Enact Holdings, Inc. · NASDAQ:ACT
Enact — Investor Presentation (December 2018)
77 slides from Enact's investor presentation, December 2018
Slide 1: Effective Loan Application Interviewing and Review - Using the New URLA
Effective Loan Application Interviewing and Review - Using the New URLA December 2018 Genworth Mortgage Insurance Corporation ©2018 Genworth Financial, Inc. All rights reserved.
Slide 2: Effective Loan Application Interviewing
Effective Loan Application Interviewing Objective – Provide Originators and Processors with best practices for taking and reviewing quality loan applications and supporting documentation Agenda – Questions to Ask – Purpose of Loan Fields – 1003 Starting with Property Section – Contract Revie
Slide 3: Uniform Residential Loan Application (URLA) Timeline Update
Uniform Residential Loan Application (URLA) Timeline Update September 26, 2017 – Finalized Demographic Information Addendum – URLA Effective Dates – Desktop Underwriter® (DU®) Specification Timeline Effectively Reviewing the New URLA 3
Slide 4: Uniform Mortgage Data Program (UMDP)
Uniform Mortgage Data Program® (UMDP ®) Effectively Reviewing the New URLA 4
Slide 5: Fannie Mae's URLA Page
Fannie Mae’s URLA Page https://www.fanniemae.com/singlefamily/uniform-residential-loan- application?utm_source=fanniemae&utm_campaign=best_match Effectively Reviewing the New URLA 5
Slide 6: Freddie Mac's URLA Page
Freddie Mac’s URLA Page http://www.freddiemac.com/singlefamily/sell/ulad.html Effectively Reviewing the New URLA 6
Slide 7: Effectively Reviewing the New URLA
Effectively Reviewing the New URLA • 7
Slide 8: Same Look and Feel
Same Look and Feel Effectively Reviewing the New URLA • 8
Slide 9: Fannie Mae URLA link
https://www.fanniemae.com/singlefamily/uniform-residential-loan-application Effectively Reviewing the New URLA • 9
Slide 10: New
*New Previously in the Declarations Previously in section 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 • 10
Slide 11: 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 Discuss With Borrower And Be Clear About Any Changes To Inco
Slide 12: 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 13: 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
Slide 14: 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 suf
Slide 15: Non-U.S. Citizen Borrower Eligibility
Non–U.S. Citizen Borrower Eligibility Effectively Reviewing the New URLA 15
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
Slide 17: No Primary Housing Expense
*NEW * No Primary Housing Expense – Caution on loans with no traditional credit. To receive an Approve/Eligible or Accept/Eligible recommendation, the borrower must have a housing reference Effectively Reviewing the New URLA • 17
Slide 18: 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 • 18
Slide 19: Military Service
Military Service https://www.benefits.va.gov/homeloans/ Effectively Reviewing the New URLA 19
Slide 20: Language Preference
Language Preference *NEW Effectively Reviewing the New URLA 20
Slide 21: 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 22: 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 receive commission as 25% or more of the income? – Does your borrower work for a relative? – Are there other income types or situations that may be
Slide 23: Employment/Income
Employment/Income *New * 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 in the future for you to use as a qualifying source of income Effectiv
Slide 24: Employment/Income
Employment/Income *New Effectively Reviewing the New URLA • 24
Slide 25: 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 addition
Slide 26: 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 27: Capacity: Fannie Mae
Capacity: Fannie Mae https://www.fanniemae.com/content/guide/selling/b/index.html Effectively Reviewing the New URLA 27
Slide 28: Capacity: Freddie Mac
Capacity: Freddie Mac Effectively Reviewing the New URLA 28
Slide 29: 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
Slide 30: Capacity: Freddie Mac
Capacity: Freddie Mac Employed Income Types Primary – Borrower’s primary source of employed income Secondary – Second job, part-time job or multiple jobs Primary Additional – Commissions – Bonus Additional – Overtime Secondary – Tips – Auto allowance – Mortgage differential – Militar
Slide 31: Freddie Mac Documentation Matrix
Freddie Mac Documentation Matrix Documentation Matrix – Assists in properly underwriting and documenting the loan file for Freddie Mac Eligible loans only – Lenders may have overlays so always check specific program requirements – Updated September 2018 http://freddiemac.com/learn Effectively Re
Slide 32: Capacity
Capacity Show Your Income Calculation Work – Agencies/Investors require calculations – Self-Employed Borrowers • Written analysis • Available worksheets – Fannie Mae Cash Flow Analysis (Form 1084) – Freddie Mac Income Analysis (Form 91) – Schedule Analysis Method – Specific Lender/Investor Forms
Slide 33: Assets and Liabilities
Assets and Liabilities *New * List Assets – Breakdown by type of asset – Ask applicant which account or accounts or “source” of funds will be used for the transaction – Collect two months assets statement – Know what is considered a large deposit – Explain any change source of funds must be comm
Slide 34: 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 35: Gift Funds
Gift Funds Gift Funds – Enter into AUS correctly – Must come from acceptable source – A gift can be provided by: • A relative, defined as the borrower’s spouse, child, or other dependent, or by any other individual who is related to the borrower by blood, marriage, adoption, or legal guardianshi
Slide 36: Assets and Liabilities
Assets and Liabilities 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 55
Slide 37: Sweat Equity- Fannie Mae
Sweat Equity- Fannie Mae Effectively Reviewing the New URLA 56
Slide 38: Sweat Equity- Freddie Mac
Sweat Equity- Freddie Mac http://www.freddiemac.com/learn/pdfs/mp/sweat_equity_reminders.pdf Effectively Reviewing the New URLA 57
Slide 39: 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 40: Liabilities
Liabilities Minimum Payments – Usually on credit report – If not on credit report • Creditor supplied documentation • Revolving, DU and Loan Product Advisor® allow using the greater of: – 5% of outstanding balance, or – $10 Open Ended Accounts (O-J or O-I under MOP on Credit Report) – Suffic
Slide 41: Liabilities
Liabilities Student Loans – Fannie Mae *See Fannie Mae SEL 2017-04 for guidance on student loan debts when calculating a borrower’s DTI Ratio Guidelines Stated Are Generic Fannie Mae Policy Effectively Reviewing the New URLA 60
Slide 42: Liabilities
Liabilities Student Loans – Freddie Mac • For loans in repayment, forbearance or deferment: – If the monthly payment amount is greater than zero, use the monthly payment reported on the credit report, or other file documentation, or – If the monthly payment amount is zero, use.5% of the outstand
Slide 43: 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 Fredd
Slide 44: Other Liabilities and Expenses
Other Liabilities and Expenses *New * Real Estate liabilities are NOT entered in Section 2, they will be entered in Section 3. Other Liability Section Tips: – Not all liabilities appear on a credit report – Installment debts with 10 or fewer remaining payments: • Typically not be included in deb
Slide 45: Real Estate Owned (REO) Section
Real Estate Owned (REO) Section *New * * * * * Previously listed in liability section Effectively Reviewing the New URLA • 64
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 include escrows of taxes and insurances that the mortgage servicer may be collecting. – Veri
Slide 47: Real Estate Owned (REO) Section
Real Estate Owned (REO) Section Rental Income Guidelines and Rental Income Forms • Fannie Mae Forms 1037, 1038 and 1039 – Genworth has calculators on website • Genworth Rental Income Calculator is an option • Freddie Mac Update - Rental Form 92 – Genworth has posted Form 92 calculator on our web
Slide 48: 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 – Occupancy must make sense • Fannie Mae and Freddie Mac continue to see occupancy mi
Slide 49: Loan and Property Information
Loan and Property Information *New * * * All Data Fields Should be Correctly Completed – Refinance: Does address match up to W-2/bank statement mailing address? – Refinance: How long have they owned property? Complete year acquired, original cost, existing liens, purpose of refinance. – Is there
Slide 50: Interested Party Contributions
Interested Party Contributions IPCs Are Either Financing or Sales Concessions – Financing concessions are allowed, but have restrictions on the amounts that can be applied to the transaction – Sales concessions are amounts that exceed the allowable financing concessions (or are non-realty items)
Slide 51: IPC's - Fannie Mae
IPC’s - Fannie Mae Avoiding Common Underwriting Errors 73
Slide 52: IPC's - Freddie Mac
IPC’s - Freddie Mac Avoiding Common Underwriting Errors 74
Slide 53: 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 54: 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 55: 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 77
Slide 56: Demographic Information Addendum
Demographic Information Addendum *New * * * * Effectively Reviewing the New URLA 78
Slide 57: Loan Originator Information
Loan Originator Information *New * * * Effectively Reviewing the New URLA • 79
Slide 58: Continuation Sheet
Continuation Sheet Effectively Reviewing the New URLA 80
Slide 59: 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 • 81
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 • 82
Slide 61: Lender Loan Information
Lender Loan Information *New * * * * * All data fields should be correctly completed – Refinance: Does address match up to W-2/bank statement mailing address? – Refinance: How long have they owned property? Complete year acquired, original cost, existing liens, purpose of refinance. – Is there a
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 – Id
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 • 86
Slide 65: Lender Loan Information - DOT
Lender Loan Information - DOT *New * * Sub-totaled Effectively Reviewing the New URLA 87
Slide 66: Lender Loan Information New Information Data Set
Lender Loan Information New Information Data Set Effectively Reviewing the New URLA • 88
Slide 67: Unmarried Addendum
Unmarried Addendum New Form Please reference your internal policies & procedures. Effectively Reviewing the New URLA • 89
Slide 68: Instructions
Instructions New Form Written for the consumer Effectively Reviewing the New URLA • 90
Slide 69: Updates
Updates Effectively Reviewing the New URLA 91
Slide 70: FAQ's
FAQ’s https://www.fanniemae.com/content/faq/urla-ulad-faqs.pdf Effectively Reviewing the New URLA 92
Slide 71: Genworth Underwriting Guidelines
Genworth Underwriting Guidelines Effectively Reviewing the New URLA 93
Slide 72: Genworth Rate Express
Genworth Rate Express® Effectively Reviewing the New URLA 94
Slide 73: LOS Connections
LOS Connections Effectively Reviewing the New URLA 95
Slide 74: Training Tools and Information
Training Tools and Information Effectively Reviewing the New URLA 96
Slide 75: Training Tools and Information
Training Tools and Information Effectively Reviewing the New URLA 97
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 98
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
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