NARsurveyedapanelofmortgageoriginatorsabouttheir

experiencesinthe1st quarterof2016.Participantswerequeried
oncurrenttrendsinlendingandtheimpactofrecentpolicyand
regulatorychanges.Hereareafewofthefindings:

NonQMlendingtumbledinthe1st quarterfromalreadyanemic
levelsasinvestordemandfornonQMloansretreated,butlenders
expectedittoimprovemodestlyoverthenextsixmonths

Creditaccessingeneralisexpectedtoriseoverthecomingsix
monthsdrivenbygainsinprimeandnearprimelending

TheshareoftransactionsdelayedduetoTRIDwasslashedfrom8.3
percenttojust1.8percentwithnocancelationsduetoTRID.

Respondentscontinuetoadviseforlongerratelocks,butnearly
threequartersindicatedthattheycouldcompletesettlement
withoutthebuffer,thoughtheuseofratelockextensionsrose.

Lessthan30percentoflenderswerewillingtosharetheclosing
documents(CD)withREALTORS.TILAregulationswerethemost
frequentlycitedreason

Nearlyathirdofrespondentsindicatedawaitandseeapproachto
theFHAsrevisedcertificationrules,whileanotherthirdindicated
thatthechangewouldnotresultinincreasedlendingtolower
creditborrowers

NonQMlendingtumbledinthe1st
quartertoitslowestsharesincethe3rd
quarterof2015

WhiletheshareoflendersofferingnonQMand
rebuttablepresumptionloanswassteady,lenders
willingnesstoextendthiscreditremainslimited

InvestordemandfornonQMwasmixedinthe
1st quarter,butmorerespondentsindicatednot
participatinginthenonQMmarket.

Lendersexpectamodestimprovementin
accessforprimeandnearprimeborrowers

whileinvestorinterestisexpectedtogrowfor
nonQM,primeandnearprimemortgages

POLICYISSUES:
TRIDANDFHA
CERTIFICATIONPOLICY

DelaysandcancellationsattributedtoTRIDtumbled
betweenthe4th and1st quarters,butlenders
reluctancetoofferpreapprovalsrose.

Theaveragedelayslippedfrom6daysinthe4th
quarterto3.8daysinthe1st quarterof2016.

Lendersadviceshiftedtowardsmodestly
longerlockperiods.

73.3%felttheycouldcloseontimewithoutthelongerlocks,
butmorethanhalfnotedanincreaseinlockextensions.

Anunchanged55percentoforiginatorswould
notsharethenewclosingdisclosure(CD)with
REALTORScitingliabilityunderTILA.

Nearlythreequartersofrespondents
wouldsharetheclosingdisclosure(CD)
givenasignedwaiverfromtheconsumer

RespondentswhowouldnotsharetheCDevenwitha
waivercited:
LackofclarityaboutwrittenconsentfromtheCFPB
Lackofclarityaboutwrittenconsentandthe
applicationofTILA
Lackofuniformityofconsent/waiverforms

Lendersexpectationsfornormalizationofboth
theirownoperationsandinvestorsdemand
slippedfromthe4th quartertothe1st quarter,
suggestingaprotractedtimeframeforissues

Nearlyathirdofrespondentsindicatedthat
despitetheFHAsproposedchangestoits
certificationpolicy,theywouldremain
reluctanttolendtolowercreditborrowers

Appendix:
SurveyMethodology

135lendersweresurveyed
ThesurveywasconductedfromApril6th to31st
Responseratewas11.1%
Thesampleisageographicallydiversegroupof
lendersfocusedonthepurchasemarket
Lenderssizebyannualvolumedeclinedrelative
tothe4th quarterof2015

QuestionscanbedirectedtoKenFearsat
kfears@realtors.org

NationalAssociationofREALTORS
ResearchDivision

http://www.REALTOR.org/researchandstatistics

https://www.facebook.com/narresearchgroup

@NAR_Research

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