"This year's survey data is consistent with the industry's emphasis on improving credit access for more home-ready homebuyers," said
Underwriting: Industry begins acknowledging easing of credit standards
Fifty percent of respondents believe overly tight underwriting standards are hurting homeownership opportunities for
When presented with the same question in
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.
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
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