New Lending Players Fill Gaps Left By Trouble Firms

WSJ reports today that midsized lenders have stepped into the gap left by some of the larger firms hard hit by the credit crunch. According to the story: “Jay Brinkmann, chief economist for the Mortgage Bankers Association, says many medium-size mortgage lenders are well-positioned for the turbulent environment because of their specialization in loans sold to government agencies. Such loans dominate the current mortgage market, partly because securitization is essentially dormant. Smaller banks also have higher capital-reserve requirements than larger rivals, which left them ‘operating on better capital cushions going into this downturn,’ Mr. Brinkmann says.”