The non-banks’ increased share of home loans comes at a time when big lenders such as Wells Fargo, Bank of America and JPMorgan are pulling back, according to a study by academics at Harvard’s Kennedy School. The banks say they are reacting to tighter capital requirements and heavy penalties for mis-selling imposed by financial watchdogs after the 2008 crisis. Shadow banks perform banklike functions such as lending but are subject to lighter supervision because they are funded by professional investors rather than retail depositors protected by government insurance schemes.

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