RICHMOND, Va. – Nov. 30, 2016 – Genworth Mortgage Insurance again surveyed mortgage industry executives at the 2016 Mortgage Bankers Association (MBA) Annual Convention in Boston and found that fewer now see mortgage underwriting standards as overly restrictive.
Overall, 50 percent of industry execs believe underwriting standards are overly restrictive, but that’s a drop from the 61 percent who said so at the 2014 MBA annual convention.
“This year’s survey data is consistent with the industry’s emphasis on improving credit access for more home-ready homebuyers,” says Rohit Gupta, president and chief executive officer at 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: 50 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. Two years ago, 61 percent believed overly strict underwriting was harming the dream of homeownership, 25 percent supported tighter underwriting restrictions and 14 percent viewed the standards as appropriate.
Affordability: Despite improving credit access, many potential homebuyers are still priced out of the purchase market, but the industry is divided on the root cause: 37 percent of respondents cited high downpayment requirements; 33 percent cited stringent credit requirements; and 30 percent cited a shortage of single-family homes for sale.
Regulatory: 71 percent of respondents view GSE (government-sponsored enterprises, such as Fannie Mae and Freddie Mac) requirements on 97 percent LTV (loan to value) loans either negatively or neutrally. 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: 45 percent cited compliance burdens as the biggest threat to the housing industry over the next 12 months; 32 percent cited borrower access to credit; 20 percent pointed to the current rising rate environment; and 3 percent cited lack of progress on GSE reform.
Technology: 91 percent believe increased automation in the mortgage origination process will improve accuracy on application forms. An additional 8 percent have not seen a major change in either direction; and 1 percent view automation as a negative that will hurt originations.
© 2016 Florida Realtors®
Source: Florida Realtors Feed