Enact Holdings, Inc. · NASDAQ:ACT
Enact — Investor Presentation (April 2020)
75 slides from Enact's investor presentation, April 2020
Slide 1: Effective Loan Application Interviewing Using the New URLA
Effective Loan Application Interviewing Using the New URLA April 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
Effective Loan Application Interviewing Objective – Basic Understanding of the New URLA; Lenders may begin use as of as of September 1, 2020, it is mandatory November 1, 2020 – Reminders and Best Practices to taking a complete loan application and reviewing supporting documentation Effectively Revie
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/ Effectivel 5 y
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 Effectivel 6 y
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 https://guide.freddiemac.com/app/guide/content/a_id/1003723 https://guide.freddiemac.com/app/guide/bulletin/2020-11 https://guide.
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: Fannie Mae 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 – Take notes as you interview the applicant; You can then use th
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 Ask Questions to Determine if You Will Need Tax Returns: – Does your borrower own 25% or more of a business? – Does your borrower work for a relative? – Are there other income types or situations that typically require tax returns: • Interest or Dividend • Capital Gain/Loss • Renta
Slide 24: Employment/Income
Employment/Income *New On job full two years? If not use this section. Any gaps? Get an explanation. Any pay change? Effectively Reviewing the New URLA • 23
Slide 25: 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 26: 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 27: Capacity: Fannie Mae
Capacity: Fannie Mae Fannie Mae Single Family Selling Guide §B3-3.1-01, Employment and Other Sources of Income Effectively Reviewing the New URLA 26
Slide 28: Capacity: Fannie Mae
Capacity: Fannie Mae https://selling-guide.fanniemae.com/Selling-Guide/Origination-thru-Closing/#Continuity.20of.20Income Effectively Reviewing the New URLA 27
Slide 29: Capacity: Freddie Mac
Capacity: Freddie Mac Effectively Reviewing the New URLA 28
Slide 30: Capacity: Freddie Mac
Capacity: Freddie Mac Income Continuance Charts Were Added to Topic 5301.1 – Income and earnings types typically without documentable continuance – Income types with documentable continuance – Other income types that may or may not have documentable continuance Freddie Mac’s Single-Family Seller/Ser
Slide 31: Documentation Matrix – Freddie Mac
Documentation Matrix – Freddie Mac – Documentation Matrix- April 2020 – Assists with processing and documenting loan files – Be mindful of Product Overlays Follow COVID-19 Policies April 14 to May 17 https://sf.freddiemac.com/content/_assets/resources/pdf/update/docmatrix.pdf Effectively Reviewing t
Slide 32: 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 income – Stale dated? – Year End paystub for borrower
Slide 33: Capacity: Fannie Mae Commission Income
Capacity: Fannie Mae Commission Income Effectively Reviewing the New URLA 32
Slide 34: Capacity: Freddie Mac
Capacity: Freddie Mac Commission Income – Removed requirement for tax returns Page 6 Loan Product Advisor Documentation Matrix Effectively Reviewing the New URLA 33
Slide 35: 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 – Rental Forms 10
Slide 36: Capacity
Capacity Income Trend/Declining Income – Can the income be used to qualify? – If so, use only the lower of the two years Fannie Mae Comparative Income Form (Form 1088) – For Self-Employed Borrowers – Reference Guide on the Genworth website https://www.fanniemae.com/content/guide_form/1088.pd
Slide 37: Capacity: Self-Employed Income
Capacity: Self-Employed Income Freddie Mac Income Calculations – Bulletin 2016-19 • Revised and clarified self-employed income requirements for Freddie Mac • Distributions are not required for partnerships and S corporations but business must be capable of paying out profit and generating future ear
Slide 38: Capacity: Freddie Mac Long Term Rental Income
Capacity: Freddie Mac Long Term Rental Income One-year management history or ownership of a primary home income (Section 5306.19c)(ii) March 1, 2019 – The borrower must own a Primary Residence to use rental income to qualify when purchasing a new rental property; and – Whether purchasing a new renta
Slide 39: Fannie Mae Selling Announcement SEL
Fannie Mae Selling Announcement SEL 2019-08 Effectively Reviewing the New URLA 38
Slide 40: 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 41: 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 40
Slide 42: 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 41
Slide 43: 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 44: Assets: Large Deposits
Assets Large Deposits Fannie Mae – 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 Fannie Mae Single Family Selling Guide § B3-4.2-02, Depository Accounts (12/06/2016) Deposits Wh
Slide 45: 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 46: Real Estate Owned (REO) Section
Real Estate Owned (REO) Section *New * * * * * Mortgages Previously listed in liability section Effectively Reviewing the New URLA • 58
Slide 47: 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 page 5 of 1003 – Refinance: Does address match up to W-2/bank statement mailing address? – Occupan
Slide 48: 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 49: Declarations
Declarations *New * * * * Other Common Issues: – Be sure to go through the declarations carefully with your borrowers – Have any “yes” answers explained completely – Remember, guidelines concerning previous bankruptcy and/or foreclosure require waiting periods and re-establishment of credit • Ea
Slide 50: Declarations
Declarations *New * * * Other Common Issues: – Be sure to go through the declarations carefully with your borrowers – Have any “yes” answers explained completely – Remember guidelines concerning previous bankruptcy and/or foreclosure requires waiting periods and re-establishment of credit • Each
Slide 51: 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 66
Slide 52: 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 • 67
Slide 53: Military Service
Military Service https://www.benefits.va.gov/homeloans/ Effectively Reviewing the New URLA 68
Slide 54: Demographic Information Addendum
Demographic Information Addendum *New * * * * Effectively Reviewing the New URLA 69
Slide 55: Loan Originator Information
Loan Originator Information *New * * * Effectively Reviewing the New URLA • 70
Slide 56: Continuation Sheet
Continuation Sheet Effectively Reviewing the New URLA 71
Slide 57: URLA - Additional Borrower
URLA - Additional Borrower New If the borrowers have separate Form financial information, a unique URLA. Note: Join 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 • 72
Slide 58: 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 • 73
Slide 59: 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 60: 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 61: 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 62: Lender Loan Information
Lender Loan Information *New * Confirm Qualifying Rate vs. Note Rate on Adjustable Rate Programs Effectively Reviewing the New URLA • 77
Slide 63: Lender Loan Information - DOT
Lender Loan Information - DOT *New * * Sub-totaled Effectively Reviewing the New URLA 78
Slide 64: Unmarried Addendum
Unmarried Addendum New Form Effectively Reviewing the New URLA • 79
Slide 65: Instructions
Instructions New Form Written for the consumer Effectively Reviewing the New URLA • 80
Slide 66: Updates
Updates https://singlefamily.fanniemae.com/learning-center/delivering/faqs-uniform-residential-loan-application- uniform-loan-application-dataset Effectively Reviewing the New URLA 81
Slide 67: 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 82
Slide 68: Genworth Underwriting Guidelines
Genworth Underwriting Guidelines Effectively Reviewing the New URLA 83
Slide 69: Genworth Rate Express®
Genworth Rate Express® Effectively Reviewing the New URLA 84
Slide 70: LOS Connections
LOS Connections Effectively Reviewing the New URLA 85
Slide 71: Training Tools and Information
Training Tools and Information Effectively Reviewing the New URLA 86
Slide 72: Training Tools and Information
Training Tools and Information Effectively Reviewing the New URLA 87
Slide 73: Additional MI Site Information
Additional MI Site Information Effectively Reviewing the New URLA 88
Slide 74: Your Genworth Resources
Your Genworth Resources ➢ ActionCenter®: 800 444.5664 ➢ Your Local Genworth Regional Underwriter ➢ Your Genworth Sales Representative Effectively Reviewing the New URLA 89
Slide 75: 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