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Making Sense of the U.S. Economyand Housing MarketAugust 2012‫‏‬ ©2012 Genworth Financial, Inc. All rights reserved.

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Legal Disclaimer “The materials presented in this webinar are intended solely for informational and illustrative purposes to provoke thought and discussion among the participants. Webinar participants should not rely on any of the information presented but should independently conduct their own research and analysis before making any business decisions. Genworth makes no representations or warranties as to the accuracy or suitability of any of the information contained herein.” 1

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Contents Section Page U.S. Economy 03 Labor Market 08 Housing 12 Hot Topics 23 2

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U.S. Economy Drought Conditions Will Pressure Food Prices Source: NDMC; NOAA 3

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Recovery Has Been WeakRecovery From Trough: Real GDP Perspective On The Employment Picture 1.20 100% Percentage Of Peak Employment Prior To Recession 99% 1.15Index, End of Recession =100 98% 1.10 97% 96% 1.05 95% 1.00 94% 0.95 93% 10 12 11 0 1 2 3 4 5 6 7 8 9 -6 -5 -4 -3 -2 -1 12 18 21 24 27 30 33 36 42 45 48 51 57 60 15 39 54 3 6 9 0 Quarters from Trough 1970 1975 1982 1991 2001 2009 Months Since Peak Employment 1957 1960 1970 1974 1980 1981 1990 2001 2008 Balance Sheet Recession = Weak Recovery Employment Following Path Of Prior “Jobless” Recoveries Source: BEA, BLS via IHS Global Insights 4

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Drivers of Growth Consumption & Business Investment Lead the Recovery 7 GDP Growth During Recovery 6 60% 60% 50% 50% 5 Contribution to Growth Share of Economy 2Q2012 Inventories 40% 40% 4 Consumption 30% 30%Contribution to Growth (PP) Equip & Software 20% 20% 3 State & Loval Govt 10% 10% 2 Federal Govt 0% 0% 1 Net Trade -10% -10% Residential -20% -20% 0 NonRes Struct -30% -30% Inventories Government Non-Residential Struct Residential Struct Durable Goods Services & Non-Durables Biz Equip & Software Trade -1 Change in Real GDP Change in Final Sales -2 -3 3Q2009 4Q2009 1Q2010 2Q2010 3Q2010 4Q2010 1Q2012 2Q2012 1Q2011 2Q2011 3Q2011 4Q2011 Consumption And Business Investment Have Driven Growth Both Will Be Challenges in 2H2012 Source: BEA via IHS Global Insight 5

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Orders for Durable Goods Slow Diffusion Indices Of Business Conditions Uncertainty Saps Business Investment 70 100 15% 90 10%Diffusion Index (50= No Net Change in Conditions) 60 (Positive Response + .5*No Change) 80 5% Quarterly Change Diffusion Index 70 0% 50 60 -5% 40 50 -10% 40 -15% 30 30 -20% 20 20 -25% Jan-90 Jan-92 Jan-94 Jan-96 Jan-98 Jan-00 Jan-02 Jan-04 Jan-06 Jan-08 Jan-10 Jan-12 May-05 May-06 May-07 May-08 May-09 May-10 May-12 Jan-05 Jan-06 Jan-07 Jan-08 Jan-09 Jan-10 Jan-12 May-11 Jan-11 Sep-05 Sep-06 Sep-07 Sep-08 Sep-09 Sep-10 Sep-11 Diffusion Index of Current Diffusion Index of Expectations ISM Production (L) ISM New Orders (L) New Orders Durable Goods (R) New Orders Non-Defense exAir Capital (R) With Uncertainty in the U.S. and Chaos in Europe Businesses are Understandably Hesitant to Make Investments Source: Conference Board, ISM, BEA via IHS Global Insight 6

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Consumer PressuredHousehold Asset Appreciation Important to Consumption Retail Sales vs Consumer Confidence 8% 3 6% 120 7% 3.5 4% 100 Ratio to Household Assets-to-GDP Percentage Change 3m/3m 6% 4 2% 80 5% 4.5Savings Rate Index 4% 5 0% 60 3% 5.5 -2% 40 2% 6 -4% 20 1% 6.5 Savings Rate (L) Assets-to-GDP (R) -6% 0 0% 7 Jan-07 Jan-08 Jan-09 Jan-10 Jan-12 Jan-11 Apr-07 Jul-07 Oct-07 Apr-08 Jul-08 Oct-08 Apr-09 Jul-09 Oct-09 Apr-10 Jul-10 Oct-10 Apr-12 Jul-12 Apr-11 Oct-11 Jul-11 1985 1986 1987 1988 1989 1990 1991 1992 1993 1994 1995 1996 1997 1998 1999 2000 2001 2002 2003 2004 2005 2006 2007 2008 2009 2010 2011 2012 Retail Sales ExGas - VPQ Consumer Confidence - Expectations Lack of Confidence Also Saps Consumption Drop in Gas Prices Will Help Mitigate But Not Overcome Weak Jobs Growth Source: Federal Reserve, Census, Conference Board via IHS Global Insight 7

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Labor Market Comes Back to EarthPayrolls & Unemployment 500 12% Initial Claims 700 Four Week Moving Average 250 10% 650 600 0 8% 550 500 -250 6% 450 400 -500 4% 350 300 -750 2% 250 200 2000 2001 2003 2004 2005 2006 2007 2008 2009 2010 2002 2012 2011-1000 0% May-07 Jan-06 May-06 May-08 May-09 May-10 May-12 Jan-07 Jan-08 Jan-09 Jan-10 Jan-12 May-11 Jan-11 Sep-06 Sep-07 Sep-08 Sep-09 Sep-10 Sep-11 Change in Payrolls, M (L) Unemployment Rate, (R) Weakness No Longer Solely Attributable to Weather Source: BLS via IHS Global Insight 8

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Leading Indicators Of Labor Market ConditionsJob Openings Still Trending Up Survey Employment Indices Moderating But Hiring Remains Weak 80 305.0% Openings Hires Seperations Quits4.5% 70 20 Diffusion Index (50 = No Change) Net Percentage of Firms4.0% 60 103.5% 50 03.0%2.5% 40 -102.0% 30 -201.5% 20 -30 Jan-00 Jan-01 Jan-02 Jan-03 Jan-04 Jan-05 Jan-06 Jan-07 Jan-08 Jan-09 Jan-10 Jan-12 Jul-11 Jan-11 Jul-00 Jul-01 Jul-02 Jul-03 Jul-04 Jul-05 Jul-06 Jul-07 Jul-08 Jul-09 Jul-10 Jul-121.0% Jul-01 Jul-02 Jul-03 Jul-04 Jul-05 Jul-06 Jul-07 Jul-08 Jul-09 Jul-10 Jul-11 Jan-01 Jan-02 Jan-03 Jan-04 Jan-05 Jan-06 Jan-07 Jan-08 Jan-09 Jan-10 Jan-12 Jan-11 ISM Manufacturing (L) ISM Non-Manufacturing (L) Consumer Confidence Jobs (L) NFIB - Increase Employment (R) While Job Openings Still Support Employment Growth, Other Survey Measures Suggest Strong Growth Will Be Hard To Achieve Source: BLS, Institute for Supply Management via IHS Global Insight 9

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Labor Market Depends On GDP GrowthLong-term Unemployment Divergence Between Growth & Employment is Abnormal 8.5% -3.0% 50 50 7.5% -2.5% 45 45 6.5% GDP (L) Unemployment (R) -2.0% 40 40 5.5% -1.5% YoY Percentage Change 4.5% -1.0% 35 Mean Unemployment Duration 35 3.5% -0.5% % of Unemployed % Unemployed 27 Weeks+ YoY Change 30 30 2.5% 0.0%Weeks 25 25 1.5% 0.5% 0.5% 1.0% 20 20 -0.5% 1.5% 15 15 -1.5% 2.0% -2.5% 2.5% 10 10 -3.5% 3.0% 5 5 -4.5% 3.5% 0 0 -5.5% 4.0% 1980 1982 1984 1986 1988 1990 1992 1994 1996 1998 2000 2002 2004 2006 2008 2010 2012 1950 1952 1954 1956 1958 1960 1962 1964 1966 1968 1970 1972 1974 1976 1978 1980 1982 1984 1986 1988 1990 1992 1994 1996 1998 2000 2002 2004 2006 2008 2010 2012 Long-Term Unemployment Damages Workers’ Skills and Potential GDP Weak Outlook for GDP Leads to Slow Growth in Jobs Source: BLS via IHS Global Insight 10

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Bifurcated Labor Market Unemployed per Vacancy 8 7 Where are the Jobs? * 6 Total Change -77 85 1,815 -499 -378 -1,391 -1,765 -2,010 106 69 -84 -391 -128 2,500 5 4 2,000 Change During Recession Change During Recovery 3 Change In Employed (In Thousands) 2 1,500 1 0 1,000 Jan-01 Jul-01 Jan-02 Jul-02 Jan-03 Jul-03 Jan-04 Jul-04 Jan-05 Jul-05 Jan-06 Jul-06 Jan-07 Jul-07 Jan-08 Jul-08 Jan-09 Jan-11 Jul-11 Jan-12 Jul-09 Jan-10 Jul-10 500 June 2012 Breakdown 0 Information Financial Manufacturing Federal Govt Construction Professional / Business Services Other Services Leisure & Hospitality Local Govt Mining & Logging State Govt Trade, Transportation, & Utilities Education & Health Trade -500 Construction -1,000 Manufacturing -1,500 Prof. & Biz Services -2,000 Education & Health -2,500 Leisure & Hospitality *Data Through July 0 5 10 15 Unemployed per Job Opening Structural Unemployment Will Remain High If the Current Job Creation Pattern Persists Source: BLS via IHS Global Insight 11

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Average FICO Score of Originations 760 740 720Housing 700 680 660 640 2002 2003 2004 2005 2006 2007 2008 2009 2010 2012 2011 Total Purchase Credit Conditions Continue to Tighten Source: CoreLogic, Fair Issac 12