According to the Rural Bankers Association of the Philippines (RBAP), REGULATORY REFORMS that will require greater capital for rural banks, which would encourage mergers, could be detrimental to small lenders who have been affected by the pandemic.

“We agree that mergers and consolidations lead to stronger banks and a healthy rural banking sector. While its goals are laudable, the implementation timeline needs to be carefully reviewed as rural banks are still recovering from operational losses during the pandemic,” RBAP Chairman Albert T. Concha, Jr. said in a message. Viber.

Bangko Sentral ng Pilipinas Governor Benjamin E. Diokno said in March that they were in the Iffinal stages of reviewing minimum capital requirements for rural banks, taking into account that a strong capital base will be crucial to meet the challenges facing the sector.

The minimum capital required for rural banks ranges from P10 million to P200 million, depending on the location and the number of branches that will be established by the lenders.

Mr Concha urged regulators to consider that smaller banks need “extraordinary support” from the government amid the pandemic.

“Some rural banks may be unduly classiIfed as underfunded due to loan loss provisioning caused by temporary delays in recovering from borrowers whose businesses have been impacted by the pandemic,” he said.

“These setbacks may be temporary and do not necessarily mean rural banking is unstable.”

Based on central bank data, the gross non-performing loan (NPL) ratio of the rural and cooperative banking sector stood at 12.84% at the end of 2021. This was lower than the ratio of 14.67 % NPL a year earlier.

However, it was still well above the industry’s NPL ratio of 10.48% seen at the end of 2019.

Meanwhile, Concha said a survey of rural banks that have merged or consolidated showed that such transactions are very costly and time-consuming for small lenders.

“Some mergers have actually collapsed while trying to consolidate because of the costs and issues involved,” Concha said.

“Tax incentives and tax breaks coupled with an easier inter-agency government approval process will certainly encourage more rural banks to merge and consolidate,” he added.

The central bank said it closed the operations of 21 rural banks since the start of the pandemic in March 2020. It also processed nine rural banking transactions for mergers, consolidations and acquisitions during the same period. — Luz Wendy T. Noble

Rocket Mortgage dominates the overall home loan market, but when it comes to loans backed by the US Department of Veterans Affairs (VA), Rocket is in a race for second place.

Freedom Mortgage retained its spot as the most active VA lender in 2021, finishing ahead of Rocket Mortgage by a wide margin. The Top 10 list includes several lenders that specialize in VA loans, including Veterans United Home Loans, Navy Federal Credit Union, and USAA.

These rankings are based on a Bankrate analysis of preliminary Home Mortgage Disclosure Act data, with assistance from ComplianceTech’s LendingPatterns.com.

The VA market is more concentrated than the broader mortgage market. The 10 largest VA lenders accounted for nearly half of all VA home loans issued in 2021.

In an intriguing trend, VA loans slowed slightly in 2021 after strong growth in 2020. Total originations fell to 1.2 million in 2021 from 1.4 million in 2020, and volume dropped to 387 billion dollars in 2021 compared to 427 billion dollars in 2020.

The 10 Largest VA Lenders

Top 10 VA Lenders by Number of Loans:

1. Liberty Mortgage. Freedom Mortgages focuses on loans offered through the Federal Housing Administration (FHA) and VA mortgage programs. Freedom issued 155,000 VA loans worth $43 billion in 2021.
2. Rocket mortgage. Rocket issued more than 107,000 VA loans worth $29.73 billion in 2021, according to HMDA data.
3. Veterans Home Loans. This company issued 100,000 VA loans with a combined value of $29.7 billion.
4. Penny Mac. The lender has issued nearly 59,000 VA mortgages worth $17.5 billion.
5. United Shore Financial. Better known as United Wholesale Mortgage, this lender issued nearly 40,000 VA loans worth nearly $15.1 billion in 2021.
6. Federal Naval Credit Union. This nonprofit credit union climbed the list as of 2020, originating 38,000 VA loans worth $12.7 billion.
7. LoanDepot. LoanDepot issued 33,000 VA loans worth $12.1 billion in 2021.
8. Caliber of home loans. Caliber has issued some 30,000 VA mortgages worth $10.6 billion.
9. USAA. The military-oriented lender has issued nearly 28,000 VA loans worth $7.8 billion.
10. Lakeview Loan Service. This lender has issued over 24,000 VA mortgages with a total value of $7 billion.

When VA lenders are ranked by dollar volume rather than number of loans issued, Lakeview Loan Servicing breaks out of the top 10. That spot is occupied by Home Point, which has issued nearly 24,000 VA loans worth 7, $2 billion.

A Quick Guide to VA Loans

VA loans can be a great deal. Although they require no down payment and have lax credit score requirements, VA loans offer rates similar to those paid by conventional borrowers with stellar credit. VA loans are issued by banks and mortgage lenders, with the US Department of Veterans Affairs guaranteeing a portion of the loan.

Starting in 2020, VA loans no longer limit the amounts current and former service members can borrow. This means that new VA loan borrowers have no cap on zero VA loan sizes.

One downside applies: Most borrowers pay VA loan financing fees. Fees range from 0.5% on some refinances to 3.6% for some home purchases. The exact fees vary depending on the value and type of your loan, the amount you have invested, and whether this is your first VA financing.

When it comes to credit scores, the VA itself does not have a minimum credit score requirement. Instead, lenders should look at the overall profile of the loan.

However, mortgage lenders can set their own underwriting requirements, and many lenders require a credit score of 620 or higher.

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