Many borrowers are unaware of their homebuying power and are underestimating their mortgage eligibility, according to a recent study by Genworth Mortgage Insurance, a unit of Genworth Financial, Inc. The results showed that 66 percent of the 113 lending executives surveyed feel that many borrowers who are eligible for mortgages do not feel that they can realistically purchase a home.
“Everything that private mortgage insurance stands for is about helping more borrowers become homeowners,” said Rohit Gupta, president and CEO of Genworth Mortgage Insurance. “Many qualified borrowers are uncertain about their own eligibility so it’s critical for our industry to be proactive about encouraging homebuyer education as a tool to help borrowers fully understand how the home buying process will work for them.”
When questioned about the Federal Housing Administration’s (FHA) January 2015 balance sheet premium reductions, 65 percent of survey respondents noted that it will take between one to three years for the FHA to meet its required capital levels following its January premium reduction. In addition, 88 percent of those surveyed do not foresee a major impact to FHA indemnification levels as a result of the premium reductions, believing they will either remain flat or increase by one to five percent over the next 12 months.
Senior executives displayed the most concern about government policy-related issues. Genworth found that 53 percent of senior executive respondents feel that their business will be impacted by the Private Mortgage Insurance Eligibility Requirements (PMIERS), while only 38 percent of non-senior executives expressed the same concern. Compared to 37 percent of the industry as whole, 44 percent of senior executives showed more concern about the revisions to the PMIERs by the Fannie Mae and Freddie Mac.
In order to provide homebuyers with mortgage education tools, Genworth made its Homebuyer Education website more user-friendly. The new education course allows user to pace themselves and only have 12 registration fields, compared to the industry average of 19.
“Our new Homebuyer Education website provides loan officers with a great, no-fee resource for helping borrowers with the home loan process whether mortgage insurance is needed or not,” said John Clifford, SVP of commercial operations at Genworth. “The more we can do to encourage them and their borrowers to prioritize homebuyer education, the easier it will be to achieve the goal of successful homeownership.”