Genworth U.S. Mortgage Insurance's chief executive Tuesday morning said he remains optimistic in the wake of the company's first profitable quarter in some time, noting that it is favorably positioned to address challenges such as potential increases in private market competition and forecasts that call for an overall reduction in origination market volume.
When asked about possible private market competition from so-called piggyback loans, where a second lien or equity sharing is used to provide a downpayment, Genworth USMI president and CEO Rohit Gupta told a press briefing at the Mortgage Bankers Association's National Secondary Market Conference these are "always a concern," but "we have yet to see a substantial amount."
Gupta also said private MI is currently "very competitive" with the Federal Housing Administration.
When asked about forecasts for a downshift in volume, he noted that a shift toward purchases expected as part of this tends to disproportionately favor mortgage insurers. So even a relatively small pickup in purchases could result in increased business, provided that is not offset by increases in agency guarantee fees that reduce originations in that market.
Gupta also indicated, when asked about MBA president and CEO David Stevens' push for front-end risk sharing with deeper MI on agency deals, that mortgage insurers are "well aligned" with the MBA on this.
