The Trump administration wants banks back in the mortgage business. Banks have other ideas.
The Trump administration wants banks to re-enter the mortgage business to make homes more affordable, but banks are skeptical due to potential risks and costs. Regulators have proposed changes to make mortgage lending more attractive to banks, but analysts expect limited impact on the mortgage market.
The Trump administration and the Federal Reserve want banks to get back into the mortgage business. Regulators hope this will unlock more loans for homebuyers and give them more insight into risks in the housing market. Recent proposed changes aim to make it less costly for banks to originate and service mortgages. However, banks are unlikely to rush back into the mortgage business due to concerns about profitability and potential legal costs. Before the 2008 financial crisis, banks issued most of the country's mortgage loans, but tighter regulations and political fallout led them to scale back. Today, non-bank lenders issue around two-thirds of all home loans.
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