MIs Offer Forbearance in Wake of Katrina

Mortgage insurers have announced that they are working with lenders and investors to provide relief to insured borrowers who were victims of Hurricane Katrina.Genworth Financial, Richmond, Va., said it will support guidelines to allow the reduction or suspension of mortgage payments for a specified time or even create a longer payment schedule. "We want to help the people hit so hard by these storms and protect their credit ratings and financial interests," said Kevin Schneider, president of Genworth's U.S. mortgage insurance business. AIG United Guaranty, Greensboro, N.C., following Fannie Mae and Freddie Mac (as previously reported), said it will work with servicers whose borrowers have encountered hurricane damage, including those with no flood insurance. United Guaranty said it will agree to delays of foreclosure for up to six months, the capitalization of up to six mortgage payments, and modification and forbearance arrangements that allow a borrower up to 18 months to bring a mortgage current.