RICHMOND, Va., April 24, 2018 /PRNewswire/ -- Genworth Mortgage Insurance, an operating segment of Genworth Financial, Inc. (NYSE : GNW ), today announced reductions to its national Monthly and Single Premium borrower-paid mortgage insurance (BPMI) rate plans and introduced two rate adjustors—Co-Borrower and Debt-to-Income (DTI) ratio—both specific to the Monthly BPMI plan. Genworth's long track record of pricing transparency in its rate plans is also a key component of today's announced changes. The price reductions and new adjustors will take effect on Monday, June 4, 2018.
"Our goal is to implement prudent pricing solutions that increase homeownership opportunities for qualified borrowers and deliver attractive returns to our shareholders," said Rohit Gupta, President and CEO of Genworth Mortgage Insurance. "Today's announcement further emphasizes our desire to address evolving affordability needs in a clear and transparent manner, and more granularly differentiate performance of the loans we insure."
Genworth's lower rates on Monthly and Single Premium BPMI rate plans give lenders more flexibility to help borrowers, particularly as the housing market strengthens and interest rates climb. The added differentiation by number of borrowers and DTI ratio aligns pricing with observed performance trends at a time when the market mix of these attributes is changing. These new Monthly BPMI rate adjustors provide improved guidance to better manage borrower risk. For example, loans with co-borrowers will see an MI rate decrease of approximately 18 percent from current rates, and loans for borrowers with a DTI ratio greater than 45 percent can expect an MI rate increase of approximately eight percent from current rates. These changes result in an overall rate decrease for Genworth's monthly plan of about 10 percent.
"Genworth is committed to remaining competitively priced in the market and refining our pricing across key risk characteristics," said Gupta. "Introducing these transparent rates balances these business objectives following the recent reduction to the federal tax rate and the current favorable macro-economic conditions. Our new pricing maintains similar mid-teen returns, which are above our cost of capital and internal hurdle rates. We look forward to implementing our changes in June and to continued innovation that drives our business forward."
About Genworth Financial
Genworth Financial, Inc. (NYSE : GNW ) is a Fortune 500 insurance holding company committed to helping families achieve the dream of homeownership and address the financial challenges of aging through its leadership positions in mortgage insurance and long term care insurance. Headquartered in Richmond, Virginia, Genworth traces its roots back to 1871 and became a public company in 2004. For more information, visit genworth.com.
From time to time, Genworth releases important information via postings on its corporate website. Accordingly, investors and other interested parties are encouraged to enroll to receive automatic email alerts and Really Simple Syndication (RSS) feeds regarding new postings. Enrollment information is found under the "Investors" section of genworth.com. From time to time, Genworth's publicly traded subsidiaries, Genworth MI Canada Inc. and Genworth Mortgage Insurance Australia Limited, separately release financial and other information about their operations. This information can be found at http://genworth.ca and http://www.genworth.com.au.
SOURCE Genworth Mortgage Insurance