RICHMOND, Va., May 5, 2014 /PRNewswire/ -- Almost 150,000 homeowners in the United States were able to stay in their homes or avoid foreclosure during the housing crisis due to efforts of the Homeowner Assistance (HOA) team at Genworth Mortgage Insurance (MI), the Raleigh, NC-based unit of Genworth Financial, Inc. (NYSE: GNW).
Between 2007 and the end of 2013, Genworth MI worked with borrowers and its mortgage servicing partners to help 149,891 homeowners recover from the effects of the Great Recession or other setbacks that resulted in mortgage delinquencies. Instead of potentially having to write off all or a portion of these delinquent mortgages, the HOA team's efforts kept almost $22 billion of mortgages on the books of lenders and investors as productive assets, based on the $185,500 average unpaid principal balance of mortgages insured by Genworth MI.
"Private mortgage insurance helps creditworthy borrowers navigate the path to homeownership years sooner than if they had to save for a 20 percent down payment," said Joe Hullinger, Genworth MI vice president of operations. "But our mission also includes helping borrowers who encounter financial difficulty stay in their homes." Hullinger said approximately 79 percent of all borrowers who received a workout were able to remain in their homes.
Genworth MI's HOA team can help distressed borrowers work with mortgage servicers to obtain loan modifications or other measures to temporarily or permanently lower their monthly mortgage payments so they can remain in their home. The HOA team also can help borrowers work with servicers to sell their home to avoid the costs and credit damage of the foreclosure process, if modified loan terms or payments are not a viable option. These measures collectively are called loan workouts.
Hullinger said that workouts during this housing cycle peaked in 2010 at more than 39,000, but Genworth MI helped more than 20,200 borrowers remain in their homes or avoid foreclosure in 2013. "By collaborating with our partner servicers, these workouts create a win for everyone involved," said Hullinger. "They help the homeowner, reduce losses for investors, allow the servicer to continue receiving mortgage payments, and avoid or lessen losses for Genworth MI."
Hullinger said that Genworth MI's redefault rate – the percentage of borrowers who remain current on their modified mortgage after their workout – is on par with the industry average for mortgage servicers. The company uses a variety of tools to ensure successful loan workouts, including predictive analytics to identify homeowners most at risk for delinquency – sometimes before they miss their first mortgage payment. This helps mortgage servicers reach out to distressed homeowners sooner to offer workout options. Workouts are more likely to be successful when offered to borrowers in the earlier stages of mortgage delinquency. The use of predictive analytics also helps ensure that workout options are offered equally to all qualified borrowers.
Hullinger said borrowers are more open to considering workouts now, than in the earlier days of the housing crisis. "Distressed homeowners may be more willing to take a workout now due to a belief that there's been overall economic improvement, the existence of better programs such as streamlined modification programs offered by the government-sponsored enterprises (GSEs), and improvements in servicer activity spurred by new guidelines from the Consumer Financial Protection Bureau and the GSEs," said Hullinger.
About Genworth Financial
Genworth Financial, Inc. (NYSE: GNW) is a leading Fortune 500 insurance holding company dedicated to helping people secure their financial lives, families and futures. Genworth has leadership positions in offerings that assist consumers in protecting themselves, investing for the future and planning for retirement -- including life insurance, long term care insurance, and financial protection coverages -- and mortgage insurance that helps consumers achieve home ownership while assisting lenders in managing their risk and capital.
Genworth operates through three divisions: U.S. Life Insurance, which includes life insurance, long term care insurance and fixed annuities; Global Mortgage Insurance, containing U.S. Mortgage Insurance and International Mortgage Insurance segments; and the Corporate and Other division, which includes the International Protection and Runoff segments. Products and services are offered through financial intermediaries, advisors, independent distributors and sales specialists. Genworth, headquartered in Richmond, Virginia, traces its roots back to 1871 and became a public company in 2004. For more information, visit genworth.com. From time to time, Genworth releases important information via postings on its corporate website. Accordingly, investors and other interested parties are encouraged to enroll to receive automatic email alerts and Really Simple Syndication (RSS) feeds regarding new postings. Enrollment information is found under the "Investors" section of genworth.com.
SOURCE Genworth Financial, Inc.