{"id":35164,"date":"2018-06-17T07:35:33","date_gmt":"2018-06-17T12:35:33","guid":{"rendered":"http:\/\/olduvai.ca\/?p=35164"},"modified":"2018-06-17T07:35:33","modified_gmt":"2018-06-17T12:35:33","slug":"next-mortgage-default-tsunami-isnt-going-to-drown-big-banks-but-shadow-banks","status":"publish","type":"post","link":"https:\/\/olduvai.ca\/?p=35164","title":{"rendered":"Next Mortgage Default Tsunami Isn\u2019t Going to Drown Big Banks but \u201cShadow Banks\u201d"},"content":{"rendered":"<header>\n<h3 class=\"entry-title\"><a href=\"https:\/\/wolfstreet.com\/2018\/06\/17\/next-mortgage-default-tsunami-isnt-going-to-drown-big-banks-but-shadow-banks\/#comment-140418\">Next Mortgage Default Tsunami Isn\u2019t Going to Drown Big Banks but \u201cShadow Banks\u201d<\/a><\/h3>\n<\/header>\n<div class=\"entry-content\">\n<p><strong>As banks pull back from mortgage lending amid inflated prices and rising rates, \u201cshadow banks\u201d become very aggressive.<\/strong><\/p>\n<p>In the first quarter 2018, banks and non-bank mortgage lenders \u2013 the \u201cshadow banks\u201d \u2013 originated 1.81 million loans for residential properties (1 to 4 units). In the diversified US mortgage industry, the top 10 banks and \u201cshadow banks\u201d alone originated 260,570 mortgages, or 14.4% of the total, amounting to $75 billion. We\u2019ll get to those top 10 in a moment.<\/p>\n<p>Banks are institutions that take deposits and use those deposits to fund part of their lending activities. They\u2019re watched over by federal and state bank regulators, from the Fed on down. Since the Financial Crisis and the bailouts, they were forced to increase their capital cushions, which are now large.<\/p>\n<p>Non-bank lenders do not take deposits, and thus have to fund their lending in other ways, including by borrowing from big banks and issuing bonds. They\u2019re not regulated by bank regulators, and their capital cushions are minimal. During the last mortgage crisis, the non-bank mortgage lenders were the first to collapse \u2013 and none were bailed out.<\/p>\n<div id=\"ntv1047604-245883-22095\" class=\"ntv-moap ntv1047604-245883-22095\">\n<div class=\"ntv-entry\">\n<div>So let\u2019s see.<\/div>\n<\/div>\n<\/div>\n<p>Of those 1.81 million mortgages originated in Q1 by all banks and non-banks, according to property data provider, <a href=\"http:\/\/www.attomdata.com\/\">ATTOM Data Solutions<\/a>:<\/p>\n<ul>\n<li>666,000 were purchase mortgages, <strong>up 2%<\/strong> from a year ago<\/li>\n<li>800,000 were refinance mortgages (refis), <strong>down 11%<\/strong> from a year ago due to rising interest rates.<\/li>\n<li>348,000 were Home Equity Lines of Credit (HELOCs), <strong>up 14%<\/strong> from a year ago<\/li>\n<\/ul>\n<p>HELOCs, which allow homeowners to use their perceived home equity as an ATM, are once again booming: $67 billion were taken out in Q1, though that\u2019s still less than half of peak-HELOC in Q2 2006, when over $140 billion were taken out.<\/p>\n<p><strong>The Top 10 Mortgage Lenders in Q1 2018<\/strong><\/p>\n<p>\u2026click on the above link to read the rest of the article\u2026<\/p>\n<\/div>\n","protected":false},"excerpt":{"rendered":"<p>Next Mortgage Default Tsunami Isn\u2019t Going to Drown Big Banks but \u201cShadow Banks\u201d As banks pull back from mortgage lending amid inflated prices and rising rates, \u201cshadow banks\u201d become very aggressive. In the first quarter 2018, banks and non-bank mortgage lenders \u2013 the \u201cshadow banks\u201d \u2013 originated 1.81 million loans for residential properties (1 to [&hellip;]<\/p>\n","protected":false},"author":1,"featured_media":0,"comment_status":"closed","ping_status":"open","sticky":false,"template":"","format":"standard","meta":{"_monsterinsights_skip_tracking":false,"_monsterinsights_sitenote_active":false,"_monsterinsights_sitenote_note":"","_monsterinsights_sitenote_category":0,"footnotes":""},"categories":[2],"tags":[61,2606,20543,2339,20544,6876,4254,4255],"class_list":["post-35164","post","type-post","status-publish","format-standard","hentry","category-economics","tag-banking","tag-defaults","tag-mortgage-default","tag-mortgages","tag-private-lenders","tag-shadow-banking","tag-wolf-richter","tag-wolfstreet"],"_links":{"self":[{"href":"https:\/\/olduvai.ca\/index.php?rest_route=\/wp\/v2\/posts\/35164","targetHints":{"allow":["GET"]}}],"collection":[{"href":"https:\/\/olduvai.ca\/index.php?rest_route=\/wp\/v2\/posts"}],"about":[{"href":"https:\/\/olduvai.ca\/index.php?rest_route=\/wp\/v2\/types\/post"}],"author":[{"embeddable":true,"href":"https:\/\/olduvai.ca\/index.php?rest_route=\/wp\/v2\/users\/1"}],"replies":[{"embeddable":true,"href":"https:\/\/olduvai.ca\/index.php?rest_route=%2Fwp%2Fv2%2Fcomments&post=35164"}],"version-history":[{"count":1,"href":"https:\/\/olduvai.ca\/index.php?rest_route=\/wp\/v2\/posts\/35164\/revisions"}],"predecessor-version":[{"id":35165,"href":"https:\/\/olduvai.ca\/index.php?rest_route=\/wp\/v2\/posts\/35164\/revisions\/35165"}],"wp:attachment":[{"href":"https:\/\/olduvai.ca\/index.php?rest_route=%2Fwp%2Fv2%2Fmedia&parent=35164"}],"wp:term":[{"taxonomy":"category","embeddable":true,"href":"https:\/\/olduvai.ca\/index.php?rest_route=%2Fwp%2Fv2%2Fcategories&post=35164"},{"taxonomy":"post_tag","embeddable":true,"href":"https:\/\/olduvai.ca\/index.php?rest_route=%2Fwp%2Fv2%2Ftags&post=35164"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}