Lenders Anticipate Higher Profits, Less Drag from Compliance Costs; Rates Remain Near Recent Highs

Mortgage lenders are feeling more positive about profits this quarter than they did in the second quarter with 28 percent of those surveyed by Fannie Mae expecting an increase over the next three months. Seventeen percent expect lower profits and 55 percent do not anticipate a change. It was the third straight quarter that lenders reported a net positive profit margin outlook, and was a significant increase from the third quarter of 2015. The largest year-over-year increases in net profit margin outlook were seen among smaller institutions and credit unions. Fannie's third quarter Mortgage Lender Sentiment Survey asked the optimistic respondents what they expected would drive their higher profits and the top two reasons given were operational efficiency and technology and consumer demand. The

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