Fewer residential lending executives are reporting that demand for mortgages is on the rise, though an increasing share expect that agency guidelines will be relaxed in the near future.
Around 47 percent of senior mortgage executives say that demand for purchase financing backed by the government-sponsored enterprises has risen over the past three months.
That’s a much smaller share for the group than as of three months previous, when nearly three-quarters had indicated that
demand had strengthened for loans eligible for GSE purchase.
The details were outlined in the Mortgage Lender Sentiment Survey Q4 2015 Summary Report from Fannie Mae. There were 213 senior executives from 194 lending institutions who participated in the latest survey.
At the same time, the share who expect demand for GSE-eligible loans to rise over the next three months fell to a quarter from 37 percent, while the share who expect a decline rose to quarter from 19 percent.
On non-GSE eligible loans, less than half said demand increased over the past three months compared to 57 percent in the third quarter, while nearly a quarter expect lower demand over the next three months versus 17 percent in the previous survey.
On government mortgages, the share who experienced an increase in demand during the fourth quarter tumbled to 46 percent from 63 percent, and the share who expect an increase in the next three months dropped to 23 percent from more than a third in the prior period. Lower demand over the next three months is expected by nearly a quarter of the executives, an increase from 18 percent in the previous survey.
While the share of those surveyed who noted easing in GSE credit standards has fallen to 17 percent from 23 percent in the third-quarter survey, it’s up from just 12 percent in the fourth quarter of last year.
Over the next three months, 16 percent expect further easing on GSE credit standards, more than 11 percent in the prior survey.
On non-GSE eligible loans, the share who reported loosened standards fell to 18 percent from 22 percent, and the share who see further easing declined to 13 percent from 16 percent in the third quarter.
Although the share of executives who experienced eased credit standards on government mortgages retreated three percentage points from the third quarter and six percentage points from the fourth-quarter 2014 to 10 percent, those who see looser government standards ahead climbed to 12 percent from the prior period’s seven percent.
