Enact Holdings, Inc. · NASDAQ:ACT
Enact — Investor Presentation (November 2019)
52 slides from Enact's investor presentation, November 2019
Slide 1: What is MI: Understanding the Basics
What is MI: Understanding the Basics November 2019 ©2019 Genworth Financial, Inc. All rights reserved.
Slide 2: Agenda
Agenda What we will cover – Purpose of MI – Rate Card and Genworth Rate Express® – Products – Paying Claims – Guidelines, Tools and Resources – Questions All Lines Have Been Muted; Use The Questions Tab To Type In Your Questions What is MI Understanding the Basics 1
Slide 3: What Is MI – The Basics
What Is MI – The Basics Who does Mortgage Insurance insure? – Insures the LENDER not the borrower – MI required on conventional loans sold to Fannie Mae or Freddie Mac when *LTV is greater than 80% – FHA and VA loans are insured by HUD or the Veteran’s Administration – Different types of MI products
Slide 4: MI Products
MI Products Genworth Mortgage Insurance products – Borrower (BPMI) and Lender Paid (LPMI) • Monthly and Zero Monthly – Borrower Paid and Lender Paid Level Annual (Paid Monthly-remitted annually) – Borrower Paid and Lender Paid Split Premium – Borrower Paid and Lender Paid Single Premium Genworth Off
Slide 5: Genworth Rate Express
Genworth Rate Express® mi.genworth.com What is MI Understanding the Basics 4
Slide 6: Accessing Rate Cards
Accessing Rate Cards Only Use Rate Cards If You Have Opted Out Of GenRATE What is MI Understanding the Basics 5
Slide 7: Monthly Rate Cards
Monthly Rate Cards Only Use Rate Cards If You Have Opted Out Of GenRATE What is MI Understanding the Basics 6
Slide 8: Genworth Rate Express
Genworth Rate Express® mi.genworth.com What is MI Understanding the Basics 7
Slide 9: Email Required To Obtain Rate Quote
Email Required To Obtain Rate Quote User without Org Cookie Pre-registered User or Org Cookie present What is MI Understanding the Basics 8
Slide 10: $200,000 loan, 95% LTV, 30% coverage 760 score, BPMI
$200,000 loan, 95% LTV, 30% coverage 760 score, BPMI* Example shown is using a GenRATE What is MI Understanding the Basics 9
Slide 11: $200,000 loan, 95% LTV, 30% coverage 760 score, BPMI
$200,000 loan, 95% LTV, 30% coverage 760 score, BPMI* Example shown is using GenRATE What is MI Understanding the Basics 10
Slide 12: Genworth Rate Express
Genworth Rate Express Example is using GenRATE What is MI Understanding the Basics 11
Slide 13: Genworth Rate Express
Genworth Rate Express You Can Now Enter Another MI Product To Compare With Your Original Rate Quote Example is using GenRate What is MI Understanding the Basics 12
Slide 14: Genworth Rate Express
Genworth Rate Express You Can Compare Up To Four Products; You Can Select Four Quotes Right From The Start…See Next Slide Example is using GenRATE What is MI Understanding the Basics 13
Slide 15: Compare Four MI Products At Once
Compare Four MI Products At Once Save Your Preferences For Rate Quotes, One, Two, Three, Borrower Paid, Lender Paid What is MI Understanding the Basics 14
Slide 16: Monthly Premium MI (BPMI and LPMI)
Monthly Premium MI (BPMI and LPMI) Monthly Premium MI – Payment Option Which Features A Coverage Term Of One Month; Premiums Are Remitted Monthly. Borrower Paid or Lender Paid – Non-refundable – When paid by lender bump up to the interest rate Monthly or Zero Monthly – What is collected at closing?
Slide 17: Monthly Premium MI BPMI
Monthly Premium MI BPMI Example of $150,000 loan amount, 90% LTV Owner occupied, fixed rate, single family & FICO score of 760 using GenRATE and assumes two borrowers or more What is MI Understanding the Basics 16
Slide 18: Level Annual (BPMI and LPMI)
Level Annual (BPMI and LPMI) Level Annual Premium MI – A Payment Option That Features An Initial Coverage Term Of Twelve Months; Premiums Remitted Annually. The Premium Stays the Same Years 1-10 or until Cancelled. Borrower Paid – Only a Refundable Option – Borrower paid can be financed (fir
Slide 19: Level Annual Borrower Paid MI
Level Annual Borrower Paid MI Lender Level Annual MI is the same premium but the interest rate on the loan is higher so the PI payments are more over the life of the loan Monthly Premium Included In Borrower Ratios Ends Up As $23.75 Per Month ($285/12 = $23.75) Example of $150,000 loan amount, 90% L
Slide 20: Split Premium (BPMI and LPMI)
Split Premium (BPMI and LPMI) Split Premium MI – Payment Option That Features Lower Monthly Rates Combined With An Upfront Premium Due At Closing. Borrower Paid – Non-refundable : Non-refundable portion of premium included in points and fees for QM; – Refundable Up front refundable premium up to 1.7
Slide 21: Six Split Premium Plans (Refundable/Non-Refundable Options)
Six Split Premium Plans (Refundable/Non- Refundable Options) What is MI Understanding the Basics 20
Slide 22: Non-Refundable Split Premium Plan #1
Non-Refundable Split Premium Plan #1 What is MI Understanding the Basics 21
Slide 23: Non-Refundable Split Premium Plan #1
Non-Refundable Split Premium Plan #1 Example of $150,000 loan amount, 90% LTV, Premium Option Plan 1; Owner occupied, fixed rate, single family & FICO 760 using GenRATE and assumes two or more borrowers What is MI Understanding the Basics 22
Slide 24: Single Premiums (BPMI) or (LPMI)
Single Premiums (BPMI) or (LPMI) Borrower Paid – Provides Coverage Until The Loan Amortizes To 78% Of The Original Value, Unless Previously Cancelled – Can be refundable or non-refundable – Product must meet QM test for Borrower Paid: Allows for 1.75% to be excluded from points and fees for QM if re
Slide 25: Non-Refundable BPMI Single Premium
Non-Refundable BPMI Single Premium Use A Lender Credit To Pay For The Premium; Not Counted In QM Fees And Points 8. Creditor-paid charges. (Comment 32(b)(1)-2)) Charges paid by the creditor, other than loan originator compensation paid by the creditor that is required to be included in point and fee
Slide 26: Non-Refundable LPMI Single Premium
Non-Refundable LPMI Single Premium Example of $150,000 loan amount, 90% LTV, Owner occupied, fixed rate, single family & FICO 760 using GenRATE and assumes two or more borrowers What is MI Understanding the Basics 25
Slide 27: What is MI Understanding the Basics
What is MI Understanding the Basics 26
Slide 28: MI Helps How?
MI Helps How? Borrower Benefits – Less than 20% down – Average homebuyer can take up to 10 years to save the 20% down – MI can be cancelled-There are restrictions • MI can be cancelled by Lenders but Investors may have certain requirements when it can be cancelled • Homeowners Protection Act (HPA) r
Slide 29: Coverage and Exposure
Coverage and Exposure Coverage – Percentage of Risk the MI company has – Fannie Mae and Freddie Mac have coverage requirements – Most investors follow Fannie/Freddie guidelines for MI coverage – Lenders must ensure the required MI coverage is in force on the loan to deliver it Exposure – The amount
Slide 30: Required MI Coverage
Required MI Coverage Let’s put numbers into the formula – Appraisal Value/Sales Price $100,000 – Loan amount: $95,000 or 95% LTV ($95,000/$100,000 = 95%) – Lender requires and MI provider will ensure 30% of the loan amount (which is the standard MI coverage for Fannie Mae and Freddie Mac) • $95,000
Slide 31: How is maximum MI Coverage Calculated?
How is maximum MI Coverage Calculated? Unpaid Insured Loan Balance: $176,000 Plus Allowable Foreclosure Costs: $ 18,000 Total Outstanding Balance/Costs: $194,000 Percentage of Coverage: 30% Maximum Coverage: ($194,000 X 30% $ 58,200) Genworth Will Pay The Lender Lesser Of The Maximum Coverage Or Act
Slide 32: Calculation of Payment Claim to Lender
Calculation of Payment Claim to Lender Total Outstanding Balance Costs: $194,000 Less Pre-Foreclosure Sale Proceeds: $175,000 Loss After Sale of Property: $ 19,000 Payment due Lender in this case: $ 19,000* *Genworth Would Pay The Lesser Of Maximum Claim Amount Of $58,200 ts Or Actual Loss Of $19,00
Slide 33: CFPB Bulletin 2015-03-Clarifies Only
CFPB Bulletin 2015-03-Clarifies Only http://www.consumerfinance.gov/newsroom/cfpb-provides-guidance-about-private-mortgage-insurance-cancellation-and-termination/ What is MI Understanding the Basics 32
Slide 34: Cancellation/Termination Requirements
Cancellation/Termination Requirements* Cancellation/Termination Requirements a Automatic Termination Borrower Initiated Cancellation*** LTV = 78% ** ** a b a Original Value LTV < 80% LTV< 75% LTV < 80% b Appreciated Value** Yrs 2-5 After yr 5 *HPA or Homeowners Protection Act applies to single famil
Slide 35: Fannie Mae And Freddie Mac MI Updates
Fannie Mae And Freddie Mac MI Updates Changes Effective October 1, 2018 Changes Mandatory September 1, 2019 What is MI Understanding the Basics 34
Slide 36: Highlights of Changes
Highlights of Changes Both Fannie and Freddie – Allow borrower-initiated MI terminations to be evaluated based on a borrower’s written or verbal request – For requests to cancel mortgage insurance on the basis of substantial improvements to the Mortgaged Premises, descriptions and examples of what c
Slide 37: Highlights of Changes
Highlights of Changes Freddie Mac Only (Bulletin 2018-06) – For borrower-initiated MI terminations based on original value: Clarifies that a Servicer is NOT required to also order and obtain a “current value” – For borrower-initiated MI terminations based on current value: For evidence of current va
Slide 38: Cancellation/Termination Summary
Cancellation/Termination Summary What is MI Understanding the Basics 37
Slide 39: Resources
Resources Genworth Rate Cancellation Summary, Genworth Underwriting Guidelines, MI Tips and Credit Policy, Mobile App What is MI Understanding the Basics 38
Slide 40: Genworth Underwriting Guidelines
Genworth Underwriting Guidelines mi.genworth.com What is MI Understanding the Basics 39
Slide 41: Genworth Underwriting Guidelines
Genworth Underwriting Guidelines What is MI Understanding the Basics 40
Slide 42: Genworth Underwriting Guidelines
Genworth Underwriting Guidelines mi.genworth.com What is MI Understanding the Basics 41
Slide 43: Genworth Underwriting Tips
Genworth Underwriting Tips What is MI Understanding the Basics 42
Slide 44: Loan Officer Resources
Loan Officer Resources What is MI Understanding the Basics 43
Slide 45: Genworth Rate Express
Genworth Rate Express® mi.genworth.com What is MI Understanding the Basics 44
Slide 46: Genworth Underwriting Guidelines
Genworth Underwriting Guidelines mi.genworth.com What is MI Understanding the Basics 45
Slide 47: LOS Connections
LOS Connections mi.genworth.com What is MI Understanding the Basics 46
Slide 48: Training Tools and Information
Training Tools and Information mi.genworth.com What is MI Understanding the Basics 47
Slide 49: Training Tools and Information
Training Tools and Information mi.genworth.com What is MI Understanding the Basics 48
Slide 50: Additional MI Site Information
Additional MI Site Information mi.genworth.com What is MI Understanding the Basics 49
Slide 51: Your Genworth Resources
Your Genworth Resources ➢ ActionCenter®: 800 444.5664 ➢ Your Local Genworth Regional Underwriter ➢ Your Genworth Sales Representative What is MI Understanding the Basics 50
Slide 52: 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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