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Genworth U.S. Mortgage Insurance To Offer Recapture Tax Protection on HFA Loans

RALEIGH, N.C., Oct. 27 /PRNewswire-FirstCall/ -- Genworth Financial, Inc. (NYSE: GNW) said today that its U.S. Mortgage Insurance division was making recapture tax protection available on all Genworth insured primary loans with participating Housing Finance Agencies (HFAs).

The new program covers HFA borrowers for nine years, reimbursing them up to $6,000 on any federal recapture tax they might incur in selling their homes.

"This protection will provide peace of mind for HFA borrowers concerned about tax liability if they sell their homes," said Rohit Gupta, senior vice president Products, Market Intelligence and Strategy of Genworth Mortgage Insurance. "Available at no cost to either lender or borrower, it's another example of our commitment to providing safe, secure mortgage solutions for low down payment borrowers."

Recapture tax is a federal tax that can apply to homeowners who financed the purchase of their home through proceeds of tax-exempt Mortgage Revenue Bonds or with Mortgage Credit Certificate Program assistance, both of which are common with HFA loans. Should they sell or dispose of the home or an interest in the home within nine years after the mortgage loan closing, those homeowners, under certain circumstances, may have increased federal income tax liability for the year in which they sell or otherwise dispose of the property.

The maximum recapture tax is 6.25% of the original principal balance of the loan. To determine their liability, homeowners should refer to the disclosure received from the Housing Finance Agency or lender explaining the potential tax, or consult with a tax advisor.

"Housing finance authorities are faced with imposing a recapture tax on a sale of a home," said Robert Strickland, Executive Director, Alabama Housing Finance Agency.

"This potential tax on a borrower is being eliminated by Genworth's Recapture Tax Protection. We are excited about this offering as part of the mortgage insurance so that the homebuyer gets peace of mind with additional coverage for potential recapture tax."

To get reimbursed up to $6,000 for any tax paid, borrowers file a claim with the Genworth Recapture Tax Benefits Administrator. Benefits are considered personal income, and borrowers should consult with a tax advisor on the taxability of recapture tax reimbursement.

All Genworth insured primary loans with participating HFAs will receive the Recapture Tax Protection automatically, with coverage lasting up to nine years as long as Genworth mortgage insurance is in force. There are no changes in the current submission process for HFA loans to Genworth.

About Genworth

Genworth Financial, Inc. (NYSE: GNW) is a leading public Fortune 500 global financial security company. Genworth has $114 billion in assets and employs approximately 7,000 people in 25 countries. Its products and services help meet the investment, protection, retirement and lifestyle needs of over 15 million customers. Genworth operates through three segments: Retirement and Protection, International and U.S. Mortgage Insurance. Its products and services are offered through financial intermediaries, advisors, independent distributors and sales specialists. Genworth Financial, which traces its roots back to 1871, became a public company in 2004 and is headquartered in Richmond, Virginia. For more information, visit http://www.genworth.com.

The Recapture Tax Protection is underwritten by Dealers Assurance Corporation and is subject to conditions, exclusions and exceptions not necessarily included in this summary. This summary does not change the terms of the recapture plan.

SOURCE Genworth Financial, Inc.
CONTACT: Terry Souers of Genworth Financial, Inc., +1-919-846-4459
terry.souers@genworth.com
Web site: http://www.genworth.com
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