ABA Banking Journal - September/October 2015 - (Page 10)
Dodd-Frank Rules Continue to Restrict
Mortgage Lending: ABA Survey
inety percent of the typical bank's mortgage
loans made last year were "qualified
mortgages," according to ABA's 22nd
annual Real Estate Lending Survey.
The survey revealed that nearly 80 percent of
respondents expect the Consumer Financial Protection
Bureau's mortgage lending rules will continue to
cause a reduction in credit availability with 19
percent characterizing the impact as severe.
"As expected, the ability-to-repay and QM rules
have dampened the housing market recovery,"
says ABA EVP Bob Davis. "Combine that with new
mortgage disclosures, which are just around the
corner, and we'll continue to see a slowdown in
what should be the ideal time to buy a home."
The most likely reason for a mortgage loan not
meeting QM standards was high debt-to-income
levels followed by lack of required documentation.
Despite these setbacks, bankers can boast some positive
results. The 182 respondents, 77 percent with assets less
than $1 billion, reported the highest percentage of loans
to first-time homebuyers in the survey's 22-year history.
Foreclosure rates at surveyed banks dropped
from 0.78 percent in 2013 to 0.57 in 2014, while
the average delinquency rate for single family
homes decreased from 2.16 to 1.76 percent.
The 30-year fixed-rate mortgage remains dominant
in bank lending, holding steady at 50.5 percent of all
loans in 2014 compared to 50.3 percent in 2013.
According to the survey, bankers are most concerned
about compliance and increasing regulatory
burden followed by economic uncertainty, the
interest rate environment and community bank
challenges. Eighty-seven percent of respondents
said regulation is having a moderate to extreme
negative impact on the bank's business.
What was the OVERALL IMPACT of the
Ability-to-repay/Qm rules on your lending in 2014?
bank restricted lending to
bank originated primarily
Qm loans, and non-Qm loans
were restricted to targeted
markets or otherwise limited
bank originated loans
without regard to Qm status
ABA BANKING JOURNAL | sEpTEmBEr/OcTOBEr 2015
Table of Contents for the Digital Edition of ABA Banking Journal - September/October 2015
POISED AND PROACTIVE ON THE FARM
MEETING CUSTOMERS WHERE THEY ARE
INVESTING IN STRONG RURAL COMMUNITIES
ABA COMPLIANCE CENTER INBOX
BANKS IN INSURANCE
REAL ESTATE LENDING
FROM THE STATES
INNOVATIONS IN SOCIAL RESPONSIBILITY
INDEX OF ADVERTISERS
ABA Banking Journal - September/October 2015