Including MI coverage in the mortgage equation provides direct advantages to lenders and to mortgage loan applicants.

• Lenders profit directly in a number of areas:

• MI provides credit risk mitigation, reducing the expected loss of the mortgage portfolio.

• MI provided by a highly rated mortgage insurance company is accepted by investors as a form of credit enhancement in loan sales and transfers, including securitizations and covered bonds. MI can improve the issuer economics in capital markets execution for residential mortgage-backed securities (RMBS), securitizations, and covered bonds.

• MI enables lenders to extend mortgages to clients outside traditional borrower populations. With MI, people who do not have enough money for a down payment, along with those who have the money, but choose to use it in another way, can still qualify for a home.

• Lenders can rely on the assistance and expertise of AIG United Guaranty to help develop specific mortgage products for market segments with a higher risk level.

• By lowering their risk on high-LTV loans, lenders can reduce the amount of capital needed to hold mortgage assets in portfolio.

• Borrowers also profit from MI coverage, because getting a loan with a higher LTV allows them to purchase their property sooner. MI eliminates the necessity of saving for a high down payment that – because of the steady increase in Mexican home prices increases in recent years – has become a major barrier to home ownership.