Sumita Pandit : Maybe I can add a little bit also here. In terms of consumer behavior, I do think that people are getting just more used to a higher interest rate environment. And I think for a lot of potential homebuyers who were waiting for the interest rate to change, I think it’s a good confluence of slightly lower interest rates, maybe not as great as what they had a few years back. But at some point, people need to go ahead and live their lives. So I do think that there is a consumer behavior aspect to it, as people get used to the current interest rates.
Eric Hagen : Yeah. That’s a good perspective. I appreciate that. We got prepayment speeds from the GSEs this week. Any perspective you can share there on the high LTV loans out there. And even what your persistency rate might look like if mortgage rates were to drop from here?
Derek Brummer : Well, I mean, yeah, it’s Derek. So in terms of looking at the outlook for persistency, which Rick kind of touched upon earlier, most of the portfolio is significantly out of the money from a refinance perspective. So when you kind of look at it, in terms of that interest rate movement, I think Rick and Sumita were alluding to the fact having rates go down, could be a positive in terms of kind of the origination side. Also, given a situation where your persistency still stays elevated because we have so much of the portfolio out of the money versus a typical situation where you have a bit of an interest rate dip, you might pick up originations, but then you have a lot of refi out of your portfolio. So we might be in a good spot if kind of rates kind of stay within kind of a certain corridor, let’s say, within 100 to 150 basis points down.
So I would say that I think there’s a lot of stickiness to the portfolio. And it would take significant decreases in interest rates, which I don’t think we’re protecting or most third parties are projecting to see a significant pickup in prepayments.
Eric Hagen : Yeah. Is it a fair assumption that most of the borrowers with MI now, if they were to refi, they would require MI again? Or is there more flexibility for some folks you feel like?
Derek Brummer : Well, there’s more flexibility. It just depends on the portfolio. And I think that has been — you’ve seen that a little bit in kind of the penetration rate on the refinance side. The more recent vintages, there’s going to be less embedded equity. So if you look at those who are closer to being in the money are going to be recent vintages like the last year, and they’re going to have less embedded equity. So with respect to that versus the overall portfolio, there might be a higher probability that would have — need mortgage insurance versus kind of some of the older vintages, but the older vintages that are so far out of the money. So you have to put that in perspective.
Eric Hagen : Sure. I appreciate, guys. Thank you.
Rick Thornberry : Thank you.
Operator: I show no further questions at this time. I would now like to turn the call back to Rick Thornberry for closing remarks.
Rick Thornberry : Thank you. And I want to thank everybody for their participation and the really excellent questions. We appreciate the support that we received from all of you as our investors. And we look forward to meeting with you soon. And for those of you who are also Chiefs fans for the Super Bowl this weekend, I hope that you have a good weekend and for our 49ers fans, good luck as well. So that’s it. That’s all I got. Look forward to seeing you all on the road. Take care.
Operator: Thank you for participating. This concludes today’s conference call. You may now disconnect.
