Enact’s CEO on recession worries, post-IPO changes and more

Among those that have gone public in the last two years, private mortgage insurer Enact Holding is doing better than the originators whose stock prices have tanked from their starting point.

Enact priced at $19 per share. It closed at $21.53 on June 17 — after ranging between $18.76 and $25.85 since going public.

It’s refreshingly good news after five years of uncertainty about the company’s future. Genworth Financial, which still owns a majority stake in the mortgage insurer, originally considered breaking off the business back in August 2016, prior to agreeing to an ill-fated acquisition attempt by China Oceanwide.

After four-plus years of delays led to the deal unraveling, Genworth turned to its “Plan B”, the sale of 19.9% of the rebranded Enact. But volatile stock prices for the other publicly traded mortgage insurers forced the IPO to be postponed for four months.

Timing is everything and Enact has benefited from a growing home purchase market, which is the primary use case for its product. In the first quarter, the company had net income of $165 million, with new insurance written of $19 billion. That was the second smallest quarter-to-quarter decline in NIW.

Rohit Gupta, Enact’s president and CEO since 2012, guided the mortgage insurer through the uncertain times. He discussed what’s changed at the company since the IPO and how both the company and its industry are moving through the current market for home buying while preparing for rising delinquencies, which could ultimately lead to claims payments.

Questions and answers have been edited for length and clarity.