AIG United Guaranty Announces Forbearance Measures
In Response to Damages Resulting from Hurricane Katrina

GREENSBORO, NC — Mortgage insurer AIG United Guaranty1 will work with mortgage lenders and servicers whose customers have been affected by damages due to Hurricane Katrina.

Forbearance measures are outlined in a letter to lenders and servicers of mortgages insured against borrower default by AIG United Guaranty. Under the terms of the letter, lenders are encouraged to ease payment requirements and to make necessary concessions to prevent foreclosure action on homeowners with severe property damage or interrupted employment.

Forbearance measures announced by AIG United Guaranty follow guidelines established by Fannie Mae and Freddie Mac for such disaster situations. AIG United Guaranty will work with mortgage servicers whose borrowers have encountered hardships because of the hurricane damage, including those with no flood insurance. As outlined in the letter to its customers, AIG United Guaranty will agree to the following interim arrangements by lenders and servicers.

  • Delay of foreclosure action for up to six months.
  • Capitalization of up to six mortgage payments.
  • Modification and/or forbearance arrangements that allow a borrower up to 18 months to bring a mortgage current.
"This action gives our master policy holders a great deal of latitude in serving borrowers in affected areas," said Chris Goodwin, vice president of Loss Management. "In working with lenders whose customers have been affected, we are prepared to accept a range of reasonable solutions where mortgage payment is concerned."

About AIG United Guaranty

United Guaranty Corporation and its subsidiaries (including United Guaranty Residential Insurance Company) are member companies of American International Group, Inc. (AIG). The company has been headquartered in Greensboro, North Carolina, since it was established in 1963.Subsidiaries of United Guaranty Corporation provide mortgage guaranty insurance for first and second mortgages that protects against mortgage credit losses.

In addition, the corporation’s comprehensive range of financial products and services to lenders and investors includes mortgage fraud recovery services, student loan default insurance, and access to insurance products from AIG member companies. International locations include offices in Jerusalem, Hong Kong, Taiwan, Madrid, London, Tokyo, Mexico City, Milan, Beijing, Toronto, Sydney, Budapest, and Seoul.

American International Group, Inc. (AIG) is the world’s leading international insurance and financial services organization, with operations in more than 130 countries and jurisdictions. AIG member companies serve commercial, institutional and individual customers through the most extensive worldwide property-casualty and life insurance networks of any insurer.

AIG United Guaranty media releases may be viewed on our Web site at www.ugcorp.com.

1AIG United Guaranty is a marketing term for United Guaranty Residential Insurance Company.