Mortgage Lender Sentiment Survey July 2014

Mortgage Lender Sentiment Survey

The Fannie Mae Mortgage Lender Sentiment Survey, which debuted in March 2014, is a quarterly survey among senior mortgage executives at Fannie Mae’s lending institution partners to track insights into current lending activities and market expectations.

Results collected during the first two quarters of 2014 show greater consumer mortgage demand in the second quarter of the year, a steady and positive near-term mortgage demand outlook, and divergence between larger and smaller lenders in underwriting credit standards.

The survey results show that consumer purchase mortgage demand has picked up from the first quarter to the second quarter of this year. Regarding the near-term outlook, lenders surveyed continue to report positive expectations, although expected growth remains modest.

“These results are broadly in line with other major indicators released recently, including the pickup in home sales in May, and also support our expectations of a steady but unspectacular rebound for housing during the second half of this year,” said Doug Duncan, senior vice president and chief economist at Fannie Mae.

Additionally, the comparison between responses gathered from Fannie Mae’s Mortgage Lender Sentiment Survey and National Housing Survey (among consumers) shows that mortgage executives are significantly more likely than consumers to say it is difficult for consumers to get a mortgage today. In addition, lenders’ responses to questions regarding credit standards pointed to net tightening among smaller and mid-size lenders, but net easing among larger lenders. Changing regulatory requirements was cited as the most common reason for tightening credit among all lenders surveyed.

“Lenders have been trying to find ways to manage their operational costs and meet new regulatory rules,” said Duncan. “They appear to feel cost constrained and, thus, may be applying more conservative standards in their lending practices.”