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Nine out of 10 senior loan executives say that their companies will not be making it easier to get a home loan in 2016. According to Fannie Mae’s Mortgage Lender Sentiment Survey, despite the fact that a year ago many of these same executives said that they planned to make homeownership more accessible this year, now they are backing off of those plans. In fact, they are less likely than ever to ease lending standards, the report showed.
“The trend toward easing of credit standards appears to be tapering off,” said Doug Duncan, chief economist at Fannie Mae, pointing out that things probably would have looked even bleaker if the survey had been conducted after the release of a weak May jobs report. Despite a clear disinterest in making home loans easier to access, however, lenders do seem cautiously optimistic about the market in general. Mortgage loan demand is about the same as last year, while refinance and profit margins are slightly higher, although most lenders expect the demand for refinancing to fall in the latter half of 2016.
It’s not going to be getting easier to get a traditional home loan, so if you can offer buyers another option you will be able to tap into an underserved portion of the market.
Point to Ponder:
Should lenders loosen their standards?
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