Large lenders are predicted to be the first banks to fully step up and open the credit box. And this comes directly from them, according to Fannie Mae’s third-quarter Mortgage Lender Sentiment Survey, which polls senior executives of its lending institution customers.

Larger lenders continue to be more likely than their smaller counterparts to say they expect to ease their credit standards during the next three months, with an emphasis in non-GSE-eligible and government loans.

As a result, Fannie suggested that this could indicate an effort to boost purchase mortgage activity before the year comes to a close.

“Historically, as lenders face a more competitive market for loan volume, it’s not uncommon to see some loosening in the lending standards; however, this time, the easing will likely be around the edges,” said Doug Duncan, senior vice president and chief economist at Fannie Mae.  

“Larger lenders are expecting to tap into the non-GSE-eligible and government loan market to maintain or grow their market share and offset their anticipated slowing mortgage demand as the peak spring/summer selling seasons are coming to an end,” Duncan added.

Traces of this can already be seen, with Citigroup (C) and Bank of America (BAC) announcing that they will start to offer mortgages at discounted interest rates as part of their efforts to help borrowers with low incomes or subprime-credit histories.

The loans from both of the banks are being originated and distributed by the Neighborhood Assistance Corp. of America, a national nonprofit based in Boston that works primarily with low- to moderate-income borrowers, including those who have subprime credit.

In August, Wells Fargo (WFC) reduced some of its standards for high-priced home loans in order to combat the industry-wide plummet in mortgage volume.

And while lenders are forecasting a loosening of standards, the future for originations still doesn't look too bright.  

“Lenders’ diminished purchase mortgage demand outlook is broadly in line with the softened consumer housing sentiment seen in the August National Housing Survey results released last week,” Duncan said.  

The survey found that the share of consumers who think now is a good time to buy a home hit an all-time low in August, dropping six percentage points since June to 64%.

Meanwhile, the share of lenders who expect purchase mortgage demand to go up over the next three months decreased significantly – between 26 to 33 percentage points depending on loan type – with the largest decline of 33 percentage points on GSE-eligible loans.