Genworth Provides 42% More Mortgage Workouts in 2009

The mortgage insurer Genworth Financial (GNW) provided loan workouts on $2.6bn worth of mortgages in 2009, a 42% increase from 2008, according to its Foreclosure Prevention Scorecard. Genworth partners and servicers completed 19,639 workouts last year, and 80% of the workouts “cured” the mortgage – meaning the borrower stayed in the home and became current on the payments. The other 20% of the workouts went through either a short sale or a deed-in-lieu of foreclosure. “A few years ago, what was considered the smart decision was avoiding mortgage insurance and going into a piggy back,” said Chris Antonello, a senior vice president in the Genworth mortgage insurance unit told HousingWire. “Those people who are in that situation today are having an awfully hard time getting a workout and getting a person who’s holding the first lien and the second lien to come to some agreement on who’s going to pay what first. Borrowers are not getting very far in that situation.” Genworth put 10% of the workouts through the Home Affordable Modification Program (HAMP), equaling almost 2,000 modifications. The US Treasury Department launched HAMP in March 2009 to allocate capped incentives to borrowers for the modification of loans on the verge of foreclosure. Servicers participating in the program totaled more than 66,000 permanent modifications through December. At the program’s outset, servicers rushed borrowers into a three-month trial, hoping to collect the documentation for a permanent modification along the way. When the first permanent modifications report underwhelmed the Treasury, adjustments were made. Beginning June 1, 2010, no borrower can enter into a HAMP trial without submitting all of the proper documentation. Alan Goldberg, director of strategic loss initiatives at Genworth said because of the policy change, HAMP numbers could be on the rise. “As changes are made to the program, like the documents being obtained upfront and the alternate modifications that borrowers will be able to go into that are being worked on, I think we’ll see that modifications will continue to increase,” Goldberg said. Write to Jon Prior.

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