ABA Banking Journal - September/October 2015 - (Page 10)

UPfront Dodd-Frank Rules Continue to Restrict Mortgage Lending: ABA Survey N 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? 10 bank restricted lending to Qm segments 33% bank originated primarily Qm loans, and non-Qm loans were restricted to targeted markets or otherwise limited 48% bank originated loans without regard to Qm status 19% ABA BANKING JOURNAL | sEpTEmBEr/OcTOBEr 2015

Table of Contents for the Digital Edition of ABA Banking Journal - September/October 2015

CHAIRMAN'S VIEW
UPFRONT
PICTURE THIS
ECONOMIC OUTLOOK
POISED AND PROACTIVE ON THE FARM
MEETING CUSTOMERS WHERE THEY ARE
INVESTING IN STRONG RURAL COMMUNITIES
ABA COMPLIANCE CENTER INBOX
OPERATIONS
BANKS IN INSURANCE
REAL ESTATE LENDING
BOARD MATTERS
INVESTOR PERSPECTIVE
LEGAL BRIEFS
FROM THE STATES
COMPLIANCE
INNOVATIONS IN SOCIAL RESPONSIBILITY
INDEX OF ADVERTISERS

ABA Banking Journal - September/October 2015

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