during an economic downturn since they are subject to less regulation than banks and are not required to keep the same capital levels as conventional banks. [WSJ] — Keith Larsen


Related Articles

arrow_forward_ios
Knock CFO Michelle DeBella and CEO Sean Black (Photos via Knock; PR Newswire)

Knock hires ex-Lyft, Uber exec as first CFO

Knock hires ex-Lyft, Uber exec as first CFO
Mortgage applications reach pandemic peak

Mortgage applications reach pandemic peak

Mortgage applications reach pandemic peak
High demand and low supply has driven house prices up (iStock)

Investors building single-family rentals to meet demand

Investors building single-family rentals to meet demand
Housing supply is tighter than ever. (Getty)

Active home listings hit record low

Active home listings hit record low
One New York Plaza, One Madison Avenue and 605 Third Avenue top the list of largest real estate loans. (Brookfield, Wikimedia Commons, Fisher Brothers)

These were the largest Manhattan real estate loans in December

These were the largest Manhattan real estate loans in December
(Getty)

Mortgage applications fall during holidays even as rates sink

Mortgage applications fall during holidays even as rates sink
(iStock)

China limits property loans to curb housing bubble

China limits property loans to curb housing bubble
 U.S. pending home sales declined for the third consecutive month. (iStock)

Pending home sales decline for third straight month

Pending home sales decline for third straight month
arrow_forward_ios

The Deal's newsletters give you the latest scoops, fresh headlines, marketing data, and things to know within the industry.

Loading...