Mortgage lending has steadily recovered since the 2008 recession with the help of smaller lenders and community banks, insists a fair-lending advocate
Dismantling lending regulations and weakening the Consumer Financial Protection Bureau would deal a blow to the entire economy, according to Mike Calhoun, president of the Center for Responsible Lending.
Calhoun testified before a House Financial Services Committee panel that mortgage lending had recovered steadily since the financial crisis, with community banks and small lenders contributing to its growth. He said that in 2015, mortgage lenders originated 850,085 more loans than in 2012 – a 37% increase.
“Loans originated by smaller lenders with assets under $1 billion saw the biggest increase during this period (48%) while the largest institutions with assets over $10 billion saw a 1% decline,” he said. “Credit unions alone originated $41.7 billion in first-lien mortgage loans in the third quarter of 2016, an increase of 22% over the same period in the previous year.”
Since the recession in 2008, he said “regulators have utilized a two-tier approach,” which he believed should be expanded, as well as extensive reforms that would help all banks – and not, he maintained, at the expense of consumers.
“These should be implemented immediately,” he said. “However, dismantling essential reforms, such as the mortgage ability-to-repay standard, or reducing the effectiveness of the Consumer Financial Protection Bureau, would harm consumers, banks and the overall economy.”
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