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Justin Fitzhugh

Mortgage Executives More Likely Than Consumers to Say it is Difficult to get a Mortgage

Wednesday, August 13, 2014 - Article by: Justin Fitzhugh - Nations Lending Corporation - Message

Last Month, July, 2014, Fannie Mae released its second quarterly Lender Sentiment Survey.[1] The Survey compares senior mortgage executives sentiment to consumers sentiment as reported by the National Housing Survey.[2] Overall, senior mortgage executives reported a net increase in demand for consumer purchase mortgages, and an upbeat outlook for the next quarter. I found it quite interesting that the report indicates mortgage executives are significantly more likely than consumers to say it is difficult for consumers to get a mortgage today.

CONSUMER PURCHASE MORTGAGE DEMAND

Mortgage executives reported a net increased in consumer demand for single-family purchase mortgages from the first quarter.

  • UP
    • 56% mortgage senior executives reported an increased demand for Fannie Mae and Freddie Mac eligible loans
    • 60% mortgage senior executives reported an increased demand for Non-GSE eligible loans
    • 43% mortgage senior executives reported an increased demand for Government loans.
  • THE SAME
    • 24% mortgage senior executives reported demand for Fannie Mae and Freddie Mac eligible loans stayed the same
    • 25% mortgage senior executives reported demand for Non-GSE eligible loans stayed the same
    • 29% mortgage senior executives reported demand for Government loans stayed the same.
  • DECREASE
    • 19% mortgage senior executives reported demand for Fannie Mae and Freddie Mac eligible loans decreased
    • 14% mortgage senior executives reported demand for Non-GSE eligible loans decreased
    • 28% mortgage senior executives reported demand for Government loans decreased

CONSUMER PURCHASE MORTGAGE OUTLOOK

Senior mortgage executives expect single-family purchase mortgage demand will increase in the next quarter.

  • UP
    • 54% senior mortgage executives believe demand for Fannie and Freddie Mac eligible loans will increase over the next quarter
    • 53% senior mortgage executives believe demand for Non-GSE eligible loans will go up over the next quarter
    • 42% senior mortgage executives believe demand for government loans will go up in the next quarter
  • THE SAME
    • 43% senior mortgage executives believe demand for Fannie and Freddie Mac eligible loans will remain the same over the next quarter
    • 42% senior mortgage executives believe demand for Non-GSE eligible loans will remain the same over the next quarter
    • 50% senior mortgage executives believe demand for government loans will remain the same over the next quarter
  • DECREASE
    • 4% senior mortgage executives believe demand for Fannie and Freddie Mac eligible loans will decrease over the next quarter
    • 5% senior mortgage executives believe demand for Non-GSE eligible loans decrease over the next quarter
    • 7% senior mortgage executives believe demand for government loans decrease over the next quarter.

MORTGAGE ACCESSIBILITY TODAY

Mortgage executives believe is difficult to get a mortgage, while more than 50% of consumers think is easy.

  • DIFFICULT
    • 81% of surveyed senior mortgage executives, and 46% of surveyed consumers, believe it difficult to get a mortgage today
  • EASY
    • 19% of surveyed senior mortgage executives, and 52% of surveyed consumers, believe it easy to get a mortgage today

ECONOMIC SENTIMENT

Mortgage executives are more optimistic about the state of the economy than general consumers.

  • RIGHT TRACK
    • 54% of surveyed senior mortgage executives, and 39% of surveyed consumers, believe the economic is on the right track
  • DONT KNOW
    • 10% of surveyed senior mortgage executives, and 7% of surveyed consumers, dont know whether the economy is on the right or wrong track
  • RIGHT TRACK
    • 36% of surveyed senior mortgage executives, and 54% of surveyed consumers, believe the economic is on the wrong track.

FUTURE HOME PRICES

Mortgage executives future home prices expectations are in line with consumers expectations.

  • UP
    • 58% of surveyed senior mortgage executives, and 46% of surveyed consumers, believe home prices will go up in the next 12 months
  • THE SAME
    • 37% of surveyed senior mortgage executives, and 41% of surveyed consumers, believe home prices will stay the same in the next 12 months
  • DOWN
    • 4% of surveyed senior mortgage executives, and 10% of surveyed consumers, believe home prices will go down in the next 12 months.

SO THERE YOU HAVE IT, industry peers are feeling upbeat about the economy, and despite our worries about tightened standard, consumers feel it is easy to get a mortgage. This is good news for us. I hate it when I hear potential borrowers shy out of applying for a mortgage simply because they think it is hard to get one. What is your outlook for the next three months?

1) http://www.fanniemae.com/resources/file/research/mlss/pdf/mlss-data-summary-q22014.pdf

2) http://www.fanniemae.com/portal/research-and-analysis/mortgage-lender-survey.html

As a direct agency lender, our mortgage branch opportunities are a better alternative to any mortgage net branch arrangement. When you work with Nations Lending Corporation there is no middle man, you get direct pricing and fast underwriting with minimum overlays. We are a much better alternative to any of the net branch opportunities out there.

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