Enact Holdings, Inc. · NASDAQ:ACT
Enact — Investor Presentation (August 2021)
45 slides from Enact's investor presentation, August 2021
Slide 1: Reviewing Miscellaneous Employment Income Sources
Reviewing Miscellaneous Employment Income Sources August 2021 Genworth Mortgage Insurance Corporation and Genworth Mortgage Insurance Corporation of North Carolina ©2021 Genworth Mortgage Insurance Corporation. All rights reserved.
Slide 2: Genworth MI is now Enact
Genworth MI is now Enact We’re changing to remain focused on you. As part of our evolution, we are now known as Enact. We’re building on our trusted reputation for quality service and success with an increased focus on providing responsive solutions and insightful expertise for you. Learn more at ht
Slide 3: Recommended Prerequisites
Recommended Prerequisites • Understanding Desktop Underwriter®- The Basics • Understanding Loan Product Advisor- The Basics • Calculating Income Part I: Income Documentation and Review https://new.mortgageinsurance.genworth.com/course-catalog
Slide 4: Objective
Objective Understand the Different Types of Income and How to Document Them • Commission • Bonus and Overtime • Tip Income • Temporary Leave • Seasonal & Unemployment • Auto Allowance
Slide 5: Ability-to-Repay (ATR) Rule
Ability-to-Repay (ATR) Rule Key concepts of the rule: • The creditor must make a reasonable and good faith determination that the consumer has the ability to repay the loan. • Mortgage borrowers must provide ample financial documentation; lenders must verify the documents. • In order to be approved
Slide 6: The Mortgage Application 1003/65
The Mortgage Application 1003/65
Slide 7: Verifying Employment History
Verifying Employment History Two year history is required on the 1003 for all applicants • Spell out the full, complete business name and address. • Correctly identify type of employment: • Does the borrower receive a W2 or 1099? • If the borrower owns 25% or more of the business, they are self-empl
Slide 8: Fannie Mae Resources
Fannie Mae Resources Enact
Slide 9: Selling Guide
Selling Guide https://selling-guide.fanniemae.com/
Slide 10: Fannie Mae Selling Guide
Fannie Mae Selling Guide B3-3.1-02, Standards for Employment Documentation (12/16/2020) Introduction This topic contains information on the standards for documentation of employment income, including: General Documentation Requirements Employment Documentation Provided by the Borrower Employment Doc
Slide 11: Fannie Mae - Variable Income
Fannie Mae - Variable Income Variable Income All income that is calculated by an averaging method must be reviewed to assess the borrower’s history of receipt, the frequency of payment, and the trending of the amount of income being received. Examples of income of this type include income from hourl
Slide 12: Fannie Mae - Income Trending
Fannie Mae - Income Trending Income Trending: After the monthly year-to-date income amount is calculated, it must be compared to prior years’ earnings using the borrower’s W-2’s or signed federal income tax returns (or a standard Verification of Employment completed by the employer or third-party em
Slide 13: Fannie Mae Release Notes DU Version 11.0
Fannie Mae Release Notes DU Version 11.0 https://singlefamily.fanniemae.com/media/25111/display
Slide 14: Freddie Mac Resources
Freddie Mac Resources Enact
Slide 15: Selling Guide Income Topic 5300 Revised
Selling Guide Income Topic 5300 Revised https://guide.freddiemac.com/app/guide/topic/5300 https://guide.freddiemac.com/app/guide/content/a_id/1000659
Slide 16: Income Continuance Requirements
Income Continuance Requirements 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
Slide 17: Employed Income Types
Employed Income Types Primary • Borrower’s primary source of employed income Secondary • Second job, part-time job or multiple jobs Additional • Commissions Primary Additional • Bonus • Overtime • Tips Secondary • Auto allowance • Mortgage differential • Military entitlements • Military Reserves & N
Slide 18: Freddie Mac - Calculation of Fluctuating Employment Earnings
Freddie Mac - Calculation of Fluctuating Employment Earnings The degree of fluctuation and the length of receipt of the income must be considered when calculating income used to qualify for the Mortgage. The Seller must evaluate the income trend and use the amount that is most likely to continue for
Slide 19: Freddie Mac - Calculation of Fluctuating Employment Earnings
Freddie Mac - Calculation of Fluctuating Employment Earnings The degree of fluctuation and the length of receipt of the income must be considered when calculating income used to qualify for the Mortgage. The Seller must evaluate the income trend and use the amount that is most likely to continue for
Slide 20: Loan Product Advisor Documentation Matrix
Loan Product Advisor Documentation Matrix https://sf.freddiemac.com/content/_assets/resources/pdf/update/docmatrix.pdf
Slide 21: Documenting Other Employment Income Types
Documenting Other Employment Income Types 21
Slide 22: Fannie Mae Commission Income
Fannie Mae Commission Income A minimum history of 2 years of commission income is recommended; however, commission income that has been received for 12 to 24 months may be considered as acceptable income, as long as there are positive factors to reasonably offset the shorter income history. Document
Slide 23: Freddie Mac - Commission Income
Freddie Mac - Commission Income History of receipt: Two years, consecutive1 Continuance: Must be likely to continue for at least the next three years Calculation: Refer to Section 5303.4(b) for calculation guidance and requirements Documentation Requirements with Streamline Accept and Standard All o
Slide 24: Fannie Mae Bonus and Overtime
Fannie Mae Bonus and Overtime A minimum history of two years of employment income is recommended. However, income that has been received for a shorter period of time may be considered as acceptable income, as long as the borrower’s employment profile demonstrates that there are positive factors to r
Slide 25: Freddie Mac - Bonus Income and OT
Freddie Mac - Bonus Income and OT History of receipt: Two years, consecutive1 Continuance: Must be likely to continue for at least the next three years Calculation: Refer to Section 5303.4(b) for calculation guidance and requirements Documentation Requirements with Streamline Accept and Standard All
Slide 26: Tip Income - Fannie Mae
Tip Income - Fannie Mae Tip income may be used to qualify the borrower if the lender verifies that the borrower has received it for the last two years. Documentation - Obtain the following documents: A completed Request for Verification of Employment (Form 1005 or Form 1005(S))*, or • the borrower’s
Slide 27: Freddie Mac - Tip Income
Freddie Mac - Tip Income Tip income reported by employer History of receipt: Two years, consecutive1 Continuance: Must be likely to continue for at least the next three years Calculation: Refer to Section 5303.4(b) for calculation guidance and requirements Documentation Requirements with Streamline
Slide 28: Temporary Leave - Fannie Mae
Temporary Leave - Fannie Mae Temporary leave from work is generally short in duration and for reasons of maternity or parental leave, short-term medical disability, or other temporary leave types that are acceptable by law or the borrower's employer. Borrowers on temporary leave may or may not be pa
Slide 29: Temporary Leave - Fannie Mae
Temporary Leave - Fannie Mae https://www.fanniemae.com/content/guide/selling/b3/3.1/09.html#Tip.20Income
Slide 30: Temporary Leave - Fannie Mae
Temporary Leave - Fannie Mae https://www.fanniemae.com/content/guide/selling/b3/3.1/09.html#Tip.20Income
Slide 31: Freddie Mac - Temporary Leave
Freddie Mac - Temporary Leave Temporary leave from an employer may encompass various circumstances (e.g., family and medical, short-term disability, maternity, other temporary leaves with or without pay). Temporary leave is generally short in duration. The period of time that a Borrower is on tempor
Slide 32: Seasonal Employment and Unemployment
Seasonal Employment and Unemployment Seasonal employment and unemployment compensation The Borrower must have a two-year consecutive history of receiving income from seasonal employment and the seasonal employment income must be likely to continue for at least the next three years in order to consid
Slide 33: Seasonal Income and Unemployment - Fannie Mae
Seasonal Income and Unemployment - Fannie Mae Verify the borrower has at least a two-year history of seasonal employment and income. *Unemployment compensation cannot be used to qualify the borrower unless it is clearly associated with seasonal employment that is reported on the borrower’s signed fe
Slide 34: Freddie Mac – Seasonal Employment
Freddie Mac – Seasonal Employment Seasonal employment may be primary employment (e.g., highway construction and road work in colder regions) or secondary employment (e.g., educators teaching summer school). The Borrower's earnings may be comprised of base non-fluctuating earnings, fluctuating hourly
Slide 35: Freddie Mac – Unemployment associated with Seasonal Income
Freddie Mac – Unemployment associated with Seasonal Income History of receipt: Two years, consecutive1 Continuance: Must be likely to continue for at least the next three years Calculation: Refer to Section 5303.4(b) for calculation guidance and requirements Documentation Requirements with Streamlin
Slide 36: Tax Return Review for Unemployment
Tax Return Review for Unemployment * *Note that all of the income types listed on Part I of Schedule 1 have changed on the 2020 tax form
Slide 37: Auto Allowance - Fannie Mae
Auto Allowance - Fannie Mae For an automobile allowance to be considered as acceptable stable income, the borrower must have received payments for at least two years. The lender must add the full amount of the allowance to the borrower’s monthly income, and the full amount of the lease or financing
Slide 38: Freddie Mac – Auto Allowance
Freddie Mac – Auto Allowance History of receipt: Two years, consecutive1 Continuance: Must be likely to continue for at least the next three years Calculation: The Seller may add the full amount of the allowance to the Borrower’s qualifying income, and when calculating the Borrower’s debt payment-to
Slide 39: Freddie Mac ¹
Freddie Mac ¹ Income history and stability – requirements and guidance Many additional employed income types are fluctuating income. The stability of fluctuating income is determined based primarily upon historical earnings so it is imperative that a sufficient income history has been established. F
Slide 40: Enact Rate Express
Enact Rate Express® Enact" MI&RATES | UNDERWRITING & GUIDES | LOS& CONNECTIONS | ENACT TOOLKIT | TRAINING ouRBLoG =| ABOUTUS Je’ve changed to Temain focused on you. Genworth MI is now Enact. ° Rate Express (0) Find Rates Quick GETA QUOTE Now Underwriting Innovate Underwriting Know More & 800 444.566
Slide 41: Enact Underwriting Guidelines
Enact Underwriting Guidelines 41
Slide 42: Enact Training Resources
Enact Training Resources Genworth Ml is now Enact MI&RATES | UNDERWRITING & GUIDES | LOS & CONNECTIONS | ENACT TOOLKIT TRAINING =| ~ 6 & 800.444.5664 | | me We've changed to emain focused on you. Genworth MI is now Enact. ee fe & Training Boost Your Knowledge LEARN Now Underwriting Op Rate Express I
Slide 43: Enact Training Resources
Enact Training Resources 43 Enact Self-Employed Borrower Tools by Enact MI ‘We get it, mental math is hard. That’s why Enact provides a collection of downloadable calculators and reference guides to help you analyze a self-employed borrower's average monthly income and expenses. Please note that the
Slide 44: Your Enact Resources
Your Enact Resources • ActionCenter® : 800 444.5664 • Your Local Enact Regional Underwriter • Your Enact Sales Representative 44
Slide 45: Legal Disclaimer
Legal Disclaimer Enact 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 training is