Lenders' Outlook on the New Year

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Mortgage lenders continue to have a negative profit outlook, and view competitors as the biggest barrier to profit. Demand for both refinances and purchases has decreased.

" On net, lenders said they view competition from other lenders as their biggest hurdle to profitability. This sentiment, which has driven profit concerns for five consecutive quarters, reached its fourth straight survey high with 75 percent of those with a negative outlook naming this as a reason. Among those expecting profits to improve, increased operating efficiency was cited most often.

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More lenders reported seeing declining demand for refinancing over the previous three months.  This continues a trend that started in the first quarter of 2017. The net share of lenders who expect to see refinancing demand grow in the first quarter of 2018 fell to the lowest reading in a year across all three loan types.

Demand for purchase loans was also lower for all loan types compared to the previous quarter and was the lowest for any fourth quarter over the past three years.  The net share of lenders who expect an increase in purchase mortgage demand over the next three months was about the same as it has been for recent fourth quarters."

Read more here.

Quotations from Mortgage News Daily "Mortgage Lenders' Biggest Fear: Other Mortgage Lenders"