Genworth Mortgage Insurance's Evan Stolove spoke with DS News about the concerns he sees in the mortgage insurance sector of the industry and how to best ensure compliance in regard to conduct decisions made in the marketplace.
Stolove is Senior Vice President and General Counsel for Genworth Mortgage Insurance. He has over 20 years of legal and business experience, and previously served as Fannie Mae’s Vice President and Deputy General Counsel. Evan graduated from the University of Maryland School of Law. He resides in Raleigh, NC.
Can you describe some of the biggest concerns you see now working for a mortgage insurance company?
My experience isn’t yet so wide ranging as to make me an expert in the mortgage insurance industry, per se, because Fannie Mae plays in a slightly different space, although there's definitely a relationship. Since I am still somewhat new to Genworth, what I would say are probably the biggest concerns that I've noted about the industry so far are things like PMIERs compliance, the ability to raise capital as needed, uncertainty with respect to mortgage finance in general, the future of the GSEs and how that is all going to play out, and without a doubt, the economy overall.
Being an insurer, you don't have the ability to offset fluctuations in general economic cycles, so things like unemployment, interest rate fluctuations, and home price appreciation/depreciation―we're sensitive to all of those things. They affect our business models. They affect the amount of capital we need to retain. They affect our pricing. Regulatory uncertainty is yet another factor―the general risks that a regulator is going to have a different interpretation with respect to a law than perhaps they've had previously or that the industry understood to be the case.
What are the major compliance concerns you see in the industry?
It's not technically regulatory compliance, but I alluded to the PMIERs earlier, the Private Mortgage Insurer Eligibility requirements that were issued by Fannie and Freddie in conjunction with their conservator, FHFA. They have become incredibly important for the mortgage industry. Ensuring compliance with the PMIERs is instrumental and critical to our ongoing ability to write new business. I'd say that's the primary concern from a compliance perspective. Beyond that it would probably be two sets of laws in particular that we as an industry continually focus on. One being RESPA and the other being state anti-discrimination laws.
How do you address these concerns, or what advice do you have in addressing these concerns?
Here at Genworth, we have a very robust set of programs and controls around these. We do regular and routine training for our sales force and other employees here to ensure they understand the limits of the law. Then we set up a waterfall of committees and decision makers who need to sign off on things so that the right eyes are looking at it. Legal and compliance both play instrumental roles, along with risk, in ensuring that we are monitoring those carefully. Genworth in particular has a very, very robust structure to ensure that the decisions about how we conduct ourselves and how we play in the marketplace are compliant.