Enact Holdings, Inc. · NASDAQ:ACT
Enact — Investor Presentation (February 2019)
46 slides from Enact's investor presentation, February 2019
Slide 1: What is MI? Understanding the Basics of Mortgage Insurance
What is MI? Understanding the Basics of Mortgage Insurance February 2019 Genworth Mortgage Insurance Corporation ©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 2
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 prod
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 Standard Annual (Paid Monthly-remitted annually) – Borrower Paid and Lender Paid Split Premium – Borrower Paid and Lender Paid Single Premium Genwo
Slide 5: Genworth Rates and Rate Notes
Genworth Rates and Rate Notes What is MI Understanding the Basics 5
Slide 6: What is MI Understanding the Basics
What is MI Understanding the Basics 6
Slide 7: Rate Notes link
https://new-content.mortgageinsurance.genworth.com/documents/rate-cards/national/Rate%20Notes%20NAT_sept2018.pdf What is MI Understanding the Basics 7
Slide 8: What is MI Understanding the Basics
What is MI Understanding the Basics 8
Slide 9: Genworth Rate Express®
Genworth Rate Express® What is MI Understanding the Basics 9
Slide 10: $200,000 loan, 95% LTV, 30% coverage, BPMI
$200,000 loan, 95% LTV, 30% coverage 760 score, BPMI* *Example is using a Genworth Rate card What is MI Understanding the Basics 10
Slide 11: Genworth Rate Express
Genworth Rate Express Quote Assumes Two Or More Borrowers On The Loan *Example is using a Genworth Rate card What is MI Understanding the Basics 11
Slide 12: Genworth Rate Express
Genworth Rate Express Easy To Compare Different MI Products To See Which Is Best For Your Borrower; Can Also Compare To FHA *Example is using a Genworth Rate card What is MI Understanding the Basics 12
Slide 13: 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
Slide 14: Monthly Premium MI (BPMI and LPMI)
Monthly Premium MI (BPMI and LPMI) Example of $150,000 loan amount, 90% LTV $150,000 x .28%= 420/12= Owner occupied, fixed rate, single family & FICO score ≥ 760 $35 per month What is MI Understanding the Basics 14
Slide 15: Borrower Paid Monthly Premium
Borrower Paid Monthly Premium What is MI Understanding the Basics 15
Slide 16: Standard Annual (BPMI and LPMI)
Standard Annual (BPMI and LPMI) Standard Annual Premium MI – A Payment Option That Features An Initial Coverage Term Of Twelve Months; Premiums Remitted Annually. The Rate Is Higher For First Year And Reduced For Renewal Years. Borrower Paid – Refundable and Non-refundable Options – Borrower
Slide 17: Standard Annual (BPMI and LPMI)
Standard Annual (BPMI and LPMI) Standard Annual Rate Cards Are Not On The Website Monthly Premium Included In Borrower Ratios Ends Up As $28.75 Per Month ($345/12 = $28.75) *Example of $150,000 loan amount, 90% LTV *Example is using a Genworth Rate card and assumes one borrower Owner occupied, f
Slide 18: 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 u
Slide 19: Six Split Premium Plans (Refundable/Non-Refundable Options)
Six Split Premium Plans (Refundable/Non- Refundable Options) What is MI Understanding the Basics 19
Slide 20: 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 score ≥ 760 *Example is using a Genworth Rate card and assumes 1 borrower What is MI Understanding the Basics 20
Slide 21: 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 i
Slide 22: 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 23: Non-Refundable BPMI Single Premium
Non-Refundable BPMI Single Premium Example of $150,000 loan amount, 90% LTV Owner occupied, fixed rate, single family & FICO score ≥ 760 *Example is using a Genworth Rate card and assumes 1 borrower Use A Lender Credit To Pay For The Premium; Not Counted In QM Fees And Points 8. Creditor-paid charge
Slide 24: 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 (HP
Slide 25: 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 amo
Slide 26: 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,
Slide 27: 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 Max
Slide 28: 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 Actua
Slide 29: 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 29
Slide 30: 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 family p
Slide 31: Fannie Mae And Freddie Mac MI Updates
Fannie Mae And Freddie Mac MI Updates Changes Effective October 1, 2018 Changes Effective March 1, 2019 What is MI Understanding the Basics 31
Slide 32: 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 wh
Slide 33: 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 curren
Slide 34: Cancellation/Termination Summary
Cancellation/Termination Summary What is MI Understanding the Basics 34
Slide 35: Resources
Resources Genworth Rate Cancellation Summary, Genworth Underwriting Guidelines, MI Tips and Credit Policy, Mobile App What is MI Understanding the Basics 35
Slide 36: Genworth Underwriting Guidelines
Genworth Underwriting Guidelines What is MI Understanding the Basics 36
Slide 37: Genworth Underwriting Guidelines
Genworth Underwriting Guidelines What is MI Understanding the Basics 37
Slide 38: Genworth Underwriting Guidelines
Genworth Underwriting Guidelines What is MI Understanding the Basics 38
Slide 39: Genworth Underwriting Tips
Genworth Underwriting Tips What is MI Understanding the Basics 39
Slide 40: Loan Officer Resources
Loan Officer Resources What is MI Understanding the Basics 40
Slide 41: Genworth Rate Express®
Genworth Rate Express® Avoiding Common Underwriting Errors 41
Slide 42: LOS Connections
LOS Connections Avoiding Common Underwriting Errors 42
Slide 43: Training Tools and Information
Training Tools and Information Avoiding Common Underwriting Errors 43
Slide 44: Training Tools and Information
Training Tools and Information Avoiding Common Underwriting Errors 44
Slide 45: 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 45
Slide 46: 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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