Enact Holdings, Inc. · NASDAQ:ACT
Enact — Investor Presentation (August 2020)
77 slides from Enact's investor presentation, August 2020
Slide 1: Effective Loan Application Interviewing
Effective Loan Application Interviewing Using the New URLA August 2020 Customer Education Brought to you by: Genworth Customer Development and Process Consulting ©2020 Genworth Financial, Inc. All rights reserved. 0
Slide 2: Effective Loan Application Interviewing: Objective
Effective Loan Application Interviewing Objective – Basic Understanding of the New URLA; Lenders may begin use as of as of January 1, 2021, it is mandatory March 1, 2021 – Reminders and Best Practices to taking a complete loan application and reviewing supporting documentation Effectively Reviewing
Slide 3: Uniform Residential Loan Application (URLA) Timeline
Uniform Residential Loan Application (URLA) Timeline Mandatory March 1, 2021 – Open production optional use beings January 1, 2021 Effectively Reviewing the New URLA 2
Slide 4: Fannie Mae’s URLA Page
Fannie Mae’s URLA Page https://singlefamily.fanniemae.com/delivering/uniform-mortgage-data-program/uniform-residential-loan- application Effectively Reviewing the New URLA 3
Slide 5: Freddie Mac’s URLA Page
Freddie Mac’s URLA Page http://www.freddiemac.com/singlefamily/sell/ulad.html Effectively Reviewing the New URLA 4
Slide 6: Fannie Mae COVID-19 Resources
Fannie Mae COVID-19 Resources Fannie Mae Updates, FAQs, Fannie Mae’s COVID 19 webpage https://singlefamily.fanniemae.com/ Effectively Reviewing the New URLA 5
Slide 7: Fannie Mae COVID-19 Resources
Fannie Mae COVID-19 Resources Fannie Mae Updates, FAQs, Fannie Mae’s COVID 19 webpage https://singlefamily.fanniemae.com/originating-underwriting#selling-promo 6
Slide 8: COVID-19 Updates!!
COVID-19 Updates!! Freddie Mac released Selling Updates and Appraisal Flexibilities in Bulletin 2020-05 on 3/23/20 and Bulletin 2020-08 on 3/31/20 & 2020-11 on 4/14/2020 and 2020-23 on June 11 and Bulletin 2020-27 on July 9 https://guide.freddiemac.com/app/guide/content/a_id/1003723 https://guide.fr
Slide 9: Effectively Reviewing the New URLA
Effectively Reviewing the New URLA • 8
Slide 10: Same Look and Feel
Same Look and Feel Effectively Reviewing the New URLA • 9
Slide 11: Uniform Residential Loan Application link
https://www.fanniemae.com/singlefamily/uniform-residential-loan-application Effectively Reviewing the New URLA • 10
Slide 12: Questions to Ask From the Beginning
Questions to Ask From the Beginning Pre-Loan Application Questions – Did you freeze your Credit? – Credit Score – Mortgage Model vs Consumer Model – Serious derogatory events - Waiting Period - Re-established credit, we will talk about – Do you have an existing mortgage? Fannie Mae and Freddie Mac w
Slide 13: Credit Freeze FAQ’s
Credit Freeze FAQ’s https://www.consumer.ftc.gov/articles/0497-credit-freeze-faqs Effectively Reviewing the New URLA 12
Slide 14: Credit Freeze
Credit Freeze 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 request by mai
Slide 15: New
*New Previously in liability section and easily missed * * Reg B * Prohibits asking for additional info Loan detail has been moved onto the new URLA throughout the forms - Loan amount, interest rate, loan type… Effectively Reviewing the New URLA • 14
Slide 16: Marital Status
Marital Status Civil Union is a legally recognized union of a same-sex couple, with rights similar to those of marriage. Domestic Partnership is a legal or personal relationship between two individuals who live together and share a common domestic life but are neither joined by marriage nor a civil
Slide 17: Requesting The Credit Report
Requesting The Credit Report Make Sure When You Order Any Type of Credit Report You: – Get the complete legal name of the borrower – Use the correct spelling of both the first and last name – Identify any alternate names the borrower may use – Confirm whether the borrower uses any generation suffix
Slide 18: New
*New Previously in the Declarations section Loan detail has been moved onto the new URLA throughout the forms - Loan amount, interest rate, loan type… Effectively Reviewing the New URLA • 17
Slide 19: Non–U.S. Citizen Borrower Eligibility
Non–U.S. Citizen Borrower Eligibility Effectively Reviewing the New URLA 18
Slide 20: Fannie Mae
Fannie Mae https://www.fanniemae.com/content/fact_sheet/non-citizen-borrower-eligibility.pdf Effectively Reviewing the New URLA 19
Slide 21: No Primary Housing Expense
*NEW * No Primary Housing Expense – Caution on loans with no traditional credit: To be able to deliver a loan with no traditional credit following the AUS, the recommendation must be an Approve/Eligible or Accept/Eligible recommendation AND the borrower must have a housing reference for at least 12
Slide 22: Employment/Income
Employment/Income *New * * Enter the Employer’s main number. Do NOT list the borrower’s personal work phone number that was collected in Section 1a. Spell out the full, complete business name and address. – Does the borrower work from home and has a corporate office somewhere else? • Use convers
Slide 23: Employment/Income
Employment/Income Employed Borrowers- Ask Questions: – Have they been furloughed or laid off anytime this year? – Have they had a reduction in hours or pay? – Has any OT, bonus or commission been reduced or discontinued – Is the borrower self-employed? What is the nature of their business and has it
Slide 24: Employment/Income
Employment/Income Ask Questions to Determine if You Will Need Tax Returns: – Does your borrower own 25% or more of a business? Work for a relative? – Realtors, Loan Originators, Consultants, etc. tax returns are typically required – Are you planning on using: • Interest or Dividend • Capital Gain/Lo
Slide 25: Employment/Income
Employment/Income *New On job full two years? If not, this section will be completed. Any gaps? Get an explanation. Any pay change? Effectively Reviewing the New URLA • 24
Slide 26: Employment/Income
Employment/Income *New-applicants can browse for income type * Income From Other Sources - Reminders: – Income must be broken down by specific type – “Other” is a last resort in income identification – Income trends must be stable or increasing and likely to continue for you to use as a qualifying s
Slide 27: Capacity
Capacity Steady, Stable, Likely to Continue – Two Year History – Guideline exceptions for some income types – Examples: Alimony, Survivor Benefits, Retirement • Three Year Continuance from application date Documentation – Check guidelines for minimum documentation requirement – Seek additional docum
Slide 28: Documentation Matrix – Freddie Mac
Documentation Matrix – Freddie Mac – Documentation Matrix- June 2020 – Assists with processing and documenting loan files – Be mindful of Product Overlays Follow COVID-19 Policies https://sf.freddiemac.com/content/_assets/resources/pdf/update/docmatrix.pdf Effectively Reviewing the New URLA 27
Slide 29: Capacity
Capacity Examine Paystubs Carefully – Clear explanations for withholding items • Possible undisclosed debt – Consistent information • Address • Social Security number – Last four digits – Year to date income • Showing on paystub • Consistent with historical income (base and or prior year’s earnings)
Slide 30: Capacity
Capacity Show Your Income Calculation Work – Agencies/Investors require calculations – Self-Employed Borrowers • Written analysis • Available worksheets (Updated for 2019) – Fannie Mae Cash Flow Analysis (Form 1084) – Freddie Mac Income Analysis (Form 91) – Schedule Analysis Method – Fannie Mae Comp
Slide 31: Assets and Liabilities
Assets and Liabilities *New * Do not enter gift funds in Section 2. Gifts are entered in Section 4. List Assets – Breakdown each asset by type – Ask applicant which account or accounts or “source” of funds will be used for the transaction – Know what is considered a large deposit – Explain any c
Slide 32: Other Assets Section If Applicable
Other Assets Section If Applicable Other Assets - These asset types are the less common – Verify acceptability of the assets type and check to see if any program restrictions apply Effectively Reviewing the New URLA 31
Slide 33: Asset Documentation
Asset Documentation Review the URLA – Review total assets listed on URLA with total funds to be verified on AUS – Do you have enough funds verified? – If not, contact borrower for source of additional funds. Where will they come from…gift? Effectively Reviewing the New URLA 32
Slide 34: Assets and Reserves
Assets and Reserves If reserves are required, document that the borrower has sufficient reserves from acceptable sources. – Reserves are dependent on: • Risk of the loan file and how many properties the borrower owns • Property and occupancy type • Product and underwriting type Always verify your ap
Slide 35: Assets: Large Deposits Fannie Mae
Assets Large Deposits Fannie Mae – A large deposit is any single deposit that is 50% or more of the total qualifying income being used to qualify • Source any account opened in most recent 90 days if using VODs Fannie Mae Single Family Selling Guide § B3-4.2-02, Depository Accounts (12/06/2016) Depo
Slide 36: Assets: Large Deposits Freddie Mac
Assets Large Deposits Freddie Mac – A large deposit is any deposit that is 50% or more of the total qualifying income being used to qualify • Source any account opened in most recent 90 days if using VODs Freddie Mac Seller/Servicer Guide § 5103.1 and 5501 Required funds https://sf.freddiemac.com/co
Slide 37: Assets: Earnest Money
Assets Earnest Money – Documentation • From eligible source (account listed on URLA?) • Correct documentation per guidelines – Is it a gift? – Make sure funds are not counted twice • Back out of bank account balance if necessary Effectively Reviewing the New URLA 36
Slide 38: Assets: Borrower’s Own Funds
Assets Borrower’s Own Funds – Fannie Mae 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 con
Slide 39: Assets: Borrower’s Own Funds
Assets Borrower’s Own Funds – Freddie Mac • 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) Benefit is used as source of funds Effectively Reviewing the New URLA
Slide 40: Asset Documentation Requirements
Asset Documentation Requirements When Reviewing Bank Statements, Look for the Following: – Proof the bank statement is the borrower’s (name, address consistent with 1003) – Verify statement includes an account number (it can be truncated) – Earnest money cleared? – Do you have all pages? – Any alter
Slide 41: Assets - IRA or Retirement Funds
Assets - IRA or Retirement Funds Look For Indications That the Account is an IRA or Retirement Account - Borrowers Do Not Always Tell You – Many investment accounts can be retirement accounts, so carefully review for evidence of the account type – If less than 100% vested, you can use only the veste
Slide 42: Assets and Liabilities
Assets and Liabilities *New Do not enter gift funds in Section 2. Gifts are entered in Section 4. * Gifts must be evidenced by a letter signed by the donor, called a gift letter. The gift letter must: – specify the dollar amount of the gift; – specify the date the funds were transferred; – inclu
Slide 43: Liabilities
Liabilities *New * Real Estate liabilities are NOT entered in Section 2 they will be entered in Section 3. Liability Section Tips: – Not all liabilities appear on a credit report – Installment debts with 10 or fewer remaining payments: • Typically not included in debt ratio, but should be listed
Slide 44: Liabilities
Liabilities Excluding Debts – Contingent Liabilities or Not – Fannie Mae • Allows for any type debt (revolving, leases, student loans) – Must document 12-month payment history, with no delinquencies – Evidence payments made by someone other than borrower(s) – Freddie Mac same as above. See Freddie M
Slide 45: Real Estate Owned (REO) Section
Real Estate Owned (REO) Section *New * * * * * Mortgages Previously listed in liability section Effectively Reviewing the New URLA • 44
Slide 46: Real Estate Owned (REO) Section
Real Estate Owned (REO) Section A Mortgage Trade Line Needs Additional Caution Taken When Reviewing*. The payment on the report typically represents the payment based on repaying the note. It does not always include escrows of taxes and insurances that the mortgage servicer may be collecting. – Veri
Slide 47: Fannie Mae LL-2020-03
Fannie Mae LL-2020-03 Effective June 2, 2020 And Remains Effective Until Further Notice Updated Policy for new Purchase and refinance transactions – Lenders must review borrower’s credit report to determine the status of all mortgage loans. In addition, lenders must apply due diligence for each mort
Slide 48: Bulletin 2020-17
Bulletin 2020-17 TEMPORARY PURCHASE AND REFINANCE ELIGIBILITY REQUIREMENTS FOR BORROWERS WITH EXISTING MORTGAGES These temporary requirements are effective for Mortgages with Application Received on and after June 2, 2020 and until further notice. It is encouraged to implement these requirements to
Slide 49: Loan and Property Information
Loan and Property Information *New * * * Previously the first section of the application All Data Fields Should be Correctly Completed – Show correct USPS address; Legal address should be listed on continuation page of 1003 – Refinance: Does address match up to W-2/bank statement mailing address
Slide 50: Loan and Property Information
Loan and Property Information *New * * * All Data Fields Should be Correctly Completed; Ask A Few Questions – Is there an existing HELOC with no balance to be released or re-subordinated or will there be subordinate financing? It takes time to obtain these documents – Currently offered or listed
Slide 51: Declarations
Declarations *New * * * * Other Common Issues: – Be sure to go through the declarations carefully with your borrowers – Are they buying multiple properties at the same time? – Are they taking out another loan that is not disclosed? Or applying for new credit that is not disclosed? Yes answers wi
Slide 52: Declarations
Declarations *New * * * Other Common Issues: – Remember guidelines concerning previous bankruptcy and/or foreclosure requires waiting periods and re-establishment of credit • Additional documentation will be required to verify the event • Each Lender, Investor and MI Company may have rules that
Slide 53: Acknowledgements and Agreements
Acknowledgements and Agreements *New * Disclosure of the use of appraisal and use of electronic records and signatures Reporting of late payments to credit reporting agencies Use and sharing of a borrower’s personal information disclosed on the URLA Effectively Reviewing the New URLA 52
Slide 54: Military Service
*NEW * Military Service – The length of service or service commitment, duty status and character of service determine the eligibility for specific home loan benefits. Effectively Reviewing the New URLA • 53
Slide 55: Military Service
Military Service https://www.benefits.va.gov/homeloans/ Effectively Reviewing the New URLA 54
Slide 56: Demographic Information Addendum
Demographic Information Addendum *New * * * * Effectively Reviewing the New URLA 55
Slide 57: Loan Originator Information
Loan Originator Information *New * * * Effectively Reviewing the New URLA • 56
Slide 58: Continuation Sheet
Continuation Sheet Effectively Reviewing the New URLA 57
Slide 59: URLA - Additional Borrower
URLA - Additional Borrower New If the borrowers have separate Form financial information, a unique URLA. Note: Joint assets, liabilities, and real estate should be listed on only one application and not duplicated on more than one application. Effectively Reviewing the New URLA • 58
Slide 60: Lender Loan Information
Lender Loan Information New Form The Lender Loan Information now has some of the loan information fields Effectively Reviewing the New URLA • 59
Slide 61: Lender Loan Information
Lender Loan Information *New * * * * * All data fields should be correctly completed – Refinance: How long have they owned property? – Is there an existing HELOC with no balance to be released or re-subordinated? – Remember to ask on a refi if the property is currently offered or has been listed
Slide 62: Community Property States
Community Property States Community Property Refers to Joint Ownership of Property Where Multiple People, Such as a Married Couple, Can Simultaneously Own a Single Piece of Property. Here is a list of the Community Property states which recognize this property regime: – Arizona – California – Idaho
Slide 63: Lender Loan Information
Lender Loan Information *New * * * ** * Tenancy in Common is different than Joint Tenancy, because the transfer of the property to a beneficiary in the event of an owner's death, is different. In a Joint Tenancy agreement, the title of the property is passed to the surviving owner, while in a Tenanc
Slide 64: Lender Loan Information
Lender Loan Information *New * Confirm Qualifying Rate vs. Note Rate on Adjustable Rate Programs Effectively Reviewing the New URLA • 63
Slide 65: Lender Loan Information - DOT
Lender Loan Information - DOT *New * * Sub-totaled Effectively Reviewing the New URLA 64
Slide 66: Unmarried Addendum
Unmarried Addendum New Form Effectively Reviewing the New URLA • 65
Slide 67: Instructions
Instructions New Form Written for the consumer Effectively Reviewing the New URLA • 66
Slide 68: Updates
Updates https://singlefamily.fanniemae.com/learning-center/delivering/faqs-uniform-residential-loan-application- uniform-loan-application-dataset Effectively Reviewing the New URLA 67
Slide 69: FAQ’s
FAQ’s https://singlefamily.fanniemae.com/learning-center/delivering/faqs-uniform-residential-loan-application-uniform-loan- application-dataset Effectively Reviewing the New URLA 68
Slide 70: Genworth Underwriting Guidelines
Genworth Underwriting Guidelines Effectively Reviewing the New URLA 69
Slide 71: Genworth Rate Express
Genworth Rate Express® Effectively Reviewing the New URLA 70
Slide 72: LOS Connections
LOS Connections Effectively Reviewing the New URLA 71
Slide 73: Training Tools and Information
Training Tools and Information Effectively Reviewing the New URLA 72
Slide 74: Training Tools and Information
Training Tools and Information Effectively Reviewing the New URLA 73
Slide 75: Additional MI Site Information
Additional MI Site Information Effectively Reviewing the New URLA 74
Slide 76: Your Genworth Resources
Your Genworth Resources ➢ ActionCenter®: 800 444.5664 ➢ Your Local Genworth Regional Underwriter ➢ Your Genworth Sales Representative Effectively Reviewing the New URLA 75
Slide 77: 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