Enact Holdings, Inc. · NASDAQ:ACT
Enact — Investor Presentation (April 2020)
92 slides from Enact's investor presentation, April 2020
Slide 1: Freddie Mac Form 91, Part I
Freddie Mac Form 91, Part I The Personal Tax Returns April 2020 Customer Education Brought to you by: Genworth Customer Development and Process Consulting ©2020 Genworth Financial, Inc. All rights reserved. 0
Slide 2: Lender Responsibility
Lender Responsibility Investors (Fannie Mae, Freddie Mac, Private Investors) require it be determined that self-employed borrowers demonstrate the financial ability to repay the mortgage. – History – Income calculation – Continuance / Stability of income Session Covers Conventional Loans And Today’s
Slide 3: Objective
Objective Learn to use Freddie Mac’s Income Analysis Form (Form 91) and data from tax returns to calculate supportable self-employed borrower income. – W-2 wages from a business owned by the borrower – Schedule B dividends and interest income – Income from a Schedule C (Sole Proprietor) – Considerat
Slide 4: Documentation Matrix
Documentation Matrix Updated April 2020 http://www.freddiemac.com/learn/pdfs/uw/docmatrix.pdf Freddie Mac Form 91 Part I 3
Slide 5: Documentation Matrix
Documentation Matrix Page 14 of Matrix Freddie Mac Form 91 Part I 4
Slide 6: Documentation Matrix
Documentation Matrix Page 15 of Matrix Freddie Mac Form 91 Part I 5
Slide 7: Documentation Matrix
Documentation Matrix Page 15 of Matrix Freddie Mac Form 91 Part I 6
Slide 8: Documentation Matrix
Documentation Matrix Page 16 of Matrix Freddie Mac Form 91 Part I 7
Slide 9: Bulletin 2020-8
Bulletin 2020-8 The temporary credit underwriting requirements below are effective for Mortgages with Application Received Dates on or after April 14, 2020, and remain in place for Mortgages with Application Received Dates on or before May 17, 2020; however, Sellers are encouraged to apply these upd
Slide 10: Documentation Matrix
Documentation Matrix Page 29 of Matrix Freddie Mac Form 91 Part I 9
Slide 11: Chapter 5304.1(d) Business & Income Analysis
Chapter 5304.1(d) Business & Income Analysis https://guide.freddiemac.com/app/guide/content/a_id/1000657 Freddie Mac Form 91 Part I 10
Slide 12: Chapter 5304.1(d) Business & Income Analysis
Chapter 5304.1(d) Business & Income Analysis https://guide.freddiemac.com/app/guide/content/a_id/1000657 Freddie Mac Form 91 Part I 11
Slide 13: Chapter 5304.1(d) Business & Income Analysis
Chapter 5304.1(d) Business & Income Analysis https://guide.freddiemac.com/app/guide/content/a_id/1000657 Freddie Mac Form 91 Part I 12
Slide 14: Chapter 5304.1(d) Business & Income Analysis
Chapter 5304.1(d) Business & Income Analysis https://guide.freddiemac.com/app/guide/content/a_id/1000657 Freddie Mac Form 91 Part I 13
Slide 15: Genworth Has Form 91 And 92 Income Calculation Tools Posted To Website
http://www.freddiemac.com/singlefamily/forms/sell/pdf/91.pdf Genworth Has Form 91 And 92 Income Calculation Tools Posted To Website Freddie Mac Form 91 Part I 14
Slide 16: Training Tools and Information
Training Tools and Information https://new.mi.genworth.com/ Freddie Mac Form 91 Part I 15
Slide 17: Training Tools and Information
Training Tools and Information Freddie Mac Form 91 Part I 16
Slide 18: When Borrowers Own Multiple Partnerships, S Corps Or Corporations
When Borrowers Own Multiple Partnerships, S Corps Or Corporations, Complete A Separate Worksheet For Each Business; Complete A Separate Worksheet For Each Borrower Freddie Mac Form 91 Part I 17
Slide 19: Does Borrower Own > 25% of a Business?
Does Borrower Own > 25% of a Business? Can checking the Self-employed Indicator to “Yes” increase the ® risk of the loan when evaluated by Desktop Underwriter ? What about Loan Product Advisor®? No Yes Freddie Mac Form 91 Part I 18
Slide 20: You'll Need
You’ll Need Freddie Mac Form 91 Part I 19
Slide 21: The Case Study
The Case Study You will be working with John and Mary Homeowner who: – Own a Schedule C business called Impressive Images (John) – Have schedule B interest income earned from personal assets – Have capital gain/loss activity reported on a Schedule D – Own an existing rental property shown on a Sched
Slide 22: IRS Form 1040
IRS Form 1040 Review for: – Name, Address, Social – All pages and schedules, supporting documents such as W-2, 1099 – Look lines 1-6, should you have a supporting document or schedule? – Schedule D now on line 6 Page 2 Freddie Mac Form 91 Part I 21
Slide 23: IRS Form 1040
IRS Form 1040 Review for: – Review Line 7a for indication of a Schedule 1 Page 2 Freddie Mac Form 91 Part I 22
Slide 24: Does Your Borrower Have Additional Sources Income?
Does Your Borrower Have Additional Sources Income? Review Schedule 1 and verify if additional schedules are needed to analyze If Schedule e activity, is it rental or partnership or S Corp or both?? Verify you have the K-1s if applicable Page 4 Freddie Mac Form 91 Part I 23
Slide 25: The Form 91
The Form 91 Freddie Mac Form 91 Part I 24
Slide 26: Does Our Applicant Have Ownership?
Does Our Applicant Have Ownership? Is this W-2 wage Self-Employed or salary income? Page 1 Freddie Mac Form 91 Part I 25
Slide 27: Schedule E Partnerships and S Corps
Schedule E Partnerships and S Corps Page 14 Freddie Mac Form 91 Part I 26
Slide 28: IRS Form K-1
IRS Form K-1 Page 27 Freddie Mac Form 91 Part I 27
Slide 29: Does Our Applicant Have Ownership?
Does Our Applicant Have Ownership? Do we enter this on our worksheet? Page 1 and 34 Freddie Mac Form 91 Part I 28
Slide 30: Calculator and Quick Reference Guide
Calculator and Quick Reference Guide Enter John’s W-2 income; it is considered self-employed income, because he owns more than 25% of the business. * Do You Have Any Other W-2’s? Review and Determine If There Are Additional Self-Employed W-2 Wages To Enter. Use of this or any W-2 income from this bu
Slide 31: Freddie Mac Form 91 Section 2
Freddie Mac Form 91 Section 2 Page 8 Freddie Mac Form 91 Part I 30
Slide 32: 2019 Schedule B
2019 Schedule B Don’t use unless needed for qualifying – If borrower owns a US corporation that paid dividends, you must subtract out the dividends paid – We are only reviewing a one year history, so we cannot use! Page 8 Freddie Mac Form 91 Part I 31
Slide 33: Did Your Borrower File A Schedule C?
Did Your Borrower File A Schedule C? Review Schedule 1, Line 3 for Schedule C income Page 4 Freddie Mac Form 91 Part I 32
Slide 34: Freddie Mac Form 91, Sections 3 and 4
Freddie Mac Form 91, Sections 3 and 4 Freddie Mac Form 91 Part I 33
Slide 35: Schedule C
Schedule C Page 9 Freddie Mac Form 91 Part I 34
Slide 36: Schedule C
Schedule C Page 9 Freddie Mac Form 91 Part I 35
Slide 37: Schedule C
Schedule C Page 9 Freddie Mac Form 91 Part I 36
Slide 38: Schedule C
Schedule C Freddie Mac Form 91 Part I 37
Slide 39: Schedule C
Schedule C Page 9 Freddie Mac Form 91 Part I 38
Slide 40: Schedule C
Schedule C Page 9 Freddie Mac Form 91 Part I 39
Slide 41: Schedule C
Schedule C Page 9 Freddie Mac Form 91 Part I 40
Slide 42: Schedule C
Schedule C Freddie Mac Form 91 Part I 41
Slide 43: Schedule C
Schedule C Page 9 Freddie Mac Form 91 Part I 42
Slide 44: Schedule C
Schedule C Freddie Mac Form 91 Part I 43
Slide 45: Schedule C
Schedule C Enter only the $2,955 amortization on your calculator Page 10 Freddie Mac Form 91 Part I 44
Slide 46: Schedule C
Schedule C Freddie Mac Form 91 Part I 45
Slide 47: Schedule C
Schedule C Page 9 Freddie Mac Form 91 Part I 46
Slide 48: Schedule C
Schedule C Use This Depreciation Adjustment Option Only When Investor Policy Allows And The Adjustment Is Needed To Qualify Freddie Mac Form 91 Part I 47
Slide 49: Schedule C
Schedule C Review Line 9 for Car and Truck Expenses – If there is an entry, look for the math Page 9 Freddie Mac Form 91 Part I 48
Slide 50: Schedule C
Schedule C Additional depreciation can be found by multiplying business miles on Schedule C, Line 44a x IRS depreciation factor for that year. Page 10 If The Schedule C Section IV (On Page 2) Is Blank, Review For An IRS Form 4562 Worksheet. Freddie Mac Form 91 Part I 49
Slide 51: Schedule C
Schedule C Use This Depreciation Adjustment Option Only When Investor Policy Allows And The Adjustment Is Needed To Qualify Freddie Mac Form 91 Part I 50
Slide 52: Schedule C
Schedule C Verify 4562 is for the Schedule C – Review Page 2 of the worksheet Line #30 Page 16 Freddie Mac Form 91 Part I 51
Slide 53: Schedule C
Schedule C Page 17 Business Miles Of 7,554 x 26¢ Is $1,964 In Additional Depreciation That Could Be Added Back. Freddie Mac Form 91 Part I 52
Slide 54: Schedule C
Schedule C Car and Truck Worksheet – Can be used if no 4562 is available – Review it is for Schedule C – Review for business miles Pages 18 and 19 Freddie Mac Form 91 Part I 53
Slide 55: IRS Publication 463
IRS Publication 463 Freddie Mac Form 91 Part I 54
Slide 56: Schedule C
Schedule C Freddie Mac Form 91 Part I 55
Slide 57: Freddie Mac Form 91, Section 5
Freddie Mac Form 91, Section 5 https://guide.freddiemac.com/app/guide/content/a_id/1000659 Don’t Use If You Don’t Need; If Needed To Qualify, Follow Chapter 5302.2 Freddie Mac Form 91 Part I 56
Slide 58: Schedule D Capital Gains
Schedule D Capital Gains Don’t use unless needed for qualifying – Two year history, stable receipt and likely to continue – Check investor overlays before using – Let’s review IRS Form 1040, Line 6 to see what was reported – Our 2019 example show $3,000 loss Pages 2 and 11 Freddie Mac Form 91 Part I
Slide 59: Schedule D
Schedule D Page 11 Where Did The $10,544 Loss On Line 6 Come From? The 1040 Showed A $3,000 Loss. Freddie Mac Form 91 Part I 58
Slide 60: Schedule D
Schedule D 0 Page 12 Freddie Mac Form 91 Part I 59
Slide 61: Genworth Rental Income Calculator
Genworth Rental Income Calculator – Locate Calculator and Quick Reference Guide for Rental Income – Turn to Schedule E, Part I, Rentals – Rental Income has been removed from the Form 91 Page 13 Freddie Mac Form 91 Part I 60
Slide 62: Mortgage Statement/Payment Coupon
Mortgage Statement/Payment Coupon A mortgage statement/payment coupon can verify: – If loan is impounded or escrowed – What property is associated with the mortgage payment – Current tax and insurance information – Current HOA dues: most investors want verification PUD, Condo or Coop PITI $1,637 (ve
Slide 63: Calculator and Quick Reference Guide: Rental Income
ae ase Genwort Mortgage Insurance Calculator and Quick Reference Guide: Rental Income Please use the following calculator and quick reference guide to assist in calculating rental income from IRS Form 1040 Schedule E_ it provides suggested guidance only and does not replace Fannie Mae or Freddie Mac
Slide 64: Page 13
Page 13 Freddie Mac Form 91 Part I 63
Slide 65: 2019 Schedule E Rental Income
2019 Schedule E Rental Income Freddie Mac Form 91 Part I 64
Slide 66: Page 13
Page 13 Freddie Mac Form 91 Part I 65
Slide 67: 2019 Schedule E Rental Income
2019 Schedule E Rental Income Freddie Mac Form 91 Part I 66
Slide 68: Page 13
Page 13 Freddie Mac Form 91 Part I 67
Slide 69: 2019 Schedule E Rental Income
2019 Schedule E Rental Income Freddie Mac Form 91 Part I 68
Slide 70: Page 13
Page 13 Freddie Mac Form 91 Part I 69
Slide 71: 2019 Schedule E Rental Income
2019 Schedule E Rental Income Freddie Mac Form 91 Part I 70
Slide 72: Page 13
Page 13 Freddie Mac Form 91 Part I 71
Slide 73: 2019 Schedule E Rental Income
2019 Schedule E Rental Income Freddie Mac Form 91 Part I 72
Slide 74: Page 13
Page 13 Freddie Mac Form 91 Part I 73
Slide 75: 2019 Schedule E Rental Income
2019 Schedule E Rental Income Freddie Mac Form 91 Part I 74
Slide 76: Page 13
Page 13 Freddie Mac Form 91 Part I 75
Slide 77: 2019 Schedule E Rental Income
2019 Schedule E Rental Income Freddie Mac Form 91 Part I 76
Slide 78: Page 13
Page 13 Freddie Mac Form 91 Part I 77
Slide 79: 2019 Schedule E Rental Income
2019 Schedule E Rental Income Freddie Mac Form 91 Part I 78
Slide 80: 2019 Schedule E Rental Income
2019 Schedule E Rental Income Freddie Mac Form 91 Part I 79
Slide 81: Mortgage Statement/Payment Coupon
Mortgage Statement/Payment Coupon A mortgage statement/payment coupon can verify: – If loan is impounded or escrowed – What property is associated with the mortgage payment – Current tax and insurance information – Current HOA dues: most investors want verification PUD, Condo or Coop PITI $1,637 (ve
Slide 82: 2019 Schedule E Rental Income
2019 Schedule E Rental Income Freddie Mac Form 91 Part I 81
Slide 83: URLA Rental Property
URLA Rental Property PITI $1,637 (verified on mortgage statement) + $265 (verified HOA) = $1,902 Freddie Mac Form 91 Part I 82
Slide 84: Net Rental Income
Net Rental Income Compare “Rental Income” figure with loan application (Fannie Mae Form 1003) – Most systems calculate rental income from the REO section of the 1003 – Review the 1003 to verify what appears as rental income/rental loss – If the number is different, override your system to reflect th
Slide 85: Genworth Underwriting Guidelines
Genworth Underwriting Guidelines Freddie Mac Form 91 Part I 84
Slide 86: Genworth Rate Express
Genworth Rate Express® Freddie Mac Form 91 Part I 85
Slide 87: LOS Connections
LOS Connections Freddie Mac Form 91 Part I 86
Slide 88: Training Tools and Information
Training Tools and Information Freddie Mac Form 91 Part I 87
Slide 89: Training Tools and Information
Training Tools and Information Freddie Mac Form 91 Part I 88
Slide 90: Additional MI Site Information
Additional MI Site Information Freddie Mac Form 91 Part I 89
Slide 91: Your Genworth Resources
Your Genworth Resources ➢ ActionCenter®: 800 444.5664 ➢ Your Local Genworth Regional Underwriter ➢ Your Genworth Sales Representative Freddie Mac Form 91 Part I 90
Slide 92: 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