Banks are no longer America's biggest mortgage lenders

Banks do not dominate the mortgage market anymore.
(Image credit: iStock)

Banks no longer dominate the mortgage market, The Wall Street Journal reports. Banks accounted for less than half of all mortgage loan dollars extended to U.S. borrowers in the third quarter — the first time that has happened in more than 30 years. Nonbank lenders — such as Quicken Loans and PennyMac Financial Services, which are often willing to take on riskier borrowers — gave out 51.4 percent of the loan dollars for the quarter, up from 9 percent in all of 2009.

Why are banks pulling away from housing loans? Perhaps to avoid the legal threats and mortgage-related fines that have cost them tens of billions of dollars in recent years. "It's becoming the perfect storm — when you punish banks, [they] don't lend out money," one analyst told The Journal. "Banks are becoming utilities that are unable or unwilling to play with risk."

Subscribe to The Week

Escape your echo chamber. Get the facts behind the news, plus analysis from multiple perspectives.

SUBSCRIBE & SAVE
https://cdn.mos.cms.futurecdn.net/flexiimages/jacafc5zvs1692883516.jpg

Sign up for The Week's Free Newsletters

From our morning news briefing to a weekly Good News Newsletter, get the best of The Week delivered directly to your inbox.

From our morning news briefing to a weekly Good News Newsletter, get the best of The Week delivered directly to your inbox.

Sign up
To continue reading this article...
Continue reading this article and get limited website access each month.
Get unlimited website access, exclusive newsletters plus much more.
Cancel or pause at any time.
Already a subscriber to The Week?
Not sure which email you used for your subscription? Contact us
Kelly Gonsalves

Kelly Gonsalves is a sex and culture writer exploring love, lust, identity, and feminism. Her work has appeared at Bustle, Cosmopolitan, Marie Claire, and more, and she previously worked as an associate editor for The Week. She's obsessed with badass ladies doing badass things, wellness movements, and very bad rom-coms.