Best automation opportunities for loan processing

Join our expert panelists to learn how lenders can achieve their goals using the integration of intelligent document automation and RPA technology.

4 Strategies to Strengthen Customer Relationships

Discover the right strategies to execute fast-acting campaigns, track results and improve your bottom line – all while strengthening customer relationships.

HousingWire's 2021 Spring Summit

We’ve gathered four of the top housing economists to speak at our virtual summit, a new event designed for HW+ members that’s focused on The Year-Round Purchase Market.

An Honest Conversation on minority homeownership

In this episode, Lloyd interviews a senior research associate in the Housing Finance Policy Center at the Urban Institute about the history and data behind minority homeownership.


Lender confidence falls in the face of rising interest rates

Majority of lenders say mortgage rates aren’t favorable

Mortgage rates began their rise after President-elect Donald Trump won the election, and have not stopped rising since.

Now, lenders are reporting much lower expectations when it comes to near-term mortgage demand, according to Fannie Mae’s fourth quarter 2016 Mortgage Lender Sentiment Survey.

The survey, which was conducted after the election, shows that the net share of lenders expecting an increase in purchase mortgage demand over the next three months hit near all-time lows. The majority of lenders reported “mortgage rates are not favorable,” which was cited by a survey high of two-thirds of lenders.

Demand expectations for the next three months were at or near survey lows across the different loan types, including GSE eligible, non-GSE eligible and government.

Refinance mortgage demand fared even worse as it dropped to a new survey low across all loan types. These new lows are coming in after three straight quarters of positive profit margin outlook.

“The survey captured lenders’ bearish sentiment driven by the recent surge in mortgage rates – a level of bearishness last seen in the summer of 2013 during the taper tantrum,” said Doug Duncan, Fannie Mae senior vice president and chief economist. “The sudden surge in mortgage rates weighed on expected future purchase and refinance volume.”

“Downbeat production expectations suppressed lenders’ profit margin outlook to the worst showing in the survey’s short history,” Duncan said. “Rates could slowly unwind in coming quarters, reversing some of the decline in expected volume.”

“However, the potential normalization of interest rates after a sustained period of strong refinancing volumes presents the biggest business challenge facing mortgage lenders in some time,” he said.

All signs point toward a continued increase in mortgage rates. Wednesday, the Federal Reserve raised its benchmark interest rate by 25 basis points, and could raise rates three more times next year.

This chart shows that lenders are now much less concerned with compliance issues, and much more concerned with current market trends, such as rising interest rates.

Click to Enlarge


(Source: Fannie Mae)

Most Popular Articles

FHFA doubles affordable housing disbursement to $1B

FHFA Director Mark Calabria has upset the #FannieGate folks: the GSEs will be doubling their affordable housing disbursement to $1B in 2020

Mar 01, 2021 By

Latest Articles

Compass rivals question path to profitability

Compass’s S-1 reveals some creative accounting when it comes to revenue. Here’s our breakdown of Compass’ path to profitability. HW+ Premium Content

Mar 03, 2021 By
3d rendering of a row of luxury townhouses along a street

Log In

Forgot Password?

Don't have an account? Please