Enact Holdings, Inc. · NASDAQ:ACT
Enact — Investor Presentation (December 2018)
39 slides from Enact's investor presentation, December 2018
Slide 1: Fannie Mae and Freddie Mac: Understanding Your Options
Fannie Mae and Freddie Mac: Understanding Your Options December 2018 Genworth Mortgage Insurance Corporation ©2018 Genworth Financial, Inc. All rights reserved.
Slide 2: Course Objectives
Course Objectives – Learn how to properly structure a loan to your advantage, by understanding differences between Fannie Mae and Freddie Mac qualifying guidelines – Save time up front by knowing which GSE to select, when both are an option NOTE: This is NOT a comprehensive list of all differences,
Slide 3: Agenda
Agenda – LTV Differences – Credit and liabilities – Assets and Reserves – Income – Multiple Financed Properties – Interested Party Contributions – Appraisal – General Reminders on Updates ® ® – HomeReady and Home Possible Differences – Genworth MI Website – Helpful Tools Fannie Mae and Freddie Mac:
Slide 4: LTV Differences Primary and Second Home
LTV Differences Primary and Second Home Fannie Mae (Fixed Rate/ARMS**) Freddie Mac (Fixed Rate/ARMS) – Maximum LTV/TLTV/HCLTV – Maximum LTV/TLTV/HTLTV Purchase and Limited Cash-Out Refi Purchase and No Cash-Out Refi* – 1-unit Primary 97 (Fixed Only)** – 1-unit Primary 97 (Fixed only)
Slide 5: LTV Differences Investment Properties
LTV Differences Investment Properties Fannie Mae (Fixed Rate/ARMS) Freddie Mac (Fixed Rate/ARMS) – Maximum LTV/TLTV/HCLTV – Maximum LTV/TLTV/HTLTV Purchase Purchase and *No Cash-out Refi – 1-unit 85% – 1-unit 85%( One unit refi has the – 2-4 unit 75% advantage) Limited Cash-Out Refin
Slide 6: No Cash and Limited Cash Out Amounts
No Cash and Limited Cash Out Amounts Fannie Mae Freddie Mac (Effective for – Limited cash-out is defined as Mortgages with Settlement dates on allowing cash back up to lessor of 2% and after October 27, 2018, but sellers may implement immediately of the Mortgage amount or $2000 – No cash out
Slide 7: Credit and Liabilities
Credit and Liabilities Fannie Mae Freddie Mac – Maximum DTI is 50% – No published maximum DTI • Updated to not require additional compensating factors from 45% to 50% • Fine-tuned in Jan. 2018 – DU® carries out DTI to two decimal – Rounds down on the DTI places – 20.49% = 20% – 20.99% = 20.9
Slide 8: Credit and Liabilities
Credit and Liabilities Fannie Mae Freddie Mac – 30 Day Charge Accounts or Open – 30 Day Charge Accounts or Open Ended Accounts Ended Accounts • Must be omitted and funds verified to • Can be omitted and funded verified to pay off (reserves); or pay off (reserves); or • Verify employer reimbu
Slide 9: Credit and Liabilities
Credit and Liabilities Fannie Mae Freddie Mac – Disputed tradelines DU tries to – Disputed tradelines Loan Product assess with the tradeline - if Approve, Advisor tries to qualify with disputed no additional action needed tradeline • DU will reassess without disputed • Will receive “Invalid”
Slide 10: Credit and Liabilities
Credit and Liabilities Fannie Mae Freddie Mac – Alimony may be included as a – Alimony must be treated as a liability liability or subtracted from income – Mortgage using payment history is – Mortgage payment history NOT NOT required for ACCEPT loans with reported on the credit report – DU w
Slide 11: Credit and Liabilities
Credit and Liabilities Fannie Mae Freddie Mac: Mac Repayment, – Student Loan debt lender may use: Deferment – *Deferredor Forbearance student loans use • Payment on credit report if one is listed (Effective for loans • The greater with of monthly payment on the • Monthly payment from stu
Slide 12: Credit and Liabilities
Credit and Liabilities Fannie Mae Freddie Mac – *Student Loan in Forgiveness, cancellation, discharge and employment contingent repayment programs – Monthly payment amount may be excluded from DTI, if file contains evidence • Student loans have less than 10 months payments; or • Payments are
Slide 13: Fannie Mae Student Loan Cash-Out Refinance
Fannie Mae Student Loan Cash-Out Refinance Priced as Limited Cash Out – Subject to Cash-out LTV limits Fannie Mae and Freddie Mac: Understanding Your Options 13
Slide 14: ALL Borrowers Without Credit Scores
ALL Borrowers Without Credit Scores Fannie Mae DU Freddie Mac Loan Product Advisor – Max LTV/CLTV/HCLTV 90% – Max LTV/TLTV/HTLTV 95% – 1-unit non-manufactured home – 1-unit non-manufactured home – Conforming only; no high balance – Conforming only; no super conforming – Owner occupied only –
Slide 15: Credit and Liabilities
Credit and Liabilities Fannie Mae Freddie Mac – Federal Tax Liens – Federal Tax Liens – Allowed to include the payment due – No policy to allow for payments under a federal income tax installment agreement in the DTI, instead of payment in full • Lenders must obtain a copy of the approved IR
Slide 16: Significant Derogatory Credit
Significant Derogatory Credit Fannie Mae Freddie Mac – Approve/Eligible – Accept/Eligible • Lenders must review the waiting period • Loan Product Advisor has determined before origination of the new loan the credit reputation is acceptable • Extenuating circumstances – Caution: Lenders must
Slide 17: Assets and Reserves
Assets and Reserves Fannie Mae Freddie Mac – Use of business assets for closing – Use of business assets for closing • NO specific policy on review of large • Policy allows to document two months deposits on business statements business account statements • Deposits must make sense for the •
Slide 18: Assets and Reserves
Assets and Reserves Fannie Mae Freddie Mac – Two months asset statements for – Streamlined Accept One month ALL DU loans assets statements – Standard Documentation Two months asset statements Today’s Presentation Covers Non-HARP Loans And Guidelines Applicable To Loans Submitted To Desktop U
Slide 19: Self-Employment
Self-Employment Fannie Mae SEB Documentation Freddie Mac SEB Documentation – One or two years, based on DU findings – Must be self-employed > 5 years to only message obtain 1 year personal and business tax – Business returns may be waived if return business in existence for 5 years, • All ot
Slide 20: Self-Employment
Self-Employment Fannie Mae SEB Documentation Freddie Mac – One or two years, based on DU findings SEB Documentation message – Must be self-employed > 5 years to – Business returns may be waived if only obtain 1 year personal and business in existence for 5 years, business tax return inco
Slide 21: Rental Income
Rental Income Fannie Mae Freddie Mac Rental Income Rental Income (Effective March 1, – No requirement to own a primary 2019) home to use rental income – Borrower’s must own a Primary – No requirements for primary Residence to use rental income to residence conversion qualify when pur
Slide 22: Commission Income & Auto Allowance
Commission Income & Auto Allowance Fannie Mae 2018-09 Freddie Mac – Removed the different treatment of – Unreimbursed employee expenses commission income based on reflected on Schedule A and IRS percentage of employment income. Form 2106 (if applicable) of the All commission income will be t
Slide 23: Income Commencing After The Note Date
Income Commencing After The Note Date Fannie Mae Option Two – Purchase Only – Primary – One Unit – Income must start within 90 days of the note date No requirement income must start by a certain timeframe under Option 1 Fannie Mae and Freddie Mac: Understanding Your Options 23
Slide 24: Income Commencing After The Note Date
Income Commencing After The Note Date Freddie Mac – Freddie Mac allows use of a “future salary increase” under Option 1 – Option 1 is the Option where income must start within 90 days of the note date – Option 1 is 1 unit Primary Only – Options 2 difference loan purpose and property types Fannie
Slide 25: Income Commencing After The Note Date
Income Commencing After The Note Date Freddie Mac – Option 1 Freddie allows for “future salary increases” Fannie Mae and Freddie Mac: Understanding Your Options 25
Slide 26: Income
Income Fannie Mae Freddie Mac – Restricted Stock and Restricted Stock – Restricted Stock and Restricted Stock Units Units may be considered, under • No policy for the use as income certain conditions • Two year consecutive history of receipt • To be considered for history of receipt, RS and
Slide 27: Multiple Financed Properties
Multiple Financed Properties Fannie Mae Freddie Mac – Maximum number is 10 – Maximum number is 10 – Reserves based on UPB for each – Reserves based on PITIA for each financed second home or investment financed second home or investment property borrower owns and is property borrower owns and
Slide 28: Interested Party Contributions
Interested Party Contributions Fannie Mae Freddie Mac – Calculates from the sales price – Calculates from the “value*” – Freddie Mac definition of value is lesser of sales price or appraised value, as of note date Percentages Are The Same For Both Fannie Mae And Freddie Mac They Just Calcula
Slide 29: Appraisal Waiver Eligible & ACE Differences
Appraisal Waiver Eligible & ACE Differences Fannie Mae Freddie Mac – PIW now *Appraisal Waiver Eligible – Automated Collateral Evaluation • One Unit, including Condos (ACE) • Primary, second homes and investment • 1 unit primary or second home properties • Includes Condo 7/2018 • Purchases p
Slide 30: Rural High-Needs Appraisal Waiver
Rural High-Needs Appraisal Waiver Fannie Mae – Rural High-Needs Appraisal Waiver • Loan must receive an Approve/Eligible • Purchase transactions • One Unit principal residence (no manufactured homes) located in a designated rural high-needs area • Borrowers with income at or below 100% of AMI •
Slide 31: Miscellaneous Eligibility
Miscellaneous Eligibility Did You Know? – Fannie Mae aligned their ARM and fixed rate LTVs (up to 95%) – Fannie Mae treats timeshares as installment debt, regardless of how they appear on the credit report – DU 10.1 was updated in 2017 to allow for more loans to include only one year tax return,
Slide 32: Genworth Underwriting Guidelines
Genworth Underwriting Guidelines Fannie Mae and Freddie Mac: Understanding Your Options 32
Slide 33: Genworth Rate Express®
Genworth Rate Express® Fannie Mae and Freddie Mac: Understanding Your Options 33
Slide 34: LOS Connections
LOS Connections Fannie Mae and Freddie Mac: Understanding Your Options 34
Slide 35: Training Tools and Information
Training Tools and Information Fannie Mae and Freddie Mac: Understanding Your Options 35
Slide 36: Training Tools and Information
Training Tools and Information Fannie Mae and Freddie Mac: Understanding Your Options 36
Slide 37: Additional MI Site Information
Additional MI Site Information Fannie Mae and Freddie Mac: Understanding Your Options 37
Slide 38: Your Genworth Resources
Your Genworth Resources ➢ ActionCenter®: 800 444.5664 ➢ Your Local Genworth Regional Underwriter ➢ Your Genworth Sales Representative Fannie Mae and Freddie Mac: Understanding Your Options 38
Slide 39: 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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