ISSUE 3: LOW-DOC LENDING IN AUSTRALIA

Issue 3 of Genworth’s spotlight series discusses the emerging trends of low-doc lending in Australia, stating that the main factor driving demand for this type of mortgage is the growing number of contract and self-employed workers in Australia.

• Over 39% of the Australian workforce at the beginning of 2008 was deemed to be self-employed, highlighting the potential for the product to grow.
• While there is greater risk associated with offering loans to self-employed borrowers, with proper safeguards in place, and risk offset by LMI, the opportunities for prudent lenders should continue to expand.