RICHMOND, Va., June 21, 2016 /PRNewswire/ -- Genworth
Mortgage Insurance ("Genworth"), a subsidiary of Genworth
Financial, Inc. (NYSE: GNW), today released results from its study
of industry executives conducted at the 2016 Mortgage Bankers
Association Secondary Conference in New York City. Key
findings showed that, when forecasting existing home sales, 78
percent of respondents expect first-time homebuyer market share to
either continue at current levels or increase by at least three
percentage points. This surge in new purchasers has driven
demand, leading to tighter inventory.
"Our industry, via this year's survey data, acknowledges the
first-time homebuyer's rise as a key component of the homeownership
mix," said Rohit Gupta, President
and CEO of Genworth Mortgage Insurance. "To support this demand, we
must stay true to the great strides we have made in improving
underwriting quality, making private capital available, and
expanding the availability of prudent and affordable low down
payment mortgages. Under these circumstances, it is important
that all industry participants continue work to ensure we have an
accessible, efficient, and innovative environment for new mortgage
originations."
First-Time Homebuyers Creating Excess Demand
As
mentioned, when forecasting existing home sales, almost eight of
every ten (78 percent) respondents expect first-time homebuyer
market share to either continue at current levels (47 percent chose
this option) or increase by at least three percentage points (31
percent chose this option). Twenty-two percent expect to see a
decrease of at least two percentage points. The added demand
created by this group has played a factor in the tightening
inventory seen in today's housing market.
But Home Accessibility Still an Issue
When
identifying the top obstacle limiting borrower access to mortgage
credit, 64 percent of respondents cited the lack of a sufficient
down payment. An additional 16 percent believe a lack of adequate
income when applying for a loan was the greatest obstacle. Nine
percent indicated home price affordability was the biggest hurdle,
and an additional eight percent cited poor borrower credit scores.
Only three percent of respondents believe there are not any major
hurdles with borrowers' access to mortgage credit in today's
environment.
So Lenders Look for Alternate Solutions to Meet
Demand
The return of piggyback mortgages (80-10-10s) is
a growing concern for industry executives. At this year's MBA
Secondary Conference, 49 percent of respondents expressed concern
about the return of this vehicle, whereas only 38 percent of
respondents voiced the same concern in Genworth's 2014 MBA Annual
Conference survey. Of the 49 percent who expressed concern in 2016,
31 percent believe those who sign up for these loans may not
understand the full risks involved, and 18 percent believe
borrowers run the risk of over-levering themselves. The 51 percent
of respondents who do not view piggybacks as a concern believe
borrowers are responsible for their own decisions.
Technology: Industry Sentiment Still Divided
While many firms in the industry have begun investing in improving
their technological infrastructure, these investments can carry
long lead times before showing a true impact. This seems to
be influencing the industry's perception of where it ranks in terms
of technological integration. Almost half of respondents (49
percent) believe that technological integration into the home
lending process is subpar. This represents only a three percent
improvement from when Genworth asked the same question to industry
executives at the 2014 MBA Annual Conference (52 percent at the
time believed technology integration was subpar).
Thirty-eight percent of respondents believe that technology
integration today is average, and only 13 percent believe
technology integration is strong.
Methodology: The survey of 120 mortgage professionals was
administered in person at the Mortgage Bankers Association
Secondary Conference in New York
City from May 16-17.
About Genworth Financial
Genworth Financial,
Inc. (NYSE: GNW) is a Fortune 500 insurance holding company
committed to helping families achieve the dream of homeownership
and address the financial challenges of aging through its
leadership positions in mortgage insurance and long term care
insurance. Headquartered in Richmond, Virginia, Genworth traces its roots back to
1871 and became a public company in 2004. For more information,
visit genworth.com.
From time to time, Genworth releases important information via
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section of genworth.com. From time to time, Genworth's
publicly traded subsidiaries, Genworth MI Canada Inc. and Genworth
Mortgage Insurance Australia Limited, separately release financial
and other information about their operations. This information can
be found
at http://genworth.ca and http://www.genworth.com.au.
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SOURCE Genworth Mortgage Insurance