Enact Holdings, Inc. · NASDAQ:ACT
Enact — Investor Presentation (April 2020)
58 slides from Enact's investor presentation, April 2020
Slide 1: Self Employed Borrower: 1120S with K1
Self Employed Borrower 1120S with K1 April 2020 Customer Education Brought to you by: Genworth Customer Development and Process Consulting NOTICE: This document contains confidential, non-public company information. Further distribution of this document is strictly prohibited. ©2019 Genworth Financi
Slide 2: Objective
Objective Understand the meaning of “Self Employed” Learn to use Fannie Mae’s Form 1084 to calculate supportable income using tax returns. Complete Fannie Mae’s Cash Flow Analysis Form 1084 – W2 – 1120S K1 Review (Section 9) – 1120S Review (Section 10) – Solvency/Liquidity Test 1120S Corp with K1
Slide 3: Tax Forms
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Slide 4: Training Tools and Information
Training Tools and Information mi.Genworth.com 1120S Corp with K1 3
Slide 5: Training Tools and Information
Training Tools and Information 1120S Corp with K1 4
Slide 6: Fannie Mae Lender Letter 2020-03
Fannie Mae Lender Letter 2020-03 Effective for applications taken April 14 through May 17,2020 unless noted – Self-Employment • Lenders must confirm that the borrower’s business is open and operating within 10 business days of the note date (or after closing but prior to delivery). • LL 2020-03 incl
Slide 7: Fannie Mae Lender Letter 2020-03
Fannie Mae Lender Letter 2020-03 Effective for applications taken April 14 through May 17,2020 – Age of Documents • For most income and asset documents age requirements is reduced from four months to two months or 60 days from the note date. If an asset statement is issued quarterly, lenders must ob
Slide 8: Self-Employment Fannie Mae
Self-Employment Fannie Mae https://www.fanniemae.com/content/guide/selling/b3/3.2/01.html 1120S Corp with K1 7
Slide 9: You'll Need Calculators
You’ll Need Calculators- 1120S Corp with K1
Slide 10: The Case Study
The Case Study… The Case Study John Dolittle John is 100% owner is a 1120S Corp. His reported taxable Income is a W2 & K1 from Furry Paws Pet Clinic, Inc 1120S Corp with K1
Slide 11: 1120S Corp with K1
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Slide 12: 2019 W2: Is the borrower Self Employed?
2019 W2 Is the borrower Self Employed? 1120S Corp with K1 11
Slide 13: Schedule 1?
Schedule 1? 1120S Corp with K1 12
Slide 14: Review 1040 Schedule 1
Review 1040 Schedule 1 Review Line 5 to determine if a Schedule E has been filed this does NOT automatically prove the borrower is Self Employed. Sch. E may disclose K1’s from Partnerships, LLC’s, S-Corp’s and CMO’s… But it may be reported Rental Income. 1120S Corp with K1 13
Slide 15: Review Schedule E
Review Schedule E Now you need to review the K1… 1120S Corp with K1 14
Slide 16: 1120S K-1
1120S K-1 X X 1120S Corp with K1 15
Slide 17: Any Other W-2 Wages?
Any Other W-2 Wages? Review Form 1040, Line 7 for any additional W-2 Wages – Review all W-2’s filed – Determine if applicant owns 25% or more of the business • If yes, it is considered self-employed income • If no, calculate that income on a different form or separately * *Use of the W-2 wages is su
Slide 18: 1120S - S Corporation with W2
1120S - S Corporation with W2 1120S Corp with K1 17
Slide 19: 1120S Corp with K1
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Slide 20: 1120S - S Corporation with K1
1120S - S Corporation with K1 1120S Corp with K1 19
Slide 21: Business Classifications
Business Classifications S Corporation – Can be Owned by One Person – “Managing Shareholder” Must Receive a Salary – Business Income Reported on Form 1120S – Income Reported on Form 1040’s • Schedule E • Could also be W-2 wages or 1099 income – All Shareholders of an S Corp are Issued K-1’s – K-1s a
Slide 22: S Corps
S Corps Check for Trends or Changes – Gross receipts – Cost of goods sold – Gross profit – Bottom line “Ordinary Income” – W-2 wages • Were these paid to borrower? 1120S Corp with K1 21
Slide 23: Compensation of Owners and/or Officers
Compensation of Owners And/Or Officers From Line 7; Did We Give Credit For John’s W-2 Already? 1120S Corp with K1 22
Slide 24: Taxed at a personal rate
1120S Corporation K-1 % Line 1 Ordinary Income/Loss $_________ Line 21 Ordinary Income/Loss $_________ Schedule E page 2 Part II 1040 Schedule 1 Line 5 Net Income/Loss Sch E $_________ *Taxed at a personal rate 1120S Corp with K1 23
Slide 25: S Corp K-1
S Corp K-1 Did John get a distribution? 1120S Corp with K1 24
Slide 26: Page 2 of K-1 and Page 3 of Form 1120S
Page 2 of K-1 and Page 3 of Form 1120S 1120S Corp with K1 25
Slide 27: S Corp K-1
S Corp K-1 1120S Corp with K1 26
Slide 28: Taxed at a personal rate
1120S Corporation K-1 % Line 1 Ordinary Income/Loss $_________ Line 21 Ordinary Income/Loss $_________ Schedule E page 2 Part II 1040 Schedule 1 Line 5 Net Income/Loss Sch E $_________ *Taxed at a personal rate 1120S Corp with K1 27
Slide 29: Schedule E Partnerships and S Corps
Schedule E Partnerships and S Corps 1120S Corp with K1 28
Slide 30: Taxed at a personal rate
1120S Corporation K-1 % Line 1 Ordinary Income/Loss $_________ Line 21 Ordinary Income/Loss $_________ Schedule E page 2 Part II 1040 Schedule 1 Line 5 Net Income/Loss Sch E $_________ *Taxed at a personal rate 1120S Corp with K1 29
Slide 31: Schedule 1
Schedule 1 1120S Corp with K1 30
Slide 32: Liquidity
Liquidity Generally Accepted Accounting Principles 1120S Corp with K1 31
Slide 33: Balance Sheet
Balance Sheet 1120S Corp with K1 32
Slide 34: Balance Sheet
Balance Sheet Quick Ratio or Acid Test Current Assets : (Cash #1 + Acct Receivable #2 + #4+ #5 +Other Current Assets #6) Current Liabilities: (Acct Pay. #16 + MNB #17 + Other Current Liabilities #18) Current Assets: $77,102 + 0 + 0 +0 + 0 = $77,102 Current Liabilities: $0 + $0 + 0 = $0 1120S Corp wi
Slide 35: Liquidity
Liquidity Generally Accepted Accounting Principles 1120S Corp with K1 34
Slide 36: 1120S K1 Review
1120S K1 Review 1120S Corp with K1 35
Slide 37: S Corp K-1
S Corp K-1 1120S Corp with K1 36
Slide 38: S Corp K-1
S Corp K-1 S Corp K-1 Review – Was there rental activity? 1120S Corp with K1 37
Slide 39: S Corporation Form 1120S
S Corporation Form 1120S 1120S Corp with K1 38
Slide 40: S Corporation Form 1120S
S Corporation Form 1120S 1120S Corp with K1 39
Slide 41: S Corporation Form 1120S
S Corporation Form 1120S 1120S Corp with K1 40
Slide 42: S Corporation Form 1120S
S Corporation Form 1120S 1120S Corp with K1 41
Slide 43: S Corporation Form 1120S
S Corporation Form 1120S 1120S Corp with K1 42
Slide 44: S Corporation Form 1120S
S Corporation Form 1120S 1120S Corp with K1 43
Slide 45: S Corporation Form 1120S
S Corporation Form 1120S 1120S Corp with K1 44
Slide 46: S Corporation Form 1120S
S Corporation Form 1120S 1120S Corp with K1 45
Slide 47: S Corp K-1: How much does John own?
S Corp K-1 How much does John own? 1120S Corp with K1 46
Slide 48: S Corp K-1
S Corp K-1 1120S Corp with K1 47
Slide 49: S Corp 1125E
S Corp 1125E 1120S Corp with K1 48
Slide 50: 1084 Cash Flow Analysis
1084 Cash Flow Analysis 1120S Corp with K1 49
Slide 51: Genworth Underwriting Guidelines
Genworth Underwriting Guidelines 1120S Corp with K1
Slide 52: Genworth Rate Express
Genworth Rate Express® 1120S Corp with K1
Slide 53: LOS Connections
LOS Connections 1120S Corp with K1
Slide 54: Training Tools and Information
Training Tools and Information 1120S Corp with K1
Slide 55: Training Tools and Information
Training Tools and Information 1120S Corp with K1 54
Slide 56: Additional MI Site Information
Additional MI Site Information 1120S Corp with K1
Slide 57: Your Genworth Resources
Your Genworth Resources ActionCenter®: 800 444.5664 Your Local Genworth Regional Underwriter Your Genworth Sales Representative 1120S Corp with K1
Slide 58: 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