Question-and-Answer Session
Operator
(Operator Instructions) We will take our first question comes from Mark Finkelstein with FPK.
Mark Finkelstein - Fox-Pitt, Kelton
Hey good morning. I just wanted to dive a little bit more into the I guess the reserve per delinquency at the US semi company. I guess what I am trying to – what I am interested in is just how did you actually calculate the estimated savings from loss mitigation, is it based on paid experience? Can you just give maybe more of a granular color on what exactly was done to come to that estimate?
Michael D. Fraizer
Sure Mark and good morning. Let me turn that over to Kevin Schneider. Kevin?
Kevin Schneider
Good morning Mark.
Mark Finkelstein - Fox-Pitt, Kelton
Morning.
Kevin Schneider
I think it’s quite beneficial to start with just to remind here what our process is for loss mitigation because it’s really an upfront focus on loans, when loans are reported to us rather than to focus on them at the point they go to claim. We did it for both investigations and workouts because we think it’s more effective way to get after those loans when a problem is (Indiscernible).
What we then do is we go and we investigate those loans, we select the loans for investigation based on some of our models, our risk models, our analytics, we request those loans from our borrower, from our lenders and then once they get into the system then the file is returned, w go through the review process and depending upon the life of the review that could take two or three months to go through. What you saw in this quarter as it relates to our reserve change is our reserve model and the selection of primary case loss reserve factors that we go through on a regular basis, every single quarter, incorporates historical claim and rescission data into the frequency and the severity loss factor calculations. So, in this quarter our loss mitigation efforts which we had been ramping up through out the year continued to identify rescission that were executed. We continue to have increased doubt development, so that increased the number of opportunities that we could go after and identify. And then we began to see the actual realized benefits and improvement in that frequency factor that was driven by those rescissions. And so we – based upon our actual experience for the quarter, we that frequency factor improvement that we realized as a result of rescission and it was it was applied back to our normal reserving process and had the resulted impact that Pat talked for the quarter.
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