“I read in Bank Director that since 1990, the share of consumer loans done by community banks has dropped from 79% to just 8%. Community banks used to be the first place people went to get a mortgage, but that’s not the case anymore…

…We only occasionally get calls from banks thinking about getting into mortgage banking, but we get a fair number from bank Presidents thinking about getting out and asking us to help them think through the implications.”, Excerpt from June 2015 Mortgage Industry Newsletter

“This jives with other articles I have seen that had the big banks and private securitization (ABS and MBS) with over 90% of the market for consumer mortgages and other, non-student loan consumer credit, pre-crisis. That’s why it was the big banks and securitizers that got in trouble during the crisis and generally not the community banks. Why did the community banks cede the mortgage and other consumer lending to the big banks and securitizers? Because the competition was fierce, the margins were thin, and enormous scale and expertise (in automation/technology, securitization, servicing, regulation and compliance) was required.”, Mike Perry, former Chairman and CEO, IndyMac Bank

Posted on June 9, 2015, in Postings. Bookmark the permalink. Leave a comment.

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