February 2016 - The Industry's Best Kept Secret

TheMReport — News and strategies for the evolving mortgage marketplace.

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10 | TH E M R EP O RT TAKE 5 support on other issues and mis- conceptions they were experiencing. Secondly, we actually trained our own ActionCenter ® , which is our call-in line for our customers, and implemented a specialized hotline so customers could get any help they needed on loan-level MI ques - tions once TRID was in effect. M // What do you think originators should be aware of when working with mortgage insurers? GUPTA // Today's mortgage insur- ance industry is not the same as it was in the past. As I mentioned, the industry has new master poli- cies that provide better clarity and transparency to our policyholders. We have new capital standards and more oversight in our new standards that make our industry stronger and also more solvent for our policyholders. We are very competitive with the FHA on our pricing, on cancellation of coverage, with amortization of home price appreciation. And lastly I would say we have fast underwriting times for our customers, we have better technology interfaces than we did before, and we are able to help our customers do more busi - ness and be more productive and efficient at the same time. M // What initiative have you been working on with USMI that we should know about? GUPTA // I think most recently USMI has been engaged in discus- sions with different constituents on the possibility of a deep-cover risk share. So this is where mort- gage insurance companies will take a larger risk position in front of the GSEs on GSE loans, and it serves a few different purposes. First thing, it puts private capital at risk in housing finance and puts taxpayers in a remote position. It creates a more sustainable hous - ing finance system, both in good times and in bad times. And lastly it also leads to, hopefully, some borrower savings, just coming from a reduction in guaranty fees and an increase in MI premiums for that extra coverage that the MI industry is signing up for. M // What are you seeing is the biggest obstacle for mortgage insurance professionals? GUPTA // I would say refining long-term strategy amidst today's evolving product marketplace. We have been in this cycle for eight years and it seems like the market is still recovering from both a regula- tory and legislative perspective. In 2014, the mortgage insurance (MI) industry implemented a new master policy across the industry, working with the Federal Housing Finance Agency (FHFA) and the GSEs. We got new capital and operational standards from the FHFA and the GSEs in 2015. They went into effect end of year, and now we still have our state regulators working on new standards, which are expected to come out, hopefully, later this year. So with that backdrop, the entire MI marketplace continues to evolve as does our customer's landscape. That's why ongoing innovation and continuing to create new products and services is important. It makes us more efficient and our customers more productive. M // What advice can you give to other professionals in terms of meeting these challenges? GUPTA // The first thing is I think working with regulators and legislators to make sure that they understand the impact of new rules "Continuing to innovate, continuing to create new products and services that make us efficient, is what makes our customers productive." Underwriting the Future of the MI Industry As President and CEO of Genworth's U.S. Mortgage Insurance Business, Rohit Gupta isn't just an expert on the mortgage insurance industry; he is helping chart its future. Gupta, who also chairs the board of the U.S. Mortgage Insurers (USMI), sat down with MReport to discuss the issues most affecting mortgage insurance professionals and their customers. Among the hot topics? Innovation, new technology, and streamlined processes. or new laws that they work on. The industry did that very well in 2014 and 2015, as the FHFA and GSEs wrote out these standards. Second is, as these changes come out, implementing them in the most compliant way. As an industry, we have implemented master policies, and hopefully our entire industry announces on their respective earning calls compliance with PMIERS, so we are making progress on that front. And also at the same time, working with our customers with the goal to help them implement the changes that impact them. So an example here would be the TRID implementa - tion that the entire industry went through. We at the MI companies worked with our customers to make sure they understood the rules and implemented them in the best way possible. Lastly, staying innovative and looking further out in the future on how can we use the technologies that are available to us at this point in time to actu - ally make the experience better for consumers so they can go through this process easier. M // You mentioned TRID. What have been some of the biggest challenges with this new legislation that you've seen? GUPTA // I think the challenges were as basic as trying to interpret TRID guidance under different scenarios. So as the scenarios get more and more granular—because no two borrowers are exactly the same–how should TRID be imple - mented? How should the guidelines be interpreted? We basically stepped up and launched training for our customers on how to go through that, plus provided them with

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