Good News On Foreclosure Prevention Scorecard

Written by: Phoebe Chongchua / Realty Times

Private mortgage insurance helped save families from foreclosures this year, claims Genworth Financial. The company recently released its Foreclosure Prevention Scorecard that touts that more than 11,000 homeowners were helped in the last 12 months.

The top 10 states where a form of a "workout" -- (repayment plan) or loan modification -- to avoid foreclosure occurred were Texas, Florida, Georgia, Ohio, Pennsylvania, Michigan, North Carolina, Illinois, New York, and Indiana.

"Foreclosure doesn't benefit anybody. As a mortgage insurer, we're trying to do our best to work with the borrower and keep that person in the home as well as work with the mortgage servicer and the investor so that all parties win," says Alan Goldberg, Vice President Homeowner Assistance Program at Genworth Financial Mortgage Insurance.

Some borrowers believe that private mortgage insurance doesn't benefit them, but the company's Scorecard shows differently.

Chris Antonello, Senior Vice President of Marketing, Genworth Financial Mortgage Insurance discussed the Scorecard with me. It revealed that workouts increased 56 percent over the same period last year. Nationally, homeowners were helped mostly by repayment plans and loan modifications. Repayment plans accounted for 50 percent of all workouts, and loan modifications 32 percent. Antonello says that, nationally, 89 percent of homes were rescued. "Basically nine out of 10 homeowners that we deal with are able to stay in their home. The balance are people who either have to go through a short sale or deed in lieu -- they do leave the home but it's only 11 percent," says Antonello.

"We're also trying to highlight that a significant amount of these borrowers have monthly payments of under $1,000 which is important because people who need the help are getting it," says Antonello. The scorecard shows that 53 percent of those helped have monthly payments under $1,000.

Goldberg says Homeowner Assistance Program works directly with the mortgage servicers and the borrowers when there is a problem. "If the mortgage servicer hasn't put the borrower on a workout by the fourth month of delinquency, we start contacting the borrowers -- and we have a whole campaign where we send them written material and a calling campaign to let them know that workout assistance is available and that we can help them avoid foreclosure."

Goldberg's team seeks to create a repayment plan that works for all or a loan modification.

"If borrowers cannot afford the house, then we help them to sell the house and still avoid foreclosure," says Goldberg. He adds, "If they're upside down, we would reduce the payoff on the loan, effectively paying the claim, so the difference between what the home sold for and what the payoff was, would be up to the amount of the loss assuming it didn't exceed the amount of the coverage that we had."

"It's very important that we reach out to people who are struggling to let them know that mortgage insurance does provide this benefit. As they're going through hard times, the more people we can save and keep in their homes the better and at the same time as they make new decisions they should consider mortgage insurance," says Antonello.

For those who are looking for either a new loan or to buy a home, Antonello says he hopes the same mistakes aren't repeated. "Part of what drove the problem was that it was en vogue to avoid private mortgage insurance. Instead a lot of people did piggyback loans -- the 80-10-10 or 80-20 -- so they were highly leveraged and now, when they're running into a situation, they don't have somebody like [Genworth and Homeowners Assistance] trying to help them," says Antonello.

Antonello says, "One of the things with private mortgage assistance is that it not only gets you into the home sooner but it keeps you in the home and it's less risky than other alternatives that are out there and we provide this service so that, if you do run into a problem, our Homeowner Assistance Program comes at no-added cost -- it's free protection -- it's already built into the premium that the borrower pays."

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