Survey of Mortgage Originators, Fourth Quarter 2016

This quarter marks the 13th Survey of Mortgage Originators in which lenders are surveyed about current trends in lending. This survey covered lenders’ experiences in the 4th quarter of 2016 and also included questions on shortages of appraisers and rising rates.

Key Findings

This quarter marks the 13th Survey of Mortgage Originators in which lenders are surveyed about current trends in lending. This survey covered lenders' experiences in the 4th quarter of 2016 and also included questions on shortages of appraisers and rising rates.

• Non-QM lending inched back, while rebuttable presumption lending moderated. However, there was a significant increase in interest by investors and lenders who expect to expand credit for non-QM over the next six months. Despite this, investor demand for non-QMs is expected to ease.

• Investor demand for and lender willingness to expand access to prime borrowers, both low and high credit, is expected to continue to strengthen over the next six months.

• 55.6% of lenders indicated some level of problems getting appraisals, with 11.1% indicating it was significant.

• Lenders viewed fewer new appraisers, a reluctance to perform certain appraisals, and high refinance volumes as the main drivers of the shortage.

• However, 27.8% of lenders do not accept appraisals in which any part is performed by a trainee, while 44.4% require direct supervision of all aspects performed by a trainee.
• 9.8% of respondents had faced a "rush fee" in which fees are increased to meet a time constraint. In this sample, rush fees averaged 37.1% higher.
• 16.7% of respondents felt that rising rates will weaken demand for purchase mortgages, but 44.4% felt that strong employment and income growth will partially offset rising rates.

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