Mortgage executives surveyed by a Washington-based advisory firm mostly don’t expect looser lending conditions. Behind the outlook are regulations.
Don’t expect mortgage lenders to ease credit score requirements anytime soon, according to 71 percent of recently surveyed executives.
The group said that they were unlikely to lower credit scores as they grapple with an array of new and upcoming rules..
Those were just some of the findings from the Mortgage Industry Outlook Report. The online survey of “mortgage industry leaders” was published by The Collingwood Group.
There were 185 survey participants, of which 60 percent were identified as “lender/originator.”
They are concerned about federal and state regulation. And making matters worse is the volume of simultaneous rules being implemented.
“The reluctance to broaden the credit parameters to reach additional borrowers is a clear indication that lenders are passing up additional volume to avoid regulatory enforcement actions,” the report said.
Consumer Financial Protection Bureau rules are causing the most anxiety.
Mortgage industry professionals continue to be skeptical about a housing recovery.
But despite the skepticism and concerns, a thin majority of respondents indicated that business conditions are better than a year earlier.
Collingwood speculated that a Republican-controlled Congress could increase pressure for various officials to relax regulatory requirements and ease enforcement actions.
“I remain optimistic we’ll see a move towards collaboration,” Collingwood Vice-Chairman Brian Montgomery said in the report. “The Republicans will hold both chambers for the first time in almost a decade so I suspect they’ll be anxious to move forward on a host of issues that go beyond housing finance reform.”
Montgomery was Federal Housing Commissioner in the George W. Bush administration.
Collingwood noted that 82 percent of those surveyed said their organizations are taking “expansionary” actions like increasing compliance staff, enhancing risk controls and investing in compliance technology.
A vast majority said enforcement of new regulations is subjective and clarity around the rules are frustrating. Some believe regulatory guidance is being established through enforcement.
“No clear guidance on certain issues,” responses said. “They won’t put anything in writing when you ask a question. No recourse to their fines and penalties. No real due process.”
