Despite persistent concerns about risk and regulatory compliance, the majority of mortgage professionals agree that business conditions today are better now than they were a year ago.
According to survey results released by the Collingwood Group this week, 33 percent of mortgage lenders, servicers, and other industry professionals believe business conditions are "a little better" than they were last year. That compares to 31 percent of respondents who said the same thing in October.
As with October, more than half of those surveyed said conditions are either a little worse or a little better, "signaling that the industry has not seen a significant improvement or decline over the last year," the Collingwood Group said.
According to the firm, comments offered from lenders mostly point to more stable and consistent purchase volumes, though some also said they've had a better experience packaging and selling mortgages as a result of regulatory guidelines implemented this year.
"[Qualified mortgage] and [ability-to-repay rules] have affected our ability to sell loans on the secondary market and directly to Freddie Mac which has increased our portfolio production by twenty-five percent this year," said one anonymous respondent.
On the other hand, those citing worse conditions said they are struggling to contend with lower average loan amounts and more underwriting challenges.
The six-month outlook was slightly improved compared to October, with 64 percent of professionals expecting business conditions to improve.
Survey respondents were also asked about which of the initiatives currently underway by the Federal Housing Finance Agency (FHFA) is the most important for the market recovery. Overwhelmingly, they indicated that a clear understanding of their risk is crucial to spurring additional lending activity, with 51 percent saying changes to Fannie and Freddie's representation and warranties framework is important above all.
FHFA answered those concerns recently, unveiling new updates to the GSEs' framework guidelines designed to restore certainty to lenders worried about repurchase risk.
Meanwhile, responses were mixed to FHFA's announcement of a new low down payment mortgage option, which allows qualified homebuyers to put as little as 3 percent down on a house.
While 69 percent of respondents felt the development is a step in the right direction, many observed that there are already high loan-to-value products available for low-income borrowers and that the Federal Housing Administration already offers the best options.
Said one professional: "The announcement of a low down payment mortgage option may create more opportunities for buyers to afford housing; however, it falls short of appropriately loosening tightened credit standards for other LTV loans."