Briefing
Banks' Credit Lines to Nonbank Mortgage Companies and Downstream Mortgage Originations
Abstract: We study the downstream mortgage origination activity of banks with credit ties with nonbank mortgage companies (NMCs). We show that banks continued to compete with NMCs in the downstream mortgage origination market, despite financing competing NMCs. NMC activities remain tight to the originate-to-distribute business model, as most of the mortgages were delivered to government-sponsored enterprises, such as Fannie Mae. Their lower on-balance sheet exposure to the mortgage market reduced their interest rate risk exposure, which drove risk during the interest rate hiking period.
Access Documents
File(s):
File format is text/html
https://www.richmondfed.org/publications/research/economic_brief/2025/eb_25-38
Description: Briefing
Bibliographic Information
Provider: Federal Reserve Bank of Richmond
Part of Series: Richmond Fed Economic Brief
Publication Date: 2025-10-08
Volume: 25
Issue: 38