We talk every now and then on this blog about how banks don’t really want to foreclose on your home, even if you’ve missed a mortgage payment or two. After all, it’s much easier for any lender to keep you in your home, with you tending to it and taking care of it, and making your mortgage payments, than it is for them to sell it off – something they’re not exactly in business for. Don’t get us wrong; it is something lenders will do if they have to. But if they can find another alternative, they’re generally happy to take it. And that’s just what Genworth has been working hard to do.
Genworth isn’t a lender but rather a private mortgage insurer here in Canada. Genworth insures the mortgages lenders offer in case the borrower defaults and should that default occur, in the past Genworth would rely on the lender to take care of the foreclosure sale. This would happen sometimes months and months after the last mortgage payment was made. However, Genworth is now turning things around by hiring their own real estate agents to deal with foreclosures, and by contacting homeowners earlier to try and work out an arrangement suitable for everyone.
The first, and biggest, step Genworth is taking to actually reduce the number of foreclosures on the market, is contacting homeowners of missed payments earlier and looking at extenuating circumstances. Those circumstances may have been a medical emergency that came up, or the loss of the homeowner’s job; whatever it is, if the homeowner has valid reason for not making the payments, Genworth will often tell the bank to work with the borrower for a little while longer, making larger payments throughout the rest of the loan or adding those missed payments onto the end of it. All of this in an effort to keep homeowners in their homes, and reduce the number of foreclosures.
But, there are times when a default on a mortgage is inevitable, and it’s in these cases that Genworth has to take action; but they’ve changed the way they’re doing that, too. It used to be that the bank would take care of the sale and generally, that meant leaving the home in as-is state – a state that usually looks like a foreclosed home. But now, Genworth has hired their own team of real estate agents that can have painting done and can stage the home to make it look like any other home on the market, rather than being an obvious foreclosure.
With these two moves, Genworth is making good strides in just about every direction. The first is that they are keeping homeowners in their homes longer by staying flexible with mortgage payments; and the second is that the overall number of delinquencies is also going to go down – a trend that’s already been started. In 2010 the number of delinquent mortgages was 3,401. By the end of 2011 though, that number was only $2,752.
