Question-and-Answer Session
Operator
(Operator Instructions) We will turn to David Lewis with Raymond James.
David Lewis - Raymond James
Thank you and good morning.
Al Zucaro
Hi, Dave.
David Lewis - Raymond James
Al or Chris, the mortgage insurance segment reported first sequential combined ratio decline in 11 quarters. Do you think that we’ve seen the peak in the fourth quarter or can you get any sense based on some of the trends that you are seeing today if we kind of made it over the top of the hill and slowly maybe, but we’re kind of working our way down?
Chris Nard
This is Chris here David. We wouldn’t make that statement. I’d refer you back to what we said in the opening comments which we did see again, as we have for the last seven or eight years, this seasonal effect wherein end of the first quarter, we see a slowdown in the growth of new delinquents. That was the primary driver to this reduction in the loss ratio for the quarter.
So I don’t think any of us would be so bold as to say that we’ve seen the peak or make that prediction, but we were encouraged to see that development of usual seasonal effects. Also we saw a little bit more of the loss seeded to the captive re-insurers in the quarter, which also helped in that area as well.
David Lewis - Raymond James
I guess from my understanding, the government tried to slow the delinquencies for a couple of months, and I restored installed the foreclosures and I guess those have now been lifted and now maybe we get another flurry as that kind of your thought that you may see that because of the lag period will pick up a little?
Chris Nard
Well, we’ve got a couple of things working. The government has had a moratorium as its affected Fannie and Freddie and then many of the large lenders also adopted a voluntary moratorium.
So that has helped to pay claims area, but one thing you will get is when they release those moratoriums, you still have to work those foreclosures through the legal system and you will simply create a big backlog in the legal workings until those things get moved through.
So I wouldn’t expect essentially the plug to be pulled out of the dam, but it will take some time for that elimination of the moratorium to really work its way through the foreclosure system in America.
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