In 2012, we have observed an increase in the number of short sales, as described further below . A substantial portion of  these short sales result in payment of a deficiency amount that is equal to the maximum liability amount, while in other cases,  the deficiency amount is less than our maximum liability amount. Approved sales in which the underlying property has been sold for less than the outstanding loan amount (commonly  referred to as “short sales”) have become an increasing portion of our total claim payments. Under our master insurance policy ,  we retain the right to consent prior to the consummation of any short sales. Historically , we have consented to a short sale only  after reviewing various factors, including among other items, the sale price relative to market and the ability of the borrower to  contribute to the deficiency amount. In 2012, we entered into an agreement with the GSEs, pursuant to which we delegated to  the GSEs our prior consent rights with respect to short sales on loans owned by the GSEs, subject to such sales meeting the  GSE guidelines and processes for short sales as well as certain other factors set forth in the agreements with the GSEs.  As a  result, instead of reviewing each individual transaction prior to short sale with respect to GSE loans, we instead perform a post  claim quality review of these short sales to ensure that they are meeting the specified requirements.  We have the ability to  terminate our agreements with the GSEs upon 60 days notice. For those loans that are not owned by the GSEs, we continue to  perform an individual analysis of each proposed short sale and to provide our consent for these sales, as we believe appropriate. After a claim is received, our loss management specialists focus on: Claim Denials . We may deny a claim if the servicer does not produce documents necessary to perfect a claim, including  evidence that the insured has acquired title to the property , within the time period specified in our master insurance policy . Most  often, a claim denial is the result of the servicer ’s inability to provide the loan origination file or other servicing documents for  review. If, after requests by us, the loan origination file or other servicing documents are not provided to us, we deny the claim.  Under the terms of our master insurance policy , our insureds must provide to us the necessary documents to perfect a claim  within one year after their acquisition of title to the property through foreclosure or otherwise. If we deny a claim, we continue  to allow the insured the ability to perfect the claim during the one-year period specified in our master insurance policy . In those  circumstances when the insured successfully perfects the claim within our specified timelines, we will process the claim,  including a review of the loan to ensure appropriate underwriting and servicing. Rescissions . We have the legal right, under certain conditions, to unilaterally rescind coverage on our mortgage insurance  policies. Under the terms of our master insurance policy , we have 60 days after a claim is received to pay the claim (assuming it  has been perfected), subject to various conditions that may toll this 60 day period, such as the insured providing additional  items necessary for us to complete a review of the claim. If we determine that a loan did not qualify for insurance, as part of our  internal procedures, we issue an “intent to rescind” letter that explains the basis of our decision and provides the insured with a  period of up to 90 days from the date of the letter to challenge or rebut our decision.  We are not contractually obligated under  the terms of our master insurance policy to provide the insured with this opportunity to rebut our decision to rescind coverage. Typical events that may give rise to our right to rescind include the following: (i) we insure a loan under our master  insurance policy in reliance upon an application for insurance that contains a material misstatement, misrepresentation or  omission, whether intentional or otherwise, or that was issued as a result of any act of fraud, subject to certain exceptions; or  (ii) we find that there was negligence in the origination of a loan that we insured.  We also have rights of rescission arising from  a breach of the insured’s representations and warranties contained in an endorsement to our master insurance policy that is  required with our delegated underwriting program. In certain circumstances, we may seek to rescind structured transactions for  breach of representations and warranties pertaining to the insured loans having been underwritten in accordance with the agreed  underwriting guidelines and in the absence of any fraud or misrepresentation. 19 •  a review to ensure that program compliance and our policy requirements have been met, including: (i) whether the  loan qualified for insurance at the time the certificate of coverage was issued; and (ii) whether the insured has  satisfied its obligation in meeting all necessary conditions in order for us to pay a claim (commonly referred to as  “claim perfection”); •  analysis and prompt processing to ensure that valid claims are paid in an accurate and timely manner; •  responses to real estate owned loss mitigation opportunities presented by the insured; and •  aggressive management and disposal of acquired real estate.