Enact Holdings, Inc. · NASDAQ:ACT
Enact — Investor Presentation (March 2021)
114 slides from Enact's investor presentation, March 2021
Slide 1: Avoid Common Underwriting Errors
Avoid Common Underwriting Errors Suggested Best Practices with Best Practices In Loan Processing March 2021 Customer Education Brought to you by: Genworth Customer Development and Process Consulting Avoiding Common Underwriting Errors 0
Slide 2: Agenda
Agenda Introduction General Underwriting Tips – Resources – Examining and Documenting Files Specific Errors and Recommendations – Capacity, Credit History, Capital, Compliance Questions and Answers Avoiding Common Underwriting Errors 1
Slide 3: Resources
Resources Job Aides, Tools, Websites Avoiding Common Underwriting Errors 2
Slide 4: Fannie Mae –Single Family
Fannie Mae –Single Family https://singlefamily.fanniemae.com/news-events Avoiding Common Underwriting Errors 3
Slide 5: Fannie Mae Job Aids/FAQs
Fannie Mae Job Aids/FAQs https://singlefamily.fanniemae.com/learning-center/originating-and-underwriting Avoiding Avoiding Common CommonUnderwriting UnderwritingErrors Errors 4
Slide 6: Fannie Mae Top Trending Questions
Fannie Mae Top Trending Questions https://singlefamily.fanniemae.com/faq-top-trending-selling-faqs Avoiding Common Underwriting Errors 5
Slide 7: Freddie Mac
Freddie Mac https://sf.freddiemac.com/ Avoiding Common Underwriting Errors 6
Slide 8: Freddie Mac Learning Center
Freddie Mac Learning Center https://sf.freddiemac.com/tools-learning/freddie-mac-learning/overview Avoiding Common Underwriting Errors 7
Slide 9: Freddie Mac Learning Center
Freddie Mac Learning Center https://sf.freddiemac.com/tools-learning/freddie-mac-learning/origination-underwriting Avoiding Common Underwriting Errors 8
Slide 10: Freddie Mac Loan Product Advisor Training
Freddie Mac Loan Product Advisor Training https://sf.freddiemac.com/content/_assets/resources/pdf/step-by-step-guides/lpa_5_resources.pdf Avoiding Common Underwriting Errors 9
Slide 11: Documentation and Rental Income Matrix
Documentation and Rental Income Matrix – Documentation Matrix Updated March 2021 – Rental Income Matrix Updated July 2020 https://sf.freddiemac.com/content/_assets/resources/pdf/update/docmatrix.pdf https://sf.freddiemac.com/content/_assets/resources/pdf/update/rental.pdf Avoiding Common Underwritin
Slide 12: Genworth Underwriting Guidelines
Genworth Underwriting Guidelines Avoiding Common Underwriting Errors 11
Slide 13: Genworth underwriting manual links
https://new- https://new- content.mortgageinsurance.genworth.com/documents/national/underw content.mortgageinsurance.genworth.com/documents/national/underw riting-guidelines/UNDERWRITING%20MANUAL202001212.pdf riting-guidelines/00882.LTV.Recaps.Natl.1220.pdf Avoiding Common Underwriting Errors 12
Slide 14: Genworth Underwriting Guidelines
Genworth Underwriting Guidelines Avoiding Common Underwriting Errors 13
Slide 15: Genworth MI Top Decision Errors
Genworth MI Top Decision Errors https://new-content.mortgageinsurance.genworth.com/documents/uw-tips-and-credit- policy/00961.MI.Decision_Tips.0121.pdf Avoiding Common Underwriting Errors 14
Slide 16: Genworth MI Decision Tips link
https://new-content.mortgageinsurance.genworth.com/documents/uw-tips-and-credit- policy/00961.MI.Decision_Tips.0121.pdf Avoiding Common Underwriting Errors 15
Slide 17: Genworth MI Decision Tips Updated Every Quarter
https://new-content.mortgageinsurance.genworth.com/documents/uw-tips-and-credit- policy/00961.MI.Decision_Tips.0121.pdf Genworth MI Decision Tips Updated Every Quarter Avoiding Common Underwriting Errors 16
Slide 18: Genworth MI Decision Tips link
https://new-content.mortgageinsurance.genworth.com/documents/uw-tips-and-credit-policy/00961.MI.Decision_Tips.0121.pdf Avoiding Common Underwriting Errors 17
Slide 19: Genworth COVID-19 Resources
Genworth COVID-19 Resources Avoiding Common Underwriting Errors 18
Slide 20: Underwriting During COVID-19
Underwriting During COVID-19 https://new.mi.genworth.com/underwriting-tips-and-credit-policy Avoiding Common Underwriting Errors 19
Slide 21: Genworth Rate Express
Genworth Rate Express® Avoiding Common Underwriting Errors 20
Slide 22: Training Tools and Information
Training Tools and Information Avoiding Common Underwriting Errors 21
Slide 23: Training Tools and Information
Training Tools and Information Avoiding Common Underwriting Errors 22
Slide 24: Common Underwriting Errors
Common Underwriting Errors COVID-19 Policy Updates, Fannie Mae, Freddie Mac, Genworth Avoiding Common Underwriting Errors 23
Slide 25: Fannie Mae COVID-19 Updates
Fannie Mae COVID-19 Updates https://singlefamily.fanniemae.com/ Avoiding Common Underwriting Errors 24
Slide 26: Fannie Mae COVID-19 Updates
Fannie Mae COVID-19 Updates https://www.fanniemae.com/here-help-single-family?_ga=2.180124900.1316512315.1605534079-1279158741.1597852529#lenders Avoiding Common Underwriting Errors 25
Slide 27: Fannie Mae COVID-19 Updates
Fannie Mae COVID-19 Updates FAQs https://singlefamily.fanniemae.com/media/22326/display Avoiding Common Underwriting Errors 26
Slide 28: Fannie Mae COVID-19 Policies
Fannie Mae COVID-19 Policies LL-2021-03 which replaced LL-2020-03 https://singlefamily.fanniemae.com/media/24811/display Avoiding Common Underwriting Errors 27
Slide 29: Fannie Mae LL-2021-03
Fannie Mae LL-2021-03 Continuity of Income*: Effective March 23, 2020 to March 31, 2021 – Verbal VOE • Lenders may obtain a written VOE confirming the borrower’s current employment status within the same timeframe as the verbal VOE requirements. • An email directly from the employer’s work email add
Slide 30: Fannie Mae LL-2021-03
Fannie Mae LL-2021-03 Effective for applications taken April 14, 2020 and until further notice: – Age of Documents • For most income and asset documents, age requirements is reduced from four months to two months or 60 days from the note date. If an asset statement is issued quarterly, lenders must
Slide 31: Fannie Mae LL-2021-03
Fannie Mae LL-2021-03 Effective for applications taken April 14, 2020 and until further notice unless noted: – Self-Employment • Lenders must confirm that the borrower’s business is open and operating within 20 business days of the note date (or after closing but prior to delivery). See LL 2021-03 f
Slide 32: Fannie Mae LL-2021-03
Fannie Mae LL-2021-03 Reminders and Suspension of Employment Validation Service – Reminder that unemployment may only be used if it clearly is associated with seasonal employment reported on the signed federal tax returns and lenders verified the income by following B3-3.1-09 of the Selling Guide. •
Slide 33: Fannie Mae LL-2020-03 Effective June 2, 2020
Fannie Mae LL-2020-03 Effective June 2, 2020 And Remains Effective Until Further Notice Updated Policy for new Purchase and refinance transactions – Lenders must review borrower’s credit report to determine the status of all mortgage loans. In addition, lenders must apply due diligence for each mort
Slide 34: Fannie Mae LL-2021-03 Effective June 2, 2020
Fannie Mae LL-2021-03 Effective June 2, 2020 And Remains Effective Until Further Notice Avoiding Common Underwriting Errors 33
Slide 35: Fannie Mae LL-2021-03 Effective June 11, 2020
Fannie Mae LL-2021-03 Effective June 11, 2020 And Remains Effective Until Further Notice Avoiding Common Underwriting Errors 34
Slide 36: Updated SEB Profit and Loss FAQ For 2021
Updated SEB Profit and Loss FAQ For 2021 Avoiding Common Underwriting Errors 35
Slide 37: Fannie Mae LL-2021-03 Effective June 11, 2020
Fannie Mae LL-2021-03 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- 2021-03
Slide 38: Fannie Mae LL-2021-04
Fannie Mae LL-2021-04 See Genworth’s Fannie Mae COVID-19 webinar for full details on appraisal policies and flexibilities https://singlefamily.fanniemae.com/media/24816/display Avoiding Common Underwriting Errors 37
Slide 39: www.freddiemac.com
www.freddiemac.com https://sf.freddiemac.com/about/single-family/subscription-center Avoiding Common Underwriting Errors 38
Slide 40: Freddie Mac COVID-19 page
https://sf.freddiemac.com/about/covid19 Avoiding Common Underwriting Errors 39
Slide 41: Bulletin 2020-5
Bulletin 2020-5 Guidance Related to Covid-19 – Property Valuation Flexibilities are not covered in this session •Please review Genworth COVID-19 For Freddie Mac for complete details on appraisal policies and flexibilities for Freddie https://guide.freddiemac.com/app/guide/content/a_id/1003723 Avoidi
Slide 42: Bulletin 2020-5
Bulletin 2020-5 The temporary flexibilities are effective immediately for all Mortgages in process and remain in place for Mortgages with Applications Received on or before March 31, 2021*. Credit Underwriting: – Employed Income – 10-day pre-closing verification (PCV), Sellers may obtain one of the
Slide 43: Bulletin 2020-8
Bulletin 2020-8 Guidance Related to Covid-19 https://guide.freddiemac.com/app/guide/bulletin/2020-8 Avoiding Common Underwriting Errors 42
Slide 44: Bulletin 2020-8
Bulletin 2020-8 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 Until Further Notice Credit Underwriting: – All Income and Asset documentatio
Slide 45: Bulletin 2020-8
Bulletin 2020-8 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 Until Further Notice Credit Underwriting: – Self-employed Borrowers: Verifica
Slide 46: Bulletin 2020-8
Bulletin 2020-8 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 Until Further Notice. Credit Underwriting: – Stocks, Stock Options and Mutual
Slide 47: Bulletin 2020-14
Bulletin 2020-14 This Bulletin provides: Temporary requirements related to: – Mortgage purchase eligibility – Self reporting requirements for mortgages in COVID 19 related forbearance Additional guidance and reminders including those related to: • Furloughs and layoffs • Unemployment Compensation •
Slide 48: Bulletin 2020-14
Bulletin 2020-14 The temporary flexibilities are in effect for all Mortgages in process and remain in place for Mortgages with Applications Received Until Further Notice GUIDANCE AND REMINDERS Furloughs and layoffs Freddie Mac provides requirements for income while on temporary leave in Section 5303
Slide 49: Bulletin 2020-14
Bulletin 2020-14 The temporary flexibilities are in effect for all Mortgages in process and remain in place for Mortgages with Applications Received Until Further Notice Unemployment compensation While we recognize that many individuals have become eligible for assistance and compensation available
Slide 50: Bulletin 2020-17
Bulletin 2020-17 TEMPORARY PURCHASE AND REFINANCE ELIGIBILITY REQUIREMENTS FOR BORROWERS WITH EXISTING MORTGAGES These temporary requirements are effective for Mortgages with Application Received on and after June 2, 2020 and until further notice. In addition to reviewing the Borrower’s credit repor
Slide 51: Bulletin 2020-17
Bulletin 2020-17 TEMPORARY PURCHASE AND REFINANCE ELIGIBILITY REQUIREMENTS FOR BORROWERS WITH EXISTING MORTGAGES These temporary requirements are effective for Mortgages with Application Received on and after June 2, 2020 and until further notice. In addition to meeting all other requirements of the
Slide 52: Bulletin 2020-17
Bulletin 2020-17 TEMPORARY PURCHASE AND REFINANCE ELIGIBILITY REQUIREMENTS FOR BORROWERS WITH EXISTING MORTGAGES These temporary requirements are effective for Mortgages with Application Received on and after June 2, 2020 and until further notice. It is encouraged to implement these requirements to
Slide 53: Bulletin 2020-19
Bulletin 2020-19 Updates to COVID-19 impact on originations: ▪ Temporary requirements and guidance for self-employed income https://sf.freddiemac.com/articles/news/guide-bulletin-2020-19-new-temporary-requirements-for-self- employed-income-choicerenovation-mortgages-and-more Avoiding Common Underwri
Slide 54: Bulletin 2020-44 Amended 2020-19
Bulletin 2020-44 Amended 2020-19 Effective for applications taken June 11, 2020 and until further notice https://guide.freddiemac.com/ci/okcsFattach/get/1004034_7 Avoiding Common Underwriting Errors 53
Slide 55: P & L And Bank Statement Updates
P & L And Bank Statement Updates https://sf.freddiemac.com/general/covid-19-selling-faq Avoiding Common Underwriting Errors 54
Slide 56: Bulletin 2020-19
Bulletin 2020-19 Effective for applications taken June 11, 2020 and until further notice (See next slide) https://guide.freddiemac.com/app/guide/bulletin/2020-19 Avoiding Common Underwriting Errors 55
Slide 57: Bulletin 2020-19
Bulletin 2020-19 Effective for applications taken June 11, 2020 and until further notice https://guide.freddiemac.com/app/guide/bulletin/2020-19 Avoiding Common Underwriting Errors 56
Slide 58: Bulletin 2020-19
Bulletin 2020-19 Effective for applications taken June 11, 2020 and until further notice https://guide.freddiemac.com/app/guide/bulletin/2020-19 Avoiding Common Underwriting Errors 57
Slide 59: 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 60: 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 61: COVID FAQ's
COVID 19 FAQ’s https://sf.freddiemac.com/content/_assets/resources/pdf/faq/covid-19-selling-related-frequently-asked- questions.pdf Avoiding Common Underwriting Errors 60
Slide 62: Common Underwriting Errors
Common Underwriting Errors Capacity, Credit History, Capital, Compliance Avoiding Common Underwriting Errors 61
Slide 63: Underwriting Reminders
Underwriting Reminders Every loan is unique Always follow prudent underwriting standards Information must be consistent All applicable guidelines should be followed Guidelines show minimum requirements Avoiding Common Underwriting Errors 62
Slide 64: Five Cs Six Cs
Five Cs Six Cs Capacity Capacity Credit History Credit History Collateral Collateral Capital Capital Compliance Compliance Common Sense Avoiding Common Underwriting Errors 63
Slide 65: Capacity Errors
Capacity Errors Income Calculation and Documentation, Self-Employed Borrowers Avoiding Common Underwriting Errors 64
Slide 66: Capacity
Capacity Two Year History is Required on the URLA for All Applicants Freddie Mac Documentation Matrix Borrowers Who Experienced Recent Employment Gaps (e.g. 30 Days), A Letter Of Explanation Is Not Required, But The Seller Remains Responsible For Establishing The Employment Is Stable, Which May Requ
Slide 67: Capacity- Income
Capacity- Income Steady, Stable, Likely to Continue – Two Year History – Guideline exceptions for some income types – Examples: Alimony, Survivor Benefits, Retirement • Three Year Continuance from application date – Is there a decline? If so, has the income stabilized? • Provide documentation to sup
Slide 68: Capacity: Fannie Mae
Capacity: Fannie Mae Fannie Mae Single Family Selling Guide §B3-3.1-01, Employment and Other Sources of Income Avoiding Common Underwriting Errors 67
Slide 69: Capacity: Fannie Mae
Capacity: Fannie Mae https://www.fanniemae.com/content/guide/selling/b/index.html Avoiding Common Underwriting Errors 68
Slide 70: Capacity: Freddie Mac
Capacity: Freddie Mac https://guide.freddiemac.com/app/guide/t opic/5300 https://guide.freddiemac.com/app/guide/c ontent/a_id/1000659 Avoiding Common Underwriting Errors 69
Slide 71: Capacity: Freddie Mac
Capacity: Freddie Mac 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 https://guide.freddiemac.com/app/g
Slide 72: Capacity
Capacity Examine Paystubs Carefully – Clear explanations for withholding items • Possible undisclosed debt – Consistent information • Address on the stub does it match the 1003? • Social Security number – Last four digits match the 1003? – Year to date income • Showing on paystub, does it support qu
Slide 73: Capacity: Fannie Mae Selling Guide
Capacity: Fannie Mae Selling Guide https://selling-guide.fanniemae.com/Selling-Guide/Origination-thru-Closing/#Stable.20and.20Predictable.20Income Avoiding Common Underwriting Errors 72
Slide 74: Capacity: Fannie Mae Selling Guide
Capacity: Fannie Mae Selling Guide https://selling-guide.fanniemae.com/Selling-Guide/Origination-thru-Closing/#Variable.20Income Avoiding Common Underwriting Errors 73
Slide 75: Capacity: Fannie Mae Selling Guide
Capacity: Fannie Mae Selling Guide Trends of Income – Verify trends of income before using to qualify for a mortgage – Income used must be likely to continue https://selling-guide.fanniemae.com/Selling-Guide/Origination-thru-Closing/#Variable.20Income Avoiding Common Underwriting Errors 74
Slide 76: Capacity: Freddie Mac
Capacity: Freddie Mac https://sf.freddiemac.com/content/_assets/resources/pdf/update/docmatrix.pdf Page 4 Avoiding Common Underwriting Errors 75
Slide 77: Capacity: Freddie Mac 2019-20
Capacity: Freddie Mac 2019-20 Effective for Mortgages with Settlement Dates on or After July 2, 2020 – Require that when the borrower’s income is derived from fluctuating hourly employment earnings, under no circumstances may the employment history be less than 12 months. – Clarifying that “fluctuat
Slide 78: Capacity
Capacity Show Your Income Calculation Work – Agencies/Investors require calculations for all income scenarios • Have a worksheet or address how income was calculated and maintain in file – Self-Employed Borrowers • Written analysis • Available Worksheets on The Genworth Website without requiring and
Slide 79: Capacity
Capacity Income Trend/Declining Income – Can the income be used to qualify? – If so, use only the lower of the two years Fannie Mae Comparative Income Form (Form 1088) – For Self-Employed Borrowers – Reference Guide on the Genworth website https://new.mortgageinsurance.genworth.com/self-empl
Slide 80: Credit History Errors
Credit History Errors Credit Scores, Credit Reports, Liabilities Avoiding Common Underwriting Errors 79
Slide 81: Credit History
Credit History Credit Concerns Not Always Recognized by AUS or Common Errors – Examples of Errors • No evidence in file why you are *omitting a debt • Taxes and insurance for properties owned free and clear omitted • Debts evidenced on paystub or disclosed during initial application • Paid mortgage
Slide 82: Credit History
Credit History Credit Scores – Minimum score requirement? • Non-traditional credit borrowers (without a credit score) eligible for AUS submission with Fannie Mae’s Desktop Underwriter® 10.0 and higher versions – Two non-traditional credit references for each borrower must be reviewed for 12 months a
Slide 83: Credit History
Credit History Credit History – Trended Credit Data • Additional information can be found in Fannie Mae’s DU Version 10.0 Frequently Asked Questions • Credit reports used with Version 10.0 and higher must include trended credit data • For now, lenders do not need to analyze trended data • Borrowers
Slide 84: Credit History
Credit History Disputed Information – AUS Loans • DU provides messaging if impactful and further action necessary • Loan Product Advisor will provide “Invalid” recommendation if impactful • Manually underwritten typically significant items must be resolved prior to approval Inaccurate Information •
Slide 85: Credit History
Credit History Minimum Payments – Usually on credit report. If not on credit report • Creditor supplied documentation • Revolving, – DU uses the greater of: • 5% of outstanding balance or • $10 – Loan Product Advisor allows • 5% of outstanding balance Open Ended Accounts (O-J or O-I under MOP on Cre
Slide 86: Credit History
Credit History Student Loans – Fannie Mae Guidelines Stated Are Generic Fannie Mae Policy Avoiding Common Underwriting Errors 85
Slide 87: Credit History
Credit History Student Loans – Freddie Mac https://sf.freddiemac.com/content/_assets/resources/pdf/update/docmatrix.pdf Prudent Underwriting Practices Will Apply Avoiding Common Underwriting Errors 86
Slide 88: Credit History
Credit History Excluding Debts – Contingent Liabilities or Not – Fannie Mae and Freddie Mac • Allows for any type debt (revolving, leases, student loans & mortgage debt) – Must document 12 month payment history with no delinquencies – Evidence payments made by someone other than borrower(s) – Mortga
Slide 89: Credit History
Credit History Recent Credit Inquiries – Definition • Freddie Mac: within past 90 days – Review updated messages on Loan Product Advisor Feedback • Fannie Mae: The report must list all inquiries that were made in the previous 90 days. – Confirm if new credit obtained • Do you see the new account on
Slide 90: Capital Errors
Capital Errors Assets to Close, Borrower’s Own Funds, Gift Funds, Reserves and Large Deposits Avoiding Common Underwriting Errors 89
Slide 91: Capital
Capital Excessive Seller Contributions – Follow GSE, Investor and MI Guidelines – Loans with payment abatements are ineligible • Exception condo/HOA dues up to 12 months but amounts must be included as IPC or Interested Party Contribution – Check for guideline overlays – Put a condition on loan appr
Slide 92: IPC's- Fannie Mae
IPC’s- Fannie Mae https://www.fanniemae.com/content/guide/selling/b3/4.1/02.html Avoiding Common Underwriting Errors 91
Slide 93: IPC's- Freddie Mac
IPC’s- Freddie Mac * *Freddie determines value by using the lessor of the sales price or appraised value https://guide.freddiemac.com/app/guide/content/a_id/1000668 Avoiding Common Underwriting Errors 92
Slide 94: Capital
Capital Purchase Price (or refinance of all debt to be paid off) - Earnest Money Deposit (only if verified) - Other Financing (if applicable) - Loan Amount Applied for + Balance Owed on 30 day accounts “O” + Closing Costs + Prepaids and escrows + Judgments, collections and debt to be brought current
Slide 95: Capital
Capital Assets to Close – Cash to close plus any reserves? – Reserves • Loan Product Advisor/DU – Verify funds required – Best practice: only enter needed funds – Match assets on 1003 with DU/Loan Product Advisor and 1008; Verify and submit to underwriter only what is needed. – Manual calculation •
Slide 96: Capital
Capital Large Deposits Fannie Mae – A large deposit is a single deposit that is 50% or more of the total qualifying income being used to qualify • Source any account opened in most recent 90 days if using VODs • Asset statements look for one or two month seasoning depending on recommendation • Inves
Slide 97: Capital
Capital Large Deposits Freddie Mac – A large deposit is any single deposit that is 50% or more of the total qualifying income being used to qualify • Source any account opened in most recent 90 days if using VODs Deposits Which May Indicate Borrowed Funds Must Be Investigated. https://sf.freddiemac.
Slide 98: Capital
Capital Earnest Money – Documentation • From eligible source (account listed on 1003?) • Correct documentation per guidelines – Is it a gift? – Make sure funds are not counted twice • Back out of bank account balance if necessary Avoiding Common Underwriting Errors 97
Slide 99: Capital: Fannie Mae
Capital: Fannie Mae Borrower’s Own Funds: Fannie Mae Selling Guide Chapter B3-4.3-04 Personal Gift (09-29-2015) 1. If the borrower receives a gift from a relative or domestic partner who has lived with the borrower for the last 12 months, or from a fiancé or fiancée, the gift is considered the b
Slide 100: Capital: Freddie Mac
Capital: Freddie Mac Borrower’s Own Funds Freddie Mac Seller Servicer Guide (Chapter 5501.3(b)(i)) – No requirement for >80% LTV loans where: – Primary residence and – Gift or gift of equity received from eligible donor used as source of funds or – Employer Assisted Homeownership (EAH) Benefit is us
Slide 101: Capital
Capital Gift Funds – Enter into AUS correctly – Must come from acceptable source – A gift can be provided by: • A relative, defined as the borrower’s spouse, child, or other dependent, or by any other individual who is related to the borrower by blood, marriage, adoption, or legal guardianship; or •
Slide 102: Capital- Gift Funds
Capital- Gift Funds Availability & Transfer of Funds The lender must verify that sufficient funds to cover the gift are either in the donor’s account or have been transferred to the borrower’s account. Acceptable documentation includes the following: – a copy of the donor’s check and the borrower’s
Slide 103: Assets and Liabilities
Assets and Liabilities *New * List Assets – Breakdown by type of asset – Ask applicant which account or accounts or “source” of funds will be used for the transaction – Collect two months assets statement – Know what is considered a large deposit – Explain any change source of funds must be comm
Slide 104: Capital- Gift Funds: Freddie Mac
Capital- Gift Funds: Freddie Mac Page 24 of matrix https://sf.freddiemac.com/content/_assets/resources/pdf/update/docmatrix.pdf Avoiding Common Underwriting Errors 103
Slide 105: Assets & Liabilities
Assets & Liabilities *New Do not enter gift funds in Section 2. Gifts are entered in Section 4. * Gifts must be evidenced by a letter signed by the donor, called a gift letter. The gift letter must: – specify the dollar amount of the gift; – specify the date the funds were transferred; – include
Slide 106: Compliance
Compliance Completeness Avoiding Common Underwriting Errors 105
Slide 107: Ensure Completeness of the Loan Application and Loan Package
Compliance Ensure Completeness of the Loan Application and Loan Package – Two-year history • Employment • Residence – Occupancy • Make sense • Consistent throughout loan file – Final 1003 URLA Signed – Buyer/Seller CD in closed package – AUS updated with final data • Matched with 1003 data • Within
Slide 108: Genworth Underwriting Guidelines
Genworth Underwriting Guidelines Avoiding Common Underwriting Errors 11 1
Slide 109: Genworth Rate Express
Genworth Rate Express® Avoiding Common Underwriting Errors 11 2
Slide 110: Training Tools and Information
Training Tools and Information Avoiding Common Underwriting Errors 11 3
Slide 111: Training Tools and Information
Training Tools and Information Avoiding Common Underwriting Errors 11 4
Slide 112: Additional MI Site Information
Additional MI Site Information Avoiding Common Underwriting Errors 11 5
Slide 113: Your Genworth Resources
Your Genworth Resources ➢ ActionCenter®: 800 444.5664 ➢ Your Local Genworth Regional Underwriter ➢ Your Genworth Sales Representative Avoiding Common Underwriting Errors 11 6
Slide 114: 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