Senior mortgage banking executives are expecting that demand for non-agency programs will intensify. At the same time, the group expects requirements on such programs to ease.
On loans to finance a home purchase that are eligible for government-sponsored enterprise programs, half of home-lending executives experienced increased demand over the past three months.
At the same time, 22 percent reported that consumer demand had weakened. That put the net-up share at 28 percent, far below the 70 percent net-up share in the year-prior period.
Those findings were derived from
Fannie Mae’s second-quarter 2017 Mortgage Lender Sentiment Survey. There were 207 senior executives like chief executive officers and chief financial officers from 184 institutions who participated.
Companies represented included 54 that were classified among Fannie’s top 15 percent with annual volume of more than $1 billion. Another 58 were deemed mid-sized with Fannie Mae production of between $0.242 billion and $1.02 billion, and the remaining 72 were classified as smaller institutions.
On loans ineligible for GSE purchase, the net-up demand diminished to 28 percent in the latest period from 43 percent one year earlier. Net-up government demand was slashed to 28 percent from 57 percent.
Over the next three months, the net-up share of executives who see increased GSE purchase-money demand was 55 percent, though that was still off from 60 percent in the second-quarter 2016. The ratio improved to 59 percent from 58 percent on government mortgages.
However, expected non-GSE demand improved to 51 percent from 43 percent in the year-prior quarter.
Seventeen percent of executives noted easing in GSE credit standards, while just 3 percent reported tightening, indicating a net-ease share of 14 percent. Credit conditions loosened more than in the first-quarter 2017, when the net-ease share was 11 percent. Conditions have also improved from the same three-month period last year, when the net-ease share was just 9 percent.
On non-GSE credit standards, the net-ease share improved to 10 percent from 4 percent three months earlier and a year earlier.
Government standards were also more relaxed, with the net-ease share rising to 12 percent from 9 percent the previous quarter and 6 percent a year prior.
Looking forward, the GSE net-ease share for the next three months was 15 percent, widening from just 4 percent in the same quarter last year. The net share on non-GSE mortgage has gone from zero to 12 percent, and government expectations have improved, with the net-ease share fattening from 2 percent a year ago to 10 percent.
