Insurer Genworth Helps over 15,000 Avoid Foreclosures

Virginia-based insurance firm Genworth Financial does not only help banks manage their mortgage portfolio; it also helps homeowners avoid foreclosures.

During the one-year period ended March 2009, Genworth has helped 15,406 mortgage borrowers nationwide avoid foreclosures. This number represented a 66.7 percent increase from the number Genworth helped during the prior year. In Virginia, Genworth helped 275 borrowers avoid foreclosure, an increase of 112 percent from the one-year period ended March 2008.

Genworth sells over $3 billion worth of mortgage insurance a year, helping stabilize banks if mortgage borrowers fail to pay. Genworth’s mortgage policies cover almost $160 billion worth of mortgages.

The insurance firm takes pride in the fact that the increase rate in the number of borrowers it has helped is even higher than the increase rate for foreclosures nationwide and in Virginia.

During the past one-year period ended March, Genworth has prevented foreclosures on over $2 billion worth of mortgage loans.

According to RealtyTrac‘s studies, foreclosure filings in April increased by 32 percent nationwide while Virginia foreclosure filings increased by 47 percent from April 2008.

Chris Antonello, a mortgage insurance vice president at Genworth, admitted the workouts to prevent foreclosures helped also Genworth, but he reiterated that the workouts kept families in their homes and helped stabilize neighborhoods.

Genworth’s foreclosure prevention efforts have been supplementing other foreclosure avoidance programs, such as the Obama administration’s Making Home Affordable program and the Richmond-based nonprofit Housing Opportunities Made Equal. The nonprofit has been receiving about 350 phone calls for help every month.

Genworth executive Alan Goldberg said the most common workout done to help homeowners prevent foreclosures is loan modification. This workout is similar to refinancing because it typically adds total arrears to the total amount of loan owed and then lengthens the term of the loan to give borrowers more time to pay. It also reduces the mortgage rate so that the monthly payments are reduced, enabling borrowers to keep up with the payments.

Typically, Genworth takes the initiative to help homeowners in default when mortgage payment processors request for help in behalf of distressed homeowners or when Genworth employees examine mortgage lenders’ reports on defaulting borrowers.

Goldberg said that a workout usually just involves describing a homeowner’s financial situation, explaining the reasons for the missed payments and making some phone calls with mortgage lenders.

According to Goldberg, Genworth has been able to prevent foreclosures in approximately 90 percent of the workout processed it pursued.

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