October 2015 Mortgage Originators Survey

This survey covers the 3rd quarter of 2015 and 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 their preparation for the Know Before You Owe (or TRID) changes to the closing process, the FHA’s proposed changes to its certification policy, and the CFPB’s expansion of the small lender exemption to the Ability to Repay Rule. 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 0.3% of production in the 3rd quarter, while the rebuttable presumption share expanded to 6.7%.
  • Both the share of lenders offering and willingness to extend non-QM and rebuttable presumption loans eased, while willingness to extend plateaued at a high level for prime loans.
  • Investor demand slipped sharply in the 3rd quarter with more lenders indicating a "wait and see" strategy with respect to investor takeout.
  • Over the next six months, respondents expect access to credit for non-QM and rebuttable loans to moderate. However, investor demand for all loan categories is expected to rise over this same time frame.
  • Only 20% of respondents indicated full confidence in their own preparations for TRID after implementation in October and 75% were recommending longer lock periods for their clients.
  • 40% of respondents indicated some reluctance to offer pre-approval letters.
  • In response to the FHA's proposed certification policy, 30% of lenders plan to raise their minimum credit standards, with 71.4% of that group targeting a 640 minimum score.
  • Finally, none of the respondents in this survey either benefit from or were willing to take advantage of the CFPB's expansion of the small lender exemption under the qualified mortgage (QM) rule.

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Related Content

Qualified Mortgage (QM)

The QM is a loan that on its face would meet the ability to repay standards and have certain features associated with "safe" lending.

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