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Mortgage Lenders Downbeat about Future Profits
Friday, March 4, 2016
Lenders, especially mortgage banks and larger lending institutions, are increasingly pessimistic about their profits. Fannie Mae says that responses to its fourth quarter 2015 Mortgage Lender Sentiment Survey indicated a reversal from surveys in the first two quarters of the year; lenders were significantly more likely to say they expected their profit margins to decline.
Steve Solomon, Fannie Mae's Director of Strategic Customer Management, writing about the survey said that the mortgage industry has faced both challenges and opportunities over the last two years, with a significantly improved economy, strengthening labor markets, and historically low interest rates helping the housing market to recover. On the other hand household formation has been down and a number of new rules and regulatory changes have increased lenders' compliance costs. Consequently respondents have seen steadily increasing rates of declining profits since the first quarter of last year.
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