Enact Holdings, Inc. · NASDAQ:ACT
Enact — Investor Presentation (September 2019)
83 slides from Enact's investor presentation, September 2019
Slide 1: Self-Employed Borrower: SAM Form Part I - Personal Tax Returns
Self-Employed Borrower: SAM Form Part I - Personal Tax Returns September 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 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: Freddie Mac Documentation Matrix
Freddie Mac Documentation Matrix Documentation Matrix – Assists in underwriting and documenting loans for Freddie Mac – Lenders may have overlays – Check specific program requirements – Updated July 2019 http://www.freddiemac.com/learn/pdfs/uw/docmatrix.pdf Self-Employed Borrower SAM Form Part I 7
Slide 8: Documentation Matrix
Documentation Matrix Page 13 of Matrix Self-Employed Borrower SAM Form Part I 8
Slide 9: Documentation Matrix
Documentation Matrix Page 14 of Matrix Self-Employed Borrower SAM Form Part I 9
Slide 10: Documentation Matrix
Documentation Matrix Page 14 of Matrix Self-Employed Borrower SAM Form Part I 10
Slide 11: Documentation Matrix
Documentation Matrix Page 15 of Matrix Self-Employed Borrower SAM Form Part I 11
Slide 12: Documentation Matrix
Documentation Matrix Page 28 of Matrix Chapter 5304 of the Guide Self-Employed Borrower SAM Form Part I 12
Slide 13: Chapter 5304.1(d) Business and Income Analysis
Chapter 5304.1(d) Business and Income Analysis Self-Employed Borrower SAM Form Part I 13
Slide 14: Chapter 5304.1(d) Business and Income Analysis
Chapter 5304.1(d) Business and Income Analysis Self-Employed Borrower SAM Form Part I 16
Slide 15: Training Tools and Information
Training Tools and Information www.new.mi.Genworth.com Self-Employed Borrower SAM Form Part I 17
Slide 16: Training Tools and Information
Training Tools and Information Self-Employed Borrower SAM Form Part I 18
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 Self-Employed Borrower SAM Form Part I 19
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 Desktop Underwriter ? What about Loan Product Advisor®? No Yes Self-Employed Borrower SAM Form Part I 20
Slide 19: You'll Need
You’ll Need Self-Employed Borrower SAM Form Part I 21
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 Self-Employed Borrower SAM Form Part I 23
Slide 22: 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 24
Slide 23: 2018 Schedule B
2018 Schedule B Don’t use unless needed for qualifying – Use ONLY if income is coming from SELF-EMPLOYMENT – 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! 0 0 Page 6 Self-Employed Borr
Slide 24: SAM Form Section II Schedule C
SAM Form Section II Schedule C Self-Employed Borrower SAM Form Part I 26
Slide 25: 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 Self-Employed Borrower SAM Form Part I 27
Slide 26: Schedule C
Schedule C Page 7 Self-Employed Borrower SAM Form Part I 28
Slide 27: Schedule C
Schedule C Page 7 Self-Employed Borrower SAM Form Part I 29
Slide 28: Schedule C
Schedule C Page 7 Self-Employed Borrower SAM Form Part I 30
Slide 29: Schedule C
Schedule C Self-Employed Borrower SAM Form Part I 31
Slide 30: Schedule C
Schedule C Page 7 Self-Employed Borrower SAM Form Part I 32
Slide 31: Schedule C
Schedule C Page 7 Self-Employed Borrower SAM Form Part I 33
Slide 32: Schedule C
Schedule C Page 7 Self-Employed Borrower SAM Form Part I 34
Slide 33: Schedule C
Schedule C Self-Employed Borrower SAM Form Part I 35
Slide 34: Schedule C
Schedule C Page 7 Self-Employed Borrower SAM Form Part I 36
Slide 35: Schedule C
Schedule C Self-Employed Borrower SAM Form Part I 37
Slide 36: Schedule C
Schedule C Page 7 Self-Employed Borrower SAM Form Part I 38
Slide 37: Schedule C
Schedule C Self-Employed Borrower SAM Form Part I 39
Slide 38: Schedule C
Schedule C Review Line 9 for Car and Truck Expenses – If there is an entry, look for the math Page 7 Self-Employed Borrower SAM Form Part I 40
Slide 39: 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 8 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 41
Slide 40: Schedule C
Schedule C Self-Employed Borrower SAM Form Part I 42
Slide 41: Schedule C
Schedule C Verify 4562 is for the Schedule C – Review Page 2 of the worksheet Line #30 Page 13 Self-Employed Borrower SAM Form Part I 43
Slide 42: Schedule C
Schedule C Page 14 Business Miles Of 8,422 x 25¢ Is $2,105 In Additional Depreciation That Could Be Added Back. Self-Employed Borrower SAM Form Part I 44
Slide 43: Schedule C
Schedule C Pages 15 and 16 Self-Employed Borrower SAM Form Part I 45
Slide 44: IRS Publication 463
IRS Publication 463 Self-Employed Borrower SAM Form Part I 46
Slide 45: Schedule C
Schedule C Self-Employed Borrower SAM Form Part I 47
Slide 46: Schedule C
Schedule C Enter only the $2,999 amortization on your calculator Page 8 Self-Employed Borrower SAM Form Part I 48
Slide 47: Schedule C
Schedule C Self-Employed Borrower SAM Form Part I 49
Slide 48: 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 50
Slide 49: 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 $3,000 loss Pages 3 and 9 Se
Slide 50: Schedule D
Schedule D Page 9 Where Did The $13,544 Loss On Line 6 Come From? The 1040 Showed A $3,000 Loss. Self-Employed Borrower SAM Form Part I 52
Slide 51: Schedule D
Schedule D 0 Page 10 Self-Employed Borrower SAM Form Part I 53
Slide 52: 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 Cash Flow Analysis Form Page 11 Self-Employed Borrower SAM Form Part I 55
Slide 53: 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 54: Self-Employed Borrower SAM Form Part I
Self-Employed Borrower SAM Form Part I 57
Slide 55: Page 11
Page 11 Self-Employed Borrower SAM Form Part I 58
Slide 56: 2018 Schedule E Rental Income
2018 Schedule E Rental Income Self-Employed Borrower SAM Form Part I 59
Slide 57: Page 11
Page 11 Self-Employed Borrower SAM Form Part I 60
Slide 58: 2018 Schedule E Rental Income
2018 Schedule E Rental Income Self-Employed Borrower SAM Form Part I 61
Slide 59: Page 11
Page 11 Self-Employed Borrower SAM Form Part I 62
Slide 60: 2018 Schedule E Rental Income
2018 Schedule E Rental Income Self-Employed Borrower SAM Form Part I 63
Slide 61: Page 11
Page 11 Self-Employed Borrower SAM Form Part I 64
Slide 62: 2018 Schedule E Rental Income
2018 Schedule E Rental Income Self-Employed Borrower SAM Form Part I 65
Slide 63: Page 11
Page 11 Self-Employed Borrower SAM Form Part I 66
Slide 64: 2018 Schedule E Rental Income
2018 Schedule E Rental Income Self-Employed Borrower SAM Form Part I 67
Slide 65: Page 11
Page 11 Self-Employed Borrower SAM Form Part I 68
Slide 66: 2018 Schedule E Rental Income
2018 Schedule E Rental Income Self-Employed Borrower SAM Form Part I 69
Slide 67: Page 11
Page 11 Self-Employed Borrower SAM Form Part I 70
Slide 68: 2018 Schedule E Rental Income
2018 Schedule E Rental Income Self-Employed Borrower SAM Form Part I 71
Slide 69: Page 11
Page 11 Self-Employed Borrower SAM Form Part I 72
Slide 70: 2018 Schedule E Rental Income
2018 Schedule E Rental Income Self-Employed Borrower SAM Form Part I 73
Slide 71: 2018 Schedule E Rental Income
2018 Schedule E Rental Income Self-Employed Borrower SAM Form Part I 74
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 Self-Employed B
Slide 73: 2018 Schedule E Rental Income
2018 Schedule E Rental Income Self-Employed Borrower SAM Form Part I 76
Slide 74: 2018 Schedule E Rental Income
2018 Schedule E Rental Income PITI $1,637 (verified on mortgage statement) + $265 (verified HOA) = $1,902 Self-Employed Borrower SAM Form Part I 77
Slide 75: 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 76: Genworth Rate Express
Genworth Rate Express® Self-Employed Borrower SAM Form Part I 79
Slide 77: Genworth Underwriting Guidelines
Genworth Underwriting Guidelines Self-Employed Borrower SAM Form Part I 80
Slide 78: LOS Connections
LOS Connections Self-Employed Borrower SAM Form Part I 81
Slide 79: Training Tools and Information
Training Tools and Information Self-Employed Borrower SAM Form Part I 82
Slide 80: Training Tools and Information
Training Tools and Information Self-Employed Borrower SAM Form Part I 83
Slide 81: Additional MI Site Information
Additional MI Site Information Self-Employed Borrower SAM Form Part I 84
Slide 82: 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 85
Slide 83: 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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