Enact Holdings, Inc. · NASDAQ:ACT
Enact — Investor Presentation (August 2019)
89 slides from Enact's investor presentation, August 2019
Slide 1: Freddie Mac Form 91, Part I
Freddie Mac Form 91, Part I Personal Tax Returns August 2019 ©2019 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 Used To Document Your Files – Updated July 2019 http://www.freddiemac.com/learn/pdfs/uw/docmatrix.pdf Freddie Mac Form 91 Part I 3
Slide 5: Documentation Matrix
Documentation Matrix Page 13 of Matrix Freddie Mac Form 91 Part I 4
Slide 6: Documentation Matrix
Documentation Matrix Page 14 of Matrix Freddie Mac Form 91 Part I 5
Slide 7: Documentation Matrix
Documentation Matrix Page 14 of Matrix Freddie Mac Form 91 Part I 6
Slide 8: Documentation Matrix
Documentation Matrix Page 15 of Matrix Freddie Mac Form 91 Part I 7
Slide 9: Documentation Matrix
Documentation Matrix Page 28 of Matrix Chapter 5304 of the Guide Freddie Mac Form 91 Part I 8
Slide 10: Chapter 5304.1(d) Business and Income Analysis
Chapter 5304.1(d) Business and Income Analysis Freddie Mac Form 91 Part I 9
Slide 11: Chapter 5304.1(d) Business and Income Analysis
Chapter 5304.1(d) Business and Income Analysis Freddie Mac Form 91 Part I 10
Slide 12: Chapter 5304.1(d) Business and Income Analysis
Chapter 5304.1(d) Business and Income Analysis Freddie Mac Form 91 Part I 11
Slide 13: Chapter 5304.1(d) Business and Income Analysis
Chapter 5304.1(d) Business and Income Analysis Freddie Mac Form 91 Part I 12
Slide 14: 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 13
Slide 15: Training Tools and Information
Training Tools and Information www.mi.Genworth.com Freddie Mac Form 91 Part I 14
Slide 16: Training Tools and Information
Training Tools and Information Freddie Mac Form 91 Part I 15
Slide 17: 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 16
Slide 18: 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 Loan Product Advisor®? No Yes Freddie Mac Form 91 Part I 17
Slide 19: You'll Need
You’ll Need Freddie Mac Form 91 Part I 18
Slide 20: 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 21: IRS Form 1040
IRS Form 1040 Review for: – Name, address, social – All pages and schedules – Any Red Flags – Most recent – Signed? – Review Line 6 for indication of a Schedule 1 Page 2 Freddie Mac Form 91 Part I 20
Slide 22: The Form 91
The Form 91 Freddie Mac Form 91 Part I 21
Slide 23: 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 22
Slide 24: Schedule E to Validate Ownership
Schedule E to Validate Ownership Page 12 Freddie Mac Form 91 Part I 23
Slide 25: IRS Form K-1
IRS Form K-1 Page 28 Freddie Mac Form 91 Part I 24
Slide 26: 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. * *Use of this or any W-2 income from this business would be dependent on the viability of the business, which has yet to be determined Do You Have Any
Slide 27: Freddie Mac Form 91 Section 2
Freddie Mac Form 91 Section 2 Page 6 Freddie Mac Form 91 Part I 26
Slide 28: 2018 Schedule B
2018 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! Freddie Mac Form 91 Part I 27
Slide 29: Freddie Mac Form 91, Sections 3 and 4
Freddie Mac Form 91, Sections 3 and 4 Freddie Mac Form 91 Part I 28
Slide 30: Did Your Borrower File a Schedule C?
Did Your Borrower File a Schedule C? Review Line 12 on the Schedule 1 for any indication that the borrower filed a Schedule C for 2018 returns Page 3 Freddie Mac Form 91 Part I 29
Slide 31: Schedule C
Schedule C Page 7 Freddie Mac Form 91 Part I 30
Slide 32: Schedule C
Schedule C Page 7 Freddie Mac Form 91 Part I 31
Slide 33: Schedule C
Schedule C Page 7 Freddie Mac Form 91 Part I 32
Slide 34: Schedule C
Schedule C Freddie Mac Form 91 Part I 33
Slide 35: Schedule C
Schedule C Page 7 Freddie Mac Form 91 Part I 34
Slide 36: Schedule C
Schedule C Page 7 Freddie Mac Form 91 Part I 35
Slide 37: Schedule C
Schedule C Page 7 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 7 Freddie Mac Form 91 Part I 38
Slide 40: Schedule C
Schedule C Freddie Mac Form 91 Part I 39
Slide 41: Schedule C
Schedule C Enter only the $2,999 amortization on your calculator Page 8 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 7 Freddie Mac Form 91 Part I 42
Slide 44: 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 43
Slide 45: 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. If The Schedule C Section IV (On Page 2) Is Blank, Review For An IRS Form 4562 Worksheet. Page 8 Freddie Mac Form 91 Part I 44
Slide 46: 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 45
Slide 47: Schedule C
Schedule C Verify 4562 is for the Schedule C – Review Page 2 of the worksheet Line #30 Page 13 Freddie Mac Form 91 Part I 46
Slide 48: Schedule C
Schedule C Business Miles Of 8,422 x 25¢ is $2105 In Additional Depreciation That Could Be Added Back. Page 14 Freddie Mac Form 91 Part I 47
Slide 49: Schedule C
Schedule C Freddie Mac Form 91 Part I 48
Slide 50: Schedule C - Other
Schedule C - Other Car & Truck Expenses Worksheet Pages 15 & 16 Freddie Mac Form 91 Part I 49
Slide 51: IRS Publication 463
IRS Publication 463 Freddie Mac Form 91 Part I 51
Slide 52: Freddie Mac Form 91, Section 5
Freddie Mac Form 91, Section 5 Don’t Use If You Don’t Need; If Needed To Qualify, Follow Chapter 5302.2 Freddie Mac Form 91 Part I 52
Slide 53: 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 13 for 2017 or Schedule 1, Line 13 for 2018 returns – Our 2018 example show $3000 loss Pages 3 and 9 Fre
Slide 54: Schedule D
Schedule D Page 9 Where Did The $13,544 Loss On Line 6 Come From? The 1040 Showed A $3,000 Loss. Freddie Mac Form 91 Part I 54
Slide 55: Schedule D
Schedule D Page 10 Freddie Mac Form 91 Part I 55
Slide 56: Rental Income
Rental Income In Your Materials: – Locate Calculator and Quick Reference Guide for Rental Income – Turn to Schedule E, Part I, Rentals Page 11 Freddie Mac Form 91 Part I 58
Slide 57: Mortgage Statement/Payment Coupon
Mortgage Statement/Payment Coupon A mortgage statement/payment coupon can verify: – If loan is impounded or escrowed – What property associated with the mortgage payment – Current tax and insurance information – Current HOA dues: most investors want verification PUD, Condo or Coop Freddie Mac Form 9
Slide 58: Mortgage Statement/Payment Coupon
Mortgage Statement/Payment Coupon Total monthly payment is $2150 PITIA Payment Above Came From Mortgage Statement And HOA Coupon/Statement From Borrower And Is Impounded; For Non-impounded Loans Obtain Tax And Insurance Information Freddie Mac Form 91 Part I 60
Slide 59: Mortgage Statement/Payment Coupon
Mortgage Statement/Payment Coupon Total monthly payment is $2150 PITIA Payment Above Came From Mortgage Statement And HOA Coupon/Statement From Borrower And Is Impounded; For Non-impounded Loans Obtain Tax And Insurance Information Freddie Mac Form 91 Part I 81
Slide 60: Freddie Mac Form 92
Freddie Mac Form 92 Genworth Has A Form 92 Posted On Our Website Freddie Mac Form 91 Part I 82
Slide 61: Rental Income
Rental Income IF Using Freddie Mac Form 92 Use Section III – Net Rental Income From Non-subject investment property Page 11 Freddie Mac Form 91 Part I 83
Slide 62: 2018 Schedule E Rental Income
2018 Schedule E Rental Income Freddie Mac Form 91 Part I 84
Slide 63: Page 11
Page 11 Freddie Mac Form 91 Part I 85
Slide 64: 2018 Schedule E Rental Income
2018 Schedule E Rental Income Freddie Mac Form 91 Part I 86
Slide 65: Page 11
Page 11 Freddie Mac Form 91 Part I 87
Slide 66: 2018 Schedule E Rental Income
2018 Schedule E Rental Income Freddie Mac Form 91 Part I 88
Slide 67: Page 11
Page 11 Freddie Mac Form 91 Part I 89
Slide 68: 2018 Schedule E Rental Income
2018 Schedule E Rental Income Freddie Mac Form 91 Part I 90
Slide 69: Page 11
Page 11 Freddie Mac Form 91 Part I 91
Slide 70: 2018 Schedule E Rental Income
2018 Schedule E Rental Income Freddie Mac Form 91 Part I 92
Slide 71: Page 11
Page 11 Freddie Mac Form 91 Part I 93
Slide 72: 2018 Schedule E Rental Income
2018 Schedule E Rental Income Freddie Mac Form 91 Part I 94
Slide 73: Page 11
Page 11 Freddie Mac Form 91 Part I 95
Slide 74: 2018 Schedule E Rental Income
2018 Schedule E Rental Income Freddie Mac Form 91 Part I 96
Slide 75: Page 11
Page 11 Freddie Mac Form 91 Part I 97
Slide 76: 2018 Schedule E Rental Income
2018 Schedule E Rental Income Freddie Mac Form 91 Part I 98
Slide 77: Page 11
Page 11 Freddie Mac Form 91 Part I 99
Slide 78: 2018 Schedule E Rental Income
2018 Schedule E Rental Income Freddie Mac Form 91 Part I 100
Slide 79: 2018 Schedule E Rental Income
2018 Schedule E Rental Income Freddie Mac Form 91 Part I 101
Slide 80: On Page 3 Enter the Full PITIA
On Page 3 Enter the Full PITIA Freddie Mac Form 91 Part I 102
Slide 81: REO
REO Freddie Mac Form 91 Part I 103
Slide 82: Genworth Rate Express®
Genworth Rate Express® 104 Freddie Mac Form 91 Part I
Slide 83: Genworth Underwriting Guidelines
Genworth Underwriting Guidelines 105 Freddie Mac Form 91 Part I
Slide 84: LOS Connections
LOS Connections 106 Freddie Mac Form 91 Part I
Slide 85: Training Tools and Information
Training Tools and Information 107 Freddie Mac Form 91 Part I
Slide 86: Training Tools and Information
Training Tools and Information 108 Freddie Mac Form 91 Part I
Slide 87: Additional MI Site Information
Additional MI Site Information 109 Freddie Mac Form 91 Part I
Slide 88: Your Genworth Resources
Your Genworth Resources ➢ ActionCenter®: 800 444.5664 ➢ Your Local Genworth Regional Underwriter ➢ Your Genworth Sales Representative 110 Freddie Mac Form 91 Part I
Slide 89: 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