Genworth Files 'Red Herring' for Mortgage Insurance Unit IPO

Managers of the mortgage business say the pandemic has hurt their business, by leading to disruption in the mortgage lending and mortgage foreclosure processes, and by hurting some  borrowers’ ability to make mortgage payments.

“Any delays in foreclosure, including foreclosure moratoriums imposed by state and local governments and the [government-sponsored enterprises]  due to COVID-19, could cause our losses to increase as expenses accrue for longer periods or if the value of foreclosed homes further decline during such foreclosure delays,” the mortgage business stated.

“If we experience an increase in claim severity resulting in claim amounts that are higher than expected, our business, results of operations and financial condition could be adversely affected.”

The mortgage business lists Genworth Financial’s problems with LTCI coverage as another risk factor.

“Our parent’s challenges in its long-term care insurance business, or other financial or operational difficulties, may also be attributed to us by investors and may have an adverse effect on the perception of our common stock as an investment,” the mortgage business said.

“Additionally, any downgrade or negative outlook of our parent’s ratings may negatively impact our ratings by certain ratings agencies whose rating protocols and group rating methodologies require adverse ratings actions in cases of parent or sister company rating downgrades or adverse rating actions.” the firm said.

“A downgrade in our ratings may adversely affect our relationship with current and potential customers as well as our ability to write new business and access capital on favorable terms.”

Tom McInerney, Genworth’s CEO, is not listed in the current version of the Genworth Mortgage Holdings red herring. That company’s CEO is listed as Rohit Gupta. The red herring includes blanks for the names of 10 board members.

Tom McInerney (Photo: Victor J. Blue/Bloomberg)