Genworth Mortgage Insurer is reporting a drop in business activity in the second quarter of 2010, as a result of a drop in the number of first home buyers in the market and reduction in loan lvrs by mainstream lenders. Borrowers are slowly coming to terms that if you do not have sufficient deposit it is difficult to qualify for a home loan. When 100% and even 106% home loans were available there was far more demand for mortgage insurance than there is today.
The insurer has experienced a 41% decline in new insurance written year-on-year, and a 10% drop on the previous quarter.
However, the group’s operating earnings in Australia increased 59%, primarily from cumulative benefits from a tax law change of $16m and an improved loss experience.
The book value of Genworth mortgages in Australia was at quarter end US$1.5bn (A$1.65bn).
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