Lenders Optimistic on Access to Credit

Mortgage lending standards have been tight in the wake of the Great Recession. But recent survey work of mortgage originators points to softening in the 2nd half ot 2014. In NAR’s 3rd Survey of Mortgage Originators, nearly half of respondents expected improved access to credit for prime borrowers with FICO scores between 620 and 720 in the 2nd half of 2014. A smaller share, nearly 20%, expect access for rebuttable presumption borrowers, a rough proxy for well-underwritten subprime borrowers, to ease. Respondents were mixed with respect to non-QM lending. While roughly 30% expected improvement 10% expected weakening.

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However, respondents were more sanguine about investor demand for all types of mortgage products, a change that could expand the flow of capital to these home buyers. More than 40% of respondents expected improved investor demand for both rebuttable presumption QM and prime borrowers with credit scores between 620 and 720. Interest in non-QM lending was also expected to improve, roughly in line with that of high FICO, prime lending.

Ken Fears, Director, Regional Economics and Housing Finance

Ken Fears is the Manager of Regional Economics and Housing Finance Policy. He focuses on regional and local market trends found in the Local Market Reports and the Market Watch Reports . He also writes on developments in the mortgage industry and foreclosures.

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