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Genworth Financial Inc. Reports Operating Results (10-Q)

May 04, 2011 | About:
10qk

10qk

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Genworth Financial Inc. (GNW) filed Quarterly Report for the period ended 2011-03-31.

Genworth Financial Inc. has a market cap of $5.97 billion; its shares were traded at around $12.18 with a P/E ratio of 48.7 and P/S ratio of 0.6.

Highlight of Business Operations:

We also have Corporate and Other activities which include debt financing expenses that are incurred at our holding company level, unallocated corporate income and expenses, eliminations of inter-segment transactions and the results of non-strategic products that are managed outside of our operating segments. Our non-strategic products include our institutional and corporate-owned life insurance products. Institutional products consist of: funding agreements, funding agreements backing notes (FABNs) and guaranteed investment contracts (GICs). For the three months ended March 31, 2011, Corporate and Other activities had a net loss available to Genworth Financial, Inc.s common stockholders and a net operating loss available to Genworth Financial, Inc.s common stockholders of $76 million and $72 million, respectively.

Our loss mitigation activities, including those relating to workouts, loan modifications, pre-sales, rescissions and targeted settlements, net of reinstatements, which occurred during the first quarter of 2011 resulted in a reduction of expected losses of $122 million compared to $233 million in the first quarter of 2010.

Workouts and loan modifications, which related to loans representing 1% of our primary risk in-force as of March 31, 2011, and occurred during the period then ended, resulted in a reduction of expected losses of $94 million compared to $113 million in the first quarter of 2010. Our workout and loan modification programs with various lenders and servicers are designed to help borrowers in default regain current repayment status on their mortgage loans, which ultimately allowed many of these borrowers to remain in their homes. During the first quarter of 2011, we executed loan restructurings and modifications with our lender partners that resulted in reduced monthly mortgage loan repayment amounts through reductions of the underlying loans interest rates or debt forgiveness by lenders, or through a lengthening of the loans principal amortization period, or through some combination thereof. The loans that are subject to workouts and loan modifications that were completed could be subject to potential re-default by the underlying borrower at some future date. In addition, pre-sales and other non-cure workouts that occurred during the first quarter of 2011 resulted in a reduction of expected losses of $17 million compared to $13 million that occurred during the first quarter of 2010.

As a result of investigation activities on certain insured delinquent loans, we found certain levels of misrepresentation and non-compliance with specific terms and conditions of our underlying master insurance policies, as well as fraud. These findings separately resulted in rescission actions that occurred during the first quarter of 2011 which reduced our expected losses at the time of rescission by $11 million compared to $107 million that occurred during the first quarter of 2010.

Read the The complete Report

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