In the event that a government-owned or government-sponsored entity in one of our markets decides to reduce prices  significantly or alter the terms and conditions of its mortgage insurance or other credit enhancement products in furtherance of  political, social or other goals rather than a profit motive, we may be unable to compete in that market ef fectively, which could  have an adverse effect on our business, financial condition and operating results.  One or more private mortgage insurers may seek to regain market share from the FHA  or other mortgage insurers by  reducing pricing, loosening their underwriting guidelines, or relaxing their loss mitigation practices, which could, in turn,  improve their competitive position in the industry and negatively impact our level of NIW . In addition, before the recent housing downturn, an increasing number of alternatives to traditional private mortgage  insurance developed, many of which reduced the demand for our mortgage insurance.  As a result of the disruptions in the  housing finance and credit markets, however , many of the alternatives to private mortgage insurance are not currently available.  If market conditions were to change, or new alternatives are developed, we again could face significant competition from these  alternatives, as well as others that may develop. We depend on reliable, consistent third-party servicing of the loans that we insure. Dependable servicing generally  ensures timely billing and effective loss mitigation opportunities for delinquent or near -delinquent loans. As part of our claims  review process, we assess whether defaulted loans were serviced appropriately in accordance with our insurance policies and  servicing guidelines. In the high claims environment of the recent past, we have found a high frequency of servicer negligence  with respect to the loans we have insured, which makes us more susceptible to greater losses on these loans.  Many of our customers also service the loans that we insure, whether the loans were originated by the customer or  another lender. The same challenging economic and market conditions af fecting our customers that are described above (see  “ Our NIW and franchise value could decline if we lose a significant customer ”) also affect their ability to ef fectively maintain  their servicing operations. In addition, current housing trends have led to a significant increase in the number of delinquent  mortgage loans. These increases have strained the resources of servicers, reducing their ability to undertake loss mitigation  efforts in a timely manner, including the processing of potential loan modifications, which could help limit our losses. Further ,  due to the strain on the resources of servicers, delinquent loan servicing is increasingly being transferred to specialty servicers.  The transfer of servicing can cause a disruption in the servicing of delinquent loans.  Additionally, specialty servicers may not  have sufficient resources to effectively handle the substantially higher volume of delinquent loans.  Recent state and federal inquiries and investigations into whether servicers have acted improperly in foreclosure  proceedings, including the cost of and conditions imposed in settlements of such inquiries or investigations, may further strain  the resources of servicers. In January 2013, the CFPB issued final rules that establish national servicing standards for servicing  residential mortgage loans and impose new and potentially more burdensome requirements, procedures and standards.  These  new rules are scheduled to become effective in January 2014. Complying with the new rules could cause additional disruptions  in the servicing of mortgage loans covered by our insurance policies.  If a disruption occurs in the servicing of mortgage loans covered by our insurance policies, this, in turn, could contribute  to a rise in delinquencies and/or claims among those loans and could have a material adverse ef fect on our business, financial  condition and operating results. The FDIC, the GSEs and various lenders have adopted programs to modify loans to make them more af fordable to  borrowers with the goal of reducing the number of foreclosures. In addition, in 2009, the U.S. Department of the  Treasury  implemented the HAMP program, which provides guidelines for loan modifications. Some of the eligibility criteria for these  programs require information about borrowers, such as the borrowers’  current income and non-mortgage debt obligations.  Because the GSEs and the lenders do not share such information with us, we cannot determine with certainty the number of  loans in our default inventory that remain eligible to participate in such programs.  While modifications continue to be made  under these programs, it is unclear how many successful loan modifications will result from these programs, in particular in  light of the high level of re-default rates for loans that have been modified through these programs.  To the extent modifications  cure previously defaulted loans, our loss reserves do not account for potential re-defaults unless at the time the reserve is  established, the re-default has already occurred.  We believe that we have realized the majority of the benefits from HAMP because the number of loans insured by us that we are aware are entering HAMP  trial modification periods has decreased  significantly over time.  Loan modification, refinancing and other similar programs may not provide us with a material benefit.  Our business depends, in part, on effective and reliable loan servicing, which could continue to be negatively impacted by  the current disruption in the housing and mortgage credit markets. 72