TheMReport — News and strategies for the evolving mortgage marketplace.
Issue link: http://digital.themreport.com/i/1484258
22 | M R EP O RT COVER STORY we can do, the more self-ser- vice we are able to offer to our customers, and that's what they want to see. Our ability to meet that need digitally is exciting to me. It is a challenge because we have such a wide range of cus- tomers, some that are very, very adaptive to the new and emerging technologies. Others are more reluctant. It's important to us to support every customer, as well as maybe try to convince some of those people who are unwilling to adopt the newer technologies that this is a good thing for them. It's not necessarily just about us, it's about making their experience better and enabling them to do things as opposed to having to get on the phone. It's going to be exciting to see what more we can offer our customers and how we can make that digital experience a lot better for them. Brian Gould COO, Enact What are the primary headwinds you're facing as we approach 2023, and how are you working to surmount them? I t's a good question. I would say "uncertainty" is the theme. Will there be a recession? Will it be shallow or will it be deep? Planning for uncertainty is the number-one focus. Not knowing where mortgage volume and interest rates are going to be, we do offer contract underwriting services so we can be a vari- able-cost option for our customers who are unsure of how to staff for the uncertainty. The foreclosure moratoriums expired at the end of 2021. It typi- cally takes 12 to 18 months before you're getting through the fore- closure process, so we expect to see more claims next year as we return to pre-COVID-19 claims levels. As an insurance company, one of our core commitments to our customers is to pay claims timely and accurately. There is a potential for higher delinquen- cies going forward. So, we have a homeowner's assistance team that partners with servicers to assist them if they have questions about home retention programs, or to remind them that they have delegation agreements with us to do modifications on loans to help families stay in their homes. Most recently, we are partnering with a firm called NextJob, a com- pany that assists borrowers to get back to secure a job who've been unemployed or underemployed. They work with them, from resume to interviewing, getting prepared. It's a no-cost option that we're offering servicers that work with us. We're willing to pay for that service to assist people. Lastly, we do offer white-glove service where we do letter and phone campaigns to delinquent borrow- ers—not to collect the debt, just to put them in touch and handoff to the servicer so that we're making sure all options are exhausted for people or families who want to keep their home and have the financial ability. Again, to be very clear, we're not collecting the debt. Our goal is to get Mr. and Mrs. Borrower in touch with their servicer. And the servicers have done a better job since the global financial crisis. I give a lot of credit to the government for the forbearance programs; they were very simple. People could implement those very quickly. If you go back to the financial crisis, some of the modifications that required a net-present-value model, it was very complicated. You had to review someone's financials. If they were stale, you had to ask for more documents. How do your current preparations for ongoing higher rates or a recession compare to how you had to adapt to COVID-19? O ne of the things we do in the operations team is cross-train people for other jobs. So, if the delinquencies increase, we can shift employees to help in that area. And we've gotten a lot of positive employee feedback that, "You hired me as a claims person, but now I understand underwrit- ing, I understand home retention," and vice versa. If underwriting demand increases, we can shift people that way. We spend a lot of time preparing and testing these capabilities. How have your priorities and focuses changed as we've continued to emerge from COVID-19? W e decided to challenge our- selves and do an IPO in September of 2021, so this is our first full year as a public company. We've been building capabilities that we didn't necessarily have in- house at Enact. Also, we deployed some more data-driven technology in our underwriting capabilities. We were able to implement da- ta-driven models and technologies to further segment loans as far as how you underwrite the risk of the loans and use that technology to automate some of the low-val- ue, no-value-added kind of steps. That enhanced our turn times, which is better for customers. We want to solve for the minority homeownership gap, to the best of our control, which is mortgage insurance. So, looking at how we underwrite the credit of a loan, what we notice is that minorities are more adversely impacted by not having credit scores. We want to help families and borrowers who are credit- worthy but not yet homeowners, who don't have a credit score. How do we do that? We made our pricing more competitive for borrowers that don't have a credit score. We also expanded the un- derwriting guidelines. We aligned with the agencies, Fannie Mae and Freddie Mac, but we also expanded. We will go up to a 97% loan-to-value ratio and 45% debt- to-income ratio. There is a lot of momentum around how to help solve the homeowner's gap, and this was one thing we wanted to put our capital and our expertise behind to help our mortgage lending partners. "Our goal is to get Mr. and Mrs. Borrower in touch with their servicer. And the servicers have done a better job since the global financial crisis." —Brian Gould, COO, Enact