Enact Holdings, Inc. · NASDAQ:ACT
Enact — Investor Presentation (September 2020)
45 slides from Enact's investor presentation, September 2020
Slide 1: Understanding Desktop Underwriter Best Practices
Understanding Desktop Underwriter® Best Practices September 2020 ©2020 Genworth Financial, Inc. All rights reserved.
Slide 2: Fannie Mae news and events link
https://singlefamily.fanniemae.com/news-events Desktop Underwriter Best Practices 1
Slide 3: Desktop Underwriter Release Notes
Desktop Underwriter Release Notes https://singlefamily.fanniemae.com/applications-technology/desktop-underwriter-desktop-originator Desktop Underwriter Best Practices 2
Slide 4: Check for Full Details
Check for Full Details Desktop Underwriter Best Practices 3
Slide 5: General Messages
General Messages Clear Potential Erroneous Information – Confirm SS# Desktop Underwriter Best Practices 4
Slide 6: General Messages
General Messages See temporary guidelines Watch the expiration date of your documents! It’s 4 months - not 120 days! Desktop Underwriter Best Practices 5
Slide 7: General Messages: Check Pricing
General Messages Check Pricing Reminder- If the loan can be submitted as a HomeReady loan - All LLPA waived for transactions with credit score of 680 or greater and LTV of 80% or greater. https://www.fanniemae.com/content/pricing/llpa-matrix.pdf Desktop Underwriter Best Practices 6
Slide 8: General Messages: MI Coverage
General Messages • Check for MI coverage • Check MI guidelines Reminder - If the loan can be submitted as a HomeReady loan or is an HFA loan, the MI coverage requirement is lower when the LTV is greater than 90%! Desktop Underwriter Best Practices 7
Slide 9: Credit and Liabilities
Credit and Liabilities • 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 Desktop Underwriter Best Practices 8
Slide 10: Credit and Liabilities: Credit Freeze
Credit and Liabilities Borrowers with Credit Freeze – DU will underwrite if only one repository is frozen • A warning message will be issued by DU reminding lenders of their responsibility – If two repositories are frozen DU will issue an error message – If no credit score is generated by the two re
Slide 11: 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 12: Credit and Liabilities: Verification Messages
Credit and Liabilities Verification Messages Broken out by Topic: –Credit and Liabilities •Bankruptcy, foreclosures, charge offs, late pays, omitted accounts •What accounts were indicated as “to be paid off” •Mortgage payment that need additional attention This message is NOT on your sample findings
Slide 13: Credit and Liabilities: Disputed Trade Lines
Credit and Liabilities – When DU issues “Approve/Eligible” using the disputed trade lines: • Include the payment, if any, in the DTI but no further documentation is required. – When loan casefile does not receive Approve recommendation including the disputed trade line, risk will be assessed EXCLUDI
Slide 14: 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 15: Credit and Liabilities: Accounts Paid off at Closing
Credit and Liabilities Accounts Paid off at Closing – Funds must be verified to pay off the account (if indicated in DU loan to be paid, DU will add amount to be verified); Underwriters will use discretion and MAY include a payment even if the account is being paid off. The account may remain open a
Slide 16: Credit and Liabilities: Maximum DTI
Credit and Liabilities For loan casefiles underwritten through DU – DU determines the maximum allowable debt-to income ratio based on the overall risk assessment of the loan casefile – DU will apply a maximum allowable DTI ratio of 50% Desktop Underwriter Best Practices 15
Slide 17: Credit and Liabilities: Student Loans
Credit and Liabilities...cont Student Loans – Is it Deferred or in Repayment? – Student Loans in repayment: • Use the actual payment documented from credit report; If no payment listed – Use verified loan terms from student loan lender – Documentation supplied by the borrower or – 1% of the outstand
Slide 18: Credit and Liabilities: Monthly Obligations
Credit and Liabilities...cont The total monthly obligation is the sum of the following: – Monthly alimony, child support, or maintenance payments that extend beyond ten months SEL 2017-06 allows option to reduce income by the monthly Alimony obligation in lieu of a liability – Business debt in the b
Slide 19: Credit and Liabilities: Monthly Obligations
Credit and Liabilities...cont The total monthly obligation is the sum of the following: SEL 2018-01 allows option to include a payment in the DTI if certain requirements are met – Selling Guide requirements are: Desktop Underwriter Best Practices 18
Slide 20: Credit and Liabilities: SBA Loans
Credit and Liabilities...cont The total monthly obligation is the sum of the following: SEL 2018-09 requires SBA loans secured by the subject to be treated as a subordinated lien : Desktop Underwriter Best Practices 19
Slide 21: Documenting Employment and Income
Documenting Employment and Income Break Out Income Type For Proper AUS Results Desktop Underwriter Best Practices 20
Slide 22: Assets
Assets Do not enter gift funds in Section 2. Gifts are entered in Section 4. Desktop Underwriter Best Practices
Slide 23: Assets
Assets Observation Section Lists Total Assets Entered By Type; Underwriting Analysis Report Lists Total Funds Required, Including Any Reserves Assets Entered By Type Total Funds Required Additional Reserves May Need To Be Verified If Paying Down Accounts, Paying Off Collections Or Judgments Or Tax L
Slide 24: Minimum Borrower Contribution
Minimum Borrower Contribution 1. If the borrower receives a gift from a relative or domestic partner who has lived with the borrower for the last 12 months, or from a fiancé or fiancée, the gift is considered the borrower’s own funds and may be used to satisfy the minimum borrower contribution requi
Slide 25: 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 Desktop Underwriter Best Practices 24
Slide 26: Assets: Mutual Funds and Non-liquid Accounts
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 cost
Slide 27: Assets: Stocks or Bond Account Messages
Assets See temporary guidelines Stocks or Bond Account Messages: – Non-vested stock options and non-vested restricted stock are not acceptable sources of funds for the transaction Desktop Underwriter Best Practices 26
Slide 28: Assets: Retirement Accounts
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 29: Assets: Multiple Financed Properties
Assets DU 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 prop
Slide 30: Assets
Assets Are all the assets per DU verified plus any additional that are needed to payoff a judgment or collection? Evidence of liquidation if needed? Additional reserves? Desktop Underwriter Best Practices 29
Slide 31: 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 Desktop Unde
Slide 32: 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 33: Underwriting Analysis Report
Underwriting Analysis Report Page #2 Validate the Details Desktop Underwriter Best Practices 32
Slide 34: Underwriting Analysis Report: Amortization Type
Underwriting Analysis Report Amortization Type –Fixed or ARM? –ARM •Note Rate vs. Qualifying Rate Desktop Underwriter Best Practices 33
Slide 35: Underwriting Analysis Report: ARM Qualifying Rate
Underwriting Analysis Report ARM Qualifying Rate https://selling-guide.fanniemae.com/Selling-Guide/Origination-thru-Closing/Subpart-B3-Underwriting- Borrowers/Chapter-B3-6-Liability-Assessment/1736872401/B3-6-04-Qualifying-Payment-Requirements-04- 15-2014.htm Always Enter The Index And Margin On ARM
Slide 36: ARMS: LIBOR-SOFR Transition
ARMS: LIBOR-SOFR Transition https://www.fanniemae.com/content/news/libor-sofr-transition?utm_campaign=ssn- sell2019iss&utm_source=sfsfmc&utm_medium=email&utm_content=eml-noa-1120b-o-n&utm_term=b2b Desktop Underwriter Best Practices 35
Slide 37: Property
Property Field reviews are no longer required for properties with values over $1,000,000 with LTV/CLTV over 75% Lenders required to choose the most reliable appraisal when two appraisals are obtained Waiver of project reviews for all detached condo units (excluding manufactured homes) and allo
Slide 38: Genworth Underwriting Guidelines
Genworth Underwriting Guidelines
Slide 39: Genworth Rate Express
Genworth Rate Express® NA & 800 444.5664 |G | Q SENWVOIL ae ry Mortgage Insurance UNDERWRITING & GUIDES | LOS & CONNECTIONS | GENWORTH TOOLKIT | TRAINING OUR BLOG | ABOUT US Rate Express ITIONS THAT MATTER Genworth Mortgage Insurance Rate Cards GenRATE ga YOU year! ttf,.: Quote Sweepstakes Resources
Slide 40: LOS Connections
LOS Connections NA & 800 444.5664 |G | Q Genworth == Ayre Mortgage Insurance mR Search Q S caaiecal @ VIEW ACCOUNT MI & RATES | UNDERWRITING & GUIDES LOS & CONNECTIONS | GENWORTH TOOLKIT | TRAINING OUR BLOG ABOUT US YOU-CENTRIC SOLUTIONS THAT MAT submit on Our Site Genworth Mortgage Insurance LOS Co
Slide 41: Training Tools and Information
Training Tools and Information
Slide 42: Training Tools and Information
Training Tools and Information 41
Slide 43: Additional MI Site Information
Additional MI Site Information
Slide 44: Your Genworth Resources
Your Genworth Resources ActionCenter®: 800 444.5664 Your Local Genworth Regional Underwriter Your Genworth Sales Representative
Slide 45: 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
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