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Have Mortgage Underwriting Standards Bottomed Out?
Tuesday, March 29, 2016
If lenders' opinions count, credit standards appear to be as low as they will go, at least in the medium term. On the other hand, it appears they are unlikely to tighten perceptively either. Fannie Mae's first quarter 2016 Mortgage Lender Sentiment Survey conducted in February, asked respondents whether credit standards for mortgage loans had tightened or eased over the three-months prior to the polling and if were expected to ease or tighten over the upcoming three months.
The company reports that the net share of those reporting that standards had recently eased fell for the second straight quarter although the net-reported-tightening of standards for government loans rose for the first time since the third quarter of 2014. To keep things in perspective, those reporting tightening for any one loan type are in single digits as are the net differences. Their responses for activity over the next three months shows even less motion is expected.
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