A lot of banks took a long hard look at mortgage origination after the financial crisis and decided they want to clean their hands of the industry that fueled America’s collapse.
Andrea Riquier explained in an article in MarketWatch that banks were “scarred by the crisis and the new regulations put in place since then,” creating the question “why put up with all the uncertainty and risk involved with mortgages, which have always been a low-margin business?”
But this is starting to change.
From the article:
There are hints that the conventional wisdom may be shifting when it comes to banks and home loans.
Bank portfolio loans — the mortgages they make and then hold on their books — grew to 34% of all originations in the first half of the year. That’s the most since 2002. And, according to Urban researcher Karan Kaul, there’s a good reason for the growing share of bank-held mortgages:
“Loans are highly profitable for lenders to hold onto.”