Enact Holdings, Inc. · NASDAQ:ACT
Enact — Investor Presentation (November 2020)
103 slides from Enact's investor presentation, November 2020
Slide 1: Self-Employed Borrower: SAM Form Part I - Personal Tax Returns
CONFIDENTIAL Self-Employed Borrower: SAM Form Part I - Personal Tax Returns November 2020 Customer Education Brought to you by: Genworth Customer Development and Process Consulting Self-Employed Borrower SAM Form Part I 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 the Schedule Analysis Form (SAM) form and calculate supportable self-employed borrower income from personal tax returns – W-2 wages from a business owned by the borrower – Schedule B dividends and interest income – Income from a Schedule C (Sole Proprietor) – Consideration of
Slide 4: Self-Employment Fannie Mae
Self-Employment Fannie Mae https://www.fanniemae.com/content/guide/selling/b3/3.2/01.html Self-Employed Borrower SAM Form Part I 3
Slide 5: Self-Employment Fannie Mae
Self-Employment Fannie Mae Fannie Mae 2019 Selling Guide B3-3.2-01, Underwriting Factors and Documentation for a Self-Employed Borrower (12/04/2018) Self-Employed Borrower SAM Form Part I 4
Slide 6: Self-Employment Fannie Mae
Self-Employment Fannie Mae Fannie Mae 2019 Selling Guide B3-3.2-01, Underwriting Factors and Documentation for a Self-Employed Borrower (12/04/2018) Self-Employed Borrower SAM Form Part I 5
Slide 7: Self-Employment Fannie Mae
Self-Employment Fannie Mae Fannie Mae 2019 Selling Guide B3-3.2-01, Underwriting Factors and Documentation for a Self-Employed Borrower (12/04/2018) Self-Employed Borrower SAM Form Part I 6
Slide 8: Fannie Mae COVID-19 Resources
Fannie Mae COVID-19 Resources Fannie Mae Updates, FAQs, Fannie Mae’s COVID 19 webpage https://singlefamily.fanniemae.com/originating-underwriting#selling-promo Self-Employed Borrower SAM Form Part I 7
Slide 9: Lender Letter LL-2020-03
Lender Letter LL-2020-03 Policy For SEB Extended To November 30, 2020 Income: Updated to business 20 days Self-Employed Borrower SAM Form Part I 8
Slide 10: Fannie Mae LL-2020-03 Effective June 11, 2020 And Remains Effective Until Further Notice
Fannie Mae LL-2020-03 Effective June 11, 2020 And Remains Effective Until Further Notice Due to the pandemic’s continuing impact on businesses throughout the country, lenders are now required to obtain the following additional documentation to support the decision that the self-employed income meets
Slide 11: Fannie Mae LL-2020-03 Effective June 11, 2020 And Remains Effective Until Further Notice
Fannie Mae LL-2020-03 Effective June 11, 2020 And Remains Effective Until Further Notice Lenders must review the profit and loss statement, and business depository accounts, if required, and other relevant factors to determine the extent to which a business has been impacted by COVID-19. LL-2020-03
Slide 12: Self-Employed Borrower SAM Form Part I
Self-Employed Borrower SAM Form Part I 11
Slide 13: Business Income Calculation Adjustment
Business Income Calculation Adjustment LL-2020-03 Self-Employed Borrower SAM Form Part I 12
Slide 14: COVID-19 Tools and Resources
COVID-19 Tools and Resources https://new.mi.genworth.com/training/course/COVID-19-Self-Employed-Borrower-Updates https://new.mi.genworth.com/training/course/how-use-business-stability-and-income-calculator Self-Employed Borrower SAM Form Part I 13
Slide 15: Documentation Matrix
Documentation Matrix Updated October 2020 http://www.freddiemac.com/learn/pdfs/uw/docmatrix.pdf Self-Employed Borrower SAM Form Part I 14
Slide 16: Documentation Matrix
Documentation Matrix Page 14 of Matrix Self-Employed Borrower SAM Form Part I 15
Slide 17: Documentation Matrix
Documentation Matrix Page 15 of Matrix Self-Employed Borrower SAM Form Part I 16
Slide 18: Documentation Matrix
Documentation Matrix Page 15 of Matrix Self-Employed Borrower SAM Form Part I 17
Slide 19: Documentation Matrix
Documentation Matrix Page 16 of Matrix Self-Employed Borrower SAM Form Part I 18
Slide 20: Documentation Matrix
Documentation Matrix Page 29 of Matrix Self-Employed Borrower SAM Form Part I 19
Slide 21: Bulletin 2020-8… 2020-40
Bulletin 2020-8… 2020-40 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 November 30, 2020; however, Sellers are encouraged to a
Slide 22: Bulletin 2020-19
Bulletin 2020-19 Updates to COVID-19 impact on originations: Temporary requirements and guidance for self-employed income Temporary flexibilities for CHOICERenovation® Mortgages Delivery requirements for “no cash-out” refinance mortgages Data requirements for mortgages that are in COVID-19 f
Slide 23: Bulletin 2020-19
Bulletin 2020-19 These temporary requirements are effective for Mortgages with Application Received on and after June 11, 2020 and until further notice. It is encouraged to implement these requirements to loans in process. Due to the pandemic’s continuing impact on businesses throughout the country,
Slide 24: Bulletin 2020-19
Bulletin 2020-19 These temporary requirements are effective for Mortgages with Application Received on and after June 11, 2020 and until further notice. It is encouraged to implement these requirements to loans in process. Reviewing YTD P&L statements, business account statements and other documenta
Slide 25: Bulletin 2020-19
Bulletin 2020-19 These temporary requirements are effective for Mortgages with Application Received on and after June 11, 2020 and until further notice. It is encouraged to implement these requirements to loans in process. Establishing Stable Monthly Income The Seller must review the YTD profit and
Slide 26: Bulletin 2020-19
Bulletin 2020-19 These temporary requirements are effective for Mortgages with Application Received on and after June 11, 2020 and until further notice. It is encouraged to implement these requirements to loans in process. Establishing Stable Monthly Income- continued The Seller must establish the
Slide 27: Bulletin 2020-19
Bulletin 2020-19 These temporary requirements are effective for Mortgages with Application Received on and after June 11, 2020 and until further notice. It is encouraged to implement these requirements to loans in process. Establishing Stable Monthly Income- continued https://guide.freddiemac.com/ap
Slide 28: Bulletin 2020-19
Bulletin 2020-19 These temporary requirements are effective for Mortgages with Application Received on and after June 11, 2020 and until further notice. It is encouraged to implement these requirements to loans in process. Business Assets Loan proceeds from the SBA Payroll Protection Plan (PPP) and/
Slide 29: Chapter 5304.1(d) Business & Income Analysis
Chapter 5304.1(d) Business & Income Analysis https://guide.freddiemac.com/app/guide/content/a_id/1000657 Self-Employed Borrower SAM Form Part I 28
Slide 30: Chapter 5304.1(d) Business & Income Analysis
Chapter 5304.1(d) Business & Income Analysis https://guide.freddiemac.com/app/guide/content/a_id/1000657 Self-Employed Borrower SAM Form Part I 29
Slide 31: Chapter 5304.1(d) Business & Income Analysis
Chapter 5304.1(d) Business & Income Analysis https://guide.freddiemac.com/app/guide/content/a_id/1000657 Self-Employed Borrower SAM Form Part I 30
Slide 32: Chapter 5304.1(d) Business & Income Analysis
Chapter 5304.1(d) Business & Income Analysis https://guide.freddiemac.com/app/guide/content/a_id/1000657 Self-Employed Borrower SAM Form Part I 31
Slide 33: Training Tools and Information
Training Tools and Information https://new.mi.genworth.com/ Self-Employed Borrower SAM Form Part I 32
Slide 34: Training Tools and Information
Training Tools and Information Self-Employed Borrower SAM Form Part I 33
Slide 35: 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 Self-Employed Borrower SAM Form Part I 34
Slide 36: 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 Self-Employed Borrower SAM Form Part I 35
Slide 37: You'll Need
You’ll Need Self-Employed Borrower SAM Form Part I 36
Slide 38: 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 39: 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 Self-Employed Borrower SAM Form Part I 38
Slide 40: IRS Form 1040
IRS Form 1040 Review for: – Review Line 7a for indication of a Schedule 1 Page 2 Self-Employed Borrower SAM Form Part I 39
Slide 41: 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 Self-Employed Borrower SAM Form Part I 40
Slide 42: Calculator and Quick Reference Guide
Calculator and Quick Reference Guide Access your Quick Reference Guide SAM Form and YOUR Case Study Self-Employed Borrower SAM Form Part I 41
Slide 43: 2019 Schedule B
2019 Schedule B Don’t use unless needed for qualifying – Use ONLY if income is coming from SELF-EMPLOYMENT – We are only reviewing a one year history, so we cannot use! Page 8 Self-Employed Borrower SAM Form Part I 42
Slide 44: SAM Form Section II Schedule C
SAM Form Section II Schedule C Self-Employed Borrower SAM Form Part I 43
Slide 45: Schedule C
Schedule C Page 9 Self-Employed Borrower SAM Form Part I 44
Slide 46: Schedule C
Schedule C Page 9 Self-Employed Borrower SAM Form Part I 45
Slide 47: Schedule C
Schedule C Page 9 Self-Employed Borrower SAM Form Part I 46
Slide 48: Schedule C
Schedule C Self-Employed Borrower SAM Form Part I 47
Slide 49: Schedule C
Schedule C Page 9 Self-Employed Borrower SAM Form Part I 48
Slide 50: Schedule C
Schedule C Page 9 Self-Employed Borrower SAM Form Part I 49
Slide 51: Schedule C
Schedule C Page 9 Self-Employed Borrower SAM Form Part I 50
Slide 52: Schedule C
Schedule C Self-Employed Borrower SAM Form Part I 51
Slide 53: Schedule C
Schedule C Page 9 Self-Employed Borrower SAM Form Part I 52
Slide 54: Schedule C
Schedule C Self-Employed Borrower SAM Form Part I 53
Slide 55: Schedule C
Schedule C Page 9 Self-Employed Borrower SAM Form Part I 54
Slide 56: Schedule C
Schedule C Self-Employed Borrower SAM Form Part I 55
Slide 57: Schedule C
Schedule C Review Line 9 for Car and Truck Expenses – If there is an entry, look for the math Page 9 Self-Employed Borrower SAM Form Part I 56
Slide 58: 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. Self-Employed Borrower SAM Form Part I 57
Slide 59: Schedule C
Schedule C Self-Employed Borrower SAM Form Part I 58
Slide 60: Schedule C
Schedule C Verify 4562 is for the Schedule C – Review Page 2 of the worksheet Line #30 Page 16 Self-Employed Borrower SAM Form Part I 59
Slide 61: Schedule C
Schedule C Page 17 Business Miles Of 7,554 x 26¢ Is $1,964 In Additional Depreciation That Could Be Added Back. Self-Employed Borrower SAM Form Part I 60
Slide 62: Schedule C
Schedule C Pages 18 and 19 Self-Employed Borrower SAM Form Part I 61
Slide 63: IRS Publication 463
IRS Publication 463 Self-Employed Borrower SAM Form Part I 62
Slide 64: Schedule C
Schedule C Self-Employed Borrower SAM Form Part I 63
Slide 65: Schedule C
Schedule C Enter only the $2,955 amortization on your calculator Page 10 Self-Employed Borrower SAM Form Part I 64
Slide 66: Schedule C
Schedule C Self-Employed Borrower SAM Form Part I 65
Slide 67: SAM Form Section III
SAM Form Section III Don’t Use If You Don’t Need; If Needed To Qualify Check Investor Guidelines Self-Employed Borrower SAM Form Part I 66
Slide 68: 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 to see what was reported – Our 2019 example show $3,000 loss Pages 2 and 11 Self-Employed Borrower SA
Slide 69: Schedule D
Schedule D Page 11 Where Did The $10,544 Loss On Line 6 Come From? The 1040 Showed A $3,000 Loss. Self-Employed Borrower SAM Form Part I 68
Slide 70: Schedule D
Schedule D Page 12 Self-Employed Borrower SAM Form Part I 69
Slide 71: 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 SAM Form Page 13 Self-Employed Borrower SAM Form Part I 71
Slide 72: 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 73: Self-Employed Borrower SAM Form Part I
Self-Employed Borrower SAM Form Part I 73
Slide 74: Page 13
Page 13 Self-Employed Borrower SAM Form Part I 74
Slide 75: 2019 Schedule E Rental Income
2019 Schedule E Rental Income Self-Employed Borrower SAM Form Part I 75
Slide 76: Page 13
Page 13 Self-Employed Borrower SAM Form Part I 76
Slide 77: 2019 Schedule E Rental Income
2019 Schedule E Rental Income Self-Employed Borrower SAM Form Part I 77
Slide 78: Page 13
Page 13 Self-Employed Borrower SAM Form Part I 78
Slide 79: 2019 Schedule E Rental Income
2019 Schedule E Rental Income Self-Employed Borrower SAM Form Part I 79
Slide 80: Page 13
Page 13 Self-Employed Borrower SAM Form Part I 80
Slide 81: 2019 Schedule E Rental Income
2019 Schedule E Rental Income Self-Employed Borrower SAM Form Part I 81
Slide 82: Page 13
Page 13 Self-Employed Borrower SAM Form Part I 82
Slide 83: 2019 Schedule E Rental Income
2019 Schedule E Rental Income Self-Employed Borrower SAM Form Part I 83
Slide 84: Page 13
Page 13 Self-Employed Borrower SAM Form Part I 84
Slide 85: 2019 Schedule E Rental Income
2019 Schedule E Rental Income Self-Employed Borrower SAM Form Part I 85
Slide 86: Page 13
Page 13 Self-Employed Borrower SAM Form Part I 86
Slide 87: 2019 Schedule E Rental Income
2019 Schedule E Rental Income Self-Employed Borrower SAM Form Part I 87
Slide 88: Page 13
Page 13 Self-Employed Borrower SAM Form Part I 88
Slide 89: 2019 Schedule E Rental Income
2019 Schedule E Rental Income Self-Employed Borrower SAM Form Part I 89
Slide 90: 2019 Schedule E Rental Income
2019 Schedule E Rental Income Self-Employed Borrower SAM Form Part I 90
Slide 91: 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 92: 2019 Schedule E Rental Income
2019 Schedule E Rental Income Self-Employed Borrower SAM Form Part I 92
Slide 93: URLA Rental Property
URLA Rental Property PITI $1,637 (verified on mortgage statement) + $265 (verified HOA) = $1,902 Self-Employed Borrower SAM Form Part I 93
Slide 94: 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 95: Genworth Underwriting Guidelines
Genworth Underwriting Guidelines Self-Employed Borrower SAM Form Part I 95
Slide 96: Genworth Rate Express®
Genworth Rate Express® Self-Employed Borrower SAM Form Part I 96
Slide 97: LOS Connections
LOS Connections Self-Employed Borrower SAM Form Part I 97
Slide 98: Training Tools and Information
Training Tools and Information Self-Employed Borrower SAM Form Part I 98
Slide 99: Training Tools and Information
Training Tools and Information Self-Employed Borrower SAM Form Part I 99
Slide 100: COVID-19 Tools and Resources
COVID-19 Tools and Resources https://new.mi.genworth.com/training/course/COVID-19-Self-Employed-Borrower-Updates https://new.mi.genworth.com/training/course/how-use-business-stability-and-income-calculator Self-Employed Borrower SAM Form Part I 10 0
Slide 101: Additional MI Site Information
Additional MI Site Information Self-Employed Borrower SAM Form Part I 10 1
Slide 102: Your Genworth Resources
Your Genworth Resources ActionCenter®: 800 444.5664 Your Local Genworth Regional Underwriter Your Genworth Sales Representative Self-Employed Borrower SAM Form Part I 10 2
Slide 103: 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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