Member Spotlight: Q&A with Rohit Gupta of Enact
USMI’s member spotlight series focuses on how the private mortgage insurance (MI) industry works to address several critical issues within the housing finance system, including expanding access to affordable mortgage credit for first-time and minority homebuyers, protecting taxpayers from risk in the mortgage finance system, and providing recommendations on ways to reform the system to put it on a more sustainable path for the long-term.
This month we chat with Rohit Gupta, President and CEO at Enact. Enact, previously known as Genworth Mortgage Insurance, is an operating segment of Genworth Financial that has provided MI products and services in the U.S. since 1981. Enact operates across all 50 states and the District of Columbia, working with lenders and other partners to help people responsibly achieve and maintain the dream of homeownership by ensuring the broad availability of affordable low down payment mortgage loans.
Gupta talks about the company’s new brand and how it is better positioned to serve low down payment borrowers and the first-time homebuyer market. He also discusses the housing supply and what the U.S. government can do to help increase homeownership.
(1) Your company recently changed its name yet remains committed to helping families across the country either purchase a home or refinance existing mortgages to lower interest rates. Can you speak to the important role that Enact and private mortgage insurance plays in the housing finance system?
You are absolutely correct! We did change our name to Enact, and along with our lending partners, we remain committed to helping more low down payment borrowers safely and affordably achieve the dream of homeownership. Over the years, we have built upon our trusted reputation for quality service, in-depth understanding of our customers’ business, best-in-class underwriting, and risk and capital management expertise through multiple housing cycles.
Private mortgage insurance (PMI) is imperative in order for borrowers with low down-payments to have access to home mortgage financing options. Our Chief Economist Tian Liu’s annual First-Time Homebuyer Market Report highlights how the housing finance system continued to perform well during the fourth quarter of 2020, as the PMI industry ensured access to credit for first-time homebuyers. Credit availability for potential first-time homebuyers can be especially vulnerable given this segment of the market relies heavily on low down payment mortgages. For the full year (2020), low down payment conventional mortgages backed by PMI financed approximately 900,000 first-time homebuyers, that’s a 25% increase from 2019. Even in the midst of the global COVID-19 pandemic, the mortgage industry quickly and successfully shifted a large number of employees from the office to working from home by leveraging technology. This ensured that qualified borrowers could continue accessing credit, while maintaining social distancing protocols.
(2) Please tell us about your quarterly first-time homebuyer market report. Your last report highlighted how 2020 was an unprecedented year, resulting in a record number of first-time homebuyers. Why do you believe this was the case? And what should the industry continue to do or improve to keep first-time homebuyers accessing the housing market?
Our quarterly first-time homebuyer market report provides comprehensive coverage for the first-time homebuyer market, covering conventional, Federal Housing Administration (FHA), VA, USDA as well as the non-agency market. 2020 was a unique year because a number of factors came together – single-family homes became our office, children’s classroom, family’s restaurant, movie theater, and gym. Even as we start to see light at the end of the tunnel, homes will likely take on a bigger role for many people, making them more valuable to potential buyers.
Demographically, we’re also seeing the peak demand from the Millennial generation, the largest cohort in history. Cyclically, interest rates are at record-low levels, which supports housing affordability. Last year, the industry was instrumental in helping borrowers and lenders cope with record demand when shelter and safety were more important than ever for people, and we should continue to rely on technology and data to help potential first-time homebuyers. Our product makes a low down-payment possible, and today serves more first-time homebuyers than any other low down-payment mortgages. I believe that is something the industry should continue focusing on and sharing with the mortgage industry.
(3) The record-low housing supply is consistently increasing home prices. How is this affecting borrowers’ ability to purchase a home?
Today, rising home prices and the lack of inventory are major hurdles for homebuyers. Our industry has limited ability to influence housing supply, but we do and can play a role in making the down payment more affordable through our product. Also, we play an important role in educating borrowers on becoming responsible homeowners and lenders on our products to help their borrowers. Finally, we play an important role in keeping the mortgage origination and servicing process efficient, thereby lowering the cost to borrowers.
(4) Do you think this first-time homebuyer trend could persist? If so, why? And if not, what can the industry stakeholders and government do to ensure future generations can obtain the American Dream of buying a home?
I am optimistic about the first-time homebuyer trend because of its close relationship to homeownership. The COVID-19 pandemic has made homes and homeownership more important than ever. Even though demand continues to outpace supply, supply has been expanding. Housing starts have been over the 1.5-million-unit pace (the historical average) in seven of the past eight months. It will take some time for supply to catch up to demand, but I am confident that the housing industry will be able to deliver.
Rohit Gupta’s Biography
Rohit Gupta, President and CEO of Enact, is passionate about helping more people responsibly achieve and maintain the dream of homeownership. Rohit works with lenders, regulators, and policy leaders to advocate for the value of mortgage insurance to a sustainable housing finance system.
Along with his advocacy, Rohit served as chairman and remains a Board member of the U.S. Mortgage Insurers trade association. He also serves on the Boards of the Mortgage Bankers Association Residential Board of Governors and Housing Policy Executive Council. Additionally, Rohit is a catalyst for community change and serves as the chair of the Genworth Foundation Board, and a board member of American Cancer Society Triangle Leadership Council, and Pratham USA.
Prior to being named CEO, Rohit held the positions of Chief Commercial Officer & Senior Vice President of Products, Intelligence and Strategy, as well as Vice President – Commercial Operations. Rohit has an MBA in Finance from University of Illinois at Urbana Champaign and an undergraduate degree in Computer Science & Technology from Indian Institute of Technology. He resides in Raleigh, North Carolina with his wife and two children.