Genworth Mortgage Insurance Corp., a division of Genworth Financial (GNW), removed 136 metropolitan markets from its declining and distressed markets list, potentially loosening loan-to-value (LTV) and down payment standards in these areas. Genworth calculates a market as declining based on certain statistics including borrower performance, according to Terry Souers, a spokesman for Genworth's US mortgage insurance business. The removal of these metros from the distressed list leaves room for higher LTVs among the mortgages Genworth will insure there, meaning local borrowers potentially can bring less cash to the closing table for down payment purposes. While metros remain on the declining and distressed list, the LTV standards are tighter. "People with equity in their homes are more likely to be able to stay in those homes, even in hard times," Souers says. "It’s unfair to put someone into a home when there is a real possibility that they could be underwater before pictures were hung on the walls." An expansion of LTV standards in these areas indicates at least a bit of recovery in terms of borrower performance. Genworth's letter to lender customers (available to download here) attributes the removal of the metros from the declining and distressed list to "continued changes in the mortgage market and our ongoing evaluation of loan performance." In the metros affected by the changes, loans with LTVs greater than 90% -- up to 95% -- and with borrower credit scores of less than 700 will be eligible on or after Oct. 1, 2009 to receive mortgage insurance at Genworth's "nonstandard" rates, according to the letter. The 136 markets removed from the declining and distressed markets list include Baton Rouge, LA; Charlottesville, VA; San Antonio, TX; Fort Worth-Arlington, TX; and Kansas City, MO. Despite the removals, however, 41 individual metro areas 14 states remain on the declining and distressed list. A mix of so-called "sand states" and a handful of Northeast states populate the list, alongside Hawaii, Oregon and Utah. Write to Diana Golobay. Disclosure: The author held no relevant investment positions when this story was published.