The Consumer Financial Protection Bureau (CFPB) on Monday released its 2021 Mortgage Market Activity and Trends report, covering activity and trends in residential mortgage lending for the year. Specifically, the report shows that an increase in activity was driven primarily by home lending, signaling the end of the refinance boom, and that the share of home loans to minority borrowers relative to non-Hispanic white borrowers has increased.
Key Conclusions of the CFPB Mortgage Market Report 2021
Under the HMDA, many financial institutions are required to maintain, report and publicly disclose mortgage lending information. The CFPB’s Mortgage Market Activity and Trends Report is a product of this law and provides important information on whether property lenders are meeting the housing needs of the communities in which they operate.
In the 2021 report, the federal agency lists some key insights:
- Minority group borrowers increased their share of home loans: Black borrowers share of home loans increased from 7.3% in 2020 to 7.9% in 2021, Hispanic white borrowers saw their share of home loans increase from 9.1% % increased to 9.2% The number of borrowers increased from 5.5% in 2020 to 7.1% in 2021. In contrast, the proportion of non-Hispanic white borrowers dropped from 59.1% to 55.6 %.
- Black and Hispanic borrowers continue to see higher rejection rates and lower loan amounts: Overall, Black and White Hispanic borrowers qualified for lower median loan amounts, had lower median credit scores and lower interest rates lower higher rejection rates compared to white and non-Hispanic Asian borrowers. Black and Hispanic white borrowers also paid higher average interest rates and higher overall borrowing costs compared to their non-Hispanic white and Asian counterparts.
- Mortgage origination was driven by home loans: Non-reverse mortgage originations grew 2.4% from 2020 to 2021. But unlike last year, when the increase in loans was driven by refinancing, most of the increase could be traced back to 2021, up to jumbo home loans.
- The top 25 lenders by volume accounted for more than half of refinance loans: 4,332 lenders reported at least one completed mortgage origination in 2021, but the top 25 lenders by volume accounted for 43.9% of all completed loans. Additionally, they issued 53% of all refinance loans.