After the financial crisis, there has been a change in the sources of funds for mortgage lending. Before, the financial crisis, banks were very actively involved in providing money for mortgage lending.
The situation has changed. Now, most of the money comes from non-bank lenders. Banks take in deposits and use the money from deposits and other sources to fund loans.
Non-bank lenders use sources other than deposits. Commonly, the non-bank lenders are using lines of credit (loans from third parties) to fund mortgages. https://www.bloomberg.com/news/articles/2019-11-05/mortgage-liquidity-squeeze-flagged-as-risk-to-powell-mnuchin
In the event of a financial crisis, it is uncertain if these non-bank lenders will be able to modify mortgages for mortgagors in distress (loan modifications) or even survive a financial crisis.
Interestingly, Quicken Loans has become the largest non-bank mortgage lender.
When there is a recession, if these lenders cannot provide a loan modification to borrowers, borrowers may have to use Chapter 13 bankruptcy to reorganize their debt (and save their home).
If you are having problems paying your mortgage, please feel free to contact
Attorney Robert M. Singer
2572 Whitney Avenue, Hamden, CT 06518
serving all of Connecticut