SlideShare ist ein Scribd-Unternehmen logo
1 von 16
The State of Lending in America
and its Impact on U.S. Households

           Mortgages

            Debbie Bocian
          December 12, 2012


                              ©Center for Responsible Lending
Homeownership Still Matters
Beyond Financial Benefits
Evolution of the Mortgage Market
                Loans from Third Parties


In 2005—the
height of the
housing boom—
half of all
mortgages
and 71% of
subprime
loans
came through
brokers.
Evolution of the Mortgage Market
Private-Label Mortgage-Backed Securities
Evolution of the Mortgage Market
                         Fannie-Freddie Market Share Declines

Mortgage-Backed Securities Issued by Wall Street vs. GSEs
(“GSEs” = Fannie Mae and Freddie Mac, the government-sponsored enterprises)
        (“Non-agency MBS” = private label mortgage-backed securities)
         $2,500.00


         $2,000.00


         $1,500.00
                                                       Non-agency MBS
         $1,000.00                                     GSEs MBS



           $500.00


                 $0.00
                         1985
                         1986
                         1987
                         1988
                         1989
                         1990
                         1991
                         1992
                         1993
                         1994
                         1995
                         1996
                         1997
                         1998
                         1999
                         2000
                         2001
                         2002
                         2003
                         2004
                         2005
  Source: FDIC
Factors that Led to the Crisis


Abusive Products
•   “Exploding” adjustable rates
•   Abusive prepayment penalties
•   No income verification
•   False promises - e.g.,
    “you can always refinance”
Evolution of the Mortgage Market

Total Mortgage Market Volume and Market Share of Subprime and Alt-A Loans
                                  2001-2006
         $4,000                                                                                 45.0%

         $3,500                                                                                 40.0%

         $3,000                                                                                 35.0%
                                                                                                30.0%
         $2,500
                                                                                                25.0%
         $2,000
                                                                                                20.0%
         $1,500
                                                                                                15.0%
         $1,000                                                                                 10.0%
           $500                                                                                 5.0%
              $0                                                                                0.0%
                       2001        2002      2003         2004        2005         2006
                   Subprime Market Share   Alt-A Market Share    Total Market Volume (in $billions)

      Source: Inside Mortgage Finance
Factors that Led to the Crisis



Weak Regulation
Borrowers, state regulators
and consumer advocates
repeatedly raised concerns
about abuses in the subprime
market –but , for years,
nothing was done.
Factors that Led to the Crisis



Poor Loan Servicing
Servicers lacked the proper
technology, staff and systems
to handle the flood of
foreclosures produced by
massive loan failures.
Foreclosure Epidemic

                                    National Foreclosure Starts
1.60%

1.40%

1.20%

1.00%

0.80%

0.60%

0.40%

0.20%

0.00%
        2001     2002      2003      2004       2005      2006      2007     2008   2009   2010   2011   2012

          Source: Mortgage Bankers Association National Delinquency Survey
Disparate Impact of the
                   Foreclosure Epidemic
        Rates of Completed Foreclosures and Serious Delinquencies
                            by Race/Ethnicity
                              (2004 – 2008 Originations)
30.0%


25.0%


20.0%


15.0%


10.0%


 5.0%


 0.0%
           Asian    African-American          Latino            NH White   Others

                      Completed Forclosures       Seriously Delinquent
“Spillover” Costs of Foreclosure

CRL’s estimate of the spillover costs: nearly $2 trillion.
A Key Issue:
                       Fair, Affordable Access to Home Loans

Decline in Private Lender Mortgage Originations by Race/Ethnicity
  Share of Government-Backed Originations, 2000-2010 (purchase loans, not refinances)
Challenges



1. Protect new financial reforms
2. Prevent unnecessary foreclosures
3. Preserve homeownership
   opportunities for working families
For More Information


See all CRL research on Mortgage:
  http://rspnsb.li/QMGYMa


Contact us:
  Kathleen Day (DC): 202-349-1871
  Graciela Aponte (CA): 510-379-5518
  Ginna Green (SC): 510-866-5989

Weitere ähnliche Inhalte

Ähnlich wie State of Lending 2012 - Mortgages Overview

State of Lending Release Slideshow
State of Lending Release SlideshowState of Lending Release Slideshow
State of Lending Release SlideshowM William Sermons
 
Dougbibby 100930085051 Phpapp02
Dougbibby 100930085051 Phpapp02Dougbibby 100930085051 Phpapp02
Dougbibby 100930085051 Phpapp02johnkobierowski
 
Tom Feltner | Foreclosure Impact and Prevention
Tom Feltner | Foreclosure Impact and PreventionTom Feltner | Foreclosure Impact and Prevention
Tom Feltner | Foreclosure Impact and PreventionElyk Venture Management
 
Canada's VC Challenge - A statistical overview - August 2012
Canada's VC Challenge - A statistical overview - August 2012Canada's VC Challenge - A statistical overview - August 2012
Canada's VC Challenge - A statistical overview - August 2012heri
 
Combating Payments Fraud: How Well Are You Managing Your Company's Risk?
Combating Payments Fraud: How Well Are You Managing Your Company's Risk?Combating Payments Fraud: How Well Are You Managing Your Company's Risk?
Combating Payments Fraud: How Well Are You Managing Your Company's Risk?Nasreen Quibria
 
0900 omma rtb brian monahan
0900 omma rtb brian monahan0900 omma rtb brian monahan
0900 omma rtb brian monahanMediaPost
 
Real Food Happens Here
Real Food Happens HereReal Food Happens Here
Real Food Happens HereTodd Sweet
 
SLM FBRPresentationDecember22008Final2
SLM  FBRPresentationDecember22008Final2SLM  FBRPresentationDecember22008Final2
SLM FBRPresentationDecember22008Final2finance42
 
The Canadian Mortgage Insurance Market
The Canadian Mortgage Insurance MarketThe Canadian Mortgage Insurance Market
The Canadian Mortgage Insurance MarketScott Wilkinson
 
The future is now in pursuit of a more efficient and effective media strategy
The future is now in pursuit of a more efficient and effective media strategyThe future is now in pursuit of a more efficient and effective media strategy
The future is now in pursuit of a more efficient and effective media strategyThe Advertising Research Foundation
 
Keynote Conversation: RTB Revisited: How Is The Market Tracking
Keynote Conversation: RTB Revisited: How Is The Market TrackingKeynote Conversation: RTB Revisited: How Is The Market Tracking
Keynote Conversation: RTB Revisited: How Is The Market TrackingMediaPost
 
SLM GSPresentationDecember102008Final
SLM  GSPresentationDecember102008FinalSLM  GSPresentationDecember102008Final
SLM GSPresentationDecember102008Finalfinance42
 
State of Lending 2012 - Household Balance Sheet Overview
State of Lending 2012 - Household Balance Sheet OverviewState of Lending 2012 - Household Balance Sheet Overview
State of Lending 2012 - Household Balance Sheet OverviewCenter for Responsible Lending
 
Carlyle Financial crisis- Super Return 2008 10 15
Carlyle Financial crisis- Super Return 2008 10 15Carlyle Financial crisis- Super Return 2008 10 15
Carlyle Financial crisis- Super Return 2008 10 15gueste519a
 
2013 California Housing Market Update and San Diego Area
2013 California Housing Market Update and San Diego Area2013 California Housing Market Update and San Diego Area
2013 California Housing Market Update and San Diego AreaRealEstateEducation
 

Ähnlich wie State of Lending 2012 - Mortgages Overview (20)

State of Lending Release Slideshow
State of Lending Release SlideshowState of Lending Release Slideshow
State of Lending Release Slideshow
 
Dougbibby 100930085051 Phpapp02
Dougbibby 100930085051 Phpapp02Dougbibby 100930085051 Phpapp02
Dougbibby 100930085051 Phpapp02
 
Tom Feltner | Foreclosure Impact and Prevention
Tom Feltner | Foreclosure Impact and PreventionTom Feltner | Foreclosure Impact and Prevention
Tom Feltner | Foreclosure Impact and Prevention
 
Canada's VC Challenge - A statistical overview - August 2012
Canada's VC Challenge - A statistical overview - August 2012Canada's VC Challenge - A statistical overview - August 2012
Canada's VC Challenge - A statistical overview - August 2012
 
Combating Payments Fraud: How Well Are You Managing Your Company's Risk?
Combating Payments Fraud: How Well Are You Managing Your Company's Risk?Combating Payments Fraud: How Well Are You Managing Your Company's Risk?
Combating Payments Fraud: How Well Are You Managing Your Company's Risk?
 
0900 omma rtb brian monahan
0900 omma rtb brian monahan0900 omma rtb brian monahan
0900 omma rtb brian monahan
 
Real Food Happens Here
Real Food Happens HereReal Food Happens Here
Real Food Happens Here
 
SLM FBRPresentationDecember22008Final2
SLM  FBRPresentationDecember22008Final2SLM  FBRPresentationDecember22008Final2
SLM FBRPresentationDecember22008Final2
 
Fy2011 budget update
Fy2011 budget updateFy2011 budget update
Fy2011 budget update
 
The Canadian Mortgage Insurance Market
The Canadian Mortgage Insurance MarketThe Canadian Mortgage Insurance Market
The Canadian Mortgage Insurance Market
 
The future is now in pursuit of a more efficient and effective media strategy
The future is now in pursuit of a more efficient and effective media strategyThe future is now in pursuit of a more efficient and effective media strategy
The future is now in pursuit of a more efficient and effective media strategy
 
Keynote Conversation: RTB Revisited: How Is The Market Tracking
Keynote Conversation: RTB Revisited: How Is The Market TrackingKeynote Conversation: RTB Revisited: How Is The Market Tracking
Keynote Conversation: RTB Revisited: How Is The Market Tracking
 
SLM GSPresentationDecember102008Final
SLM  GSPresentationDecember102008FinalSLM  GSPresentationDecember102008Final
SLM GSPresentationDecember102008Final
 
Local market san francisco
Local market   san franciscoLocal market   san francisco
Local market san francisco
 
Outlook 2013
Outlook 2013Outlook 2013
Outlook 2013
 
State of Lending 2012 - Household Balance Sheet Overview
State of Lending 2012 - Household Balance Sheet OverviewState of Lending 2012 - Household Balance Sheet Overview
State of Lending 2012 - Household Balance Sheet Overview
 
Carlyle Financial crisis- Super Return 2008 10 15
Carlyle Financial crisis- Super Return 2008 10 15Carlyle Financial crisis- Super Return 2008 10 15
Carlyle Financial crisis- Super Return 2008 10 15
 
Cliff Brewis Outlook 2012
Cliff Brewis Outlook 2012Cliff Brewis Outlook 2012
Cliff Brewis Outlook 2012
 
2013 California Housing Market Update and San Diego Area
2013 California Housing Market Update and San Diego Area2013 California Housing Market Update and San Diego Area
2013 California Housing Market Update and San Diego Area
 
Building Human Capital: The New Face of Poverty
Building Human Capital: The New Face of PovertyBuilding Human Capital: The New Face of Poverty
Building Human Capital: The New Face of Poverty
 

Mehr von Center for Responsible Lending

The State of Lending:The Cumulative Impact of Predatory Lending
The State of Lending:The Cumulative Impact of Predatory LendingThe State of Lending:The Cumulative Impact of Predatory Lending
The State of Lending:The Cumulative Impact of Predatory LendingCenter for Responsible Lending
 
La situación del crédito - Préstamos de automóviles
La situación del crédito -   Préstamos de automóvilesLa situación del crédito -   Préstamos de automóviles
La situación del crédito - Préstamos de automóvilesCenter for Responsible Lending
 
The State of Lending in America & its Impact on U.S. Households
The State of Lending in America & its Impact on U.S. HouseholdsThe State of Lending in America & its Impact on U.S. Households
The State of Lending in America & its Impact on U.S. HouseholdsCenter for Responsible Lending
 
Did the Credit CARD Act Lead to Higher Interest Rates or Just More Honest Ra...
Did the Credit CARD Act Lead to Higher Interest Rates or Just More Honest Ra...Did the Credit CARD Act Lead to Higher Interest Rates or Just More Honest Ra...
Did the Credit CARD Act Lead to Higher Interest Rates or Just More Honest Ra...Center for Responsible Lending
 
Why We Need a Strong Consumer Financial Protection Bureau
Why We Need a Strong Consumer Financial Protection BureauWhy We Need a Strong Consumer Financial Protection Bureau
Why We Need a Strong Consumer Financial Protection BureauCenter for Responsible Lending
 

Mehr von Center for Responsible Lending (16)

The State of Lending:The Cumulative Impact of Predatory Lending
The State of Lending:The Cumulative Impact of Predatory LendingThe State of Lending:The Cumulative Impact of Predatory Lending
The State of Lending:The Cumulative Impact of Predatory Lending
 
The State of Lending in America: Payday Loans
The State of Lending in America: Payday LoansThe State of Lending in America: Payday Loans
The State of Lending in America: Payday Loans
 
7 car-title-loans
7 car-title-loans7 car-title-loans
7 car-title-loans
 
El estado financiero de los hogares estadounidenses
El estado financiero de los hogares estadounidensesEl estado financiero de los hogares estadounidenses
El estado financiero de los hogares estadounidenses
 
La situación del crédito - Las hipotecas
La situación del crédito - Las hipotecasLa situación del crédito - Las hipotecas
La situación del crédito - Las hipotecas
 
La situación del crédito - Préstamos de automóviles
La situación del crédito -   Préstamos de automóvilesLa situación del crédito -   Préstamos de automóviles
La situación del crédito - Préstamos de automóviles
 
La situación del crédito - Préstamos estudiantiles
La situación del crédito - Préstamos estudiantilesLa situación del crédito - Préstamos estudiantiles
La situación del crédito - Préstamos estudiantiles
 
La situación del crédito - Las tarjetas de crédito
La situación del crédito - Las tarjetas de créditoLa situación del crédito - Las tarjetas de crédito
La situación del crédito - Las tarjetas de crédito
 
The State of Lending in America & its Impact on U.S. Households
The State of Lending in America & its Impact on U.S. HouseholdsThe State of Lending in America & its Impact on U.S. Households
The State of Lending in America & its Impact on U.S. Households
 
State of Lending 2012 - Auto Loans Overview
State of Lending 2012 - Auto Loans OverviewState of Lending 2012 - Auto Loans Overview
State of Lending 2012 - Auto Loans Overview
 
State of Lending 2012 - Student Loans Overview
State of Lending 2012 - Student Loans OverviewState of Lending 2012 - Student Loans Overview
State of Lending 2012 - Student Loans Overview
 
Affordable Homeownership: CRA Conference Presentation
Affordable Homeownership: CRA Conference PresentationAffordable Homeownership: CRA Conference Presentation
Affordable Homeownership: CRA Conference Presentation
 
CRL auto finance presentation
CRL auto finance presentationCRL auto finance presentation
CRL auto finance presentation
 
Auto lending internal presentation
Auto lending internal presentationAuto lending internal presentation
Auto lending internal presentation
 
Did the Credit CARD Act Lead to Higher Interest Rates or Just More Honest Ra...
Did the Credit CARD Act Lead to Higher Interest Rates or Just More Honest Ra...Did the Credit CARD Act Lead to Higher Interest Rates or Just More Honest Ra...
Did the Credit CARD Act Lead to Higher Interest Rates or Just More Honest Ra...
 
Why We Need a Strong Consumer Financial Protection Bureau
Why We Need a Strong Consumer Financial Protection BureauWhy We Need a Strong Consumer Financial Protection Bureau
Why We Need a Strong Consumer Financial Protection Bureau
 

Kürzlich hochgeladen

The Power Laws of Bitcoin: How can an S-curve be a power law?
The Power Laws of Bitcoin: How can an S-curve be a power law?The Power Laws of Bitcoin: How can an S-curve be a power law?
The Power Laws of Bitcoin: How can an S-curve be a power law?Stephen Perrenod
 
CSR01P4 The foundations of CSR Part 4 Economic
CSR01P4 The foundations of CSR Part 4 EconomicCSR01P4 The foundations of CSR Part 4 Economic
CSR01P4 The foundations of CSR Part 4 EconomicMatthieu Bruckert
 
Sarlat Advisory - Corporate Brochure - 2024
Sarlat Advisory - Corporate Brochure - 2024Sarlat Advisory - Corporate Brochure - 2024
Sarlat Advisory - Corporate Brochure - 2024Guillaume Ⓥ Sarlat
 
Slideshare - ONS Economic Forum Slidepack - 18 March 2024.pptx
Slideshare - ONS Economic Forum Slidepack - 18 March 2024.pptxSlideshare - ONS Economic Forum Slidepack - 18 March 2024.pptx
Slideshare - ONS Economic Forum Slidepack - 18 March 2024.pptxOffice for National Statistics
 
Lundin Gold March 2024 Corporate Presentation - PDAC v1.pdf
Lundin Gold March 2024 Corporate Presentation - PDAC v1.pdfLundin Gold March 2024 Corporate Presentation - PDAC v1.pdf
Lundin Gold March 2024 Corporate Presentation - PDAC v1.pdfAdnet Communications
 
RWA Report 2024: Rise of Real-World Assets in Crypto | CoinGecko
RWA Report 2024: Rise of Real-World Assets in Crypto | CoinGeckoRWA Report 2024: Rise of Real-World Assets in Crypto | CoinGecko
RWA Report 2024: Rise of Real-World Assets in Crypto | CoinGeckoCoinGecko
 
Shrambal_Distributors_Newsletter_Mar_2024.pdf
Shrambal_Distributors_Newsletter_Mar_2024.pdfShrambal_Distributors_Newsletter_Mar_2024.pdf
Shrambal_Distributors_Newsletter_Mar_2024.pdfvikashdidwania1
 
TriStar Gold- 03-13-2024 presentation pdf
TriStar Gold- 03-13-2024 presentation pdfTriStar Gold- 03-13-2024 presentation pdf
TriStar Gold- 03-13-2024 presentation pdfAdnet Communications
 
ACCOUNTING FOR BUSINESS.II DEPARTMENTAL ACCOUNTS.
ACCOUNTING FOR BUSINESS.II DEPARTMENTAL ACCOUNTS.ACCOUNTING FOR BUSINESS.II DEPARTMENTAL ACCOUNTS.
ACCOUNTING FOR BUSINESS.II DEPARTMENTAL ACCOUNTS.KumarJayaraman3
 
Stock Market Brief Deck for 3/22/2024.pdf
Stock Market Brief Deck for 3/22/2024.pdfStock Market Brief Deck for 3/22/2024.pdf
Stock Market Brief Deck for 3/22/2024.pdfMichael Silva
 
Mphasis - Schwab Newsletter PDF - Sample 8707
Mphasis - Schwab Newsletter PDF - Sample 8707Mphasis - Schwab Newsletter PDF - Sample 8707
Mphasis - Schwab Newsletter PDF - Sample 8707harshan90
 
20240315 _E-Invoicing Digiteal. .pptx
20240315 _E-Invoicing Digiteal.    .pptx20240315 _E-Invoicing Digiteal.    .pptx
20240315 _E-Invoicing Digiteal. .pptxFinTech Belgium
 
20240314 Calibre March 2024 Investor Presentation (FINAL).pdf
20240314 Calibre March 2024 Investor Presentation (FINAL).pdf20240314 Calibre March 2024 Investor Presentation (FINAL).pdf
20240314 Calibre March 2024 Investor Presentation (FINAL).pdfAdnet Communications
 
ENT ospe 1 .pdf .....good and easy for medical
ENT ospe 1 .pdf .....good and easy for medicalENT ospe 1 .pdf .....good and easy for medical
ENT ospe 1 .pdf .....good and easy for medicalabaidurrehman0546
 
Stock Market Brief Deck for March 19 2024.pdf
Stock Market Brief Deck for March 19 2024.pdfStock Market Brief Deck for March 19 2024.pdf
Stock Market Brief Deck for March 19 2024.pdfMichael Silva
 
The Pension Regulator's "desputed numbers"
The Pension Regulator's "desputed numbers"The Pension Regulator's "desputed numbers"
The Pension Regulator's "desputed numbers"Henry Tapper
 
Stock Market Brief Deck for March 26.pdf
Stock Market Brief Deck for March 26.pdfStock Market Brief Deck for March 26.pdf
Stock Market Brief Deck for March 26.pdfMichael Silva
 
Contracts with Interdependent Preferences
Contracts with Interdependent PreferencesContracts with Interdependent Preferences
Contracts with Interdependent PreferencesGRAPE
 
2024.03 Strategic Resources Presentation
2024.03 Strategic Resources Presentation2024.03 Strategic Resources Presentation
2024.03 Strategic Resources PresentationAdnet Communications
 

Kürzlich hochgeladen (20)

The Power Laws of Bitcoin: How can an S-curve be a power law?
The Power Laws of Bitcoin: How can an S-curve be a power law?The Power Laws of Bitcoin: How can an S-curve be a power law?
The Power Laws of Bitcoin: How can an S-curve be a power law?
 
CSR01P4 The foundations of CSR Part 4 Economic
CSR01P4 The foundations of CSR Part 4 EconomicCSR01P4 The foundations of CSR Part 4 Economic
CSR01P4 The foundations of CSR Part 4 Economic
 
Sarlat Advisory - Corporate Brochure - 2024
Sarlat Advisory - Corporate Brochure - 2024Sarlat Advisory - Corporate Brochure - 2024
Sarlat Advisory - Corporate Brochure - 2024
 
New Monthly Enterprises Survey. Issue 21. (01.2024) Ukrainian Business in War...
New Monthly Enterprises Survey. Issue 21. (01.2024) Ukrainian Business in War...New Monthly Enterprises Survey. Issue 21. (01.2024) Ukrainian Business in War...
New Monthly Enterprises Survey. Issue 21. (01.2024) Ukrainian Business in War...
 
Slideshare - ONS Economic Forum Slidepack - 18 March 2024.pptx
Slideshare - ONS Economic Forum Slidepack - 18 March 2024.pptxSlideshare - ONS Economic Forum Slidepack - 18 March 2024.pptx
Slideshare - ONS Economic Forum Slidepack - 18 March 2024.pptx
 
Lundin Gold March 2024 Corporate Presentation - PDAC v1.pdf
Lundin Gold March 2024 Corporate Presentation - PDAC v1.pdfLundin Gold March 2024 Corporate Presentation - PDAC v1.pdf
Lundin Gold March 2024 Corporate Presentation - PDAC v1.pdf
 
RWA Report 2024: Rise of Real-World Assets in Crypto | CoinGecko
RWA Report 2024: Rise of Real-World Assets in Crypto | CoinGeckoRWA Report 2024: Rise of Real-World Assets in Crypto | CoinGecko
RWA Report 2024: Rise of Real-World Assets in Crypto | CoinGecko
 
Shrambal_Distributors_Newsletter_Mar_2024.pdf
Shrambal_Distributors_Newsletter_Mar_2024.pdfShrambal_Distributors_Newsletter_Mar_2024.pdf
Shrambal_Distributors_Newsletter_Mar_2024.pdf
 
TriStar Gold- 03-13-2024 presentation pdf
TriStar Gold- 03-13-2024 presentation pdfTriStar Gold- 03-13-2024 presentation pdf
TriStar Gold- 03-13-2024 presentation pdf
 
ACCOUNTING FOR BUSINESS.II DEPARTMENTAL ACCOUNTS.
ACCOUNTING FOR BUSINESS.II DEPARTMENTAL ACCOUNTS.ACCOUNTING FOR BUSINESS.II DEPARTMENTAL ACCOUNTS.
ACCOUNTING FOR BUSINESS.II DEPARTMENTAL ACCOUNTS.
 
Stock Market Brief Deck for 3/22/2024.pdf
Stock Market Brief Deck for 3/22/2024.pdfStock Market Brief Deck for 3/22/2024.pdf
Stock Market Brief Deck for 3/22/2024.pdf
 
Mphasis - Schwab Newsletter PDF - Sample 8707
Mphasis - Schwab Newsletter PDF - Sample 8707Mphasis - Schwab Newsletter PDF - Sample 8707
Mphasis - Schwab Newsletter PDF - Sample 8707
 
20240315 _E-Invoicing Digiteal. .pptx
20240315 _E-Invoicing Digiteal.    .pptx20240315 _E-Invoicing Digiteal.    .pptx
20240315 _E-Invoicing Digiteal. .pptx
 
20240314 Calibre March 2024 Investor Presentation (FINAL).pdf
20240314 Calibre March 2024 Investor Presentation (FINAL).pdf20240314 Calibre March 2024 Investor Presentation (FINAL).pdf
20240314 Calibre March 2024 Investor Presentation (FINAL).pdf
 
ENT ospe 1 .pdf .....good and easy for medical
ENT ospe 1 .pdf .....good and easy for medicalENT ospe 1 .pdf .....good and easy for medical
ENT ospe 1 .pdf .....good and easy for medical
 
Stock Market Brief Deck for March 19 2024.pdf
Stock Market Brief Deck for March 19 2024.pdfStock Market Brief Deck for March 19 2024.pdf
Stock Market Brief Deck for March 19 2024.pdf
 
The Pension Regulator's "desputed numbers"
The Pension Regulator's "desputed numbers"The Pension Regulator's "desputed numbers"
The Pension Regulator's "desputed numbers"
 
Stock Market Brief Deck for March 26.pdf
Stock Market Brief Deck for March 26.pdfStock Market Brief Deck for March 26.pdf
Stock Market Brief Deck for March 26.pdf
 
Contracts with Interdependent Preferences
Contracts with Interdependent PreferencesContracts with Interdependent Preferences
Contracts with Interdependent Preferences
 
2024.03 Strategic Resources Presentation
2024.03 Strategic Resources Presentation2024.03 Strategic Resources Presentation
2024.03 Strategic Resources Presentation
 

State of Lending 2012 - Mortgages Overview

  • 1. The State of Lending in America and its Impact on U.S. Households Mortgages Debbie Bocian December 12, 2012 ©Center for Responsible Lending
  • 4. Evolution of the Mortgage Market Loans from Third Parties In 2005—the height of the housing boom— half of all mortgages and 71% of subprime loans came through brokers.
  • 5. Evolution of the Mortgage Market Private-Label Mortgage-Backed Securities
  • 6. Evolution of the Mortgage Market Fannie-Freddie Market Share Declines Mortgage-Backed Securities Issued by Wall Street vs. GSEs (“GSEs” = Fannie Mae and Freddie Mac, the government-sponsored enterprises) (“Non-agency MBS” = private label mortgage-backed securities) $2,500.00 $2,000.00 $1,500.00 Non-agency MBS $1,000.00 GSEs MBS $500.00 $0.00 1985 1986 1987 1988 1989 1990 1991 1992 1993 1994 1995 1996 1997 1998 1999 2000 2001 2002 2003 2004 2005 Source: FDIC
  • 7. Factors that Led to the Crisis Abusive Products • “Exploding” adjustable rates • Abusive prepayment penalties • No income verification • False promises - e.g., “you can always refinance”
  • 8. Evolution of the Mortgage Market Total Mortgage Market Volume and Market Share of Subprime and Alt-A Loans 2001-2006 $4,000 45.0% $3,500 40.0% $3,000 35.0% 30.0% $2,500 25.0% $2,000 20.0% $1,500 15.0% $1,000 10.0% $500 5.0% $0 0.0% 2001 2002 2003 2004 2005 2006 Subprime Market Share Alt-A Market Share Total Market Volume (in $billions) Source: Inside Mortgage Finance
  • 9. Factors that Led to the Crisis Weak Regulation Borrowers, state regulators and consumer advocates repeatedly raised concerns about abuses in the subprime market –but , for years, nothing was done.
  • 10. Factors that Led to the Crisis Poor Loan Servicing Servicers lacked the proper technology, staff and systems to handle the flood of foreclosures produced by massive loan failures.
  • 11. Foreclosure Epidemic National Foreclosure Starts 1.60% 1.40% 1.20% 1.00% 0.80% 0.60% 0.40% 0.20% 0.00% 2001 2002 2003 2004 2005 2006 2007 2008 2009 2010 2011 2012 Source: Mortgage Bankers Association National Delinquency Survey
  • 12. Disparate Impact of the Foreclosure Epidemic Rates of Completed Foreclosures and Serious Delinquencies by Race/Ethnicity (2004 – 2008 Originations) 30.0% 25.0% 20.0% 15.0% 10.0% 5.0% 0.0% Asian African-American Latino NH White Others Completed Forclosures Seriously Delinquent
  • 13. “Spillover” Costs of Foreclosure CRL’s estimate of the spillover costs: nearly $2 trillion.
  • 14. A Key Issue: Fair, Affordable Access to Home Loans Decline in Private Lender Mortgage Originations by Race/Ethnicity Share of Government-Backed Originations, 2000-2010 (purchase loans, not refinances)
  • 15. Challenges 1. Protect new financial reforms 2. Prevent unnecessary foreclosures 3. Preserve homeownership opportunities for working families
  • 16. For More Information See all CRL research on Mortgage: http://rspnsb.li/QMGYMa Contact us: Kathleen Day (DC): 202-349-1871 Graciela Aponte (CA): 510-379-5518 Ginna Green (SC): 510-866-5989

Hinweis der Redaktion

  1. In spite of the housing crisis, homeownership is still central to the hopes and aspirations of many Americans. A home isn’t only shelter: it’sa key source of economic mobility and financial security.
  2. Not all of the benefits of homeownership can be measured in dollars. Research suggests that children in home–owning households do better academicallyand are less likely to become teen parents. Homeownership benefits neighborhoods, too, since areas with high ownership tend to have higher property values and tax revenues,which can be used to support community assets like schools and parks.
  3. In recent years, the mortgage market changed drastically. Two major developments stand out:First, lenders began to rely on mortgage brokers to originate loans. Lenders paid brokers based on the number of loans they sold and on how much they charged borrowers, not based on whether they were affordable.
  4. Second, Wall Street financial companies began issuing their own mortgage–backed securities and selling them to investors. The mortgages purchased by private companies did not have to conform to the same standards as the loans purchased by Fannie Mae and Freddie Mac.  
  5. Thevolume of mortgage-backed securities issued by Fannie and Freddie (the government-sponsored enterprises, GSEs) went down in the early 2000s, while those by private Wall Street banks went up.
  6. These mortgage developments meant that brokers, lenders and mortgage securitizers were often more interested in the volume of their mortgage business, not the performance of the loans. Many lenders and brokers aggressively marketed and originated mortgages without evaluating whether borrowers could pay them back. The market became inundated with dangerous mortgages. 
  7. As a result, the composition of the mortgage market changed dramatically. Between 2001 and 2006, the share of the overall mortgage market made up of subprime and other types of risky loans went from 10% to 39%.
  8. No one stopped the proliferation of reckless lending. Many market participants, such a brokers and servicers, were virtually unregulated at the federal level. Where consumer protections did exist, the authority was fractured among several agencies. In some cases federal regulators actually hindered consumer protections that had been passed at the state level. 
  9. Once the foreclosure crisis began, the sheer volume of work completely overwhelmed the capacity of servicers, who were not equipped to handle large volumes of distressed loans. 
  10. Combined, all these factors produced the worst foreclosure epidemic in U.S. history. Since 2007, millions of homes have gone into foreclosure, and millions more remain in distress. The crisis has devastated families and communities across the country and continues to impair economic growth for our nation as a whole.
  11. Foreclosures have affectedborrowers of all races and incomes, but the crisis has disproportionately affected borrowers of color. 11% of African–American borrowers and 14% of Latino borrowers have already lost their home to foreclosure – that’s compared to 8% of Asian borrowers and 6% of non–Hispanic whites. This disparity reflects that African–American and Latino borrowers were targeted by subprime lenders and were more likely to receive riskierloan products than white borrowers.
  12. Unfortunately, foreclosure costs extend beyond the individual families losing their homes. Foreclosures decrease the values of surrounding properties, causing losses of wealth for neighboring families. We estimate that $1.95 trillion in home equity has been lost to property owners who happen to live near foreclosed homes. Our full report also includes state-by-state “spillover” costs.
  13. The housing crisis has made mortgage loans harder to get, even for qualified families. As shown in this chart, the credit crunch would be even worse if the Federal Housing Administration had not stepped up its lending support.
  14. The housing market is slowly recovering today, but we’re left with new challenges:One - the Dodd-Frank Financial Reform Act of 2010 will go a long way toward preventing the types of lending abuses that caused this crisis but there are ongoing efforts to weaken or repeal the law. Financial reforms must be protected. Two – we must stop preventable foreclosures. Every successful intervention helps the homeowner, their community, and our economy as a whole.Finally, policymakers must avoid creating a permanent “dual” mortgage market, where only the highest–wealth borrowers with near–perfect credit can gain access to mainstream mortgages.