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Lender crushes market by focusing on offering mortgages to a select few

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Mortgage Professional America | 19 Jan 2015, 08:45 AM Agree 0
The bank's portfolio is pretty solid: It has less than 100 offices and it doesn't like to take risks. So, how does it make its money?
  • | | 19 Jan 2015, 10:27 AM Agree 0
    I think the Fed's will find this article very interesting. I think they will say the bank is discriminating against riskier borrowers through disparate impact. You can do that as a bank. I see fines in their future.
  • Schocker | | 19 Jan 2015, 10:33 AM Agree 0
    Marketing to a demographic and discriminating against a demographic are 2 different things. There shouldn't be anything criminal about seeking out solid customers and creating a low risk portfolio. I agree that the Feds may not feel this way though.
  • Alex V | | 19 Jan 2015, 10:34 AM Agree 0
    That's what I was thinking, the regulators are possibly going to see this as redlining and discrimination.

    Problem for lenders is that on the one hand they are expected to give equal access to everyone, on the other hand this bank has shown that by lending to only the "best" customers with low LTV's seems to have proven financially successful and responsible to the bank's shareholders.

    Government wants low income families to have access to buy houses but the higher the LTV, the less "skin in the game" by the borrower and the numbers clearly show that the higher the LTV the higher the foreclosures and delinquency.

    No easy solution.
  • JC | | 19 Jan 2015, 11:24 AM Agree 0
    Sounds like good business practice, but also sounds like redlining
  • mortgage guy, | | 19 Jan 2015, 11:42 AM Agree 0
    First republic does a great job, I just call this "smart business" but the regulaters, do not like to see anyone pulling ahead of the pack, they will do something to change this, you can bet on it, This is no longer the same Country I grew up in .....sad....
  • Anon | | 19 Jan 2015, 02:51 PM Agree 0
    How do they meet their CRA requirements?
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