Sumary of Lenders Expect Refi Wind-Down to Lower Profits:
- Fannie Mae’s second quarter Mortgage Lender Sentiment Survey found most respondents do not expect business, and therefore profits, to remain at current levels..
- It was the third quarter in which pessimism predominated, but only 52 percent of respondents to the first quarter survey expected a decline..
- Lenders reported they had seen increased demand for purchase mortgages over the prior three months as demand for refinancing wound down..
- The net share of lenders who reported that demand had grown turned negative for the first time since the first quarter of 2019 and was the lowest since the fourth quarter of 2018 for GSE-eligible and government loans..
- Looking forward, lenders expect demand for purchase mortgages to remain relatively strong, but those expectations were lower than the previous quarter for GSE and government loans..
- “This quarter, the largest net percentage of lenders in the survey’s seven-year history are expecting a decrease in their profit margin outlook….