able concern. Q12 wondered about house prices, whether they would rise in 2013 and if so, by how much? Twelve of the 25 folks surveyed expect prices to increase this year and by an average of 6.6 percent. The range of house price gains spanned from three percent to 15 percent. Four of the execs surveyed expect double-digit increases. Interestingly, no one expected falling prices or even flat prices. Q13 queried whether the execs saw liquidity in the jumbo market continuing to improve, and whether they would characterize the jumbo market as “healthy,” (however they might define that term). Twenty-three of the 25 answering the question agreed the jumbo market’s liquidity was improving, but only seven of 24 executives viewed the sector as healthy.
Q14 asked about mortgage brokers, specifically whether they expected an increase in the number of broker wholesalers and in broker market share. Seventeen said they didn’t expect growth in outlets or share versus seven who did. Q15 sought to ascertain if mortgage production or mortgage servicing would be profitable in 2013. Scaled from one through 10, the averages were 7.2 for production profitability and 6.8 for profits from servicing. There were 11 responses ranked at eight or above, and only one response of five or below, a three. Q15 also inquired if their firms were ahead or behind in their 2013 goals for originations and profits. Fourteen of the executives’ firms were ahead, eight were behind and three were flat to their budgeted goals.
Q16 asked if the surveyed firms were selling or retaining their servicing. Sixteen firms are retaining servicing, seven are selling it, and two others do both. Eighteen of 23 respondents aren’t buying MSRs, so seven are. A vast majority of executives now think that non-banks have an advantage over banks in buying and selling servicing, 23 of 24. Q17 inquired about whether the financial crisis changed consumers’ attitudes toward homeownership. Yes, the executives responded by a margin of two to one, it has altered consumer attitudes. Q18 wondered if the companies entered 2013 with more committed capital than a year earlier. Yes, said 13, but another 11 said continued on page 43
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group average was 36 percent, with a range of responses from five percent to 80 percent. Q4 questioned whether folks expected purchase activity to strengthen significantly this year. Yes, said 19 executives, compared to six who begged to differ. The latter saw some improvement but wouldn’t characterize it as “significant.” Q5 asked what percentage of their conventional production was over 80 percent LTV. The group average was 23 percent, but 15 of 25 respondents rated it below the group average. Meanwhile, also in Q5, the mean was 87 percent, with 15 of 24 respondents indicating that 90 percent or more of their FHA, VA and USDA originations were 95 percent LTV or greater. Q6 asked executives if the GSEs would be privatized or eliminated in the next five years. No, said 18 of the 22 respondents. Q7 wondered whether the executives thought that FHA market share would increase, decrease or stay the same in 2013. Fifteen expect a decrease in FHA share compared to nine who expect no change and one who expects an increase. Q8 inquired if the administration’s push to expand FHA’s credit box was a good idea? Not really, said 19 of 24 surveyed. Q8 also asked if the executives felt firms would go along with any such loosening. No, said 13, compared to 10 who felt the pressure to ease would force participants to go along with the guidelines (as most did in the mid-aught years) even if it wasn’t in their best interests. Q9 sought to learn if the executives’ firms had changed their servicing strategies in recent years. Twelve said they had versus nine who admitted no change in servicing strategy. Q9 also wanted to learn if Basel III was affecting their firm’s mortgage banking strategies. No, said 14 executives, compared to eight who felt Basel III proposals were likely to affect their corporate strategies. Q10 wondered if Basel III’s proposed mortgage servicing right (MSR) treatment would affect their companies over the next decade were it to be implemented as currently proposed. Scaled one through 10, the average response was a 5.8, with a very wide range of from zero to nine. Fourteen of the 24 executives surveyed ranked the impact at six or higher. Asked if they felt the regulators would loosen the proposed treatment before adopting the new capital rules, 16 indicated they would likely do so versus eight who felt a loosening was unlikely. Q11 asked if appraised values, especially in the jumbo market, were still a concern. Indeed they are, responded 16 executives, compared to six who felt appraisals were not a size-