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Insurers Prevent Home Foreclosures

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By SHANNON BEHNKEN

sbehnken@tampatrib.com

Published: November 26, 2008

TAMPA - Homeowners facing foreclosure could find help in an unlikely place - the company that insures their mortgage.

As foreclosure rates skyrocket across the country, PMI companies have seen default claims - and their payouts - jump, too. One of the companies, Genworth Financial, is jumping in to help keep loans from failing and avoid having to settle with the lender.

When a lender says it can't work out a loan modification with a homeowner and wants to foreclose, Genworth doesn't just take the lender's word. The company has an assistance team that negotiates between the homeowner and lender.

It can't offer anything the lender can't, but it makes sure all options have been explored.

The effort, company officials say, is paying off.

The company released a report card for the program Tuesday. In the past 12 months, it has helped 11,109 of its customers in obtaining loan workouts. All those customers avoided a foreclosure, and 89 percent stayed in their homes, the company said.

Of the top 10 states where Genworth does workouts, Florida has been one of the most successful. The company has mediated 901 workouts in the past year in the Sunshine State, second only to Texas. Florida has seen the largest increase in workouts among the states - 163 percent.

Buyers who took out conventional loans and had a down payment of less than 20 percent typically were required by lenders to carry PMI insurance, which insures a settlement for the lender if the homeowner defaults.

Most of the homes in foreclosure, however, don't have PMI insurance. The companies avoided subprime loans made to risky borrowers, and those loans now make up the bulk of the nation's foreclosures.

Reporter Shannon Behnken can be reached at (813) 259-7804.

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