New Lender Survey Suggests QM Will Impact Credit Standards and Operational Costs

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Mortgage Lender Sentiment Survey

Purchase Mortgage Demand Expected to Grow, Credit Standards to Remain Unchanged, According to Lenders

June 14, 2016

Lender attitudes toward the housing market are positive overall heading into Q3, having recovered from a significant decline in recent quarters, according to Fannie Mae’s second quarter 2016 Mortgage Lender Sentiment Survey®. Conducted in May, the survey results show that lenders reporting demand growth for GSE eligible purchase mortgages over the past three months rebounded to 70 percent on net, compared with 20 percent in the prior quarter (Q1 2016) and 71 percent one year ago (Q2 2015). Additionally, lenders' purchase demand expectations for the next three months remain near the levels seen during the same period last year — dipping slightly for GSE eligible and non-GSE eligible mortgages to 60 percent and 43 percent, respectively, but ticking up to 58 percent for government loans.

While lenders also reported a moderate net easing of credit standards across all loan types over the prior three months, expectations to ease standards during the next three months have gradually ticked downward on net since Q4 2015, with most lenders expecting to keep their credit standards unchanged. For GSE eligible loans, only 4 percent of lenders on net expect to further ease credit standards within the next three months.

"Key survey sentiment indicators suggest that lenders remain cautiously optimistic in their market outlook," said Doug Duncan, senior vice president and chief economist at Fannie Mae. "The outlook for purchase demand growth over the next three months returned to levels similar to last year, while the outlook for refinance demand and profit margin improved moderately versus last year’s levels. Additionally, the trend toward easing of credit standards appears to be tapering off, as the vast majority of lenders, around 90 percent, reported plans to keep their credit standards about the same. The survey was conducted before the recent May jobs report, and the weaker reported job gains might potentially temper this optimism."

Lenders' expectations for consumer demand for GSE eligible single-family purchase mortgages over the next three months

Lenders' expectations for easing or tightening credit standards for GSE eligible single-family purchase mortgages over the next three months

On this webpage you will find a news release with highlights from the survey results, the Q2 2016 data summary highlighting key attitudinal indicators, a detailed research report, the questionnaire used for the Q2 2016 survey, and FAQs providing additional information about the survey.

Downloads and Related Links
Q2 2016 News Release
Q2 2016 Mortgage Lender Sentiment Survey Data Summary (PDF)
Q2 2016 Mortgage Lender Sentiment Survey Detailed Research Report (PDF)

Mortgage Lender Sentiment Survey Archive
Click here for an archived list of Fannie Mae's Mortgage Lender Sentiment Survey results.