Lender Intelligence · Q2 2026 · FRC Research
OFI = 47.
What Does This Mean
For Your Credit Policy?
The Overlay Friction Index maps where competitors are tightening, where market opportunity is opening, and what the data says about next quarter. Built from 7 years of CFPB HMDA data. Updated quarterly.
Q2 2026 Market Signals
Where the Opportunity Is
OFI = 47 nationally. But the opportunity is not uniform. Segment and geography matter. Here's where large banks have pulled back and where market share is available.
🟢 Opportunity
FHA Purchase
58.5%
Large bank FHA denial rate. Market leader pulled back to 848 originations. 80K+ annual demand unserved by big banks.
🔴 Caution
Conventional
OFI ↑
Conventional overlay re-tightening. Large banks already at 42%+ denial rate. Competitive pressure intensifying.
🟡 Monitor
VA Loans
16.1%
Lowest denial rate nationally. Stable. VA specialist lenders dominating. Entry window narrowing.
Competitor Overlay Map — 2024 HMDA
Where Your Competitors Stand
Seven years of HMDA data reveals exactly how major lenders behave across market cycles. This is the competitive intelligence your credit committee needs.
| Lender |
FHA Denial Rate |
Conv Denial Rate |
FHA Volume |
Signal |
| UWM |
19.9% |
12.0% |
74,402 |
Aggressive — low overlay |
| National Average |
22.5% |
21.0% |
826,925 |
Baseline |
| Rocket Mortgage |
28.4% |
16.8% |
66,721 |
FHA active, conv efficient |
| loanDepot |
37.0% |
18.4% |
20,996 |
FHA overlay elevated |
| Wells Fargo |
58.5% |
30.9% |
848 |
Exited FHA — market open |
Source: CFPB HMDA Data Browser 2024. Full dataset: financeratecalc.com/hmda-master-dataset.json (CC BY 4.0)
Credit Policy Scenario
The Arbitrage Window
Q2 2026 Scenario — FHA Segment
Large banks have exited the FHA market systematically. Wells Fargo: 63% volume decline since 2018, denial rate now 58.5%. JPMorgan: FHA originated 1,372 — symbolic presence only.
Meanwhile, FHA home purchase applications remain stable at 80,000–100,000 per quarter regardless of rate environment. These borrowers have no alternative — they cannot move up to conventional.
At OFI 47: A lender that reduces FHA overlay from 640 to 600 FICO minimum this quarter captures demand that major banks are actively turning away. This window existed at OFI 38 (Q4 2025) and remains open at OFI 47. It narrows if OFI drops below 35.
OFI Accuracy — Backtest 2018–2024
Does OFI Actually Predict?
OFI correlation with mortgage rates: r = 0.902. Correlation with FHA denial rate trends: r = 0.698. Here's how OFI signals compared to what actually happened:
2021 Q4
OFI 32 — LOW
FHA denial 18.9% · Easiest market
✓ Correct
2022 Q2
OFI 48 → 52
FHA denial jumped to 24.1%
✓ Correct
2022 Q3
OFI 52 — WARNING
Wells Fargo FHA peaked at 60.4%
✓ Correct
2025 Q4
OFI 38 — EASE
Brief market loosening confirmed
✓ Correct
2026 Q2
OFI 47 — RE-TIGHTENING
Current — monitoring
⟳ Live
Full methodology and data: financeratecalc.com/ofi-methodology.html · financeratecalc.com/ofi-evidence.html
OFI Lender Intelligence — Pricing
Get the Full Picture
OFI public data is free and always will be. The Lender Intelligence Report goes deeper — segment analysis, state-level breakdown, competitor overlay mapping, and credit policy recommendations.
Public
Free
Always
- National OFI score
- Quarterly historical trend
- HMDA master dataset (CC BY 4.0)
- OFI methodology
Quarterly Report
$2,500
per report · Q3 2026 launching
- Segment OFI (FHA / Conv / VA)
- State-level opportunity map
- Competitor overlay analysis
- Credit policy recommendation
- Executive summary (2 pages)
Annual Subscription
$8,000
4 reports · Q3 2026 launching
- Everything in Quarterly
- Custom segment focus
- Priority Q&A with FRC Research
- Early access to new data
Not financial advice. OFI is an observational market metric. All HMDA data sourced from CFPB HMDA Data Browser (public federal data, CC BY 4.0). Lender Intelligence Report launches Q3 2026. © 2026 FinanceRateCalc Research Division. Ziya Y., 23-year banking professional.