Mortgage insurer MGIC today warned that a battered US lending industry faced further pain when a credit crisis peaks next year.
Speaking with Mortgage Business MGIC Investment Corporation chairman and chief executive officer Curt Culver predicted that the US mortgage industry is in for a rough ride when borrowers are hit hard as teaser rates end over the coming year.
“All the problems suffered by US lenders so far have been down to liquidity; the impact of credit is yet to come,” said Culver.
Speaking about the domestic market however Culver is confident that the Australian lending industry will remain healthy.
“There have been some adjustments to risk in the Australian market in response to events overseas, but this is a fundamentally different lending environment,” he said.
“While the Australian lending industry has suffered because of global liquidity issues, this is a variable-rate lending environment. Combined with a robust housing market lenders should be able to weather the storm,” said Culver.
