Banks have been walking away from low-income homebuyers seeking loans, and that has affordable housing advocates worried.
Newly-released federal data on mortgage lending from the Consumer Financial Protection Bureau shows people with low- and moderate-incomes made up only 26.3% of borrowers in 2017, down from 36.6% in 2009.
Also, skyrocketing housing costs have locked many people of modest means out of the market. "Non-bank" is a catchall term for financial institutions that don't take deposits.
Non-bank mortgage lenders just do mortgage lending, for example. "So a number of banks have de-emphasized their mortgage lending, because there are other business lines they can focus on."
Non-banks, meanwhile, have doubled down on volume — particularly through refinances — and now originate 56% of all home loans, according to the CFPB data.
Now, the biggest mortgage lender in the country isn't a bank at all — it's Quicken Loans, which originated 27% more loans in 2017 than its nearest competitor, Wells Fargo. "Frankly it's kind of disturbing to me," says Jesse Van Tol, CEO of the National Community Reinvestment Coalition, an umbrella group of affordable housing organizations. "We think every lending institution has an obligation to lend to people of modest means," Van Tol says.