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New Mortgage Rules Restrict Credit Availability, Says ABA Survey


April 7 - More than 80 percent of banks expect new mortgage regulations to reduce mortgage credit availability, according to the American Bankers Association’s 21st annual Real Estate Lending Survey. The survey results, released at ABA’s Real Estate Lending Conference in Charleston, S.C., revealed that more than one-third of respondents will only make qualified mortgage loans, while another one-third will also make non-qualified mortgage loans but only to targeted markets or products.

“The new mortgage rules are a serious challenge, especially in the near term, for mortgage lending,” said Robert Davis, executive vice president at the American Bankers Association. “The problem will last at least as long as bankers calibrate their compliance systems, and perhaps much longer.”

Despite these setbacks, bankers can boast some positive results. The 208 respondents, 76 percent with assets less than $1 billion, reported the highest percentage of single family mortgage loans since the mortgage crisis began.

Foreclosure rates at surveyed banks dropped from 0.98 percent in 2012 to 0.73 percent in 2013, while the average delinquency rate for single family homes decreased from 2.40 percent to 1.87 percent.

The 30-year fixed-rate mortgage remains dominant in bank lending, growing to 50.3 percent of all loans in 2013 from 46.3 percent in 2012.

Commercial real estate loan demand is trending higher for 26 percent of respondents, but remains stagnant for 51 percent.

The delinquency rate for commercial real estate loans remained little changed at 3.3 percent in 2013.

According to the survey, bankers are most concerned about the increasing regulatory burden and compliance cost.

Click here for a complete report: 2014 ABA Real Estate Lending Survey