Genworth: Rising Rates, Alternative Mortgage Products Biggest Market Challenges
Genworth Mortgage Insurance, Richmond, Va., said a survey of mortgage professionals at this spring’s Mortgage Bankers Association National Secondary Market Conference & Expo cited rising mortgage rates the re-emergence of alternative mortgage products as biggest challenges facing the mortgage market this year.
The survey of 105 mortgage industry professionals took place in May. Of those, 79 percent cited both rising inflation as a trigger of higher interest rates (49 percent) and re-emergence of alternative mortgage products (30 percent) as biggest challenges. Another 17 percent cited loosening credit standards; 4 percent cited “excessive liquidity” in the mortgage market.
“Rising interest rates and inflation, when combined with today’s inventory shortage, are accelerating home price appreciation, causing some lenders and consumers to explore less-tested methods for financing home purchases,” said Genworth President and CEO Rohit Gupta. “Despite this, private mortgage insurance is experiencing another strong year, particularly among first-time homebuyers, as the majority of consumers and lenders still prioritize financing solutions backed by tested, well-capitalized businesses.”
The survey also found the majority of industry executives believe removing legal uncertainty for lenders originating FHA loans (44 percent) and lower compliance cost for lenders (30 percent) are the best ways to improve access to credit in the mortgage market. Additional responses included adoption of alternative credit scores (14 percent) and more ambitious affordable housing goals for the GSEs (12 percent).
Other survey findings:
–Ninety-two percent of respondents said given the recent rise in Debt-to-Income limits, compensating factors should play a role for an above 45-DTI applicant. Only 8 percent said that high DTI limits will facilitate more credit access, allowing more individuals to achieve homeownership without adding risk to the market.
–A majority of respondents (54 percent) identified easily customizable dashboards for organization-wide production management as the top service they want integrated into Loan Origination System platforms. Respondents also noted the ability to share screens and data with a customer (21 percent) and the ability to upload lists of closed loan data to active commitments (20 percent) as desired services.
–Sixty-eight percent of respondents said that they have begun to integrate or have already fully integrated GSE Day One Certainty tools into their processes. However, about one-third of respondents (32 percent) report that they have still not begun using third-party data validations on DU/LP loans.
