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."
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