Few Lenders Plan to Loosen Standards
Those hoping credit standards will continue to ease may be out of luck. About 90 percent of lenders surveyed recently say they have no plans to relax their credit standards for at least the next three months, according to Fannie Mae’s second quarter 2016 Mortgage Lender Sentiment Survey, which polls senior executives at lending institutions.
In fact, lenders surveyed show that their expectations to ease standards in the near future have lessened since a year ago.
“The trend toward easing of credit standards appears to be tapering off, as the vast majority of lenders, around 90 percent, reported plans to keep their credit standards about the same,” says Doug Duncan, Fannie Mae’s chief economist. “The survey was conducted before the recent May jobs report, and the weaker reported job gains might potentially temper this optimism.”
What’s more, key survey sentiment indicators suggest that lenders remain cautiously optimistic in their market outlook, Duncan says.
“The outlook for [mortgage application] purchase demand growth over the next three months returned to levels similar to last year, while the outlook for refinance demand and profit margin improved moderately versus last year’s levels,” Duncan says.
Source: “Fannie Mae: Almost No Lenders Plan to Ease Credit Standards,” HousingWire (June 14, 2016)
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