The number of new mortgages issued in 2015 rose 22% — reversing a more than 30% decline in mortgage originations the previous year — even as the number of originating institutions declined and nonbanks accounted for a greater share of new loans, according to housing finance data released Thursday.
In its annual issuance of Home Mortgage Disclosure Act data, the Federal Financial Institutions Examination Council said that the total number of new mortgages rose to 7.4 million, up from 6.1 million in 2014. That increase reflected "strong" growth in both new home mortgages and refinances, with new first-lien home loans increasing to 3.7 million from 3.2 million in 2014 and refinances increasing to 3.2 million from 2.4 million in 2014.
The proportion of loans being made by non-depository independent mortgage companies continued its upward trend, the report said, with nonbanks originating 50% of new first-lien mortgages and 48% of refinances in 2015 — the highest levels, the report said, since 1995.
Data showed that racial minorities remain disproportionately more likely to be rejected for a mortgage, but the proportion of nonwhite homeowners rose steadily.
In 2015, 5.5% of homeowners were African-Americans — up from 5.2% in 2014, but below its peak of 8.7% in 2006, the data said. Similarly, the number of Hispanic borrowers went up 4% in 2015, to 8.3% of all mortgage holders (down from the 2006 peak of 11.7%). The report said that its analysis concluded that "sharp reductions in lending to individuals with low credit scores can explain much of the decrease in black and Hispanic white market shares."
New higher-priced mortgages also declined in 2015, making up only 3% of new first-lien mortgages and 2% of refinances. But the report showed that smaller banks and credit unions made up by far the largest proportion of lenders offering higher-priced mortgages.
"While small banks and credit unions accounted for about 18 percent of conventional home-purchase loans, they originated about 47% of higher-priced conventional home-purchase loans," the report said.
This year's report comes as a surprise after last year's findings showed a 31% decline in new mortgage originations, which was seen as attributable to a tapping out of the well of refinance customers and fears about rising interest rates.
Rules issued by the Consumer Financial Protection Bureau concerning disclosures made to borrowers during the home-purchase process were expected to have an even more chilling effect on mortgage lending in 2014, but this year's bounceback suggests those fears even less well-founded.
