It wrote 59% less insurance. This was largely due to a tightening of lending guidelines, changes in product mix, and to lenders & investors being hesitant to back Genworth-insured mortgages (since Genworth polices are only 90% government guaranteed, versus CMHC’s 100% guarantee).
Genworth said “Job losses across Canada and home price declines” increased its claims losses to $71 million from $30 million in Q2 2008.
The company ended the quarter with $511 million in cash on hand.
The company helped 1,226 borrowers who couldn’t make their mortgage payments, versus 148 in Q2 2008. Genworth reported a 90%+ success rate with these “workouts.”
Refinances have been 35-40% of Genworth’s business. (It said premiums are lower on refinance business than purchases.)
Genworth is Canada’s 2nd largest default insurer. As of Dec. 31, 2008, the company estimated its share of Canada’s mortgage default insurance market was 30%, but this has come down a bit since then.
Despite a mixed earnings report, however, Genworth’s stock has ramped up the past few days. It’s now up 17% from it’s close on IPO day, July 7.
Traders are obviously anticipating good news to come.