What to expect at HousingWire’s Spring Summit

The focus of the Summit is The Year-Round Purchase Market. Record low rates led to a banner year for mortgage lenders in 2020, and this year is expected to be just as incredible.

Increasing lending and servicing capacity – regardless of rates

Business process outsourcing and digital transformation are proven solutions that more companies in the mortgage industry are turning to. Download this white paper for more.

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.

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Lenders in a funk over mortgage market outlook

Fannie Mae's Mortgage Lender Sentiment Survey reveals moral is very low

Lenders reported a net negative profit margin outlook for the eighth consecutive quarter in the face of further erosion of purchase mortgage demand.

According to Fannie Mae's Mortgage Lender Sentiment Survey, lenders are feeling worse about the market this quarter than they were last year and last quarter. The biggest reason they have the mortgage blues? Competition from other lenders was the most cited reason by survey participants for the squeeze on margins.

“Lenders continued their bearish trend this quarter, as they note ongoing anemic refinance activity and the worst purchase mortgage demand for a third quarter in the survey’s history,” Fannie Mae Senior Vice President and Chief Economist Doug Duncan said in a statement.

Indeed, there has been a growing movement toward consolidation as a result of tightening margins, especially in the independent mortgage banker space (which you can read about in the upcoming HW Magazine).

Up until now, lenders have been trying to ease credit standards to kickstart the sputtering purchase market, but according to the report, lenders are easing off that tack.

“The profit outlook remains negative, with those lenders expecting decreased profit margins outweighing those anticipating increases for the eighth consecutive quarter. For the first time this year, consumer demand was one of the top two reasons for the downbeat profit outlook, cited by more than one-third of lenders – a record high. Meanwhile, the pace at which lenders are easing credit standards has slowed,” Duncan said.

Duncan said this is because many lenders are wondering if easing credit requirements might not be the true solution to affordability, one of the main ice cubes in the mortgage market’s coffee, and that even if it is, that they may not be able to afford to take it far enough to make a difference.

“The net shares of lenders reporting easing credit standards for GSE-eligible and government loans are less than half the peak shares reached at the end of last year,” Duncan said.

“This may suggest the realization among lenders that combatting declining affordability by making it easier to obtain mortgages might not be the answer – or simply that there is little room for additional easing going forward,” he added.

Mix all this negativity together and what you get is the worst lender sentiment toward purchase mortgage prospects this survey has ever recorded for any Q3, a still negative outlook on a barely existent refinance mortgage market and an abysmal outlook for profitability in general.

If you know a lender, buy him or her a drink, and settle in for a long winter.

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