Genworth Financial Inc

And HPA, again, based on our experience, the impact of that is really linear. So every point of embedded HPA helps to reduce the probability of ultimately rolling the claim. Obviously, more is better. Higher is better. We do put some stats in our earnings presentation about how much of our portfolio and how much of our delinquencies have at least 10% embedded equity. in their respective portfolios. And I think that's just a nice amount of cushion to protect against some of the softness that's developing in local markets that Rohit made reference to earlier.

Got it. Both your comments were quite helpful there, so thank you for that. Maybe just, I'll get in queue after this again, but maybe just any update on the Washington front. Obviously, we hear a lot of, I guess, a lot of news, a lot of tweets, but anything on the ground changing from a regulatory standpoint that's impacting your business in a meaningful way? Thank you.

Uh, yeah, so we are very engaged on the Washington front. As I've said in previous calls, we have very strong relationships with the and then across the housing ecosystem and with key legislators. So we continue to engage in the dialogue on all the topics being discussed. So whether it's guideline changes or any changes to the programs that exist with the GSEs, as those announcements happen or as those initiatives start, we are actively engaged in making sure that we are continuing to create a housing finance system where we are supporting well-qualified consumers achieve the dream of homeownership. So, as we think about specific initiatives, we can talk about any of these offline, but we are definitely in the actual working groups, either directly or through trade associations. So, that continues to be a productive dialogue.

Thank you. Thanks for taking my questions. Thank you.

Thank you. As a reminder, to ask a question, you'll need to press star 11 on your telephone.

The next question comes from Bose George with KBW.

Your line is now open.

Hey, guys. Good morning. Actually, Dean, just a quick follow-up on the comment you made about the embedded HBA this quarter. Just when you look at the trend on that, the HBA on new notices, has there been a change in that over the last, say, year or so?

Yeah, I think it's – Bose, thanks for the question. I mean, it's definitely – HBA overall has slowed. And in some markets, as we've been talking about, it's declined. So you have seen some slowing, let's say, over the last 12 to maybe even 18 months. At the same time, when you look at it in the aggregate over the course or over the total of the new delinquencies that were reported in the current quarter, it's still substantial. And still, we believe, serves as a meaningful mitigate to the probability of ultimately going to claim.

Okay, great. And then actually in terms of the defaulted claim, can you talk about the sort of the actual defaulted claim levels that you're seeing, you know, relative to that 9% that you kind of book it on new notices?

Yeah, so you correctly referenced we do have a 9% claim rate on new delinquencies. I think we've stated this in the past, Bose, that that 9% claim rate, really isn't aligned with current performance trends. It's more a nod to the fact that we're operating in an environment of heightened economic uncertainty, and that uncertainty could, you know, ultimately impact the performance trajectory of delinquencies rolling to claim on a go-forward basis. You know, that uncertainty has ebbed and flowed through time, but I still think today you know, we're operating with a high degree of uncertainty in the current environment. You know, I think from a performance perspective, obviously, we've seen performance meaningfully better than that 9% claim rate. It's really been the underpinning of the reserve releases that we did in the current quarter, obviously, 48 million in the second quarter. But also, if you look back, over the course of the last three years, there's about roughly 250 million of annual reserve release over those three years. So we continue to see performance better than 9%, but we still believe the 9% is prudent in line with our prudent and measured approach to reserving and appropriate for the here and now. What would change that go forward, Bose, is us looking at the future macroeconomic environment and saying that uncertainty has abated. That would cause us to come back and take a look at that appropriateness of that 9% and potentially make a change.

Okay, great. Thanks a lot. Thanks, both.

Thanks, both.

Thank you. This concludes the question and answer session. I'd now like to turn the call back to Rohit Gupta for closing remarks.

Thank you, Cathy, and thank you, everyone. We appreciate your interest in an act, and I look forward to seeing many of you at the virtual JPM Future of Financials Forum on August 13th. Thank you.

Thank you for your participation in today's conference. This does conclude the program, and you may now disconnect.