In addition to our suite of traditional lenders mortgage insurance (LMI) products, Genworth provides portfolio LMI – also known as bulk LMI – for customers looking to insure a pool of loans at the same time. Portfolio LMI cover is commonly used for credit enhancement on a securitisation transaction, or for other risk transfer and capital purposes.
We are committed to providing the high quality service you have come to expect. Below is an outline of the process for making an application for portfolio LMI cover to ensure service levels and your expectations are achieved.
Our aim is to work with you in line with the processes and timeframes set out below. As the nature of individual transactions varies considerably, the timeframes in this guide are indicative only.
Making an application for portfolio LMI cover
Upon receiving your enquiry for portfolio LMI cover, we will consult with you around specifics on the pool you are seeking cover for and discuss any individual requirements. Following this, and upon receipt of the required information to assess the pool, we will:
- perform a risk assessment on the pool of loans to be insured and price the transaction
- complete a quality review on a sample of the portfolio of loans to be insured. This will typically involve a review of the loan data, relevant credit policies, and a file review conducted on-site in your office. This can typically be completed within three days, and
- prepare the necessary legal documents relating to the portfolio LMI cover.
Quotation generally takes 5-10 business days and subsequent to that, formal execution of documentation takes an additional 5-10 days. Timeframes vary depending upon size and complexity of the transaction.
To initiate your application for portfolio LMI cover, Genworth will request the data be provided in our standard template, which will be provided to you upon request. Providing the data in this form will assist with the timely risk assessment and operational loading of the loans (once the quote is accepted).
Genworth understands that for unique reasons, you may have diverse pools of loans requiring portfolio LMI cover. Genworth will work with you to provide a solution that addresses your needs. We offer portfolio LMI cover for both residential mortgage-backed security (RMBS) transactions as well as for pools of seasoned loans and will work with you to review options for coverage on the entire pool or a segment if requested by you.
Genworth will consider all applications for portfolio LMI on a case-by-case basis, however some loans may be excluded from the portfolio for which you are applying for portfolio LMI cover. Typically, we exclude loans:
- for which the security property is used for any purpose other than residential as defined by a valuation or any other supporting documentation
- with ANY limited documentation or low-doc loans as defined by the lenders lending guidelines and procedures
- with less than six months’ seasoning
- which have been in arrears for 30 days or more at any time during the 12 months prior to the date the portfolio LMI cover commences, or any loans which are in arrears of any duration as of the date the portfolio LMI cover commences or in hardship
- with a current scheduled LVR greater than 80 per cent
- with a current scheduled balance greater than $1,250,000
- that have previously been declined for lenders mortgage insurance in connection with the lender
- for borrowers with aggregate exposure of Genworth lenders mortgage insurance over $2,500,000
- in circumstances where there is not at least one borrower who is an Australian citizen or permanent resident of Australia
- made in connection with a property that is not described as readily saleable or habitable in the original valuation for that property as at the date of the original valuation
- not originated according to and in compliance with Insured's credit policy and other procedures at the time of the initial advance
You will need to provide us with a copy of the relevant credit policy under which each loan to be insured was originated, if you haven’t provided one to Genworth for a previous transaction, or if it has changed since then.
Portfolio LMI cover is insured by Genworth under the Terms and Conditions and the Bulk Insurance Modules of our LMI Master Policy. If the existing Master Policy between your organisation and Genworth does not contain the Bulk Insurance Module, we will provide you with a copy of that Module.
As described in the Bulk Insurance Module, we will issue you with an acceptance advice setting out the premium payable for the insurance and confirming the agreed exclusions. The list of loans insured by Genworth as part of the portfolio LMI cover will also be provided.
Genworth offers a quality review free of charge for each portfolio LMI transaction we insure. This review will typically be completed within three business days and we will share with you any major issues we identify through the review which may help you to improve the portfolio performance and ultimately reduce funding costs.
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