The partnership came into effect on December 31 2010 with Mutual One becoming an Appointed Representative of Genworth Financial given its role in arranging and administering the mortgage insurance offered through a collective arrangement to a range of mortgage lenders.
The development of the MII collective follows the publication of the FSA’s Sourcebook for Building Societies in 2010 and its expectation of societies having appropriate risk mitigation measures, such as MII, in place when operating in the high loan-to-value arena.
By using mortgage indemnity insurance, these building societies can maintain a presence in higher LTV lending, which is traditionally used by first time buyers. The products provide protection for lenders whose capital requirements could benefit by the cover being in place.
Andrew Gold, chief operating officer of Mutual One, says: “Following the publication of the Sourcebook, we undertook a process of seeking a mortgage indemnity insurance provider for a collective MII arrangement, delivering a wider range of benefits to those who participate.
“Following careful examination of the product benefits, sustainability and service proposition available in the marketplace, we were delighted to select Genworth Financial’s mortgage insurance offering for our MII collective given their proven track record. We believe the MII collective relationship will help Societies continue to meet their core purpose of providing a wide choice of residential mortgages including those for borrowers who need higher LTV mortgages.”
Tammy Richardson, senior vice president – commercial for Genworth Financial’s mortgage insurance business in the UK, says: “It’s a long held principle of Genworth that mortgage insurance enables lenders to widen access to homeownership for consumers through the bad times as well as the good.
“We advocate prudent lending as a means to returning to stability in the housing market, and believe this new facility with Mutual One will help both the building societies involved, and their customers. We look forward to working with them to achieve this goal.”