Text of the Fed's report to Congress on CRA lending performance

Source: Federal Reserve Board

Excerpt from the Fed's report:

...Many institutions report no difference in performance between CRA-related and other home purchase and refinance lending. However, when there is a difference in performance, respondents tend to report that CRA-related home purchase and refinance lending performs less well than other home purchase and refinance lending. For example, about half of the survey respondents have higher rates for measures of delinquency for CRA-related home purchase and refinance loans than for overall home purchase and refinance loans; about one-third report no difference in delinquency rates and one-sixth report lower delinquency rates for CRA-related loans. As was the case for profitability, larger institutions are more likely than smaller institutions to report that CRA-related home purchase and refinance loans do not perform as well as home purchase and refinance loans in the aggregate.

CRA-related home purchase and refinance loans do not appear to perform as well as other home purchase and refinance loans when the analysis is conducted on a per CRA-dollar basis. Moreover, the differences appear to be larger than when measured on a per institution basis. For example, 46 percent of the dollars associated with CRA-related loans were originated by institutions that report that credit losses are higher for CRA-related home purchase and refinance loans than for other home purchase and refinance loans, whereas only 28 percent of institutions report such an experience on a per institution basis. Similar patterns are observed when performance is measured by delinquency and charge-off rates.

A large proportion of respondents report that origination and servicing costs, credit losses, and pricing are about the same for CRA-related and other home purchase and refinance loans on a per institution basis. However, for those respondents that do report differences, the difference most often indicates higher costs or credit losses or lower prices for CRA-related home purchase and refinance loans. When assessed on a per CRA dollar basis, CRA-related home purchase and refinance loans appear to have higher origination and servicing costs, but similar pricing, when compared with the costs and pricing of other home purchase and refinance loans...

Executive Summary : Adobe Acrobat

Full text of report : Adobe Acrobat

Tables from the report : Adobe Acrobat

Visit the Federal Reserve site for more information...