Friday, July 10, 2020 / by Erik Bjorklund
The continued high volume of refinancing
kept mortgage lenders' outlook for profits relatively high during the second
quarter, although it was down slightly from the first quarter of the year.
Fannie Mae's Mortgage Lender Sentiment survey found that more than half (52 percent)
of lenders who responded believed that their profit margins would be higher
than the prior quarter, while the remainder were almost equally divided between
those who expected lower profits or that they would remain unchanged. The
survey of senior mortgage executives was conducted between May 5, 2020 and May
18, 2020. The lender optimism was based largely on
the demand for refinancing, which outweighed a perceived decline in mortgage demand.
The net share of lenders reporting demand growth for refis over the prior three
months remained strong for all loans types (GSE-eligible, non-GSE-eligible, and
government) and reached a survey high for GSE-eligible loans. Demand growth
expectations on net for the next three months fell from last quarter but
remained high across all loan types.
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