NARsurveyedapanelofmortgageoriginatorsabouttheir

experiencesinthe4th quarterof2015.Participantswere
queriedoncurrenttrendsinlending,theirwillingnessto
originatecertainproducts,theoutlook,andtheimpactof
recentpolicyandregulatorychanges.Hereareafewofthe
principalfindings:

NonQMlendingmadeamodestcomebackinthe4th quarterledby
banks,whilemortgagebankersspurreddemandforrebuttable
presumptionloans.

InvestordemandfornonQMloansslumped,butisexpectedtoimprove
modestlyoverthenextsixmonths

Creditaccessingeneralisexpectedtoriseoverthecomingsixmonthsas
isinvestordemandformostcategories

Lendersreportthat8.3percentofsettlementsweredelayedand1.5
percentcancelledduetoTRID.Midsizedoriginatorsreportedthemost
issues

Morethan60percentofrespondentsadvisedclientsforlongerrate
locks,butnearlyhalfofthisgroupindicatedthattheycouldcomplete
settlementwithoutthebufferonatleastsometransactions

Lessthan30percentoflenderswerewillingtosharetheclosing
documents(CD)withREALTORS

Themajorityoflendersexpectoperationstonormalizewithin9months

70percentofrespondentsthinktheFHAsrevisedcondoruleswillhelp
withaccesstocredit

NonQMLendingIncreasedModestlyin
the4th quarter,butRemainsSubdued

Largerlendersandbanksaremorelikelyto
originatenonQMloans,whilenonbanksand
smalllendersfocusinsidetheexemptionsto
theAbilitytoRepay(ATR)rule

WhiletheshareoflendersofferingnonQMand
rebuttablepresumptionloanswassteady,Lenders
willingnesstoextendthiscreditcontinuedtocontract

InvestordemandfornonQMloanssoftenedin
the4th quarterasmorerespondentsindicated
eitherflatordeclininginterest.

Lendersexpectamodestimprovementin
accessforallborrowers

whileinvestorinterestisexpectedtogrowfor
rebuttablepresumptionloansandtoeaseforprime

POLICYISSUES:
TRIDANDFHACONDORULES

TRIDcausedsomedelaysandcancellations.On
average,6dayswereaddedtorespondents
settlementprocessduetotheTRIDchanges

TRIDsimpactwasmorepronouncedformidsizedoriginators

Lendersareadvisingclientstotakelongerrate
locks,butasignificantsharefelttheycould
settleontimewithoutthebuffer

60percentofrespondentsreportedanincreaseinrate
lockextensionsduetoTRID,while30percentindicated
somedegreeofreluctancetoofferpreapprovalletters

Lendersnamedvendorsoftwareand
investorissuesasmajorblockagesinthe
TRIDprocess

Thetitleprocessandclosingagentswere
sitedwithalowerfrequency,while
REALTORSwerecitedfrequentlybutwitha
lesserdegreeofimpact

Despiteamorefavorableviewof
REALTORSthanothersettlement
partners,morethan55percentof
originatorsdonotsharethenew
closingdocumentwithREALTORS

Respondentsindicatedthat
transactionsinvolvinglawyerswere
slowerandmoreproblematic

60percentoflendersexpecttheiroperationsto
benormalizedwithin6months,butonly45
percentexpectinvestorstobecomecomfortable
inthatsameperiod

70percentoforiginatorsthink
changestotheFHAscondolending
policieswillimproveaccesstocredit

Appendix:
SurveyMethodology
135lendersweresurveyed
ThesurveywasconductedfromJanuary13th to
February3rd
Responseratewas17.8%
Geographicallydiversegroupoflendersfocused
onthepurchasemarket
Othercharacteristicsinlinewithpriorsurveys

QuestionscanbedirectedtoKenFearsat
kfears@realtors.org

NationalAssociationofREALTORS
ResearchDivision

http://www.REALTOR.org/researchandstatistics

https://www.facebook.com/narresearchgroup

@NAR_Research

https://www.pinterest.com/narresearch/