August 2015 Mortgage Originators Survey

The survey covering the second quarter of 2015 reviews trends in mortgage production with an emphasis on changes in the availability of non-prime, QM rebuttable presumption, and non-QM products. Survey participants were also queried about the impending implementation of the TILA RESPA Integrated Documentation (TRID), the FHA's new defect taxonomy, and problems attaining tax transcripts. As in previous surveys, this quarter's panel of respondents includes members of Community Mortgage Lenders of America.

Key Findings

  • The non-QM share of originations shrank again to just 0.8% of production in the second 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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