The question of whether banks are bulking up on retained mortgages has recently taken on emotional overtones, with some alleging that data show a significant trend towards bigger on-balance-sheet books and others countering that loans will be sold for as long as the GSEs and Ginnie are buying. Here, we assess FRB data on mortgage portfolios and the reasons why data show a recent increase, especially for smaller banks.
The full report is available to subscription clients. To find out how you can sign up for the service, click here.