Economists' Outlook

Housing stats and analysis from NAR's research experts.

Spring’s Mortgage Market Thaw Continues This Summer

Every quarter, NAR surveys a panel of lenders who specialize in mortgages for home purchase. In the second quarter of 2015, lenders continued to expand access for borrowers. Despite a decline in the share of production that was non-QM, an increasing share of lenders offered non-QM and rebuttable presumption loans. This trend points to easing of standards in the jumbo space as well as a thaw in the lower credit score portion of the conventional and FHA markets. A sharp uptick in interest from mortgage investors appears to be creating an outlet for this demand. In addition, respondents shared their opinions on the new TRID rules and FHA taxonomy.


Highlights of the Survey:


  • The non-QM share of originations shrank again to just 0.8% of production in the 2nd quarter, while the rebuttable presumption share expanded to 5.5%.
  • While willingness to originate non-QM and rebuttable presumption loans eased, the share of lenders offering these products increased dramatically.
  • For the second consecutive quarter, the share of respondents indicating an increase in investor demand for non-QM loans surged reaching 46.2%.
  • Over the next six months, respondents expect access to credit for non-QM loans to moderate slightly, while access for rebuttable presumption products remains steady and prime products continue to expand. Respondents indicated that investor demand is likely to mimic these patterns.
  • More than half of lenders are concerned about the potential impact of TRID timelines, but only expect 9.5% of closings to be delayed and 1.0% to be cancelled.
  • However, 38.5% of lenders report that TRID will moderately impact their willingness to issue pre-approval letters.
  • Only 15.4% of respondents felt the FHA’s new defect taxonomy helped to clarify the risk around the FHA’s enforcement policies and an equal share would be more willing to lend to borrowers with credit scores below 640 as a result.
  • Finally, a significant share of originators reported having issues attaining tax transcripts from the IRS, but the issue was more evident with smaller producers.


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