Genworth helping clients stave off foreclosure

Claims for its mortgage insurance are climbing, but so, too, are Genworth Financial Inc.'s efforts to keep people from losing their homes.

The Henrico County-based insurance giant arranged 15,406 "workouts" nationwide to avoid foreclosure during the 12 months that ended March 31.

That's up 66.7 percent from the previous year -- an even faster rise than in the total number of foreclosure notices hitting homeowners' mailboxes. In Virginia, workouts rose 112 percent to 275.

RealtyTrac, a real estate firm that monitors foreclosure activity nationwide, recently reported the number of foreclosures in process last month was up 32 percent nationwide and 47 percent in Virginia from a year ago.

"In the end, we keep people in houses; yes, the mortgage insurer benefits, but so does the borrower and so does the community," said Chris Antonello, a senior vice president in Genworth's mortgage insurance unit.

"We want to do more."

For Genworth, stepping in to help arrange a workout makes sense.

It sells more than $3 billion a year in mortgage insurance, which promises to make banks whole if borrowers don't pay. Its policies cover nearly $160 billion of mortgages.

The workouts it has arranged in the past 12 months have prevented foreclosure on more than $2 billion of mortgage debt.

Genworth is not the only entity trying to help out. The federal government is trying to encourage workouts through its Making Home Affordable program. Also, Richmond-based Housing Opportunities Made Equal, a nonprofit housing group, is receiving 300 to 350 calls a month for help, double what it received a year ago.

One was Alfred Kersey, who lives in eastern Henrico and was falling behind on a mortgage with an interest rate of more than 9 percent when he was laid off from his printing-plant job last fall.

Kersey tried one firm that promised it could negotiate easier loan terms -- but only if he paid a $500 fee plus $75 for paperwork and eventually $3,000 more for unspecified services.

Kersey paid the money, but nothing happened. Finally, this spring, he went to the nonprofit, which negotiated with his mortgage company to win a cut in his interest rate, to an initial 3.1 percent for one year, eventually rising to 4.3 percent.

It means he, his wife and two children can remain in their home.

"It's a big relief," he said.

Kersey is benefiting from a loan modification, which Genworth Vice President Alan Goldberg said is the most common arrangement.

It is basically a refinancing, adding the payments a borrower missed into the total owed, often with a lengthening of the time to repay the debt and a lower interest rate to cut the monthly bill.

It has become more common than a repayment plan, in which borrowers make scheduled payments to repay what they missed on top of continuing monthly payments.

Genworth steps in either when the companies that process mortgage payments request it or when its own employees' review of late payment reports from lenders shows a homeowner is 90 days or more late with a payment.

A form that looks a bit like a loan application, detailing a borrower's financial situation; a letter outlining why they've been having trouble keeping up with their payments; and a phone call or two usually is all it takes to work out a solution, Goldberg said.

In about 90 percent of cases, the answer means homeowners keep their houses. Most are dealing with things outside their control -- a layoff, for instance -- and already are working hard to solve their financial squeeze.

"It's not really credit counseling. . . . We're not going to tell you that you need to sell your car or something," Goldberg said. "But we can help get in touch with people who do that, if that's what you need."

Contact David Ress at (804) 649-6051 or .