Mortgage Standards Are Easing

Fannie Mae’s third quarter 2015 Mortgage Lender Sentiment Survey reveals that more lenders report easing of mortgage lending standards across all loan types. Conducted in August 2015, the survey asked senior mortgage executives whether their lending organization’s credit standards have eased, tightened, or remained essentially unchanged for GSE eligible, non-GSE eligible, and government loans during the prior three months. Notably, the gap between lenders reporting easing as opposed to tightening over the prior three months jumped to 20 percentage points and 18 percentage points for GSE eligible and non-GSE eligible loans, respectively—reaching new survey highs of “net easing.” In addition, the share of lenders who expect their organizations to ease credit standards over the next three months ticked up this quarter for both GSE eligible and non-GSE eligible loans.

Highlights from the survey include:
•Senior mortgage executives continue to be more optimistic about the economy than general consumers.
•Senior mortgage executives continue to be more optimistic than general consumers about future home prices.
•Senior mortgage executives continue to be less optimistic than general consumers when it comes to the ease of getting a mortgage today.
•The share of lenders reporting increased purchase mortgage demand over the prior three months fell slightly this quarter (Q3 2015) from last quarter (Q2 2015), but overall remains at a high level compared with the 2014 readings.
•For purchase mortgage demand over the next three months, the share of lenders expecting demand to go up fell this quarter from last quarter, likely reflecting seasonal influences, but remains higher than the same period last year (Q3 2014).

Leave a Reply