November 2014 Mortgage Originators Survey

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This survey has been expanded to measure lender expectations of market conditions and capacity as well as current policy issues, including changes at the RHS and lending headwinds.

Highlights

• The non-QM share of originations nearly doubled in the 3rd quarter to 2.6%. However, the rebuttable presumption share tumbled from 12.8% to 3.5% over this same time frame.
• Respondents’ confidence in their preparations for the QM/ATR rules eroded again in the 3rd quarter, with just 58.3% indicating that they had fully adapted compared to 61.9% in the 2nd quarter.
• The net share of lenders offering rebuttable presumption and non-QM products increased from the 2nd to the 3rd quarter. Willingness to originate non-QM mortgages fell dramatically from the 2nd quarter, but the decline was less dramatic for rebuttable presumption mortgages. Lenders were more willing to originate prime mortgages with the exception of those with lower FICOs.
• 24% of lenders felt the investor takeout for non-QM loans had improved from the 2nd quarter.
• The QM rule continues to dog lenders with 64% indicating having had an issue closing a loan in the 3rd quarter due to some facet of the rule, and an increase in the share of lenders using buffers in advance of the QM requirements.
• Over the next 6 months, respondents expect improvements in demand for all products, but more so for non-QM and rebuttable presumption loans. The majority of respondents expect improved investor demand for all mortgage types, but some expect softening.