Just as prospective homebuyers can search, shop and compare homes online without providing any personal information or identification, prospective borrowers can now do the same with home loans when using the relative newbie mortgage lender, Magilla Loans.
Magilla Loans recently took the temperature of some 200 major mortgage lending firms. Are lenders expecting to loan more in 2018 than in 2017? Are lenders considering loosening up underwriting criteria?
In this latest survey, Magilla Loans learned that “yes” is the answer to both questions. Nine out of ten polled lenders expect to lend more in 2018 than they did in 2017 and 36% lenders expect to loosen their respective underwriting criteria for loan candidate approval. The remainder (66%) says their respective underwriting guidelines will remain the same and 8% say they will tighten underwriting criteria.
“Of the emerging trends disclosed in the lender survey, the most prominent is that nearly all lenders will be more aggressive in 2018, pointing to a positive inflow of residential and commercial loans across the US,” said Dean Sioukas, CEO of Magilla. Magilla itself claims it has already channeled billions in purchase loans through its website since it began in 2015.
The Mortgage Banker’s Association (MBA) is projecting $1.18T for purchasing money mortgages this year, $1.25T in 2019 and $1.32T in 2020. In 2017, lenders wrote approximately $1.17T in purchase financing.
Mike Fratantoni, MBA’s chief economist, is anticipating slow and steady gains in purchase origination growth. “We expect this growth to continue over the next few years.”
The MBA’s Market Composite Index that measures the number of loan applications indicated a slight slip of 2.6& during the week of 1/18/18 however, this slip in numbers followed two weeks of substantial gains, 8.3% the first week of January and 4.1% the second week of Januar. These two gains represent the biggest jump in the number of mortgage loan applications since April 2010, 8 years ago.
The titans of the secondary lending market, Fannie Mae and Freddie Mac, are also forecasting money flowing into home loans this year and next. Fannie Mae anticipates $1.2T for single-family home purchase originations in 2018 and $1.24T in 2019. Freddie Mac predicts that loan volume could be as much as $1.7T this year and $1.8T next year.