RICHMOND, Va., May 18, 2017 /PRNewswire/ -- Thirty-nine percent
of mortgage industry professionals believe that consumers' lack of
knowledge about the homebuying process is one of the greatest
impediments to first-time homebuyer demand, according to a recent
survey of mortgage industry executives by Genworth Mortgage
Insurance, an operating segment of Genworth Financial, Inc. (NYSE:
GNW). Following closely behind was lack of inventory (28 percent)
and excess student debt (27 percent). Rising interest rates came in
at six percent.
The survey was conducted at the 2017 Mortgage Bankers
Association Secondary Market Conference recently held in
New York City.
The greatest cause of confusion among first-time homebuyers is
the role of a 20 percent down payment. 28 percent of
respondents said consumers still mistakenly believe that a 20
percent down payment is a requirement for purchasing a home,
keeping many first-time buyers from achieving their homeownership
goals. Interestingly, an additional 41 percent of industry
executives surveyed believe that even among prospective borrowers
who understand a 20 percent down payment is not mandatory to
purchase a home, the belief persists that it would be difficult to
get into a house with less.
"While first-time homebuyers continue to drive the purchase
market, we believe many are staying on the sidelines due to the
misconception that a 20 percent down payment is required to secure
a mortgage," said Rohit Gupta, CEO
of Genworth Mortgage Insurance. "There are various low down payment
options available today that allow prospective homebuyers to reach
their dreams of homeownership sooner. It is crucial that, as an
industry, we proactively educate eligible borrowers about solutions
that will enable them to buy a home when they're ready."
As a key player in the private mortgage insurance space,
Genworth Mortgage Insurance continues to explore solutions that can
help facilitate a seamless process for lenders as well as
consumers. Private mortgage insurance is an effective
solution for credit worthy buyers entering the purchase market with
less than 20 percent to put down, without them having to wait for
what can take many people several years to save that amount.
Following are additional findings from this survey, which
provide insights into the industry's appetite for technology
integration, front-end credit risk transfer and underwriting
standards:
Industry Appetite for Increased Technology Growing but
Faces Integration Headwinds
While the industry is overwhelmingly aware of the need for improved
technological infrastructure for originating mortgages (93
percent), respondents are divided on what is holding the industry
back. Outdated mortgage technology platforms requiring extensive
overhauls (35 percent), the lack of a true understanding of the
requirements for integration (29 percent), and the rising
associated costs (29 percent) were seen as the biggest obstacles to
bringing better technology into the home lending
process.
Experts Excited About Opportunity for Deeper
MI
Eighty-five percent of respondents believe front-end credit risk
transfer with deeper mortgage insurance would have a positive
impact on the mortgage industry. This majority believes that deeper
MI would lower taxpayer risk, with many in this group believing
that it would do so without increasing borrower costs. Only 15
percent of those surveyed saw no need to change the current system
of relying on capital markets for back-end credit risk transfer
deals.
Industry Divided on Underwriting Standards
While sentiment about today's underwriting standards is still
divided, there is a consensus that credit quality has improved.
Exactly half of industry executives surveyed see today's mortgage
underwriting standards as too high, resulting in quality borrowers
being excluded, and 43 percent think that today's current standards
are appropriate for the market. Only seven percent thought that
today's standards were too low.
Methodology: The Genworth survey of 150 mortgage
professionals was administered in person at the Mortgage Bankers
Association Secondary Conference in New
York City from May 1-2.
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 postings on its corporate website. Accordingly,
investors and other interested parties are encouraged to enroll to
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feeds regarding new postings. Enrollment information is found under
the "Investors" 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 Financial, Inc.