Cover of the Q2 2017 Survey of Mortgage Originators

The 2nd quarter marked the 15th Survey of Mortgage Originators. This survey covered lenders’ experiences in the 2nd quarter of 2017 and included questions on the impact of Fannie Mae’s increase to its DTI ratio as well as the FED’s choice to end its program of reinvesting its portfolio of Treasuries and agency MBS.

Key Findings

  • Lenders' expected access to credit among prime borrowers to remain strong over the next six months, but investor interest appears to be flattening, perhaps in a lean towards sectors with moderate amounts of risk.
  • Non-QM lending remained in low gear as the share of lenders offering them as well as willingness to lend moderated. An increasing share of lenders were waiting for better investor takeout for non-QM loans.
Bar graph: Share of production for safe harbor QM, rebuttable QM, and non-QM
  • Rebuttable presumption lending gained steam in both the share of lenders offering it and willingness to originate.
Bar graph: Net willingness to originate vs prior quarter
  • 57.1% of responding lenders felt that Fannie Mae's decision to increase its cap on DTI to 50% would expand access to credit and lending volumes.
Bar graph: Expected effect of higher DTI cap at Fannie Mae
  • Just 14.3% of respondents planned to add an overlay on borrowers with DTIs between 45% and 50% with an average fee of 0.5%.
  • More than 70% of respondents expect rates to rise as a result of the Fed ending its reinvestment program. A majority of these borrowers also expect rates to become more volatile, while only 7.1% expect no change. A 0.5% rate increase was most commonly cited by respondents and 40% expect this to be priced in in advance of a move by the Fed.
Bar graph: Expected effect of Fed reinvestment in treasuries and agency MBS

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