Despite its success, future of nonbanks still in question with housing issues
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In November, nonbank lenders’ share of FHA-backed mortgages hit $1 trillion for the first time, according to a HousingWire report.
While a bigger piece of the pie sounds like a good thing, greater market share brings with it greater risk, and the future of nonbanks is in still in question if the industry tumbles again.
Ted Tozer, head of Ginnie Mae, told the Wall Street Journal that nonbank lenders may not have sufficient capital to weather the storm in a future housing squeeze.
“This is the biggest shift in mortgage lending since the savings-and-loans debacle in the 1980s,” Tozer said.
Meanwhile, others say Tozer’s statement is out of proportion.
“It would take a significant rise in delinquencies to get to the place he’s talking about,” Pete Mills, senior vice president of residential policy and member engagement at the Mortgage Bankers Association, told the Journal.
While a bigger piece of the pie sounds like a good thing, greater market share brings with it greater risk, and the future of nonbanks is in still in question if the industry tumbles again.
Ted Tozer, head of Ginnie Mae, told the Wall Street Journal that nonbank lenders may not have sufficient capital to weather the storm in a future housing squeeze.
“This is the biggest shift in mortgage lending since the savings-and-loans debacle in the 1980s,” Tozer said.
Meanwhile, others say Tozer’s statement is out of proportion.
“It would take a significant rise in delinquencies to get to the place he’s talking about,” Pete Mills, senior vice president of residential policy and member engagement at the Mortgage Bankers Association, told the Journal.
