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NHB – APUHF Housing Conference April 12, 2013 ©2013 Genworth Financial, Inc. All rights reserved. Mortgage Insurance (MI) / Guarantees.

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Presentation on theme: "NHB – APUHF Housing Conference April 12, 2013 ©2013 Genworth Financial, Inc. All rights reserved. Mortgage Insurance (MI) / Guarantees."— Presentation transcript:

1 NHB – APUHF Housing Conference April 12, 2013 ©2013 Genworth Financial, Inc. All rights reserved. Mortgage Insurance (MI) / Guarantees

2 Genworth Financial, Inc.’s Key Statistics Dating back to 1871 with 141 years underwriting experience More than 15 Million Consumers Over 23,700 Volunteer Hours Global Presence (Over 25 Countries) Approximately 6,300 Employees Total Revenues of $10.0 Billion Total Assets of $113.3 Billion A FORTUNE 500  company More than 3.5 Million Mortgage Insurance policies All figures as of December 31, 2012 except volunteer hours as of December 31,

3 Genworth’s Global MI Thought Leadership Sweden USA UK New Zealand Spain  South Korea IrelandMexicoItaly FinlandIndiaHong KongGermany AustraliaChinaCanada Brazil 2 Operating platforms or representative offices

4 Positive Development Aspects Of Housing 3 For Both Families And Societies Source: Retsinas, Nicolas Paul And Belsky, Eric. Low-income Home Ownership. The Brookings Institution. 2002: Web. 1 November For The FamilyFor Society / Government Enhances Stability, Safety & Security Aids Social MobilityHelps Reduce Non-Banked Populations Supports Improvement In Health, Education, Welfare Facilitates Robust, Resilient Economic Development Provides Tangible Asset For Future Financial Needs / Legacy Contributes To National Wealth Allows Families To Fully Participate In Economies They Have Helped Create Grows Perception As Developed Nation

5 Source: HDFC, India Infoline Research Sep 2009 Depth Of Housing Finance - Asia Source: HDFC, India Infoline Research September 2009 Mortgage Debt Outstanding To GDP Why Such Low Relative Penetration In Some Markets? 4

6 5 Higher Default Probability Source: Fitch Ratings RMBS Seven-Country Default Average (2010 & 2011) Risk Aversion To High Loan-To-Value* (LTV) Mortgages One Potential Barrier … * Loan-To-Value Ratio = Loan Amount Divided By Property Value

7 What Is Mortgage Insurance (MI)? What MI Is …What MI Is NOT … 6 Mortgage Life Insurance … Pays Loan Amount w/Borrower’s Death MI Complements Financing By Covering The Consumer Credit Risk Associated With Residential Mortgage Loans Payment Protection Insurance... Unemployment, Disability Support Protects Lenders From Borrower Default On Residential Mortgages Generally Used When LTV > 70-75% Targeted At 1 st Time / Middle Class Purchasers GSE Type Guarantees

8 7 Offers Tools For Maintaining Home Ownership MI Developmental Advantages For Lenders … For Market Introduces Additional Source Of Capital Into The Housing System Encourages Builders, Developers, Lenders To Better Serve First-Time Buyers Creates Standardization / Enforces Underwriting Standards Unique Source Of Feedback For Regulators And Market Mitigates Risk Provides Best Practice Resources For Mortgage Innovation For Home Buyers … Helps Borrowers Get Into Homes Faster Reduces Savings For Down Payment Grows Earning Assets

9 How It Works – Micro Level 8 No MI Lender Exposure 80 80LTV Mortgage Borrower Equity 25 Lender Loss 25 Borrower Equity 10 MI Claim 25 Property Salvage 65 35% MI Claim Severity Recovery 65 90LTV Mortgage Borrower Equity 20 Smaller Borrower Down Payment Lower Lender Exposure Example: Loan Size = 100

10 Summary MI Now Used In Over 35 Countries … Public, Private, Public / Private Facilitates Economic Development Broad & Deep Market Value Propositions Consumers, Lenders, Regulators 9 MI Helps People Into Homes Faster … And Helps Them Stay There


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