RICHMOND, Va., Nov. 30, 2016 /PRNewswire/ -- Genworth
Mortgage Insurance1, an operating segment of Genworth
Financial, Inc. (NYSE: GNW), today released results from a survey
of industry executives conducted at the 2016 Mortgage Bankers
Association ("MBA") Annual Convention and Expo in Boston, MA. Key findings showed that 50
percent of industry executives believe underwriting standards are
overly restrictive, compared with 61 percent of respondents at the
2014 MBA Annual Convention and Expo in Las Vegas. The findings, detailed below, also
measure sentiment on affordability challenges, regulatory
requirements, industry headwinds and technology.
"This year's survey data is consistent with the industry's
emphasis on improving credit access for more home-ready
homebuyers," said Rohit Gupta,
President and Chief Executive Officer, Genworth Mortgage
Insurance. "While there is certainly more to be done on this
front, we are pleased by the gradual progress we have seen over the
past two years."
Underwriting: Industry begins acknowledging easing of
credit standards
Fifty percent of
respondents believe overly tight underwriting standards are hurting
homeownership opportunities for U.S. homebuyers, while 12 percent
feel that tighter underwriting restrictions are still needed. The
remaining 38 percent believe the current standards are
appropriate.
When presented with the same question in Genworth Mortgage
Insurance's survey during the MBA's Annual Convention and Expo in
2014, 61 percent believed overly strict underwriting was harming
the dream of homeownership, while 25 percent supported tighter
underwriting restrictions and 14 percent viewed the standards at
the time as appropriate. The 24 percentage point increase in
executives who believe the current standards are appropriate
reflects a higher comfort level with today's credit
environment.
Affordability: High down-payment requirements,
stringent credit requirements, viewed as pricing out the first-time
homebuyer
Despite improving credit access,
many potential homebuyers are still being priced out of the
purchase market and the industry is divided on the root cause.
Thirty-seven percent of respondents cited high down-payment
requirements as the biggest driver. Thirty-three percent cited
stringent credit requirements, and an additional 30 percent believe
a shortage of single family homes for sale was the greatest
obstacle.
Regulatory: Respondents believe that GSE Borrower
Requirements on 97% LTV Loans could be eased
Seventy-one percent of respondents view the impact of borrower
requirements placed by the GSEs, or government-sponsored
enterprises, on 97% LTV loans either negatively because they
restrict mortgage credit (which in turn shrinks the purchase
market) or neutrally because they haven't had a major impact on
originations. The remaining 29 percent view the impact as
positive because they help mitigate risk for originations.
These results suggest that respondents still think that more can be
done to prudently expand the credit box.
Industry Headwinds: Increased compliance burdens and
access to credit viewed as the biggest threats to the housing
industry
Forty-five percent of respondents
identified increased compliance burdens as the biggest threat to
the housing industry over the next 12 months. An additional 32
percent cited borrower access to credit as the biggest threat, 20
percent believe the biggest threat is the current rising rate
environment, and three percent cited lack of progress on GSE reform
as the most severe industry threat.
Notably, Genworth asked this same question at the 2015 MBA
Annual Convention and Expo in San
Diego, with almost identical results (about one percent
variation on all four responses). This shows that, one year after
the October 2015 implementation of
the TILA-RESPA Integrated Disclosure (TRID) regulation and
approximately one year ahead of the new Home Mortgage Disclosure
Act (HMDA) amendments to Regulation C set to take effect in
January 2018, we are still in a
period of regulatory evolution that is top of mind for our
industry.
Technology: Overwhelming support for automation in
mortgage origination
Ninety-one
percent of respondents believe increased automation in the mortgage
origination process will have a positive impact that facilitates
and accelerates originations while improving accuracy on
application forms. An additional eight percent have not seen a
major resulting change in either direction, and one percent viewed
automation as a negative that will hurt originations and overlook
red flags in borrower profiles. As industry demand increases for
faster turn times and more streamlined originations, so too will
the demand for firms with top technological infrastructure.
"As an industry," Gupta continued, "we have implemented
significant improvements in our technological infrastructure and we
are poised to see positive steps on housing policy. It is important
that our industry maintain a strong ongoing dialogue that maximizes
these improvements and supports the strengthening purchase
market."
Methodology: The survey of 226 mortgage professionals was
administered in person at the Mortgage Bankers Annual Convention
and Expo in Boston, MA, from
October 24-25, 2016.
About Genworth Financial, Inc.
Genworth
Financial, Inc. 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.
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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.
1 All mortgage guaranty insurance is underwritten by
Genworth Mortgage Insurance Corporation.
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SOURCE Genworth Mortgage Insurance