Mortgage Delinquency Continues to Improve:

Lender Processing Services, Inc. (LPS) provides analytics on the mortgage and real estate industries with a loan-level database representing approximately 70 percent of the overall market. It is the leading indicator we use to track the future health of the mortgage business and potential impact on Genworth Financial (GNW) mortgage insurance businesses.

The most recent LPS December 2012 Mortgage Monitor shows a slight seasonal upward move in mortgage delinquencies from 7.12% in November to 7.17% in December. The year to year comparisons, a better indication because it takes seasonality into account, continue to show definite improvement from the December 2011 level of 7.89%. Foreclosures dropped from 4.20% in December 2011 to 3.44% in December 2012. These bode well for GNW as insurance reserve levels should already reflect the previous higher delinquency and foreclosure levels.

LPS Mortgage Monitor Dec-12

Source: Loan Processing Services December Mortgage Monitor Report

Genworth’s Earnings Conference Call is scheduled for February 6 at 9:00 a.m. (ET) to discuss the quarter’s results.  It will issue its earnings release and financial supplement containing fourth quarter results after the market closes on February 5, 2013. The company will report on business results and provide a progress update on strategic priorities. Genworth’s earnings release and fourth quarter financial supplement will be available through the company’s website,, at the time of their release to the public. The conference call will be accessible via telephone and the Internet.

The call will be interesting as it is the new CEO, Thomas McInerney, first call after stepping into the job in January 2013. He has a lot of leadership experience at other insurance companies and shows an initial bias for action by isolating the U.S. mortgage insurance operations from other GNW operations in his first month.  See our post Genworth Financial: New Leadership [Source] and Genworth (GNW) Announces Resourceful Capital Plan [Source].

During the call we hope to hear about the progress and outlook for operations improvements especially improving Long-term care results and investment returns and the outlook on various strategic initiatives to improve capital allocation including:

  1. The potential Australian Mortgage business spinoff;
  2. Sale of the wealth management business;
  3. Positioning the European life style insurance business for eventual sale;
  4. The potential for share buybacks at still very attractive discounts to book value.

Long GNW

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