United Guaranty CEO unsure what’s in store
GREENSBORO — Billy Nutt is Greensboro’s man in the economy’s heaviest combat zone.
Nutt is the chief executive officer of AIG United Guaranty, a Greensboro company that insures mortgage lenders from bad loans.
The past few months have been “absolutely unbelievable” for Nutt, whose company is owned by insurance giant American International Group
The group has received more than $182 billion in federal aid since last September.
“We at United Guaranty are living the nightmare that has been left behind by all the collateral damage” that began with the housing market crash last year, he said at a meeting Wednesday of the Greensboro Rotary Club.
Now, reports are circulating that AIG may close or sell United Guaranty.
Although Nutt is barred by securities regulations from speaking about major corporate events, he said his personal opinion is that the best outcome would be for AIG to spin off United Guaranty and sell it to another investor.
That would be best for the Greensboro community, he said, and for the company’s 500 local employees.
At United Guaranty, financial problems stemmed from another part of the meltdown: consumers defaulting on home mortgages by the hundreds of thousands.
United Guaranty reimburses mortgage lenders when buyers can’t pay and foreclosure doesn’t cover losses.
It lost $2.5 billion in 2008, and AIG said the recession would continue to affect the subsidiary this year as well.
Nutt said he began to grow uneasy more than a year ago when he saw a reality TV show.
“I told my wife while we were sitting in bed one night: When I see the TV show 'Flip (This) House,’ this is the beginning of the end,” he said.
Cheap credit, aggressive real estate dealers and a faulty assumption that real estate prices would increase forever trapped the entire economy into a web that would soon crumble, he said.
None of the people fueling that overheated market had a big stake in the game, he said, because responsibility was broadly spread.
Now, United Guaranty is writing new policies for solid loan portfolios, he said, that will earn money well into the future.
But speaking broadly about the economy, Nutt said: “Where do we go from here? I don’t know. I don’t know.”
Contact Richard M. Barron at 373-7371 or richard.barron@news-record.com
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