The trend in home lending credit availability varies depending on whom you ask. In general, large mortgage lenders are more optimistic than their smaller counterparts.
Among senior executives at small mortgage lenders, 22 percent said that credit standards have tightened over the past three months.
It’s even worse at mid-sized lending institutions, where a quarter of their executives indicated that credit standards are tougher now than three months ago.
Those findings were among the results discussed in the inaugural quarterly Mortgage Lender Sentiment Survey from Fannie Mae. The survey of senior executives at Fannie’s lending institution partners was conducted between May 28 and June 8.
But at larger institutions, just 12 percent of surveyed executives said that standards were tighter.
At the same time, while 19 percent of executives at larger firms said credit standards have eased, the share was just 9 percent at mid-sized lenders and 3 percent at smaller lenders.
Looking forward, just 1 percent of large lender executives expected standards to tighten over the next three months on loans eligible for purchase by the government-sponsored enterprises, while the share jumped to 11 percent at mid-sized companies and 10 percent at small lenders.
The report found that 58 percent of all executives surveyed expected home prices will increase over the next year, while just 4 percent predicted a decline. The rest saw no changes ahead.
Only 19 percent of the participants said it would be easy to get a mortgage today. Most — 81 percent — said it would be difficult. Their opinions diverged from consumers, with a slight majority of consumers saying it would be easy.
Although a solid majority of the executives said demand for purchase financing on government-sponsored enterprise loans and non-GSE eligible loans has improved over the past three month, less than half felt that way about government mortgages. But roughly half felt purchase demand will increase in all three categories during the next three months.
“Lenders’ profit margin outlook has improved from Q1 to Q2 2014, as more lenders expect their profit margin over the next three months to stay the same and fewer lenders expect their profit margin to decrease,” the report stated. “‘Government regulatory compliance’ and ‘competition from other lenders’ are cited as the most popular reasons driving the decrease in profit margin over the next three months. ‘Consumer demand’ and ‘operation efficiency’ are cited as the most popular reasons driving the increase in profit margin over the next three months.”
