One reason banks stay in the mortgage business is that it’s an easy way to book LMI loans for CRA credit and then move them on to Ginnie or the GSEs to reduce most of the risk. The OCC’s proposal to rewrite Community Reinvestment Act rules contemplates providing CRA credit only for portfolio loans. If this occurred – and it won’t happen fast, if at all – bank mortgage activity would drop still farther and faster.
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