Essent Group Ltd. (NYSE:ESNT) Q4 2022 Earnings Call Transcript

Mark Casale: Yeah, I think that’s actually a good assessment of it, Jeff. I mean, this is one, most of the guys in forbearance originally in COVID cured. A lot of times, they cured because they sold the house. I mean €“ and we can see that now. I mean with the technology, you can see when we want your defaulted loans is listening and we could see like where was that €“ where we have it, marked at and where they’re selling it at. So in that market, they were able to kind of get out of that, which we’d assume was going to be part of it. And I think it’s the same thing here, just the embedded equity in the mark-to-market that we have on the book has really helped that. And then in terms of just I’m not sure €“ and this is longer term, but the forbearance and the tool as it is with the GSEs, I actually think that’s going to be a common occurrence around events.

Clearly, it happened with €“it happens with hurricanes. It happened with COVID. So other significant recessions, I would not be surprised. It’s a very effective tool of keeping borrowers in their homes and allowing to work it out, right? And in the post crisis, we had HARP, but there the milk kind of already spilled on the floor, and it was a way to help mitigate that with COVID right out of the gate. GSEs were extremely responsive. This is – it was really a smart move. I mean it hurt us, right, because we had to post reserves for it and in terms of people were defaulting because they were allowed to. But long term, keeping borrowers in their home is really good for everyone, except maybe for those who live in a default type world and things like that.

So, I think it’s a common tool and I think it’s going to €“ I think it’s a real benefit to the industry that is maybe a little bit underappreciated.

Geoffrey Dunn: Okay. Great. Thank you.

Mark Casale: You are welcome.

Operator: And there are no further questions at this time. I will turn the call back over to management for some final closing remarks.

Mark Casale: I would like to thank everyone for calling in today and their interest in Essent and have a great weekend.

Operator: This concludes today’s conference call. Thank you for your participation. You may now disconnect.