Enact Holdings, Inc. · NASDAQ:ACT
Enact — Investor Presentation (April 2021)
67 slides from Enact's investor presentation, April 2021
Slide 1: Understanding Loan Product Advisor - Advanced Guidelines and Updates
Understanding Loan Product Advisor® - Advanced Guidelines and Updates April 2021 Customer Education Brought to you by: Genworth Customer Development and Process Consulting
Slide 2: Genworth Training
Genworth Training https://new.mi.genworth.com/training/course/understanding-loan-product-advisor-basics#watchnow Advanced Loan Product Advisor 1
Slide 3: Freddie Mac Updates - Where To Get Them
Freddie Mac Updates - Where To Get Them Freddie Mac’s Website – Link to www.freddiemac.com – Link to Client Resource Center https://my.sf.freddiemac.com/ – Subscription Center – Learning Center – http://www.freddiemac.com/loanadvisorsuite/ – Single Family News – Pending Loan Product Advisor® Enhance
Slide 4: www.freddiemac.com
www.freddiemac.com https://sf.freddiemac.com/about/single-family/subscription-center Advanced Loan Product Advisor 3
Slide 5: Freddie Mac's Client Resource Center
Freddie Mac’s Client Resource Center https://my.sf.freddiemac.com/https://my.sf.freddiemac.com/ Advanced Loan Product Advisor 4
Slide 6: Freddie Mac COVID-19 resources
https://sf.freddiemac.com/content/_assets/r esources/pdf/faq/covid-19-selling-related- https://sf.freddiemac.com/about/covid19 frequently-asked-questions.pdf Advanced Loan Product Advisor 5
Slide 7: Genworth Training
Genworth Training https://new.mi.genworth.com/training/course/freddie-mac-covid-19-updates#watchnow Advanced Loan Product Advisor 6
Slide 8: Loan Product Advisor Documentation Matrix
Loan Product Advisor Documentation Matrix Tool to help document files https://sf.freddiemac.com/content/_assets/resources/pdf/update/docmatrix.pdf Advanced Loan Product Advisor 7
Slide 9: Freddie Mac Rental Income Matrix
Freddie Mac Rental Income Matrix Tool to help document files https://sf.freddiemac.com/content/_assets/resour ces/pdf/update/rental.pdf Advanced Loan Product Advisor 8
Slide 10: The Loan Product Advisor You've Asked For
https://sf.freddiemac.com/tools-learning/loan-advisor/our-solutions/the-loan-product-advisor-youve-asked-for Advanced Loan Product Advisor 9
Slide 11: Feedback Certificate
Feedback Certificate • Review the Feedback Certificate for Purchase Eligibility Messages – Freddie Mac Eligible – Freddie Mac Ineligible (Not eligible for sale to Freddie Mac/Investor) – Freddie Mac 500 A-minus Offering Many Lenders Do NOT Allow For A-Minus Loans To Be Delivered Or Insured. Always C
Slide 12: Feedback Certificate
Feedback Certificate Risk Classes for: •Conventional / Conforming Loans – ACCEPT – CAUTION Advanced Loan Product Advisor 11
Slide 13: Feedback Certificate- Loan Details
Feedback Certificate- Loan Details Documentation Levels for Conventional Conforming Loans – Streamlined Accept (Generally the Rule of One…). – Standard (Generally the Rule of Two) But Investor Product/Program Requirements may apply Advanced Loan Product Advisor 12
Slide 14: Feedback Certificate-Loan-to-Value Ratios
Feedback Certificate-Loan-to-Value Ratios Advanced Loan Product Advisor 13
Slide 15: Feedback Certificate- Qualifying Ratios
Feedback Certificate- Qualifying Ratios Advanced Loan Product Advisor 14
Slide 16: Feedback Certificate- Credit Report Details
Feedback Certificate- Credit Report Details Tammy Testcase Advanced Loan Product Advisor 15
Slide 17: Credit and Liabilities
Credit and Liabilities Borrowers with Credit Freeze https://guide.freddiemac.com/app/guide/content/a_id/1000641 Advanced Loan Product Advisor 16
Slide 18: Credit and Liabilities
Credit and Liabilities If consumers ask for a freeze online or by phone, the credit reporting agency must have the freeze in place within one business day. And when consumers want to lift the freeze, the credit reporting agencies have to make that happen within one hour. (If consumers make the r
Slide 19: Feedback Certificate- Mortgage Details
Feedback Certificate- Mortgage Details Advanced Loan Product Advisor 18
Slide 20: Property Type and PITIA
Property Type and PITIA Is Property type entered correctly (condo, PUD, manufactured home) Are the HOA dues, flood insurance or MI payments included in the housing payment, if applicable? Do you have written support? Does the occupancy make sense? Borrower Section Lender Loan Info Advanced Loa
Slide 21: Refinance
Refinance Paying off a second mortgage? Verify it was used to purchase the property or treat the loan as a cash out. Verify seasoning requirements for ownership and taking cash out. Is the property currently offered for sale or has it been offered for sale in the past six months? For refinan
Slide 22: Feedback Certificate- Mortgage Details
Feedback Certificate- Mortgage Details Advanced Loan Product Advisor 21
Slide 23: Feedback Certificate- Mortgage Details
Feedback Certificate- Mortgage Details Advanced Loan Product Advisor 22
Slide 24: Required ARM Detail
Required ARM Detail Advanced Loan Product Advisor 23
Slide 25: Freddie Mac Qualifying Requirements
Freddie Mac Qualifying Requirements https://guide.freddiemac.com/app/guide/content/a_id/1000523 Advanced Loan Product Advisor 24
Slide 26: Feedback Certificate- Asset Details
Feedback Certificate- Asset Details Advanced Loan Product Advisor 25
Slide 27: Feedback Certificate- Transaction Details
Feedback Certificate- Transaction Details Advanced Loan Product Advisor 26
Slide 28: Feedback Certificate- Mortgage Summary
Feedback Certificate- Mortgage Summary Advanced Loan Product Advisor 27
Slide 29: Feedback Certificate- Data Quality
Feedback Certificate- Data Quality Advanced Loan Product Advisor 28
Slide 30: Feedback Certificate- Employment and Income Messages
Feedback Certificate- Employment and Income Messages Advanced Loan Product Advisor 29
Slide 31: Documenting Employment and Income
Documenting Employment and Income Break Out Income Type For Proper AUS Results Advanced Loan Product Advisor 30
Slide 32: Employment Income
Employment Income When a borrower has less than a two-year history of primary employment you may be able to determine the income is stable. However, when the borrower’s income is derived from fluctuating hourly earnings the employment history must be at least 12 months Refer to Selling Guide 5303.2
Slide 33: Fluctuating Hourly Employment Earnings
Fluctuating Hourly Employment Earnings Effective for Mortgages with Settlement Dates on or After July 2, 2020 – Require that when the borrower’s income is derived from fluctuating hourly employment earnings, under no circumstances may the employment history be less than 12 months. – Clarifying that
Slide 34: Employment Income
Employment Income Primary Employment typically should have a two-year history. Documentation requirements include all of the following: Y-T-D Paystub(s) W-2 Form(s) 10-day Pre-closing Verification (PCV) Or, all of the following: Written VOE Y-T-D Earnings and most recent calendar year 10
Slide 35: Employment: Self-Employed Income
Employment: Self-Employed Income Freddie Mac Income Calculations – Updated Form 91 Income Calculations Form • Genworth posted updated Form 91 at mi.genworth.com – Revised documentation requirements • Two years tax returns for businesses in existence less than five years • One year tax return for bus
Slide 36: Non-Taxable Income
Non-Taxable Income History of receipt: A history of receipt is not required Continuance: Must be likely to continue to remain tax exempt Calculation: To determine the amount to adjust (i.e., "gross-up") the Borrower's income, use: 25% of the tax-exempt portion of the income or • The current federal
Slide 37: Non-Taxable Income- Social Security Only
Non-Taxable Income- *Social Security Only History of receipt: A history of receipt is not required Continuance: Must be likely to continue to remain tax exempt Calculation: May gross up 15% of the income without obtaining additional documentation. Documentation: No documentation when grossing up onl
Slide 38: Feedback Certificate- Asset and Reserves Messages
Feedback Certificate- Asset and Reserves Messages Advanced Loan Product Advisor 37
Slide 39: Assets
Assets All funds used in the transaction must come from eligible sources. For purchases, document the borrower has sufficient funds verified from eligible sources. For refinances, verification of funds is required unless the funds to close are $500 or less and reserves are not required and the loan
Slide 40: Asset General Documentation Requirement
Asset General Documentation Requirement – Most recent one or two months asset statements (depending on documentation path- Streamline or Standard) – Be sure to read Feedback to confirm how much you need to verify – Asset documentation valid for four months for both existing and new construction – Yo
Slide 41: Assets
Assets Standard Depository Messages: – Number of months documentation Best Practices: – Do you have All of the pages? –Truncated account numbers allowed as long as the last four digits are displayed Advanced Loan Product Advisor 40
Slide 42: Assets
Assets Direct account verifications and asset account statements used to verify the Borrower's accounts held in financial institutions must meet the following additional requirements: •Direct account verifications (i.e., verification of deposit form (VOD)) must: • Identify the financial institution
Slide 43: Assets
Assets See temporary guidelines Mutual Funds and Other *Non-liquid Account Types: – Proof of liquidation Proof Of Liquidation – When used for the down payment or closing costs, if the value of the asset is at least 20% more than the amount of funds needed for the down payment and closing cos
Slide 44: Assets
Assets See temporary guidelines Retirement accounts (401k or IRA) – Accounts that allow for withdrawals only in connection with the borrower’s employment termination, retirement, or death, or the account does not allow for any type of withdrawal should not be entered Look For Indications That the Ac
Slide 45: Minimum Borrower Contribution
Minimum Borrower Contribution Borrower’s Own Funds Freddie Mac Seller Servicer Guide (Chapter 5501.3(b)(i)) – No requirement for >80% LTV loans where: – Primary residence and – Gift or gift of equity received from eligible donor used as source of funds or – Employer Assisted Homeownership (EAH) Bene
Slide 46: Assets
Assets LPA uses the number of financed properties to apply the following eligibility guidelines for casefiles when the borrower has multiple financed properties and the subject property is an investment or second home.: – A minimum credit score of 720 is required for borrowers with 7-10 financed pro
Slide 47: Freddie Mac Required Reserves
Freddie Mac Required Reserves https://sf.freddiemac.com/content/_assets/ resources/pdf/requirements/reserves.pdf Advanced Loan Product Advisor 46
Slide 48: Assets
Assets Are all the assets per LPA verified plus any additional that are needed to payoff a judgment or collection? Evidence of liquidation if needed? Additional reserves? Loan Product Advisor does not validate if the maximum seller paid fees have been exceeded. You must validate this based o
Slide 49: Asset and Reserve Best Practices
Asset and Reserve Best Practices Enter each asset separately according to account type Verify you have all pages to the asset statement Review for large deposits and remove any unsourced funds that are not needed Do you need one or two months statements? Do you have consecutive and most recent state
Slide 50: Feedback Certificate- Credit and Liabilities Messages
Feedback Certificate- Credit and Liabilities Messages • Check for overlay of minimum credit score • Check for overlay of minimum number of credit scores • Check for overlay of minimum number of tradelines used in credit score Advanced Loan Product Advisor 49
Slide 51: Credit and Liabilities
Credit and Liabilities Disputed Information – Loan Product Advisor will provide “Invalid” recommendation if impactful Collections are not required to be paid off by Freddie Mac, but may be a requirement of the lender. Tax Liens and judgments must be paid and funds must be verified, in addition to th
Slide 52: Liabilities
Liabilities To exclude a liability that someone else pays requires documentation for 12 months showing timely payment and to exclude a mortgage, they must be a co- signer When excluding a mortgage payment that someone else has been verified making the payments, it is the PITIA that can be exclud
Slide 53: Liabilities
Liabilities Revolving: Indicate both the balance and monthly payment on all revolving accounts. Do not “omit” the debt even when 10 or fewer payments remain. These payments should always be included in the applicant’s debt ratio. 30-Day Charge: Monthly payments on open-end accounts are not required
Slide 54: Liabilities
Liabilities Leases: Indicate both the balance and monthly payment on all leases. Do not “omit” the debt even when 10 or fewer payments remain. Lease payments should always be included in the applicant’s debt ratio. Advanced Loan Product Advisor 53
Slide 55: Other Liabilities
Other Liabilities Child Support: Indicate both the balance and monthly payment on all support accounts. If less than 10 payments remain, the payment should not be included in the applicant’s debt ratio. Alimony: Must be deducted from the monthly income. Advanced Loan Product Advisor 54
Slide 56: Liabilities
Liabilities Student Loans: Indicate both the balance and monthly payment on all student loans. – All student loans in repayment, forbearance or deferment • If the payment amount is greater than zero, use the payment reported on the credit report or other documentation, or • If the monthly payment am
Slide 57: Liabilities
Liabilities Effective for Mortgages with Settlement Dates on and after January 2, 2020 Currently, Sellers may exclude a Borrower’s monthly student loan payment from the DTI ratio if: – The monthly payment may be excluded from the DTI provided the documentation in the file indicates • The loan has 10
Slide 58: Feedback Certificate- Property and Appraisal Messages
Feedback Certificate- Property and Appraisal Messages Advanced Loan Product Advisor 57
Slide 59: Feedback Certificate- General Messages
Feedback Certificate- General Messages Advanced Loan Product Advisor 58
Slide 60: FAQ's
FAQ’s https://sf.freddiemac.com/general/loan-product-advisor-faq#specification-v-5-0-06 Advanced Loan Product Advisor 59
Slide 61: Genworth Underwriting Guidelines
Genworth Underwriting Guidelines 60
Slide 62: Genworth Rate Express
Genworth Rate Express® >» 4% & 800 444.5664 | 4 | Q : Genworth z=. | Mortgage Insurance GE MI MI & RATES ERWRITING & GUIDES | LOS & CONNECTIONS | GENWORTH TOOLKIT | TRAINING | OUR BLOG | ABOUT US Rate Express Rate Cards D-19 updates and resources Genworth Mortgage Insurance GenRATE MI Products About
Slide 63: Training Tools and Information
Training Tools and Information 62
Slide 64: Training Tools and Information
Training Tools and Information 63
Slide 65: Additional MI Site Information
Additional MI Site Information 64
Slide 66: Your Genworth Resources
Your Genworth Resources ActionCenter®: 800 444.5664 Your Local Genworth Regional Underwriter Your Genworth Sales Representative 65
Slide 67: Legal Disclaimer
Legal Disclaimer Genworth Mortgage Insurance is happy to provide you with these training materials. While we strive for accuracy, we also know that any discussion of laws and their application to particular facts is subject to individual interpretation, change, and other uncertainties. Our train