Foreclosure Prevention Soars 81% at Genworth
Mortgage insurer Genworth Financial (GNW) helped servicers exercise foreclosure prevention workouts on $3.4bn of mortgages four-quarter period ending March 31, 2010, from $2.6bn in the previous quarter, the company said today. It marks an 81% increase in the dollar amount of saved mortgages, compared with the same period one year earlier. During the most recent 12-month period, Genworth partnered with lenders and servicers to complete 23,360 mortgage workouts. “Genworth is totally committed to helping distressed borrowers avoid foreclosure and protect their credit” said Alan Goldberg, vice president of homeowner assistance for Genworth’s US mortgage insurance business. “We are especially happy with the growing success of the Obama Administration’s Home Affordable Modification Program (HAMP)," Goldberg added. "We saw HAMP workouts increase 74% increase [sic] in the first quarter of 2010 over the previous quarter, amounting to more than $750m in mortgage dollars saved.” The uptick in HAMP workouts comes after a shaky first year of changing program requirements. Servicers participating in HAMP had to create processes, hire resources and adjust or create systems in the face of exceptional volumes of troubled mortgages, according to Goldberg. "Stated income to begin the trial period became an issue because borrowers could not ultimately supply required documentation, and could not be converted to permanent modifications," he tells HousingWire. "Borrowers were making many more than the required three payments. Third-party vendors entered the market to assist with volumes and collection of mod docs." He added: "As of today, servicers have improved processes, and we are beginning to see a good flow of permanent modifications being converted in the Genworth portfolio.” On a national basis, 80% of total workouts were classified as "cures," meaning the borrower was able to become current on the mortgage. The company's overall cure rate remains above 80% in 35 of 50 states. Loan modifications accounted for 33% of all workouts, while HAMP mods followed at 24%. Repayment plans took another 19% of workouts, short sales accounted for 18% and Genworth's Homesaver Advance program took another 4%. Other workout types accounted for the remaining 2%: Several sand states led the overall foreclosure prevention efforts, with $347m of mortgages California, $342m of mortgages in Florida, and $175m of mortgages in Arizona receiving workouts. Following the top states were Texas ($173m of mortgages), Illinois ($167m), Georgia ($164m), New York ($152m), New Jersey ($144m), North Carolina ($122m) and Maryland ($107m). Among these top 10 states, California and Arizona saw triple-digit increases in workouts. Phoenix led all cities in terms of mortgage dollars saved ($51m), followed by Chicago ($40m), Miami ($31m), Houston ($22m) and Charlotte ($19m). Each mortgage workout amounted to, on average, a savings of $144,730 per borrower. “We are seeing quarter over quarter improvements in re-default rates, likely being driven deeper payment reduction,” Goldberg tells HousingWire. Write to Diana Golobay. Additional reporting by Jon Prior. Disclosure: the author holds no relevant investments.