Academic journal article ABA Banking Journal

ABA Releases Residential, CRE Lending Survey Results

Academic journal article ABA Banking Journal

ABA Releases Residential, CRE Lending Survey Results

Article excerpt

During ABA's recent Real Estate Lending Conference--held in San Antonio in April--the association released its annual Residential Real Estate Lending Survey and its first-ever Commercial Real Estate Survey, which identified key lending trends in 2015.

QM Lending Dips

On the residential side, the survey found that qualified mortgages dipped to 86 percent, down from 90 percent the year prior. More than a quarter of banks said they are restricting lending to within QM, and about half are making non-QM loans only to targeted markets or with other restrictions. In most cases, bankers said that borrowers' debt-to-income ratios prevented loans from meeting QM standards.

Bankers continue to be concerned about the increasing regulatory burden, including the TILA-RESPA integrated disclosures and other compliance concerns. Three-fourths of respondents said regulation has had a negative impact on their business, and when determining whether to sell servicing rights, the number of banks citing regulation as a key factor rose from 10 percent in 2014 to 44 percent in 2015.

On a positive note, banks reported a drop in foreclosures and single-family delinquencies. The percentage of single-family mortgage loans made to first time homebuyers also reached an all-time high in 2015 at 15 percent.

"While banks continue to grapple with the overwhelming amount of new regulation in the mortgage space, we're pleased that the market has shown some resiliency and adjustment," says ABA EVP Bob Davis. "Despite regulatory and economic headwinds, community banks have proven to be strongly committed to first-time homebuyers."

Despite Regulation, CRE Continues to Thrive

Commercial lending saw a strong performance in 2015, and 82 percent of banks said they plan to increase capital concentration in CRE going forward, citing strategic planning and demand as the biggest drivers of growth. …

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