Posted November 03, 2019 07:02:38The housing market is so saturated that banks are charging as much as $10,000 for a mortgage-related loan, and more than $40,000 per month for a home equity line of credit, according to a new analysis.
The analysis, released Thursday by the Federal Reserve Bank of New York, said the banks charged the most in fees and fees for mortgage-linked and securitized loans between 2006 and 2019, which include credit cards, auto loans and mortgages, but also residential real estate loans, which are usually secured by mortgage-finance companies.
The analysis shows that the banks that charge the highest fees for these mortgages in 2019, by far, are Bank of America, Wells Fargo and Citigroup, which collectively charge $1,837 per month.
The study’s authors also note that the median home value of homes in New York City has more than tripled in the last decade, from $100,000 in 2000 to $350,000 by 2018.
In addition, the number of homes with less than $500,000 worth of mortgage debt rose from 1.6 million in 2010 to 1.7 million in 2019.
Among the top five largest mortgage lenders in New Jersey were Wells Fargo, Bank of Ameritrade, Bank America, Chase Manhattan and Capital One.
For a more in-depth look at the study, click here.
In 2018, Wells reported $6.4 billion in fees for its securitization business, which is used to make mortgage loans.
Its fees increased to $7.2 billion in 2019 from $5.3 billion in 2018.
The Federal Reserve’s analysis said it is likely that the rising cost of credit for the banks could be a reason why more Americans are struggling to pay off their mortgages.
“The financial pressures in the market are likely to continue to drive up the costs of mortgage-financed residential real-estate and commercial real-property,” the researchers wrote.
Since the financial crisis of 2008, the federal government has been buying mortgage-funded securities.
On the heels of the Great Recession, the government and financial institutions have spent billions of dollars buying up billions of foreclosed homes and refinance mortgages to lower the interest rates on those loans.
Banks have also been under pressure to lower their fees for securitizations, which they say help borrowers afford their mortgages and help them avoid foreclosure.
However, the banks’ fees have skyrocketed over the last three years.
The median price of a home sold in New England fell 9.2% in 2018 to $1.1 million, according a report from the National Association of Realtors.
Last month, the Federal Deposit Insurance Corp. said that its fees to lenders for securing mortgages dropped 11% in 2017, compared to the previous year, but it didn’t provide an explanation for why.
Meanwhile, the housing market has become so saturated, it has become almost impossible to keep track of all the mortgages outstanding.