WASHINGTON, Sept. 17, 2014 /PRNewswire/ -- Large
lenders' expectations that underwriting standards will ease over
the next three months coincide with overall lenders' expected
pullback in the demand for single-family purchase mortgages,
according to results from Fannie Mae's third-quarter Mortgage
Lender Sentiment Survey. The share of lenders who expect purchase
mortgage demand to go up over the next three months decreased
significantly – between 26 to 33 percentage points depending on
loan type – with the largest decline of 33 percentage points on
GSE-eligible loans. Among those surveyed, larger lenders continue
to be more likely than their smaller counterparts to say they
expect to ease their credit standards during the next three months,
in particular for non-GSE-eligible and government loans, perhaps
indicating an effort to boost purchase mortgage activity before the
year comes to a close.
"Lenders' diminished purchase mortgage demand outlook is broadly
in line with the softened consumer housing sentiment seen in the
August National Housing Survey results released last week," said
Doug Duncan, senior vice president
and chief economist at Fannie Mae. "Historically, as lenders face a
more competitive market for loan volume, it's not uncommon to see
some loosening in the lending standards; however, this time, the
easing will likely be around the edges." These latest third quarter
results are largely consistent with Fannie Mae's study released
last month, titled "Impact of QM," that shows larger lenders are
more likely than smaller lenders to pursue non-QM loans. "Larger
lenders are expecting to tap into the non-GSE-eligible and
government loan market to maintain or grow their market share and
offset their anticipated slowing mortgage demand as the peak
spring/summer selling seasons are coming to an end," said
Duncan.
MORTGAGE LENDER SENTIMENT SURVEY HIGHLIGHTS
Differences in Economic and Housing Sentiment Between Senior
Executives and General Consumers
- Compared to general consumers, senior mortgage executives
continue to be more optimistic about the overall economy and more
pessimistic about consumers' ability to get a mortgage today.
Steady Consumer Purchase Mortgage Demand Over the Prior Three
Months
- Consumer demand reported for single-family purchase mortgages
over the prior three months remain little changed from Q2 to Q3
2014.
Negative Consumer Purchase Mortgage Demand Outlook for the
Next Three Months
- The share of lenders expecting demand growth for the next three
months declined significantly from Q2 to Q3.
Expectations of Easing Credit Standards Among Larger Lenders
for Non-GSE Eligible and Government Loans
- Most lenders reported no major changes in their credit
standards for the prior three months and expected no major changes
for the next three months. However, larger lenders continue to be
more likely than smaller lenders to say their credit standards
eased over the prior three months and that they expect standards to
ease during the next three months, in particular for non-GSE
eligible and government loans.
Stable Mortgage Execution Outlook
- As in Q1 and Q2, most lending institutions surveyed in Q3 2014
reported that they expect to maintain their post mortgage
origination execution strategies for the next three months.
Stable Mortgage Servicing Rights (MSR) Execution
Outlook
- As in Q1 and Q2, the majority of lenders surveyed in Q3 2014
reported that they expect to maintain their Mortgage Servicing
Rights (MSR) strategies for the next three months.
Slightly Negative Profit Margin Expectations for the Next
Three Months
- Lenders' profit margin outlook for the next three months
appears to have worsened from Q2 to Q3. The net percentage of
larger and mid-sized lenders reporting decreased profit margin
expectations increased from Q2 to Q3.
This first-of-its-kind Mortgage Lender Sentiment Survey
conducted by Fannie Mae polls senior executives of its lending
institution customers on a quarterly basis to assess their views
and outlook across varied dimensions of the mortgage market. The
third quarter 2014 Fannie Mae Mortgage Lender Sentiment Survey was
conducted between August 6, 2014 and
August 22, 2014. Interviews were
conducted by Penn Schoen Berland in coordination with Fannie Mae.
For detailed findings from the 2014 third quarter survey, as well
as survey questionnaires and other supporting documents, please
visit the Fannie Mae Mortgage Lender Sentiment Survey page on
fanniemae.com. Also available on the site are special topic
analyses, which focus on findings and analyses of important
industry topics.
Opinions, analyses, estimates, forecasts, and other views of
Fannie Mae's Economic & Strategic Research (ESR) group or
survey respondents included in these materials should not be
construed as indicating Fannie Mae's business prospects or expected
results, are based on a number of assumptions, and are subject to
change without notice. How this information affects Fannie Mae will
depend on many factors. Although the ESR group bases its opinions,
analyses, estimates, forecasts, and other views on information it
considers reliable, it does not guarantee that the information
provided in these materials is accurate, current, or suitable for
any particular purpose. Changes in the assumptions or the
information underlying these views could produce materially
different results. The analyses, opinions, estimates, forecasts,
and other views published by the ESR group represent the views of
that group or survey respondents as of the date indicated and do
not necessarily represent the views of Fannie Mae or its
management.
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SOURCE Fannie Mae