Economists' Outlook

Housing stats and analysis from NAR's research experts.

TRID Costs and Lender Optomism in the 2nd Quarter

Lenders continue to deal with the effects of TRID and wavering investor demand but are more optimistic about investor demand for mortgage in the second half of 2016.  Those are some of the sentiments expressed in the Survey of Mortgage Originators for the 2nd quarter of 2016.  NAR surveyed a panel of lenders from credit unions, retail banks, and mortgage banks on current production trends as well as their outlook on regulations and policy issues such as TRID, Brexit, and front-end risk sharing.

investor demand

Highlights from the 2nd quarter include:

  • Non-QM lending remained in a slump in the 2nd quarter despite a modest improvement in investor demand for these loans.
  • Credit access in general was expected to rise over the coming six months driven by gains in non-QM and rebuttable presumption
  • The share of transactions delayed due to TRID eased further to 1.7 percent with a slight uptick in TRID-related cancellations.
  • Half of lenders passed increased costs to consumer with a weighted average increase of $258. Lenders were more reluctant to originate smaller loans in the TRID environment.
  • The share of lenders unwilling to share closing documents (CD) with REALTORS® rose to 64.3 percent in the 2nd quarter
  • Lenders grew more optimistic about normalized operations in the next six months, but less so for investors’ ability to adjust, which could prolong the impact in jumbo markets on the coasts
  • More than half of respondents indicated they would participate in front-end risk sharing or were considering it, but 42.9 were concerned about having no clear path for small lender participation.
  •  14.3 percent of respondents cited more rate extensions due to Brexit, while 28.6 percent noted a shortage of appraised but a majority 64.3 percent noted not changes.
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