AEI’s National Mortgage Risk Index declined slightly from April, falling to 11.87% in May.
About 181,000 loans were added in May, bringing total in the NMRI to 3.54 million.
American Enterprise Institute’s Ed Pinto says that there has been little discernible volume impact from QM regulation.
Nearly a quarter of loans still have total DTI > 43%, unchanged from levels in late 2013.
The survey also found that the Fair Housing Administration is not compensating for riskiness of high DTI loans, and that the government-sponsored enterprises, Fannie Mae and Freddie Mac, are compensating only to a limited extent.
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“The recent softness in mortgage lending not due to tight standards but to somewhat higher interest rates, higher home prices, lingering impact of the financial crisis, and sluggish economic recovery,” the preview of the report says. The full report will be released Monday morning.
The survey also found that subprime lending by FHA issuers continue to grow in response to government calls for expanding the FHA credit box, which risks fueling home price volatility, particularly in lower income and minority areas.