Lenders Give Upbeat Assessment of Credit Access

by devteam September 17th, 2015 | Share

More lenders are seeing an easing of mortgage lendingrnstandards Fannie Mae said today.  In its thirdrnquarter Mortgage Lender Sentiment Survey indicators of loosening standardsrnjumped substantially for both GSE eligible and non-GSE eligible loans.  </p

In the survey mortgage executives were asked whether  theirrnlending organization’s credit standards have eased, tightened, or remainedrnessentially unchanged for the two types of loans as well as government loans duringrnthe prior three months. The gap between the numbers of lenders reporting easingrnas opposed to tightening jumped to 20 and 18 percentage points for GSE eligiblernand non-GSE eligible loans, respectively-reaching new survey highs of “netrneasing.”  The share of lenders who predictrntheir organizations will ease credit standards over the next three months alsornrose for both GSE and non-GSE eligible loans.</p

“For the first time in seven quarters,rnwe see a pronounced increase in the share of lenders, particularly medium- andrnlarger-sized lenders, reporting on net an easing of credit standards in bothrnthe GSE eligible and non-GSE eligible loan categories. This is a significantrnresult in light of public discourse on credit availability and standards,” DougrnDuncan, senior vice president and chief economist at Fannie Mae said. “Ourrnsurvey responses appear to reflect multiple factors at play. Lenders may bernbecoming more comfortable with the GSEs’ updated guidelines intended to providernthem greater certainty regarding representations and warranties. Lenders alsornmay be getting more familiar with the regulatory and compliance environment.rnFinally, lenders may be removing credit overlays. Overall, we expect thatrnlenders’ tendency toward easing credit standards, together with relatively lowrnmortgage rates and a strengthening labor market, will continue to support thernhousing market expansion.”</p

The survey, a counterpart to Fannie Mae’srnmonthly National Housing Survey conducted among consumers, found that seniorrnmortgage executives continue to be more optimistic about the economy than consumersrnand more optimistic about future home prices as well, but are less optimisticrnwhen it comes to how easy consumers might find it to get a mortgage.  </p

Fewer lenders reported a growing demandrnfor home purchase mortgages than did so in the second quarter.  The same was true for the number of lendersrnexpecting increased demand over the next three months although Fannie Mae saidrnthis was in part due to seasonal influences. rnMore lenders made optimistic predictions about demand than did so at thernsame time last year. </p

Other survey findings included:</p<ul type="disc"

  • More institutions reported they expected to increasern rather than decrease the percentage of their originations sold to the GSEsrn and Ginnie Mae over the next 12 months. </li</ul<ul type="disc"
  • More lenders said they expected to decrease rather thanrn increase the share of their MSRs sold to a third party. The same was truern of lenders who expect to increase rather than decrease the share of theirrn MSRs retained and serviced by a subservicer.</li</ul<ul type="disc"
  • The share of lenders reporting an increased profitrn margin outlook over the next three months has fallen significantly thisrn quarter from last quarter, but reached a similar level seen in the samern quarter last year (Q3 2014). </li</ul

    Fannie Mae surveys senior executives ofrnFannie Mae lending institution customers quarterly to assess their views acrossrnvaried dimensions of the mortgage market.  The survey reported here was conducted betweenrnAugust 5, 2015 and August 17, 2015.

    All Content Copyright © 2003 – 2009 Brown House Media, Inc. All Rights Reserved.nReproduction in any form without permission of is prohibited.

  • About the Author


    Steven A Feinberg (@CPAsteve) of Appletree Business Services LLC, is a PASBA member accountant located in Londonderry, New Hampshire.

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