Providing Insights Into Current Lending Activities and Market ... - … · 2016-12-15 · Refinance Mortgage Demand Purchase Mortgage ... Loan Type Definition. ... lenders reporting

© 2016 Fannie Mae. Trademarks of Fannie Mae. 1

Mortgage Lender Sentiment Survey®

Providing Insights Into Current Lending Activities and Market Expectations

Q4 2016 Full Report – Published December 16, 2016


Table of Contents

Summary of Key Findings………………………………………………………………………………………….……..………………………………………….. 4Research Objectives…………………………………………………………………………………………………………………………………………………… 5Q4 2016 Respondent Sample and Groups…..………………………………………………………………......................................................................... 6Key Findings

Consumer Demand (Purchase and Refinance Mortgages)…......................................................................................................................................................... 8Credit Standards……………..………………………………………………………………………………………………………............................................................ 12Mortgage Execution Outlook……………………………………………………………………………………………………................................................................. 14Mortgage Servicing Rights (MSR) Execution Outlook……………………………………………………………………….................................................................. 16Profit Margin Outlook………………………………………………………………………………………………………………….......................................................... 18

Appendix………………………………………………………………………………………………………………………………………………………………… 21Survey Methodology Details…………………………………………………………………………………………………………………………………………………… 22Economic and Housing Sentiment……………………………………………………………………………………………................................................................... 30Consumer Demand (Purchase Mortgages)………………………………………………………………………………………………………………………………….. 34Consumer Demand (Refinance Mortgages)…………………………………………………………………………………………………………………………………. 46Credit Standards………………......................................................................................................................................................................................................... 54Mortgage Execution Outlook ……………………………………………………………………………….............................................................................................. 63Mortgage Servicing Rights (MSR) Execution………………………………………………………………………………………………………………………………... 71Profit Margin Outlook…………………………………………………………………………………………………………………………………………………………… 76Survey Question Text…………………………………………………………………………………………………………………………………………………………... 83

Q4 2016 Mortgage Lender Sentiment Survey®


DisclaimerOpinions, analyses, estimates, forecasts, and other views of Fannie Mae's Economic & Strategic Research (ESR) group or survey respondents included in these materials should not be construed as indicating Fannie Mae's business prospects or expected results, are based on a number of assumptions, and are subject to change without notice. How this information affects Fannie Mae will depend on many factors. Although the ESR group bases its opinions, analyses, estimates, forecasts, and other views on information it considers reliable, it does not guarantee that the information provided in these materials is accurate, current, or suitable for any particular purpose. Changes in the assumptions or the information underlying these views could produce materially different results. The analyses, opinions, estimates, forecasts, and other views published by the ESR group represent the views of that group or survey respondents as of the date indicated and do not necessarily represent the views of Fannie Mae or its management.



Worst profit margin outlook in three years due to post-election rate increase concerns.

• Lenders’ profit margin outlook is the worst in three years.• This quarter, those expecting lower profit outlook point primarily to market trend changes

as the top reason. Government regulatory compliance, which has historically been a top reason for lenders’ decreased profit outlook, reached a survey low.

• For purchase mortgages, the net share of lenders expecting increased demand over the next three months was at or near survey lows across the different loan types. The top reason for worsening near-term outlook across all mortgage types was “Mortgage rates are not favorable,” cited by a majority of lenders – a survey high.

• On net, lenders reporting refinance demand growth expectations for the next three months dipped to a survey low across all loan types.

Profit Margin Outlook

Refinance Mortgage Demand

Purchase Mortgage Demand



Research Objectives

Track insights and provide benchmarks into current and future mortgage lending activities and practices.

Quarterly Regular Questions– Consumer Mortgage Demand

– Credit Standards

– Mortgage Execution Outlook

– Mortgage Servicing Rights (MSR) Execution Outlook

– Profit Margin Outlook

• The survey is unique because it is used not only to track lenders’ current impressions of the mortgage industry, but also their insights into the future.

• The Mortgage Lender Sentiment Survey®, which debuted in March 2014, is a quarterly online survey among senior executives in the mortgage industry, designed to:

• A quarterly 10-15 minute online survey of senior executives, such as CEOs and CFOs, of Fannie Mae’s lending institution customers.• The results are reported at the lending institution parent-company level. If more than one individual from the same institution completes

the survey, their responses are averaged to represent their parent company.

Featured Specific-Topic Analyses– Mortgage Technology Innovation

– Lenders’ Experiences with TRID

– A Time-Series Look at the Factors Driving Lenders’ Profit Margin Outlook

– Lenders’ Mobile Strategies



Q4 2016 Respondent Sample and GroupsFor Q4 2016, a total of 155 senior executives completed the survey during November 10-20 (post-election), representing 139 lending institutions.*

Smaller Institutions Bottom 65%

Larger Institutions Top 15%

Mid-sized Institutions

Top 16% - 35%

100%

85%

65%

Loan Origination Volume Groups**

LOWER loan origination volume

HIGHER loan origination volume

Sample Q4 2016 Sample Size

Total Lending InstitutionsThe “Total” data throughout this report is an average of the means of the three loan origination volume groups listed below.

139

Loan Origination

Volume Groups

Larger InstitutionsFannie Mae’s customers whose 2015 total industry loan origination volume was in the top 15% (above $631 million)

50

Mid-sized Institutions Fannie Mae’s customers whose 2015 total industry loan origination volume was in the next 20% (16%-35%) (between $176 million to $631 million)

45

Smaller Institutions Fannie Mae’s customers whose 2015 total industry loan origination volume was in the bottom 65% (less than $176 million)

44

Institution Type***

Mortgage Banks (non-depository) 52

Depository Institutions 54

Credit Unions 29

* The results of the Mortgage Lender Sentiment Survey are reported at the lending institutional parent-company level. If more than one individual from the same institution completes the survey, their responses are averaged to represent their parent institution. ** The 2015 total loan volume per lender used here includes the best available annual origination information from Fannie Mae, Freddie Mac, and Marketrac.*** Lenders that are not classified into mortgage banks or depository institutions or credit unions are mostly housing finance agencies.



Loan Type DefinitionQuestions about consumer mortgage demand and credit standards are asked across three loan types: GSE eligible, Non-GSE eligible, and Government loans.

Loan Type Definition Used in the Survey

Loan Type Definition

GSE Eligible LoansGSE Eligible Mortgages are defined as mortgages meeting the underwriting guidelines, including loan limit amounts, of the Government-Sponsored Enterprises (GSEs) (Fannie Mae and Freddie Mac). Government loans are excluded from this category.

Non-GSE Eligible Loans

Non-GSE Eligible Mortgages are defined as mortgages that do not meet the GSE guidelines for purchase. These loans typically require larger down payments and typically carry higher interest rates than GSE loans. Government loans are excluded from this category.

Government Loans Government Mortgages primarily include Federal Housing Administration (FHA) and the Department of Veterans Affairs (VA) insured loans but also includes other programs such as Rural Housing Guaranteed and Direct loans.



Consumer Demand(Purchase and Refinance Mortgages)• For purchase mortgages, the net share of lenders reporting demand growth over the prior three months

overall remains similar to this time last year (Q4 2015). However, the net share of lenders expecting increased demand over the next three was at or near survey lows across the different loan types. The top reason for worsening near-term outlook across all mortgage types was “Mortgage rates are not favorable,” cited by a majority of lenders – a survey high.

• For refinance mortgages, the net share of lenders reporting rising demand over the prior three months rose significantly compared with the same period a year ago across all loan types. However, the net share of lenders reporting demand growth expectations for the next three months dipped to a survey low across all loan types.



Purchase Mortgage DemandFor purchase mortgages, the net share of lenders reporting demand growth over the prior three months overall remains similar to this time last year (Q4 2015). However, the net share of lenders expecting increased demand over the next three months was at or near survey lows across the different loan types.

Past 3 Months

Next 3 Months

Q: Over the past three months, apart from normal seasonal variation, did your firm’s consumer demand for single-family purchase mortgages go up, go down, or stay the same? “Up” = Went up significantly + Went up somewhat, “Down” = Went down significantly + Went down somewhatQ: Over the next three months, apart from normal seasonal variation, do you expect your firm’s consumer demand for single-family purchase mortgages to go up, go down, or stay the same? “Up” = Go up significantly + Go up somewhat, “Down” = Go down significantly + Go down somewhat

Net Up + = % of lenders saying up minus % of lenders saying downThe % saying “stay the same” is not shown

* Denotes a statistically significant change compared with Q3 2016 (previous quarter)^ Denotes a statistically significant change compared with Q4 2015 (same quarter of last year)

Non-GSE EligibleGSE Eligible Government

Up

Net Up +Down

42% 47%

75%56%*

22%32%

70%45%*

20% 15% 5% 11%

Q42014

Q12015

Q22015

Q32015

Q42015

Q12016

Q22016

Q32016

Q42016

43%49% 58% 45%*

28% 34%51%

36%15% 15%

7% 9%

Q42014

Q12015

Q22015

Q32015

Q42015

Q12016

Q22016

Q32016

Q42016

46% 62% 44%*

-1% 33%52%

35%

30%

13%10%

9%

Q42014

Q12015

Q22015

Q32015

Q42015

Q12016

Q22016

Q32016

Q42016

17%

25% 34%

30%

-5% 0%

22%

-3%*

22%25%

12%

33%*

Q42014

Q12015

Q22015

Q32015

Q42015

Q12016

Q22016

Q32016

Q42016

20%

30% 33%

26%

-4%6%

19%

-4%*

24% 24%

14%

30%*

Q42014

Q12015

Q22015

Q32015

Q42015

Q12016

Q22016

Q32016

Q42016

16%

23%30%

26%

-11%-1%

15%

-10%*

27%24%

15%

36%*^

Q42014

Q12015

Q22015

Q32015

Q42015

Q12016

Q22016

Q32016

Q42016



*Q: You mentioned that you expect your firm’s consumer demand for GSE Eligible/Non-GSE Eligible/government loans will go down over the next three months. Which of the following housing marketplace factors do you think will drive the demand down? Please select up to two of the most important reasons and rank them in order of importance. (Showing Total, % rank 1+2)

GSE Eligible Q1 2015 Q2 2015 Q3 2015 Q4 2015 Q1 2016 Q2 2016 Q3 2016 Q4 2016

N= 5 12 41 49 11 1 26 48

Home prices are high 14% 57% 27% 22% 40% 0% 33% 33%

Mortgage rates are not favorable 0% 52% 29% 31% 0% 0% 19% 67%*^There are not many homes available on the market 39% 20% 41% 44% 53% 0% 55% 37%

It is difficult to qualify for a mortgage 47% 42% 42% 27% 38% 100% 28% 19%

Economic conditions (e.g., employment) overall are not favorable 22% 27% 41% 42% 57% 100% 41% 26%


Non-GSE Eligible Q1 2015 Q2 2015 Q3 2015 Q4 2015 Q1 2016 Q2 2016 Q3 2016 Q4 2016

N= 4 11 31 42 11 6 24 38


Mortgage rates are not favorable 38% 36% 20% 32% 16% 32% 21% 66%*^There are not many homes available on the market 25% 28% 42% 41% 47% 0% 37% 30%


Economic conditions (e.g., employment) overall are not favorable 0% 25% 36% 38% 47% 49% 59% 30%*

Government Q1 2015 Q2 2015 Q3 2015 Q4 2015 Q1 2016 Q2 2016 Q3 2016 Q4 2016

N= 5 11 33 40 13 4 23 42


Mortgage rates are not favorable 14% 32% 35% 35% 0% 22% 16% 56%*There are not many homes available on the market 46% 18% 46% 35% 44% 0% 37% 35%


Economic conditions (e.g., employment) overall are not favorable 50% 27% 31% 47% 40% 0% 54% 40%

Downward Purchase Demand Outlook DriversThe share of lenders citing “mortgage rates are not favorable” as one of the two most important reasons in driving next-three-months purchase demand down reaches a survey high this quarter, across all loan types.



Net Up + = % of lenders saying up minus % of lenders saying downThe % saying “stay the same” is not shown


Non-GSE Eligible Government

Up

Net Up +Down

Q: Over the past three months, apart from normal seasonal variation, did your firm’s consumer demand for single-family refinance mortgages go up, go down, or stay the same? “Up” = Went up significantly + Went up somewhat, “Down” = Went down significantly + Went down somewhatQ: Over the next three months, apart from normal seasonal variation, do you expect your firm’s consumer demand for single-family refinance mortgages to go up, go down, or stay the same? “Up” = Go up significantly + Go up somewhat, “Down” = Go down significantly + Go down somewhat

Refinance Mortgage DemandFor refinance mortgages, the net share of lenders reporting rising demand over the prior three months rose significantly compared with the same period a year ago across all loan types. However, the net share of lenders reporting demand growth expectations for the next three months dipped to a survey low across all loan types.

Past 3 Months

Next 3 Months

GSE Eligible

28% 18%

55% 42%*^

-3%-21%

47%26%^31% 39%

8% 16%^

Q42014

Q12015

Q22015

Q32015

Q42015

Q12016

Q22016

Q32016

Q42016

31% 19%

72% 55%*^

-8%-23%

65% 41%*^

39% 42%

7% 14%^

Q42014

Q12015

Q22015

Q32015

Q42015

Q12016

Q22016

Q32016

Q42016

20% 17%

57%39%*^

-16% -22%

48%

20%*^

36% 39%

9%19%*^

Q42014

Q12015

Q22015

Q32015

Q42015

Q12016

Q22016

Q32016

Q42016

9%6% 19% 3%*

-24%-51%

-3%

-65%*^

33%57%

22%68%*

Q42014

Q12015

Q22015

Q32015

Q42015

Q12016

Q22016

Q32016

Q42016

7% 6%

28%

8%*

-27%-56%

6%

-61%*

34%

62%

22%

69%*

Q42014

Q12015

Q22015

Q32015

Q42015

Q12016

Q22016

Q32016

Q42016

3%5% 20% 2%*

-35%-55%

-4%

-65%*

38%60%

24%

67%*

Q42014

Q12015

Q22015

Q32015

Q42015

Q12016

Q22016

Q32016

Q42016



Credit Standards• Lenders continue to report modest net easing of credit standards across all loan types for the prior three

months.• Lenders continue to report modest net easing expectations across all loan types for the next three months,

with the majority of lenders expecting their credit standards to stay about the same.



Net Ease + = % of lenders saying ease minus % of lenders saying tightenThe % saying “remain unchanged” is not shown



Q: Over the past three months, how did your firm’s credit standards for approving consumer applications for mortgage loans change (across both purchase mortgages and refinance mortgages)? “Ease” = Eased considerably + Eased somewhat, “Tighten” = Tightened somewhat + Tightened considerablyQ: Over the next three months, how do you expect your firm’s credit standards for approving applications from individuals for mortgage loans to change (across purchase mortgages and refinance mortgages)? “Ease” = Ease considerably + Ease somewhat, “Tighten” = Tighten somewhat + Tighten considerably

Credit StandardsLenders continue to report modest easing of credit standards for the prior three months and continue to report modest net easing expectations for the next three months, with the majority of lenders expecting their credit standards to stay about the same.

Ease

Net Ease +Tighten

Past 3 Months

Next 3 Months

18% 18% 14% 10%9%

11% 6% 4%

9% 7% 8% 6%

Q42014

Q12015

Q22015

Q32015

Q42015

Q12016

Q22016

Q32016

Q42016

12%

17% 15% 10%

-1%

13% 12%6%

13%

4% 3% 4%

Q42014

Q12015

Q22015

Q32015

Q42015

Q12016

Q22016

Q32016

Q42016

16% 10% 14% 7%

3% 2%

8%

2%

13%8%

6%

5%

Q42014

Q12015

Q22015

Q32015

Q42015

Q12016

Q22016

Q32016

Q42016

13% 13%9% 10%9% 10%

4%

8%

4% 3%

5%

2%

Q42014

Q12015

Q22015

Q32015

Q42015

Q12016

Q22016

Q32016

Q42016

9%16%

9% 6%^

3%

14% 5% 5%^6%

2% 4% 1%

Q42014

Q12015

Q22015

Q32015

Q42015

Q12016

Q22016

Q32016

Q42016

6%

12%6% 6%

-1%

9%

1% 3%

7%

3%

5% 3%

Q42014

Q12015

Q22015

Q32015

Q42015

Q12016

Q22016

Q32016

Q42016



Mortgage Execution Outlook• Lenders continue reporting expectations to grow GSE (Fannie Mae and Freddie Mac) and Ginnie Mae shares

and reduce portfolio retention shares.



Mortgage Execution Outlook – Over Next 12 MonthsLenders continue reporting expectations to grow GSE (Fannie Mae and Freddie Mac) and Ginnie Mae shares and reduce portfolio retention shares.

Increase Decrease


Ginnie Mae (FHA/VA)GSE (Fannie Mae and Freddie Mac)Portfolio Retention

Whole Loan Sales to Non-GSE (Correspondent)Private Label Securities / Non-Agency SecuritiesNet Increase +

Net Increase + = % of lenders saying increase minus % of lenders saying decreaseThe % saying “about the same” is not shown

Whether an institution reported increase/decrease/stay the same was based on the difference to their responses to the following 2 questions:Q: Approximately, what percent of your firm’s total mortgage originations goes to each of the following categories?Q: Looking forward, what percent of your firm’s total mortgage originations over the next year will go to each of the following categories?

26% 28% 26%

25% 15% 18%

1%

13%8%

Q12015

Q22015

Q32015

Q42015

Q12016

Q22016

Q32016

Q42016

5% 4% 4%

2% 1%

3%3% 3%

1%

Q12015

Q22015

Q32015

Q42015

Q12016

Q22016

Q32016

Q42016

12% 11% 10%

16% 19% 19%

-4% -8% -9%Q1

2015Q2

2015Q3

2015Q4

2015Q1

2016Q2

2016Q3

2016Q4

2016

13% 10% 9%

19%16% 17%

-6% -6% -8%Q1

2015Q2

2015Q3

2015Q4

2015Q1

2016Q2

2016Q3

2016Q4

2016

16%12% 16%9%

10%9%

7%2%

7%

Q12015

Q22015

Q32015

Q42015

Q12016

Q22016

Q32016

Q42016



Mortgage Servicing Rights (MSR) Execution Outlook

• Consistent with last quarter (Q3 2016) and a year ago (Q4 2015), lenders continued to report expectations to slightly decrease their share of MSR sold and MSR retained (serviced in-house); and slightly increase the share of MSR retained that is serviced by a sub-servicer.




Increase Decrease Net Increase +

MSR Retained, serviced by a subservicer MSR Retained, serviced in-houseMSR Sold

Net Increase + = % of lenders saying increase minus % of lenders saying decreaseThe % saying “about the same” is not shown

13%9%

9%

-2% -4%

-2%

15% 13%11%

Q12015

Q22015

Q32015

Q42015

Q12016

Q22016

Q32016

Q42016

6%

9%

5%

-1% 1% -2%

7%

8%

7%

Q12015

Q22015

Q32015

Q42015

Q12016

Q22016

Q32016

Q42016

13% 8% 8%

3%2% 4%

10%6% 4%

Q12015

Q22015

Q32015

Q42015

Q12016

Q22016

Q32016

Q42016

Whether an institution reported increase/decrease/stay the same was based on the difference to their responses to the following 2 questions:Q: Approximately, what percent of your mortgage servicing rights (MSR) goes to each of the following categories? Q: Looking forward, what percent of your firm’s mortgage servicing rights (MSR) over the next year will go to each of the following categories?

Mortgage Servicing Rights Execution OutlookConsistent with last quarter (Q3 2016) and a year ago (Q4 2015), continued to report expectations to slightly decrease their share of MSR sold and MSR retained that is serviced in-house; and slightly increase the share of MSR retained that is serviced by a sub-servicer.



Profit Margin Outlook• Lenders reported a significant net negative profit margin outlook after three straight quarters of net positive

profit margin outlook, reaching a survey low, but in line with a year ago when lenders focused on TRID implementation, likely reflecting their lower mortgage demand expectations.

• Lenders expecting a lower profit margin outlook point primarily to market trend changes (e.g., shift from refinance to purchase) as the top reason.

• While government regulatory compliance has historically been one of the top two reasons for lenders’ decreased profit margin outlook, this quarter, it fell significantly from last quarter’s (Q3 2016) survey low and this time last year (Q4 2015), reaching a new survey low.

• Market trend changes is now the top reason for lenders’ decreased profit margin outlook, reaching a new survey high.



Lenders’ Profit Margin Outlook – Next 3 MonthsLenders’ profit margin outlook is the worst in three years. Those expecting a lower profit outlook point primarily to market trend changes as the top reason.

Increase

About the same

Decrease

Q: Over the next three months, how much do you expect your firm's profit margin to change for its single-family mortgage production? [Showing: (Substantially Increase (25+ basis points) + Moderately Increase (5 - 25 basis points)), About the same (0 - 5 basis points), (Moderately Decrease (5 - 25 basis points) + Substantially Decrease (25+ basis points)]Q: What do you think will drive the increase (decrease) in your firm’s profit margin over the next three months? Please select up to two of the most important reasons.


Key Reasons for Expected Decrease – Q4 2016Market trend changes (i.e. shift from refinance to purchase) 43%

Competition from other lenders 39%

Consumer demand 26%

GSE pricing and policies 20%

Staffing (personnel costs) 19%

Key Reasons for Expected Increase – Q4 2016Operational efficiency (i.e. technology) 42%

Market trend changes (i.e. shift from refinance to purchase) 40%

Staffing (personnel costs) reduction 33%

GSE pricing and policies 20%

Consumer demand 18%

Net increase %(% of lenders saying increase minus % of lenders saying decrease)

Showing data for selected answer choices only. n=66

Showing data for selected answer choices only. n=22

-19%

31%1%

-25% -29%

14% 12% 11%

-31%*

55% 50% 48% 49% 46% 49% 53% 55%39%*

13%41%

26% 13% 13%33% 30% 28%

15%*

32% 10% 25% 38% 42%19% 18% 17%

46%*

Profit Margin Outlook

n=182

Q42014

Q12015n=180

Q22015n=222

Q32015n=200

Q42015n=186

Q22016n=164

Q12016n=194

Q32016n=190

Q42016n=134



cc

Government Regulatory Compliance Consumer DemandCompetition from Other Lenders

Decreased Profit Margin Outlook – Top DriversThis quarter, those expecting lower profit outlook point primarily to market trend changes as the top reason. Government regulatory compliance, which has historically been a top reason for lenders’ decreased profit outlook, reaches a survey low thisquarter.


Q: What do you think will drive the decrease in your firm’s profit margin over the next three months? Please select the two most important reasons and rank them in order of importance. (Showing % rank 1 + 2)Total: Q4 2014: N=56; Q1 2015: N=16; Q2 2015: N=52; Q3 2015: N=74; Q4 2015: N=76; Q1 2016: N=35; Q2 2016: N=29; Q3 2016: N=33; Q4 2014: N=64

Market Trend Changes

60% 55% 48%61%

52%65% 67%

39% 18%*^34%

49%35%

47%34% 33%

44% 46% 39% 34%25% 18% 20%

27%25%

6%21% 26%

17%4%

25%14% 20%

11% 8%23%

43%^

Q42014

Q12015

Q22015

Q32015

Q42015

Q12016

Q22016

Q32016

Q42016

Q42014

Q12015

Q22015

Q32015

Q42015

Q12016

Q22016

Q32016

Q42016

Q42014

Q12015

Q22015

Q32015

Q42015

Q12016

Q22016

Q32016

Q42016

Q42014

Q12015

Q22015

Q32015

Q42015

Q12016

Q22016

Q32016

Q42016



Appendix

Survey Methodology Details………………………………………………………………………… 22Economic and Housing Sentiment…………………………………………………………………. 30Consumer Demand (Purchase Mortgages)……………………………………………………….. 33Consumer Demand (Refinance Mortgages)………………………………………………………. 46Credit Standards………………………………………………………………………………………. 54Mortgage Execution Outlook………………………………………………………………………... 63Mortgage Servicing Rights (MSR) Execution Outlook ..……………………………………….. 71Profit Margin Outlook…………………………………………………………………………………. 76Survey Question Text…………………………………………………………………………………. 83



Survey Methodology DetailsAppendix



Mortgage Lender Sentiment Survey®

Background• The Fannie Mae Mortgage Lender Sentiment Survey is a quarterly online survey of senior executives of Fannie Mae’s lending institution

partners to provide insights and benchmarks that help mortgage industry professionals understand industry and market trends and assess their own business practices.

Survey Methodology• A quarterly, 10-15 minute online survey among senior executives, such as CEOs and CFOs, of Fannie Mae’s lending institution partners.• To ensure that the survey results represent the behavior and output of organizations rather than individuals, the Fannie Mae Mortgage

Lender Sentiment Survey is structured and conducted as an establishment survey.• Each respondent is asked 40-75 questions.

Sample Design• Each quarter, a random selection of approximately 3,000 senior executives among Fannie Mae’s approved lenders are invited to participate

in the study.

Data Weighting• The results of the Mortgage Lender Sentiment Survey are reported at the institutional parent-company level. If more than one individual from

the same parent institution completes the survey, their responses are averaged to represent their parent institution.



Lending Institution CharacteristicsFannie Mae’s customers invited to participate in the Mortgage Lender Sentiment Survey represent a broad base of different lending institutions that conducted business with Fannie Mae in 2015. Institutions were divided into three groups based on their 2015 total industry loan volume – Larger (top 15%), Mid-sized (top 16%-35%), and Smaller (bottom 65%). The data below further describe the compositions and loan characteristics of the three groups of institutions.

42% 46% 54%

5%19%

36%47%35%

8%7% 1% 2%

Larger Mid-sized Smaller

Other

Mortgage Banks

Credit Union

Depository Institution

Institution Type

62% 68% 81%

19% 16%14%19% 17% 6%


Government

Jumbo

Conforming

Loan Types

49% 42% 50%

51% 58% 50%


Purchase

REFI

Loan Purposes



Sample Sizes

Q4 2014 Q1 2015 Q2 2015 Q3 2015 Q4 2015 Q1 2016 Q2 2016 Q3 2016 Q4 2016Sample

SizeMargin of

ErrorSample

SizeMargin of

ErrorSample

SizeMargin of

ErrorSample

SizeMargin of

ErrorSample

SizeMargin of

ErrorSample

SizeMargin of

ErrorSample

SizeMargin of

ErrorSample

SizeMargin of

ErrorSample

SizeMargin of

Error

Total Lending Institutions 192 ±6.56% 197 ±6.51% 238 ±6.22% 209 ±6.30% 194 ±6.58% 205 ±6.72% 169 ± 7.12% 200 ± 6.47% 139 ±7.93%

Loan Origination Volume Groups

Larger Institutions 49 ±12.11% 58 ±11.11% 55 ±12.91% 55 ±11.64% 59 ±11.03% 57 ±12.64% 57 ±11.28% 70 ±9.82% 50 ±12.30%

Mid-sized Institutions 56 ±11.70% 50 ±12.68% 68 ±11.55% 83 ±9.39% 59 ±11.48% 68 ±11.53% 54 ±12.13% 59 ±11.50% 45 ±13.53%

Smaller Institutions 87 ±9.98% 89 ±9.91% 115 ±8.97% 71 ±11.21% 76 ±10.81% 80 ±10.82% 58 ±12.50% 71 ±11.22% 44 ±14.46%

Institution Type

Mortgage Banks 48 ±12.66% 53 ±12.07% 71 ±11.22% 78 ±9.53% 71 ±10.15% 63 ±11.96% 65 ±10.78% 65 ±10.79% 52 ±12.40%

Depository Institutions 83 ±10.13% 95 ±9.43% 105 ±9.39% 81 ±10.31% 75 ±10.76% 88 ±10.29% 63 ±11.84% 79 ±10.46% 54 ±12.87%

Credit Unions 49 ±13.07% 40 ±14.77% 52 ±13.35% 43 ±14.18% 39 ±14.98% 47 ±14.07% 34 ±16.16% 49 ±13.21% 29 ±17.60%

2014Q4 was fielded between November 5, 2014 and November 24, 2014

2015Q1 was fielded between February 4, 2015 and February 16, 2015Q2 was fielded between May 6, 2015 and May 17, 2015Q3 was fielded between August 5, 2015 and August 17, 2015Q4 was fielded between November 4, 2015 and November 16, 2015

2016Q1 was fielded between February 3, 2016 and February 16, 2016Q2 was fielded between May 4, 2016 and May 16, 2016Q3 was fielded between August 3, 2016 and August 15, 2016Q4 was fielded between November 10, 2016 and November 20, 2016



2016 Q4 Cross-Subgroup Sample Sizes

Total Larger Lenders

Mid-Sized Lenders

Smaller Lenders

Total 139 50 45 44

Mortgage Banks(non-depository)

52 25 22 5

Depository Institutions 54 18 14 22

Credit Unions 29 3 10 16



2016 Q4 Sample Sizes: Consumer Demand

Past 3 Months Next 3 MonthsGSE

EligibleNon-GSE Eligible Government GSE

EligibleNon-GSE Eligible Government

Total Lending Institutions 136 120 114 138 119 114

Larger Institutions 49 43 48 49 43 48

Mid-sized Institutions 44 39 38 45 38 38

Smaller Institutions 44 38 28 44 38 28








Purchase Mortgages:

Refinance Mortgages:



2016 Q4 Sample Sizes: Credit Standards










Calculation of the “Total”

The “Total” data presented in this report is an average of the means of the three loan origination volume groups (see an illustrated example below). Please note that percentages are based on the number of financial institutions that gave responses other than “Not Applicable.” Percentages may add to under or over 100% due to rounding.

Example:

Over the past three months, apart from normal seasonal variation, did your firm’s consumer demand for single-family purchase mortgages go up, go down, or stay the same? GSE Eligible (Q4 2016)

Larger Institutions

Mid-sized Institutions

Smaller Institutions Q4 “Total”

Go up 59% 52% 60% 56%

Stayed the same 28% 34% 34% 33%

Go down 13% 13% 7% 11% [(13% + 13% + 7%)/3]

42%47%

75%

56%*

38% 38% 20%

33%*

20% 15% 5%11%

Q42014

Q12015

Q22015

Q32015

Q42015

Q12016

Q22016

Q32016

Q42016

GSE Eligible



Economic and Housing SentimentAppendix



U.S. Economy Overall

In general, do you, as a senior mortgage executive, think the U.S.

economy overall is on the right track or the wrong track?

Total

Larger Institutions Mid-sized Institutions Smaller Institutions


National Housing Survey ®

Among the General Population (consumers)

Right TrackDon’t knowWrong Track

National Housing Survey: http://www.fanniemae.com/portal/research-and-analysis/housing-survey.html

65% 68%

48%62%

12%6% 9% 9%

22% 26% 44%29%

Q42014

Q12015

Q22015

Q32015

Q42015

Q12016

Q22016

Q32016

Q42016

57%63%

48%62%*

12% 8% 10% 13%

31% 29%42% 25%*

Q42014

Q12015

Q22015

Q32015

Q42015

Q12016

Q22016

Q32016

Q42016

46%

71%53%

67%

12%4%

9% 12%

42% 25%40%

21%*

Q42014

Q12015

Q22015

Q32015

Q42015

Q12016

Q22016

Q32016

Q42016

36% 37% 38% 34%

11% 7% 10% 9%

52% 56% 52% 57%*

Nov2014

Feb2015

May2015

Aug2015

Nov2015

Feb2016

May2016

Aug2016

Nov2016

59%52%

44%57%

11% 13% 13% 16%

30% 35%44% 27%

Q42014

Q12015

Q22015

Q32015

Q42015

Q12016

Q22016

Q32016

Q42016


http://www.fanniemae.com/portal/research-and-analysis/housing-survey.html


Home Prices – Next 12 Months

Total National Housing Survey ®


47%

58%63%

52%*50%

39% 30% 41%*

2% 3%7% 6%

Q42014

Q12015

Q22015

Q32015

Q42015

Q12016

Q22016

Q32016

Q42016

38%

71% 69%

49%*^58%

29% 25% 39%

4% 0% 4% 8%

Q42014

Q12015

Q22015

Q32015

Q42015

Q12016

Q22016

Q32016

Q42016

50%57%

64% 61%

48% 40%29% 36%

0% 3%7%

3%

Q42014

Q12015

Q22015

Q32015

Q42015

Q12016

Q22016

Q32016

Q42016

55%

46%

56%45%

43%

47%35%

45%

2% 5%10% 7%

Q42014

Q12015

Q22015

Q32015

Q42015

Q12016

Q22016

Q32016

Q42016

44% 44% 43% 43%

44% 44% 40% 40%

6% 6% 8% 8%

Nov2014

Feb2015

May2015

Aug2015

Nov2015

Feb2016

May2016

Aug2016

Nov2016

Go UpStay the SameGo Down

Nationally, during the next 12 months, do you, as a senior mortgage executive, think home prices in general will go up,

go down, or stay the same as where they are now?

By about what percent do you, as a senior mortgage executive, think home prices

nationally will go up/down on average over the next 12 months?

National Housing Survey: http://www.fanniemae.com/portal/research-and-analysis/housing-survey.html* Denotes a statistically significant change compared with Q3 2016 (previous quarter)^ Denotes a statistically significant change compared with Q4 2015 (same quarter of last year)


1.7% 2.4% 2.8% 2.4% 2.3% 2.0% 2.5% 2.2% 1.7% 2.6% 2.5% 2.8% 2.7% 2.3% 1.7% 2.4% 2.1% 2.6%

1.7% 2.4% 2.8% 2.4% 2.3% 2.0% 2.5% 2.2% 1.5% 1.7% 2.4% 2.8% 2.4% 2.3% 2.0% 2.5% 2.2% 2.2% 1.7% 2.4% 2.8% 2.4% 2.3% 2.0% 2.5% 2.2% 1.3%




c

Difficulty of Getting a Mortgage

Total National Housing Survey ®


National Housing Survey: http://www.fanniemae.com/portal/research-and-analysis/housing-survey.html

Do you think it is very difficult, somewhat difficult, somewhat easy, or very easy for consumers to get a home

mortgage today?

Easy (Very easy + Somewhat easy)

Difficult(Very difficult + Somewhat difficult)


7%

33%22%

30%

93%

67%78%

70%

Q42014

Q12015

Q22015

Q32015

Q42015

Q12016

Q22016

Q32016

Q42016

13%29% 28% 34%

86%70% 72% 65%

Q42014

Q12015

Q22015

Q32015

Q42015

Q12016

Q22016

Q32016

Q42016

17%27% 33% 33%

83%73% 67% 67%

Q42014

Q12015

Q22015

Q32015

Q42015

Q12016

Q22016

Q32016

Q42016

48% 52% 54% 54%

47% 45% 43% 44%

Nov2014

Feb2015

May2015

Aug2015

Nov2015

Feb2016

May2016

Aug2016

Nov2016

16%28% 27%

39%

82%72% 73%

61%

Q42014

Q12015

Q22015

Q32015

Q42015

Q12016

Q22016

Q32016

Q42016





Consumer Demand(Purchase Mortgages)

Appendix



Purchase Mortgage Demand

Q: Over the past three months, apart from normal seasonal variation, did your firm’s consumer demand for single-family purchase mortgages go up, go down, or stay the same? “Up” = Went up significantly + Went up somewhat, “Down” = Went down significantly + Went down somewhatQ: Over the next three months, apart from normal seasonal variation, do you expect your firm’s consumer demand for single-family purchasemortgages to go up, go down, or stay the same? “Up” = Go up significantly + Go up somewhat, “Down” = Go down significantly + Go down somewhat


UpThe sameDown

Past 3 Months

Next 3 Months


42% 47%

75%

56%*

38%38%

20%33%*

20% 15% 5%11%

Q42014

Q12015

Q22015

Q32015

Q42015

Q12016

Q22016

Q32016

Q42016

17% 25%

34%

30%

62%50% 53% 37%*^

22%25%

12%

33%*

Q42014

Q12015

Q22015

Q32015

Q42015

Q12016

Q22016

Q32016

Q42016

43% 49%58%

45%*

42% 36%

35%45%

15% 15%7% 9%

Q42014

Q12015

Q22015

Q32015

Q42015

Q12016

Q22016

Q32016

Q42016

20%

30% 33%

26%

56%46%

54%43%

24%

24% 14%

30%*

Q42014

Q12015

Q22015

Q32015

Q42015

Q12016

Q22016

Q32016

Q42016

29%

46%62%

44%*

41% 42%

29%46%*

30% 13% 10% 9%

Q42014

Q12015

Q22015

Q32015

Q42015

Q12016

Q22016

Q32016

Q42016

16%23%

30%

26%

57% 53% 55% 38%*^

27% 24%

15%

36%*^

Q42014

Q12015

Q22015

Q32015

Q42015

Q12016

Q22016

Q32016

Q42016



Purchase Mortgage Demand: GSE Eligible (by institution size)



UpThe sameDown

Past 3 Months

Next 3 Months

Mid-sized InstitutionsLarger Institutions Smaller Institutions

37%

49%

72%59%

42%

38%23% 28%

21% 13%4% 13%

Q42014

Q12015

Q22015

Q32015

Q42015

Q12016

Q22016

Q32016

Q42016

13%

30%

30%

26%

64%51% 56%

33%*22%

19%

13%

41%*^

Q42014

Q12015

Q22015

Q32015

Q42015

Q12016

Q22016

Q32016

Q42016

46%

41%

85%

52%*

35%

43%

11%

34%*

19% 16%4%

13%

Q42014

Q12015

Q22015

Q32015

Q42015

Q12016

Q22016

Q32016

Q42016

17% 17%

42%

31%

58% 55% 48%

31%^25% 29%10%

37%*

Q42014

Q12015

Q22015

Q32015

Q42015

Q12016

Q22016

Q32016

Q42016

42%51%

68%60%

38%32% 25%

34%

21% 17%7% 7%

Q42014

Q12015

Q22015

Q32015

Q42015

Q12016

Q22016

Q32016

Q42016

20%30%

31%32%

62%43%

55%45%

18%28%

14%23%

Q42014

Q12015

Q22015

Q32015

Q42015

Q12016

Q22016

Q32016

Q42016



Purchase Mortgage Demand: GSE Eligible (by institution type)



UpThe sameDown

Past 3 Months

Next 3 Months

Depository InstitutionsMortgage Banks Credit Unions

49% 45%

75%

59%

37%

37%20%

31%

14% 17%5%

10%

Q42014

Q12015

Q22015

Q32015

Q42015

Q12016

Q22016

Q32016

Q42016

17%26%

38%

35%

65%

46%52%

31%*19%

28%

10%

35%*

Q42014

Q12015

Q22015

Q32015

Q42015

Q12016

Q22016

Q32016

Q42016

31%

50%

75%64%

46%

35%22% 28%

23%15%

2% 8%

Q42014

Q12015

Q22015

Q32015

Q42015

Q12016

Q22016

Q32016

Q42016

16%

26% 30%

19%

63%53% 59%

42%

20%

21%11% 40%*^

Q42014

Q12015

Q22015

Q32015

Q42015

Q12016

Q22016

Q32016

Q42016

49%

40%

76%

44%*

29%44%

16% 41%*

22% 15%8%

16%

Q42014

Q12015

Q22015

Q32015

Q42015

Q12016

Q22016

Q32016

Q42016

15%21%

35%

42%60%

48% 48%31%

24% 30%

17%28%

Q42014

Q12015

Q22015

Q32015

Q42015

Q12016

Q22016

Q32016

Q42016



Purchase Mortgage Demand: Non-GSE Eligible (by institution size)



UpThe sameDown

Past 3 Months

Next 3 Months


46% 51%66%

50%

43%32% 28% 43%

11%17%

6% 7%

Q42014

Q12015

Q22015

Q32015

Q42015

Q12016

Q22016

Q32016

Q42016

19%

30%

31%

23%

56% 52%59%

46%

25%

18%11%

30%*

Q42014

Q12015

Q22015

Q32015

Q42015

Q12016

Q22016

Q32016

Q42016

45%

41%

50% 44%

41%

47%

42% 46%15% 13% 8% 10%

Q42014

Q12015

Q22015

Q32015

Q42015

Q12016

Q22016

Q32016

Q42016

18% 23%

30%

27%

56% 51% 56%

32%*26% 26%

14%

41%*

Q42014

Q12015

Q22015

Q32015

Q42015

Q12016

Q22016

Q32016

Q42016

39%

55% 58%

44%

43%28% 34%

46%

18% 17%8% 10%

Q42014

Q12015

Q22015

Q32015

Q42015

Q12016

Q22016

Q32016

Q42016

23%

37%

37%29%

57%

34%48% 51%

20%29%

15% 21%

Q42014

Q12015

Q22015

Q32015

Q42015

Q12016

Q22016

Q32016

Q42016



Purchase Mortgage Demand: Non-GSE Eligible (by institution type)



UpThe sameDown

Past 3 Months

Next 3 Months


41%

45%

43%34%

46%

40%

44%59%

13% 15%

12% 7%

Q42014

Q12015

Q22015

Q32015

Q42015

Q12016

Q22016

Q32016

Q42016

26%

28%

23%

23%

54%43%

69%42%*

20%

29%

8%

34%*

Q42014

Q12015

Q22015

Q32015

Q42015

Q12016

Q22016

Q32016

Q42016

38%

50%62%

55%44%

33% 34% 37%

18% 16%4% 8%

Q42014

Q12015

Q22015

Q32015

Q42015

Q12016

Q22016

Q32016

Q42016

19%

32% 33%

16%*^

59%50% 56%

49%

22%

19%11%

35%*^

Q42014

Q12015

Q22015

Q32015

Q42015

Q12016

Q22016

Q32016

Q42016

48% 50%63%

45%

41%34% 28%

40%11% 16% 9%

15%

Q42014

Q12015

Q22015

Q32015

Q42015

Q12016

Q22016

Q32016

Q42016

21% 27%

39%

45%53%43%

39%

31%

26% 31%

22% 24%

Q42014

Q12015

Q22015

Q32015

Q42015

Q12016

Q22016

Q32016

Q42016



Purchase Mortgage Demand: Government (by institution size)



UpThe sameDown

Past 3 Months

Next 3 Months


27%

51%64%

51%38%

38%28%

39%35%

11%7%

19%

Q42014

Q12015

Q22015

Q32015

Q42015

Q12016

Q22016

Q32016

Q42016

15%

29%

24% 24%

57%51%

62%

34%*28%

20% 13%

41%*^

Q42014

Q12015

Q22015

Q32015

Q42015

Q12016

Q22016

Q32016

Q42016

32%

43%

69%

36%*

41% 44%27%

56%*

27%14%

4% 8%

Q42014

Q12015

Q22015

Q32015

Q42015

Q12016

Q22016

Q32016

Q42016

14% 16%

40%

28%

55% 58%48%

35%^31%25% 12%

38%*

Q42014

Q12015

Q22015

Q32015

Q42015

Q12016

Q22016

Q32016

Q42016

28% 43%

45% 48%45% 43%

33% 41%28%

14% 21%10%

Q42014

Q12015

Q22015

Q32015

Q42015

Q12016

Q22016

Q32016

Q42016

19% 24%

25%

25%

60%49% 55%

46%

21% 28%

20%

29%

Q42014

Q12015

Q22015

Q32015

Q42015

Q12016

Q22016

Q32016

Q42016



Purchase Mortgage Demand: Government (by institution type)



UpThe sameDown

Past 3 Months

Next 3 Months


38% 49%

77%

53%*

36%

38% 17%36%*

27%13% 6%

10%

Q42014

Q12015

Q22015

Q32015

Q42015

Q12016

Q22016

Q32016

Q42016

14%27%

39%

41%61%

43% 51%

24%*^

25%29%

10%

35%*

Q42014

Q12015

Q22015

Q32015

Q42015

Q12016

Q22016

Q32016

Q42016

16%

44% 50%

42%

50%

42% 39%

47%

33%

14%10% 11%

Q42014

Q12015

Q22015

Q32015

Q42015

Q12016

Q22016

Q32016

Q42016

18%

22% 22%

10%

58% 59% 62%47%

24%

19% 17%

43%*^

Q42014

Q12015

Q22015

Q32015

Q42015

Q12016

Q22016

Q32016

Q42016

40%33%

41% 24%

40%

59%

42%

69%

20% 8%17%

7%

Q42014

Q12015

Q22015

Q32015

Q42015

Q12016

Q22016

Q32016

Q42016

12%8%

21%28%

54%64%

54%

34%34%29% 25%

38%

Q42014

Q12015

Q22015

Q32015

Q42015

Q12016

Q22016

Q32016

Q42016



Purchase Mortgage Demand: Drivers of Change (selected verbatim)

Q: What do you think drove the change in your firm’s consumer demand for single-family purchase mortgages over the past three months? Please be as specific as possible. (Optional)

“Rates taking a dip after Brexit.” “Regional demand for housing has been fairly good in the areas we operate along with relatively low rates.” – Mid-sized Institutions

Past 3 MonthsN=76

• Low Interest Rates• Rising Housing Prices• Seasonal Variation• Economic Uncertainty

“Lack of inventory in our market within the price point of a first time homebuyer $400-700K. Move up houses are $1M or more and mostly condo's around $200-300.” – Mid-sized Institution

“Slow down in home purchases in our area. Concerns over the economy and a decrease in supply of available homes.” “Lack of inventory, Affordability.” – Larger Institutions

“Price appreciation and lack of inventory.”– Mid-sized Institution

“Economy has continued to improve. Housing prices have had steady increase in most regions. Interest rates remain low.” – Larger Institution

“Favorable rates.” “Improving local economy and consumer confidence relative to lower unemployment.” – Smaller Institutions

Drivers of Demand Up

Drivers of Demand Down



Purchase Mortgage Demand: Drivers of Change (GSE Eligible)You mentioned that you expect your firm’s consumer demand for GSE eligible loans will go up over the next three months. Which of the following housing marketplace factors do you think will drive the demand to go up? Please select up to two of the most important reasons and rank them in order of importance. (Showing % rank 1)

Total LargerInstitutions (L)

Mid-sizedInstitutions (M)

Smaller Institutions (S)

National Housing SurveyAmong the General Population

(consumers)*N= 41 13 14 14

Economic conditions (e.g., employment) overall are favorable 47% 55% 48% 43% 10%

Mortgage rates are favorable 40% 38% 38% 43% 43%

Home prices are low 3% 0% 7% 0% 14%

There are many homes available on the market 3% 0% 0% 7% 19%

It is easy to qualify for a mortgage 0% 0% 0% 0% 3%

You mentioned that you expect your firm’s consumer demand for GSE eligible loans will go down over the next three months. Which of the following housing marketplace factors do you think will drive the demand down? Please select up to two of the most important reasons and rank them in order of importance. (Showing % rank 1)





(consumers)**N= 48 20 18 10

Mortgage rates are not favorable 46% 50% 54% 30% 6%

There are not many homes available on the market 19% 30% 5% 30% 3%

Economic conditions (e.g., employment) overall are not favorable 12% 5% 5% 30% 29%

Home prices are high 8% 10% 5% 10% 34%

It is difficult to qualify for a mortgage 2% 0% 5% 0% 12%

*Q: Please tell me the primary reason why you think this is a good time to buy a house.**Q: Please tell me the primary reason why you think this is a bad time to buy a house.



Purchase Mortgage Demand: Drivers of Change (Non-GSE Eligible)You mentioned that you expect your firm’s consumer demand for Non-GSE eligible loans will go up over the next three months. Which of the following housing marketplace factors do you think will drive the demand to go up? Please select up to two of the most important reasons and rank them in order of importance. (Showing % rank 1)





(consumers)*N= 31 10 10 11






You mentioned that you expect your firm’s consumer demand for Non-GSE eligible loans will go down over the next three months. Which of the following housing marketplace factors do you think will drive the demand down? Please select up to two of the most important reasons and rank them in order of importance. (Showing % rank 1)





(consumers)**N= 38 14 16 8









Purchase Mortgage Demand: Drivers of Change (Government)You mentioned that you expect your firm’s consumer demand for government loans will go up over the next three months. Which of the following housing marketplace factors do you think will drive the demand to go up? Please select up to two of the most important reasons and rank them in order of importance. (Showing % rank 1)





(consumers)*N= 29 12 10 7






You mentioned that you expect your firm’s consumer demand for government loans will go down over the next three months. Which of the following housing marketplace factors do you think will drive the demand down? Please select up to two of the most important reasons and rank them in order of importance. (Showing % rank 1)





(consumers)**N= 42 20 14 8









Consumer Demand(Refinance Mortgages)

Appendix



Refinance Mortgage Demand

Q: Over the past three months, apart from normal seasonal variation, did your firm’s consumer demand for single-family refinance mortgages go up, go down, or stay the same? “Up” = Went up significantly + Went up somewhat, “Down” = Went down significantly + Went down somewhatQ: Over the next three months, apart from normal seasonal variation, do you expect your firm’s consumer demand for single-family refinancemortgages to go up, go down, or stay the same? “Up” = Go up significantly + Go up somewhat, “Down” = Go down significantly + Go down somewhat


UpThe sameDown

Past 3 Months

Next 3 Months


31%19%

72%

55%*^

30%39%

21%32%*

39% 42%

7% 14%^

Q42014

Q12015

Q22015

Q32015

Q42015

Q12016

Q22016

Q32016

Q42016

7% 6%

28%

8%*

59%

33%

51%

23%*34%

62%

22%

69%*

Q42014

Q12015

Q22015

Q32015

Q42015

Q12016

Q22016

Q32016

Q42016

28%18%

55%42%*^41% 43%

37% 42%31% 39%

8%16%^

Q42014

Q12015

Q22015

Q32015

Q42015

Q12016

Q22016

Q32016

Q42016

9% 6%19%

3%*

58%

37%

59%

28%*33%

57%

22%

68%*

Q42014

Q12015

Q22015

Q32015

Q42015

Q12016

Q22016

Q32016

Q42016

20% 17%

57%

39%*^

44%44%

34%42%36%

39% 9%19%*^

Q42014

Q12015

Q22015

Q32015

Q42015

Q12016

Q22016

Q32016

Q42016

3% 5%20%

2%*

59%

35%

55%

32%*

38%

60%

24%

67%*

Q42014

Q12015

Q22015

Q32015

Q42015

Q12016

Q22016

Q32016

Q42016



Refinance Mortgage Demand: GSE Eligible (by institution size)



UpThe sameDown

Past 3 Months

Next 3 Months


42%

24%

82% 73%^

27%

37%14%

14%^31%

40%

4%

13%^Q4

2014Q1

2015Q2

2015Q3

2015Q4

2015Q1

2016Q2

2016Q3

2016Q4

2016

6% 2% 19%7%

55%

25%

48%

10%*^39%

74%

33%

82%*

Q42014

Q12015

Q22015

Q32015

Q42015

Q12016

Q22016

Q32016

Q42016

33%16%

76%57%*^

31%

40% 21% 27%36%

43%

4%15%^

Q42014

Q12015

Q22015

Q32015

Q42015

Q12016

Q22016

Q32016

Q42016

8% 7%

36%

7%*

64%

28%

42%

12%*^28%

65%

22%

82%*

Q42014

Q12015

Q22015

Q32015

Q42015

Q12016

Q22016

Q32016

Q42016

18% 20%

57%

41%^33%

39%27%

45%*49%42%

15% 14%^

Q42014

Q12015

Q22015

Q32015

Q42015

Q12016

Q22016

Q32016

Q42016

7% 9%

26%

9%*

57%45%

62%

39%*36%

45%

11%

52%*

Q42014

Q12015

Q22015

Q32015

Q42015

Q12016

Q22016

Q32016

Q42016



Refinance Mortgage Demand: GSE Eligible (by institution type)



UpThe sameDown

Past 3 Months

Next 3 Months


50%

20%

83%67%^

20%

37% 14%

15%^

30%

43%

2%

17%*^

Q42014

Q12015

Q22015

Q32015

Q42015

Q12016

Q22016

Q32016

Q42016

10%4%

38%

9%*

63%

31%44%

10%*^27%

65%

18%

81%*

Q42014

Q12015

Q22015

Q32015

Q42015

Q12016

Q22016

Q32016

Q42016

21% 19%

64%53%^

35%

37%27% 35%

44% 43%

10% 12%^

Q42014

Q12015

Q22015

Q32015

Q42015

Q12016

Q22016

Q32016

Q42016

8% 7%16%

8%

55%

35%

60%

25%*37%

58%

24%

67%*

Q42014

Q12015

Q22015

Q32015

Q42015

Q12016

Q22016

Q32016

Q42016

22% 19%

72%

55%^

31%44%

18%34%

47%

37%10%

11%^

Q42014

Q12015

Q22015

Q32015

Q42015

Q12016

Q22016

Q32016

Q42016

4% 8%

34%

7%*

57%

38%

48%

25%*39%

54%

18%

68%*

Q42014

Q12015

Q22015

Q32015

Q42015

Q12016

Q22016

Q32016

Q42016



Refinance Mortgage Demand: Non-GSE Eligible (by institution size)



UpThe sameDown

Past 3 Months

Next 3 Months


45%

14%

70%61%^

29%

44%26% 30%

26%

43%

3% 9%^

Q42014

Q12015

Q22015

Q32015

Q42015

Q12016

Q22016

Q32016

Q42016

13% 3%12%

4%

51%

34%

53%

21%*36%

63%

33%

74%*

Q42014

Q12015

Q22015

Q32015

Q42015

Q12016

Q22016

Q32016

Q42016

21% 21%

48%58%^

48% 42%

46% 25%*31%38%

6%17%^

Q42014

Q12015

Q22015

Q32015

Q42015

Q12016

Q22016

Q32016

Q42016

7% 10%

26%

5%*

66%

32%

60%

12%*^26%

58%

14%

83%*^

Q42014

Q12015

Q22015

Q32015

Q42015

Q12016

Q22016

Q32016

Q42016

18% 20%

47%

18%*

45% 43%

37%

64%*^

37% 38%

16% 18%^

Q42014

Q12015

Q22015

Q32015

Q42015

Q12016

Q22016

Q32016

Q42016

7% 7%

21%

0%*

57%47%

64%

46%37%

47%

16%

54%*

Q42014

Q12015

Q22015

Q32015

Q42015

Q12016

Q22016

Q32016

Q42016



Refinance Mortgage Demand: Non-GSE Eligible (by institution type)



UpThe sameDown

Past 3 Months

Next 3 Months


32%21%

54% 55%^49%

39% 41%33%

19%

41%

5% 11%^

Q42014

Q12015

Q22015

Q32015

Q42015

Q12016

Q22016

Q32016

Q42016

15%4%

18% 6%

61%

37%

62%

12%*^24%

59%

20%

83%*^

Q42014

Q12015

Q22015

Q32015

Q42015

Q12016

Q22016

Q32016

Q42016

23% 18%

52%42%^39%

40% 40% 38%37%

41%

7%20%^

Q42014

Q12015

Q22015

Q32015

Q42015

Q12016

Q22016

Q32016

Q42016

6% 6%15%

2%*

61%

38%

63%

34%*34%

56%

23%

64%*

Q42014

Q12015

Q22015

Q32015

Q42015

Q12016

Q22016

Q32016

Q42016

22%16%

62%

42%^

40% 50%

25%

47%38%

33%

13% 11%^

Q42014

Q12015

Q22015

Q32015

Q42015

Q12016

Q22016

Q32016

Q42016

8% 9%

31%

4%*

52%

37%

50%

33%40%

54%

18%

63%*

Q42014

Q12015

Q22015

Q32015

Q42015

Q12016

Q22016

Q32016

Q42016



Refinance Mortgage Demand: Government (by institution size)



UpThe sameDown

Past 3 Months

Next 3 Months


32%

23%

72%65%^

36% 42%

23% 26%

32%

34%

5% 9%^

Q42014

Q12015

Q22015

Q32015

Q42015

Q12016

Q22016

Q32016

Q42016

4% 2% 15%2%*

52%

28%

53%

20%*44%

70%

31%

77%*

Q42014

Q12015

Q22015

Q32015

Q42015

Q12016

Q22016

Q32016

Q42016

16% 16%

62%

41%^50%

43% 35%40%

34%41%

3%19%*^

Q42014

Q12015

Q22015

Q32015

Q42015

Q12016

Q22016

Q32016

Q42016

2% 6%

31%

3%*

64%

32%46%

20%*

34%

62%

23%

78%*

Q42014

Q12015

Q22015

Q32015

Q42015

Q12016

Q22016

Q32016

Q42016

8% 10%28%

11%

48% 48% 49%59%

44% 41%

23%

30%

Q42014

Q12015

Q22015

Q32015

Q42015

Q12016

Q22016

Q32016

Q42016

4% 8%13%

0%

63%48%

72%

56%

33% 44%16%

45%*

Q42014

Q12015

Q22015

Q32015

Q42015

Q12016

Q22016

Q32016

Q42016



Refinance Mortgage Demand: Government (by institution type)



UpThe sameDown

Past 3 Months

Next 3 Months


24% 20%

78%

62%^47%

39% 20% 21%^29%

41%

2%16%*^

Q42014

Q12015

Q22015

Q32015

Q42015

Q12016

Q22016

Q32016

Q42016

5% 4%

32%

4%*

62%

34%

51%

17%*^34%

62%

17%

78%*

Q42014

Q12015

Q22015

Q32015

Q42015

Q12016

Q22016

Q32016

Q42016

17% 14%

44%34%^

41%

45%

44%

47%42%

40%

13%

18%^

Q42014

Q12015

Q22015

Q32015

Q42015

Q12016

Q22016

Q32016

Q42016

3% 6% 12%0%*

58%

36%

57%

35%*

39%

58%

31%

65%*

Q42014

Q12015

Q22015

Q32015

Q42015

Q12016

Q22016

Q32016

Q42016

11% 13%

40% 21%

48%51%

44%58%

41% 36%

16% 21%

Q42014

Q12015

Q22015

Q32015

Q42015

Q12016

Q22016

Q32016

Q42016

4% 4% 10% 0%

60%

40%

62%

42%35%

56%

27%

58%

Q42014

Q12015

Q22015

Q32015

Q42015

Q12016

Q22016

Q32016

Q42016



Credit StandardsAppendix



Credit Standards



EaseRemain UnchangedTighten

Past 3 Months

Next 3 Months


12%

17% 15% 10%

75% 79% 81% 87%

13%4% 3% 4%

Q42014

Q12015

Q22015

Q32015

Q42015

Q12016

Q22016

Q32016

Q42016

9% 16% 9%6%^

85% 82% 88% 92%^

6%2% 4% 1%

Q42014

Q12015

Q22015

Q32015

Q42015

Q12016

Q22016

Q32016

Q42016

18% 18% 14% 10%

73% 75%79% 83%

9% 7% 8% 6%

Q42014

Q12015

Q22015

Q32015

Q42015

Q12016

Q22016

Q32016

Q42016

13% 13% 9% 10%

84% 84% 86% 89%

4% 3%5% 2%

Q42014

Q12015

Q22015

Q32015

Q42015

Q12016

Q22016

Q32016

Q42016

6%12% 6% 6%

87% 85% 89%92%

7%3% 5% 3%

Q42014

Q12015

Q22015

Q32015

Q42015

Q12016

Q22016

Q32016

Q42016

16% 10% 14% 7%

70%82% 80% 88%

13%8% 6% 5%

Q42014

Q12015

Q22015

Q32015

Q42015

Q12016

Q22016

Q32016

Q42016



Credit Standards: GSE Eligible (by institution size)




Past 3 Months

Next 3 Months


19% 24%18% 10%

71% 76% 78% 86%

9% 0% 4% 4%

Q42014

Q12015

Q22015

Q32015

Q42015

Q12016

Q22016

Q32016

Q42016

12%20% 13% 12%

84% 81% 84% 84%

4% 0%4% 4%

Q42014

Q12015

Q22015

Q32015

Q42015

Q12016

Q22016

Q32016

Q42016

11%

21% 18% 17%

78% 72% 78% 78%

12% 7% 4% 4%

Q42014

Q12015

Q22015

Q32015

Q42015

Q12016

Q22016

Q32016

Q42016

5%20%

6%8%

91% 78%86% 89%

4% 2%8%

2%

Q42014

Q12015

Q22015

Q32015

Q42015

Q12016

Q22016

Q32016

Q42016

10%8%

7% 0%

79% 87% 93%100%^

12%5% 0% 0%

Q42014

Q12015

Q22015

Q32015

Q42015

Q12016

Q22016

Q32016

Q42016

6%7% 9% 2%

75%89%

88%95%

19%5% 3% 2%

Q42014

Q12015

Q22015

Q32015

Q42015

Q12016

Q22016

Q32016

Q42016



Credit Standards: GSE Eligible (by institution type)




Past 3 Months

Next 3 Months


23% 20% 12% 13%

64%74% 85% 84%

13%6% 4% 4%

Q42014

Q12015

Q22015

Q32015

Q42015

Q12016

Q22016

Q32016

Q42016

11%25% 9% 8%^

87%71%

83% 90%^

2% 4% 8% 2%

Q42014

Q12015

Q22015

Q32015

Q42015

Q12016

Q22016

Q32016

Q42016

8%

17% 22%9%

77% 80% 75% 85%

14%

3% 3% 6%

Q42014

Q12015

Q22015

Q32015

Q42015

Q12016

Q22016

Q32016

Q42016

10% 5% 8% 7%

78%93%

89% 90%

12%

1% 3% 4%

Q42014

Q12015

Q22015

Q32015

Q42015

Q12016

Q22016

Q32016

Q42016

4%9%

7% 4%

92% 89% 93% 96%

4%3% 0% 0%

Q42014

Q12015

Q22015

Q32015

Q42015

Q12016

Q22016

Q32016

Q42016

4%

8%6% 4%

82%90% 90% 96%

14%3% 4% 0%

Q42014

Q12015

Q22015

Q32015

Q42015

Q12016

Q22016

Q32016

Q42016



Credit Standards: Non-GSE Eligible (by institution size)




Past 3 Months

Next 3 Months


13%21% 16% 11%

80% 77% 77% 84%

8% 3%7% 6%

Q42014

Q12015

Q22015

Q32015

Q42015

Q12016

Q22016

Q32016

Q42016

10%19% 11% 16%

88%81% 84% 79%

2% 0%5%

4%

Q42014

Q12015

Q22015

Q32015

Q42015

Q12016

Q22016

Q32016

Q42016

22% 23% 14% 15%

69% 69%78% 82%

9%8% 8%

2%

Q42014

Q12015

Q22015

Q32015

Q42015

Q12016

Q22016

Q32016

Q42016

16% 14%6%

10%

82% 86% 84% 90%

2% 0%10%

0%

Q42014

Q12015

Q22015

Q32015

Q42015

Q12016

Q22016

Q32016

Q42016

12% 5%7% 5%

81% 87% 91%95%

7%

8%2% 0%

Q42014

Q12015

Q22015

Q32015

Q42015

Q12016

Q22016

Q32016

Q42016

18%10% 11%

5%

70%80% 80% 85%

11%

11%9%

11%

Q42014

Q12015

Q22015

Q32015

Q42015

Q12016

Q22016

Q32016

Q42016



Credit Standards: Non-GSE Eligible (by institution type)




Past 3 Months

Next 3 Months


26% 29%

6%11%^

67% 63%

83% 85%^

7% 8%12%

4%

Q42014

Q12015

Q22015

Q32015

Q42015

Q12016

Q22016

Q32016

Q42016

21% 19%6%

14%

79% 80% 85% 84%

0% 2%10%

3%

Q42014

Q12015

Q22015

Q32015

Q42015

Q12016

Q22016

Q32016

Q42016

17% 10% 19%11%

71%83% 73% 77%

12%7% 8%

12%

Q42014

Q12015

Q22015

Q32015

Q42015

Q12016

Q22016

Q32016

Q42016

12% 9% 9% 9%

81% 86% 86% 89%

7% 4% 5% 2%

Q42014

Q12015

Q22015

Q32015

Q42015

Q12016

Q22016

Q32016

Q42016

8% 9% 9% 11%

89% 88%

89% 89%

2% 3% 2%0%

Q42014

Q12015

Q22015

Q32015

Q42015

Q12016

Q22016

Q32016

Q42016

14% 18% 13% 4%

78% 75% 85%96%^

8% 7% 2% 0%

Q42014

Q12015

Q22015

Q32015

Q42015

Q12016

Q22016

Q32016

Q42016



Credit Standards: Government (by institution size)




Past 3 Months

Next 3 Months


21% 16% 17%6%

64%80% 74% 87%

15% 5%10% 7%

Q42014

Q12015

Q22015

Q32015

Q42015

Q12016

Q22016

Q32016

Q42016

7% 15% 10% 9%

86% 83% 83% 82%

7%

2% 7% 8%

Q42014

Q12015

Q22015

Q32015

Q42015

Q12016

Q22016

Q32016

Q42016

18%7% 17% 11%

74% 82% 79% 84%

7%

11%

4%5%

Q42014

Q12015

Q22015

Q32015

Q42015

Q12016

Q22016

Q32016

Q42016

4% 12%

2%8%

93%86% 92% 92%

3% 2% 6%0%

Q42014

Q12015

Q22015

Q32015

Q42015

Q12016

Q22016

Q32016

Q42016

9% 6% 4%0%

79%87%

96% 100%

12% 7%

0% 0%

Q42014

Q12015

Q22015

Q32015

Q42015

Q12016

Q22016

Q32016

Q42016

8%8% 5% 4%

74%86%

91% 93%

18%7% 3% 4%

Q42014

Q12015

Q22015

Q32015

Q42015

Q12016

Q22016

Q32016

Q42016



Credit Standards: Government (by institution type)




Past 3 Months

Next 3 Months


26%16% 16% 11%

61%75% 78% 82%

12% 10%7% 7%

Q42014

Q12015

Q22015

Q32015

Q42015

Q12016

Q22016

Q32016

Q42016

9%18%

6%10%

90% 75%87% 86%

1% 7%

8%4%

Q42014

Q12015

Q22015

Q32015

Q42015

Q12016

Q22016

Q32016

Q42016

9% 7%14%

2%

75%83% 79%

91%

16% 10%7% 7%

Q42014

Q12015

Q22015

Q32015

Q42015

Q12016

Q22016

Q32016

Q42016

3%

5% 7% 5%

83% 95%89% 90%

13%0% 4% 4%

Q42014

Q12015

Q22015

Q32015

Q42015

Q12016

Q22016

Q32016

Q42016

10%4% 0% 0%

86%93%

100% 100%

4%4% 0% 0%

Q42014

Q12015

Q22015

Q32015

Q42015

Q12016

Q22016

Q32016

Q42016

4% 0%4% 0%

88%100% 96% 100%

8% 0%0% 0%

Q42014

Q12015

Q22015

Q32015

Q42015

Q12016

Q22016

Q32016

Q42016



Credit Standards: Drivers of Change (selected verbatim)

Q: What do you think drove the change in your firm’s credit standards for approving consumer applications for purchase mortgage loans over the last three months? Please be as specific as possible. (Optional)

“Better qualified consumers combined with increased home values and competition from other lenders.” – Larger Institution

Past 3 MonthsN=21

• Regulations• Market Conditions• Competition

Q: What do you think will drive the change in your firm’s credit standards for approving consumer applications for purchase mortgage loans over the next three months? Please be as specific as possible. (Optional)

“Our changes were driven by a desire to enhance the profile of our government book.” –Larger Institution

“Market values, and concerns about affordability.” – Larger Institution

“Increased Regulation making it harder to lend money.” – Smaller Institution

Next 3 MonthsN=8

• Regulations• New Products

“Investors reducing or eliminating risk overlays.” – Larger Institution

“Review of internal policies resulted in increase[d] underwriter authority for portfolio loan exceptions.” – Mid-sized Institution

“We are developing a product specifically for borrowers moving into our market.”– Smaller Institution

“Performance as well and new credit standards required by the VA.” – Larger Institution

“Ability to offer loans to first time homebuyers in order to capture purchase money loans.” – Mid-sized Institution

“Desire for volume.”– Mid-sized Institution

Drivers of Loosening Change

Drivers of Tightening Change



Mortgage Execution OutlookAppendix



3%8% 5%

94% 91%95%

3%2% 0%

Q12015

Q22015

Q32015

Q42015

Q12016

Q22016

Q32016

Q42016

19%

15% 18%

55% 61% 60%

25% 24% 22%

Q12015

Q22015

Q32015

Q42015

Q12016

Q22016

Q32016

Q42016

18%10% 7%

58% 53% 55%

24% 37% 38%

Q12015

Q22015

Q32015

Q42015

Q12016

Q22016

Q32016

Q42016

Mortgage Execution Outlook – Next 12 Months


Total Larger Institutions Mid-sized Institutions Smaller Institutions


Portfolio Retention

Increase About the Same Decrease


12% 11% 10%

73% 70% 71%

16% 19% 19%

Q12015

Q22015

Q32015

Q42015

Q12016

Q22016

Q32016

Q42016

11% 8% 6%

72% 70%79%

17% 22% 15%

Q12015

Q22015

Q32015

Q42015

Q12016

Q22016

Q32016

Q42016

16%8% 14%

62% 67%57%

22% 25% 30%

Q12015

Q22015

Q32015

Q42015

Q12016

Q22016

Q32016

Q42016

8%

16% 10%

83%73% 83%

8% 10% 7%

Q12015

Q22015

Q32015

Q42015

Q12016

Q22016

Q32016

Q42016



38%28%

24%

39%55% 57%^

23%17% 18%

Q12015

Q22015

Q32015

Q42015

Q12016

Q22016

Q32016

Q42016

23%

29% 29%

55% 56%48%

23%

15% 23%

Q12015

Q22015

Q32015

Q42015

Q12016

Q22016

Q32016

Q42016

14%

29% 27%

58% 61% 55%

28%

10%17%

Q12015

Q22015

Q32015

Q42015

Q12016

Q22016

Q32016

Q42016





GSE (Fannie Mae and Freddie Mac)



26% 28% 26%

49% 57% 55%

25% 15% 18%Q1

2015Q2

2015Q3

2015Q4

2015Q1

2016Q2

2016Q3

2016Q4

2016

26% 36% 32%

48% 53% 57%

25%11% 11%

Q12015

Q22015

Q32015

Q42015

Q12016

Q22016

Q32016

Q42016

22% 22% 23%

57% 65%59%

21% 13% 18%

Q12015

Q22015

Q32015

Q42015

Q12016

Q22016

Q32016

Q42016

30% 27%

23%

43%53%

46%

27% 20%

31%

Q12015

Q22015

Q32015

Q42015

Q12016

Q22016

Q32016

Q42016



24%

15%

26%

62% 63%58%

14%

22%

15%Q1

2015Q2

2015Q3

2015Q4

2015Q1

2016Q2

2016Q3

2016Q4

2016

15% 17% 12%

79% 77% 77%

7% 6% 11%

Q12015

Q22015

Q32015

Q42015

Q12016

Q22016

Q32016

Q42016

5% 2%14%

95%98%

86%*

0% 0%0%

Q12015

Q22015

Q32015

Q42015

Q12016

Q22016

Q32016

Q42016





Ginnie Mae (FHA/VA)



16% 12% 16%

75% 78% 74%

9% 10% 9%

Q12015

Q22015

Q32015

Q42015

Q12016

Q22016

Q32016

Q42016

20% 14% 17%

73% 74% 72%

7%13% 11%

Q12015

Q22015

Q32015

Q42015

Q12016

Q22016

Q32016

Q42016

9% 6% 11%

86% 91%84%

5% 3% 5%

Q12015

Q22015

Q32015

Q42015

Q12016

Q22016

Q32016

Q42016

19% 17% 24%

66% 69%61%

14% 14% 15%Q1

2015Q2

2015Q3

2015Q4

2015Q1

2016Q2

2016Q3

2016Q4

2016



6% 6% 5%

91% 91%93%

3% 3% 2%

Q12015

Q22015

Q32015

Q42015

Q12016

Q22016

Q32016

Q42016

4% 3% 2%

93% 96% 92%

3% 1%

7%

Q12015

Q22015

Q32015

Q42015

Q12016

Q22016

Q32016

Q42016

0%2% 7%

100% 98% 93%

0% 0% 0%

Q12015

Q22015

Q32015

Q42015

Q12016

Q22016

Q32016

Q42016





Private Label Securities/Non-Agency Securities



5% 4% 4%

93% 94% 93%

2% 1% 3%

Q12015

Q22015

Q32015

Q42015

Q12016

Q22016

Q32016

Q42016

5% 5% 5%

93% 93% 90%

2% 2% 4%

Q12015

Q22015

Q32015

Q42015

Q12016

Q22016

Q32016

Q42016

1% 3% 5%

99% 97% 95%

0% 0% 0%

Q12015

Q22015

Q32015

Q42015

Q12016

Q22016

Q32016

Q42016

8% 4%2%

86% 93% 93%

5% 3%5%

Q12015

Q22015

Q32015

Q42015

Q12016

Q22016

Q32016

Q42016



13%14% 10%

49% 59% 61%

37%27% 29%

Q12015

Q22015

Q32015

Q42015

Q12016

Q22016

Q32016

Q42016

10%6% 11%

81% 78%75%

9%16% 14%

Q12015

Q22015

Q32015

Q42015

Q12016

Q22016

Q32016

Q42016

15% 10% 7%

85% 88% 90%

0%2% 3%

Q12015

Q22015

Q32015

Q42015

Q12016

Q22016

Q32016

Q42016





Whole Loan Sales to Non-GSE (Correspondent)



13%

10% 9%

68% 74% 74%

19% 16% 17%

Q12015

Q22015

Q32015

Q42015

Q12016

Q22016

Q32016

Q42016

13%

9%5%

63% 72% 68%

25% 19% 27%

Q12015

Q22015

Q32015

Q42015

Q12016

Q22016

Q32016

Q42016

11% 8% 11%

86% 85%77%

4% 7% 11%

Q12015

Q22015

Q32015

Q42015

Q12016

Q22016

Q32016

Q42016

16%

13% 12%

57%65% 76%^

27% 22% 12%

Q12015

Q22015

Q32015

Q42015

Q12016

Q22016

Q32016

Q42016



Mortgage Execution Share – Current

Approximately, what percent of your firm’s total mortgage originations goes to each of the following categories? Please enter a percent in each box below. If a category is not applicable to your firm, please enter 0. The percentages below must add up to 100%. Showing Mean %

Total

2014 2015 2016

Q4 Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4

N= 192 197 238 209 194 205 169 200 139

GSE (Fannie Mae and Freddie Mac) 49% 47% 46% 44% 44% 48% 46% 45% 46%

Portfolio Retention 23% 21% 22% 19% 20% 20% 23% 24% 22%

Whole Loan Sales to Non-GSE (Correspondent) 12% 17% 16% 19% 18% 15% 17% 15% 15%

Ginnie Mae (FHA/VA) 13% 12% 13% 15% 16% 15% 13% 14% 14%

Private Label Securities / Non-Agency Securities 1% 1% 1% 1% 1% 1% 1% 1% 2%

Other 1% 2% 1% 1% 1% 1% 0% 1% 1%




Mortgage Execution Share – Over Next 12 Months

Looking forward, what percent of your firm’s total mortgage originations over the next 12 months will go to each of the following categories? Please enter a percent for each category. If a category is not applicable to your firm, please enter 0. The percentages below must add up to 100%. Showing Mean %

Total

2015 2016

Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4

N= 197 238 209 194 205 169 200 139

GSE (Fannie Mae and Freddie Mac) 47% 47% 46% 44% 49% 46% 47% 47%

Portfolio Retention 21% 21% 18% 20% 19% 23% 23% 21%

Whole Loan Sales to Non-GSE (Correspondent) 16% 15% 17% 18% 14% 15% 13% 14%

Ginnie Mae (FHA/VA) 13% 14% 16% 16% 16% 14% 14% 15%

Private Label Securities / Non-Agency Securities 2% 1% 3% 1% 1% 2% 1% 2%

Other 1% 1% 1% 1% 1% 1% 1% 1%




Mortgage Servicing Rights (MSR) Execution

Appendix



Mortgage Servicing Rights Execution Outlook – Next 12 Months



MSR Sold

MSR Retained, serviced by a subservicer

MSR Retained, serviced in-house

IncreaseAbout the SameDecrease


15%

14%13%

68% 73%77%

17% 14%11%

Q12015

Q22015

Q32015

Q42015

Q12016

Q22016

Q32016

Q42016

15%10% 11%

73% 81% 81%

12%9% 9%

Q12015

Q22015

Q32015

Q42015

Q12016

Q22016

Q32016

Q42016

5% 7% 2%

88% 84%91%

7% 9% 6%

Q12015

Q22015

Q32015

Q42015

Q12016

Q22016

Q32016

Q42016

13% 9% 9%

73% 79% 80%

15% 13% 11%

Q12015

Q22015

Q32015

Q42015

Q12016

Q22016

Q32016

Q42016

13% 8% 8%

77% 85%88%^

10% 6% 4%

Q12015

Q22015

Q32015

Q42015

Q12016

Q22016

Q32016

Q42016

6%9%

5%

88% 84% 88%

7%8%

7%

Q12015

Q22015

Q32015

Q42015

Q12016

Q22016

Q32016

Q42016

9%9% 7%

64% 72%80%

27% 20% 13%

Q12015

Q22015

Q32015

Q42015

Q12016

Q22016

Q32016

Q42016

23% 11% 10%

64%83% 85%^

13%6% 5%

Q12015

Q22015

Q32015

Q42015

Q12016

Q22016

Q32016

Q42016

12% 13% 6%

84%80% 90%

4% 7% 4%

Q12015

Q22015

Q32015

Q42015

Q12016

Q22016

Q32016

Q42016

13% 4%7%

87% 92% 84%

0% 4%9%^

Q12015

Q22015

Q32015

Q42015

Q12016

Q22016

Q32016

Q42016

0% 4% 5%

95%92%

95%

5%4% 0%

Q12015

Q22015

Q32015

Q42015

Q12016

Q22016

Q32016

Q42016

0%7%

7%

91% 87% 84%

9%

6%9%

Q12015

Q22015

Q32015

Q42015

Q12016

Q22016

Q32016

Q42016



Mortgage Servicing Rights Execution Outlook – Next 12 Months



MSR Sold

MSR Retained, serviced by a subservicer

MSR Retained, serviced in-house

IncreaseAbout the SameDecrease

Mortgage Banks Depository Institutions Credit Unions

12% 8% 10%

61% 73%72%

27% 18% 18%

Q12015

Q22015

Q32015

Q42015

Q12016

Q22016

Q32016

Q42016

25%12%

18%

64% 76%73%

11%12%

9%

Q12015

Q22015

Q32015

Q42015

Q12016

Q22016

Q32016

Q42016

4%9%

2%

92% 89%95%

4%2%

3%

Q12015

Q22015

Q32015

Q42015

Q12016

Q22016

Q32016

Q42016

15%10% 7%

76% 76%83%

9%14% 9%

Q12015

Q22015

Q32015

Q42015

Q12016

Q22016

Q32016

Q42016

4%7% 1%

89% 92%99%^

7%1% 0%

Q12015

Q22015

Q32015

Q42015

Q12016

Q22016

Q32016

Q42016

8% 9%9%

80% 81% 83%

12% 10%7%

Q12015

Q22015

Q32015

Q42015

Q12016

Q22016

Q32016

Q42016

3% 8% 1%

95%82%

88%

3% 10%10%

Q12015

Q22015

Q32015

Q42015

Q12016

Q22016

Q32016

Q42016

3% 6%7%

82% 86%88%

15% 8%5%

Q12015

Q22015

Q32015

Q42015

Q12016

Q22016

Q32016

Q42016

13% 4% 10%

77%94% 86%

0% 2% 3%

Q12015

Q22015

Q32015

Q42015

Q12016

Q22016

Q32016

Q42016



Mortgage Servicing Rights (MSR) Execution Share – Current

Approximately what percent of your mortgage servicing rights (MSR) goes to each of the following categories? Please enter a percent in each box below. If a category is not applicable to your firm, please enter 0. The percentages below must add up to 100%. Showing Mean %

Total

2014 2015 2016

Q4 Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4

N= 192 197 238 209 194 205 169 200 139

MSR retained, serviced in-house 54% 48% 45% 44% 46% 52% 47% 52% 50%

MSR retained, serviced by a subservicer 18% 17% 24% 18% 20% 18% 22% 20% 19%

MSR sold 27% 34% 31% 37% 34% 30% 31% 29% 32%




Mortgage Servicing Rights (MSR) Execution Share – Over Next 12 Months

Looking forward, what percent of your firm’s mortgage servicing rights (MSR) over the next 12 months will go to each of the following categories? Please enter a percent for each category. If a category is not applicable to your firm, please enter 0. The percentages below must add up to 100%. Showing Mean %

Total

2015 2016

Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4

N= 197 238 209 194 205 169 200 139

MSR retained, serviced in-house 48% 44% 44% 46% 51% 48% 52% 50%

MSR retained, serviced by a subservicer 17% 24% 20% 20% 17% 21% 20% 19%

MSR sold 35% 32% 36% 34% 32% 31% 28% 31%




Profit Margin OutlookAppendix



Profit Margin Outlook – Next 3 Months (by institution size)

Q: Over the next three months, how much do you expect your firm's profit margin to change for its single-family mortgage production? [Showing: (Substantially Increase (25+ basis points) + Moderately Increase (5 - 25 basis points)), About the same (0 - 5 basis points), (Moderately Decrease (5 - 25 basis points) + Substantially Decrease (25+ basis points)]


Larger Institutions

Increase

About the same

Decrease

Mid-sized Institutions Smaller Institutions


n=48 n=56 n=51 n=54 n=57 n=56 n=52 n=68 n=50

Q42014

Q12015

Q22015

Q32015

Q42015

Q12016

Q22016

Q32016

Q42016

-27%

38%

-9%-30%

-45%

11%21%

1%

-47%*

-18%

33%

1%

-16%-28%

23% 15% 12%

-40%*

-11%

22%9%

-27%

-13%

8%1%

18%

-12%*

55%36% 38% 43% 34% 48% 51% 43% 31%

52% 51% 50% 51% 48% 53% 50% 59%42%

58% 66% 57% 54% 55% 47% 57% 62%40%*

9% 51%31% 13%

11%

31% 35%29%

11%*

15%41%

26% 16% 12%35% 33% 26%

9%*

15%28%

26%10% 16% 30% 22%

28%

24%

36%13%

36% 43% 56%

20% 14% 28%58%*

33% 8% 25% 32% 40%12% 18% 14%

49%*26% 6% 17%

37% 29% 22% 21% 10%36%*

n=54 n=47 n=66 n=77 n=59 n=66 n=54 n=58 n=42

Q42014

Q12015

Q22015

Q32015

Q4 2015

Q1 2016

Q2 2016

Q32016

Q42016

n=80 n=77 n=105 n=68 n=70 n=72 n=58 n=65 n=42

Q42014

Q12015

Q22015

Q32015

Q42015

Q12016

Q22016

Q32016

Q42016



Profit Margin Outlook – Next 3 Months (by institution size)

Q: Over the next three months, how much do you expect your firm's profit margin to change for its single-family mortgage production? [Showing: (Substantially Increase (25+ basis points) + Moderately Increase (5 - 25 basis points)), About the same (0 - 5 basis points), (Moderately Decrease (5 - 25 basis points) + Substantially Decrease (25+ basis points)]


Mortgage Banks

Increase

About the same

Decrease

Depository Institutions Credit Unions


n=48 n=48 n=66 n=74 n=68 n=61 n=62 n=61 n=49

Q42014

Q12015

Q22015

Q32015

Q42015

Q12016

Q22016

Q32016

Q42016

-13%

42%

-2%

-27%

-47%

17%25%

5%

-40%*

-14%

21%2%

-22%-13%

9% 7%8%

-29%* -29%

30%

11%

-23% -22%

27%

0%

31%

-34%*

55% 42% 44% 49% 41% 55% 55% 46% 35%51% 55% 50% 47% 44% 52% 43%

59%34%*

63% 59% 61% 57% 62%45%

65% 59%38%

16%50%

31% 12%6%

31% 35%29%

12%*

17%33%

26%16% 21%

28% 32%24%

19%

4%36% 25%

10% 8% 41%18% 36%

14%*

29%8%

29% 39% 53%

14% 10% 24%52%*

31%12% 24% 38% 34%

19% 25% 16%48%*

33%6% 14%

33% 30%14% 18% 5%

48%*

n=76 n=84 n=98 n=78 n=71 n=80 n=61 n=76 n=50

Q42014

Q12015

Q22015

Q32015

Q4 2015

Q1 2016

Q2 2016

Q32016

Q42016

n=47 n=39 n=48 n=40 n=38 n=46 n=34 n=48 n=29

Q42014

Q12015

Q22015

Q32015

Q42015

Q12016

Q22016

Q32016

Q42016



Increased Profit Margin – DriversWhat do you think will drive the increase in your firm’s profit margin over the next three months? Please select the two most important reasons and rank them in order of importance. (Showing % rank 1 + 2)

Total2014 2015 2016

Q4 Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4

N= 24 70 58 26 24 63 49 54 20

Operational efficiency (i.e., technology) 38% 41% 42% 56% 51% 52% 42% 54% 42%

Market trend changes (i.e. shift from refinance to purchase) 21% 20% 37% 21% 29% 30% 33% 27% 40%

Staffing (personnel costs) reduction 7% 10% 14% 4% 13% 9% 12% 14% 33%

GSE pricing and policies 17% 15% 7% 28% 16% 17% 10% 17% 20%

Consumer demand 54% 68% 70% 58% 26% 52% 69% 49% 18%*

Marketing expense reduction 9% 5% 4% 4% 5% 3% 4% 11% 11%

Less competition from other lenders 18% 16% 5% 15% 20% 7% 11% 10% 11%

Non-GSE (other investors) pricing and policies 17% 5% 12% 3% 12% 13% 2% 4% 11%

Government monetary or fiscal policy 6% 9% 2% 5% 9% 5% 5% 5% 6%

Government regulatory compliance 5% 2% 1% 0% 12% 3% 2% 2% 6%

Servicing cost reduction 3% 3% 0% 5% 0% 1% 4% 4% 0%


Question was changed to only allow up to two answer choices In Q1 2015. 2014 question text: What do you think will drive the increase in your firm’s profit margin over the next three months? Please select up to three of the most important reasons and rank them in order of importance.

For detailed data by lender size and lender type, please check out the excel file posted on the Mortgage Lender Sentiment Survey web page, together with the report.


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


Increased Profit Margin – StrategiesWhat primary strategies, if any, is your firm planning to use to achieve your increased profit margin? Please select the two most important strategies and rank them in order of importance. (Showing % rank 1 + 2)

Total2014 2015 2016Q4 Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4

N= 24 70 58 26 24 64 49 54 20

Operational efficiency (i.e. technology) investments 31% 49% 43% 49% 42% 39% 56% 43% 34%

Price adjustments 22% 40% 36% 28% 49% 37% 20% 41% 34%

New or reallocation of mortgage product offerings 28% 9% 17% 8% 12% 9% 14% 14% 24%

Loan officer staffing adjustments 33% 16% 20% 19% 12% 25% 33% 11% 24%

Marketing outreach expansion/contraction 19% 23% 31% 16% 14% 17% 19% 25% 21%

Back-office staffing adjustments 0% 4% 13% 15% 14% 20% 12% 18% 21%

New or reallocation of origination channels (i.e. retail or online or third-party channels) 17% 18% 6% 5% 5% 18% 17% 14% 15%

Business acquisition/merger/divestment 9% 11% 3% 27% 12% 8% 0% 8% 12%

Investor outlet expansion/contraction 18% 9% 7% 3% 5% 10% 8% 3% 7%

MSR (Mortgage Servicing Rights) sales 8% 6% 3% 8% 12% 2% 7% 5% 6%

New borrower segments 15% 7% 16% 13% 15% 9% 9% 14% 0%

Underwriting standard changes 0% 2% 3% 4% 0% 1% 2% 2% 0%


Question was changed to only allow up to two answer choices In Q1 2015. 2014 question text: What primary strategies, if any, is your firm planning to use to achieve your increased profit margin? Please select up to three of the most important strategies and rank them in order of importance.





Decreased Profit Margin – DriversWhat do you think will drive the decrease in your firm’s profit margin over the next three months? Please select the two most important reasons and rank them in order of importance. (Showing % rank 1 + 2)

Total2014 2015 2016

Q4 Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4

N= 56 16 52 74 76 35 29 33 64

Market trend changes (i.e. shift from refinance to purchase) 17% 4% 25% 14% 20% 11% 8% 23% 43%^

Competition from other lenders 34% 49% 35% 47% 34% 33% 44% 46% 39%

Consumer demand 34% 25% 18% 20% 27% 25% 6% 21% 26%

GSE pricing and policies 13% 21% 16% 11% 11% 13% 22% 6% 20%

Staffing (personnel costs) 20% 14% 18% 19% 27% 26% 12% 31% 19%

Government regulatory compliance 60% 55% 48% 61% 52% 65% 67% 39% 18%*^

Government monetary or fiscal policy 7% 0% 19% 6% 10% 4% 16% 5% 16%

Non-GSE (other investors) pricing and policies 3% 12% 2% 2% 2% 2% 10% 4% 7%

Operational efficiency (i.e. technology) 8% 14% 11% 12% 8% 13% 10% 9% 6%

Servicing costs 4% 7% 4% 4% 3% 2% 0% 9% 2%

Marketing expenses 0% 0% 3% 2% 0% 2% 3% 6% 0%


Question was changed to only allow up to two answer choices In Q1 2015. 2014 question text: What do you think will drive the decrease in your firm’s profit margin over the next three months? Please select up to three of the most important reasons and rank them in order of importance.





Decreased Profit Margin – StrategiesWhat primary strategies, if any, is your firm planning to use to address your decreased profit margin? Please select the two most important strategies and rank them in order of importance. (Showing % rank 1 + 2)

Total2014 2015 2016

Q4 Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4

N= 56 16 52 74 76 35 29 33 64

Operational efficiency (i.e. technology) investments 40% 52% 51% 50% 51% 45% 56% 51% 44%

Back-office staffing adjustments 26% 14% 19% 20% 19% 22% 10% 31% 26%

Price adjustments 19% 31% 25% 30% 28% 32% 40% 28% 25%

Marketing outreach expansion/contraction 39% 27% 29% 18% 23% 27% 33% 19% 25%

Loan officer staffing adjustments 22% 4% 9% 23% 19% 17% 16% 9% 21%

New or re-allocation of mortgage product offerings 12% 9% 13% 10% 11% 16% 15% 12% 14%

New borrower segments 10% 0% 6% 6% 8% 9% 7% 12% 12%

New or re-allocation of origination channels (i.e. retail, online, or third-party channels) 8% 0% 15% 11% 12% 9% 3% 9% 11%

Investor outlet expansion/contraction 9% 35% 9% 9% 6% 15% 10% 6% 8%

Business acquisition/merger/divestment 11% 17% 6% 11% 11% 2% 3% 3% 5%

MSR (Mortgage Servicing Rights) sales 0% 7% 10% 3% 2% 2% 3% 13% 4%

Underwriting standard changes 2% 0% 3% 6% 2% 4% 0% 0% 4%


Question was changed to only allow up to two answer choices In Q1 2015. 2014 question text: What primary strategies, if any, is your firm planning to use to address your decreased profit margin? Please select up to three of the most important strategies and rank them in order of importance.





Survey Question TextAppendix



Question TextEconomic and Housing Sentimentq1. In general, do you, as a senior mortgage executive, think the U.S. economy overall is on the right track or the wrong track?

q1a. Do you think it is very difficult, somewhat difficult, somewhat easy, or very easy for consumers to get a home mortgage today?

q2. Nationally, during the next 12 months, do you, as a senior mortgage executive, think home prices in general will go up, go down, or stay the same as where they are now?

q4a. By about what percent do you, as a senior mortgage executive, think home prices nationally will go up on average over the next 12 months?

q5a. By about what percent do you, as a senior mortgage executive, think home prices nationally will go down on average over the next 12 months?

Consumer Demandq6. Over the past three months, apart from normal seasonal variation, did your firm’s consumer demand for single-family purchase mortgages go up, go down, or stay the same? Please answer for GSE eligible

mortgages, non-GSE eligible mortgages, and Government mortgages.

q7. What do you think drove the change in your firm’s consumer demand for single family purchase mortgages over the past three months? Please be as specific as possible. (Optional)

q14. Over the next three months, apart from normal seasonal variation, do you expect your firm’s consumer demand for single-family purchase mortgages to go up, go down, or stay the same? Please answer for GSE eligible mortgages, non-GSE eligible mortgages, and Government mortgages.

q46. You mentioned that you expect your firm’s consumer demand for GSE eligible loans will go up over the next three months. Which of the following housing marketplace factors do you think will drive the demand to go up? Please select up to two of the most important reasons and rank them in order of importance.

q47. You mentioned that you expect your firm’s consumer demand for GSE eligible loans will go down over the next three months. Which of the following housing marketplace factors do you think will drive the demand down? Please select up to two of the most important reasons and rank them in order of importance.

q49. You mentioned that you expect your firm’s consumer demand for Non-GSE eligible loans will go up over the next three months. Which of the following housing marketplace factors do you think will drive the demand to go up? Please select up to two of the most important reasons and rank them in order of importance.

q50. You mentioned that you expect your firm’s consumer demand for Non-GSE eligible loans will go down over the next three months. Which of the following housing marketplace factors do you think will drive the demand down? Please select up to two of the most important reasons and rank them in order of importance.

q51. You mentioned that you expect your firm’s consumer demand for government loans will go up over the next three months. Which of the following housing marketplace factors do you think will drive the demand to go up? Please select up to two of the most important reasons and rank them in order of importance.

q52. You mentioned that you expect your firm’s consumer demand for government loans will go down over the next three months. Which of the following housing marketplace factors do you think will drive the demand down? Please select up to two of the most important reasons and rank them in order of importance.



Question Text Continuedq10. Over the past three months, apart from normal seasonal variation, did your firm’s consumer demand for single-family refinance mortgages go up, go down, or stay the same? Please answer for GSE eligible

mortgages, non-GSE eligible mortgages, and Government mortgages.

q18. Over the next three months, apart from normal seasonal variation, do you expect your firm’s consumer demand for single-family refinance mortgages to go up, go down, or stay the same? Please answer for GSE eligible mortgages, non-GSE eligible mortgages, and Government mortgages.

q20. You indicated that you expect your firm’s demand to go down for the following types of mortgages. By about what percent do you expect your firm’s consumer demand for single-family refinance mortgages to go down over the next three months?

q21. You said that you expect your firm’s demand to go up for the following types of mortgages. By about what percent do you expect your firm’s consumer demand for single-family refinance mortgages to go up over the next three months?

Profit Margin Outlookq22. Over the next three months, how much do you expect your firm's profit margin to change for its single-family mortgage production?

q23. What primary strategies, if any, is your firm planning to use to address your decreased profit margin? Please select the two most important strategies and rank them in order of importance.

q24. What do you think will drive the decrease in your firm’s profit margin over the next three months? Please select the two most important reasons and rank them in order of importance.

q25. What primary strategies, if any, is your firm planning to use to achieve your increased profit margin? Please select the two most important strategies and rank them in order of importance.

q26. What do you think will drive the increase in your firm’s profit margin over the next three months? Please select the two most important reasons and rank them in order of importance.

Credit Standardsq27. Over the past three months, how did your firm’s credit standards for approving consumer applications for mortgage loans change (across both purchase mortgages and refinance mortgages)? Please answer for

GSE eligible mortgages, non-GSE eligible mortgages, and Government mortgages.

q28. What do you think drove the change in your firm’s credit standards for approving consumer applications for purchase and refinance mortgage loans over the last three months? Please be as specific as possible. (Optional)

q31. Over the next three months, how do you expect your firm’s credit standards for approving applications from individuals for mortgage loans to change (across purchase mortgages and refinance mortgages)? Please answer for GSE eligible mortgages, non-GSE eligible mortgages, and government mortgages.

q32. What do you think will drive the change in your firm’s credit standards for approving consumer applications for purchase and refinance mortgage loans over the next three months? Please be as specific as possible. (Optional)



Question Text ContinuedMortgage Execution Shareq35. Approximately, what percent of your firm’s total mortgage originations goes to each of the following categories? Please enter a percent in each box below. If a category is not applicable to your firm, please enter

0. The percentages below must add up to 100%. q44. Looking forward, what percent of your firm’s total mortgage originations over the next 12 months will go to each of the following categories? Please enter a percent for each category. If a category is not

applicable to your firm, please enter 0. The percentages below must add up to 100%.

Mortgage Servicing Rights Execution Shareq38. Approximately what percent of your mortgage servicing rights (MSR) goes to each of the following categories? Please enter a percent in each box below. If a category is not applicable to your firm, please enter 0.

The percentages below must add up to 100%.q45. Looking forward, what percent of your firm’s mortgage servicing rights (MSR) over the next 12 months will go to each of the following categories? Please enter a percent for each category. If a category is not

applicable to your firm, please enter 0. The percentages below must add up to 100%. q45d. What do you think will drive the change in your firm's percentage of MSR sold over the next 12 months? Please be as specific as possible. (Optional)


Documents

Providing Insights Into Current Lending Activities and Market ... - … · 2016-12-15 · Refinance Mortgage Demand Purchase Mortgage ... Loan Type Definition. ... lenders reporting