Enact Holdings, Inc. · NASDAQ:ACT
Enact — Genworth Mortgage Insurance — Investor Presentation (August 2019)
81 slides from Enact's investor presentation, August 2019
Slide 1: Understanding Loan Product Advisor - Advanced Guidelines and Updates
Understanding Loan Product Advisor® - Advanced Guidelines and Updates August 2019 Genworth Mortgage Insurance Corporation ©2019 Genworth Financial, Inc. All rights reserved.
Slide 2: Agenda
Agenda Loan Product Advisor – Resources – Recent Updates – Data Integrity Reminders – Documentation Matrix – Help Tools and Training – Genworth Mortgage Insurance Today’s Session Covers Conventional Loans Only Advanced Loan Product Advisor 2
Slide 3: Freddie Mac Updates - Where To Get Them
Freddie Mac Updates - Where To Get Them Freddie Mac’s Website – http://www.freddiemac.com/loanadvisorsuite/ – Single Family News – Pending Loan Product Advisor Enhancements – Subscription Center – Links to www.freddiemac.com – Learning Center Advanced Loan Product Advisor 3
Slide 4: www.FreddieMac.com
www.FreddieMac.com Advanced Loan Product Advisor 4
Slide 5: Freddie Mac Seller Servicer Guide
Freddie Mac Seller Servicer Guide Advanced Loan Product Advisor 5
Slide 6: Freddie Mac Communications
Freddie Mac Communications Bulletins Advanced Loan Product Advisor 6
Slide 7: Advanced Loan Product Advisor
Advanced Loan Product Advisor 7
Slide 8: Bulletin 2019-17
Bulletin 2019-17 Escrow accounts - Requirements related to Escrow accounts – (Effective 11/7) Employee relocation programs - Requirements and flexibilities for Mortgages made pursuant to employee relocation programs (Effective immediately) Property eligibility for Manufactured Homes - Guidance
Slide 9: Bulletin 2019-16
Bulletin 2019-16 Home Possible Mortgages Changes to income limits including revised borrower income limit, 2019 AMI limits, LPA impacts Updates to requirements for rental income Extension of effective date for previously revised requirements limiting financed properties owned Income
Slide 10: Bulletin 2019-16
Bulletin 2019-16 Properties located in Eligible Disaster Areas Change to age of documentation requirements for disasters Calculation of monthly housing expense Updates requirements for including real estate taxes in monthly housing expense Environmental hazard disclosure Ext
Slide 11: Upcoming Changes - June 2019
Upcoming Changes - June 2019 https://sf.freddiemac.com/content/_assets/resources/pdf/fact-sheet/upcoming_requirement_changes.pdf Advanced Loan Product Advisor 11
Slide 12: Bulletin 2019-15
Bulletin 2019-15 • On July 28, Loan Product Advisor and the Home Possible Income & Property Eligibility tool will be updated to reflect Borrower income limits of 80% of the AMI as well as the 2019 AMI limits • The policy applies for loans, including those in low-income census tracts Advanced Loa
Slide 13: Bulletin 2019-12
Bulletin 2019-12 • Removal of requirement to perform a final interior inspection for deed-in-lieu properties • EDR Code updates • Updates to subsequent transfers of servicer requirements for mortgage registered with MERS • Clarification of escrow requirements • Removal of requirements for partic
Slide 14: Bulletin 2019-12
Bulletin 2019-12 • Removal of requirement to perform a final interior inspection for deed-in-lieu properties • EDR Code updates • Updates to subsequent transfers of servicer requirements for mortgage registered with MERS • Clarification of escrow requirements • Removal of requirements for partic
Slide 15: Bulletin 2019-11
Bulletin 2019-11 Condominium project requirements: – Ineligible condominium projects – Condominium project reviews • Reciprocal Review PERS & HRAP – Streamline Review 75/75/90% Primary, 70/70/75% Second & Investment homes – Condominium projects with commercial parking facilities • May exclude th
Slide 16: Bulletin 2019-11 Continued
Bulletin 2019-11 Continued- • Private flood insurance requirements – updates to clarify acceptance of private flood insurance • Addition of the demographic information addendum to Form 65, Uniform Residential Loan Application. • Addition of eMortgage requirements to the Guide. Advanced Loan Prod
Slide 17: Bulletin 2019-10
Bulletin 2019- 10 Due to the anticipated discontinuance of the publication of the LIBOR index in 2021, Freddie will no longer purchase LIBOR ARMs with Settlement Dates more than six months after the Note Date. This change is effective immediately and is being implemented in consultation with the
Slide 18: Bulletin 2019-9
Bulletin 2019- 9 Selling Updates • Property eligibility and appraisal requirements • Property with Accessory Units no longer require a comp with accessory unit • Appraisal re-use without an update if within 120 days of refinance • Allowing Modification construction conversion documentation for M
Slide 19: Bulletin 2019-7
Bulletin 2019- 7 Selling Updates • Home Possible® Mortgages • Occupying borrower can only own 2 financed properties including the subject • Assets as a basis for repayment of obligations- seller can use 240 months instead of 360 months. • Second home mortgages • Allows for homes at are not acces
Slide 20: Release Notes
Release Notes New Feedback Messages – Subject Property Address – Property Rights Type (Fee Simple or Leasehold) Updated Feedback Messages – Commission – Assets & Income Modeler (AIM) – AIM for Self-Employed – Underwriting Updates Redesigned URLA & New ULAD Available in LPA on July 1st Re
Slide 21: March 2019 Feedback Messages
March 2019 Feedback Messages Advanced Loan Product Advisor 21
Slide 22: Bulletin 2019-5
Bulletin 2019- 5 Selling Updates Automated income assessment with Loan Product Advisor using tax return data. Borrower income, including: – Treatment of alimony or maintenance payments. – Restricted stock (RS) and restricted stock units (RSU) documentation requirements. Lender incentives
Slide 23: Loan Product Advisor Documentation Matrix
Loan Product Advisor Documentation Matrix http://www.freddiemac.com/learn/pdfs/uw/docmatrix.pdf Advanced Loan Product Advisor 23
Slide 24: Loan Product Advisor Documentation Matrix
Loan Product Advisor Documentation Matrix Tool to help document files https://sf.freddiemac.com/content/_assets/resources/pdf/update/docmatrix.pdf Advanced Loan Product Advisor 24
Slide 25: Freddie Mac Rental Income Matrix
Freddie Mac Rental Income Matrix Tool to help document files https://sf.freddiemac.com/content/_assets/resources/pdf/update/rental.pdf Advanced Loan Product Advisor 25
Slide 26: Loan Product Advisor Feedback Certificate
Loan Product Advisor Feedback Certificate Let’s Review The Feedback Certificate Handout That Was Provided Advanced Loan Product Advisor 26
Slide 27: Validate Mortgage Information
Validate Mortgage Information Advanced Loan Product Advisor 27
Slide 28: Feedback Certificate
Feedback Certificate http://www.freddiemac.com/help/lpa_tool/feedback_certificate_page.html Advanced Loan Product Advisor 28
Slide 29: Feedback Certificate
Feedback Certificate http://www.freddiemac.com/help/lpa_tool/feedback_certificate_page.html Advanced Loan Product Advisor 29
Slide 30: Feedback Certificate
Feedback Certificate http://www.freddiemac.com/help/lpa_tool/feedback_certificate_page.html Advanced Loan Product Advisor 30
Slide 31: Income And Ratio Information
Income And Ratio Information Validate Liabilities From Your LOS To Loan Product Advisor; Do Ratios Match? What Liabilities Must Be Included? Advanced Loan Product Advisor 31
Slide 32: Number of Submissions
Number of Submissions You Must Always Validate/Underwrite To The Most Recent Loan Product Advisor Submission Advanced Loan Product Advisor 32
Slide 33: Feedback Summary - # of Messages
Feedback Summary - # of Messages Let’s Start With The Employment And Income Messages Advanced Loan Product Advisor 33
Slide 34: Income/Employment Messages
Income/Employment Messages • Documentation “Level” determines the documentation required – Note: Many messages say “if”, so they apply only “if”…. Advanced Loan Product Advisor 34
Slide 35: Capacity: Freddie Mac
Capacity: Freddie Mac Employed Income Types Primary – Borrower’s primary source of employed income Secondary – Second job, part-time job or multiple jobs Additional Primary – Commissions – Bonus – Overtime Additional – Tips Secondary – Auto allowance – Mortgage differential – Militar
Slide 36: Capacity: Self-Employed Income
Capacity: Self-Employed Income Freddie Mac Income Calculations – Updated Form 91 Income Calculations Form • Genworth posted updated Form 91 at mi.genworth.com – Revised documentation requirements • Two years tax returns for businesses in existence less than five years • One year tax return for b
Slide 37: Advanced Loan Product Advisor
Advanced Loan Product Advisor 37
Slide 38: Advanced Loan Product Advisor
Advanced Loan Product Advisor 38
Slide 39: Assets and Reserves
Assets and Reserves • Read All Messages Advanced Loan Product Advisor 39
Slide 40: Asset Documentation Requirements
Asset Documentation Requirements Freddie Mac Documentation Requirements. Asset account statements must: – Identify the financial institution – Identify the account owner – Identify the account number, which at a minimum must include the last four digits – Identify the account type – Show all tra
Slide 41: Asset Documentation Requirements
Asset Documentation Requirements Freddie Mac Documentation Requirements. Direct verification sources must: – Identify the financial institution – Identify the account owner – Identify the account number, which at a minimum must include the last four digits – Identify the account type – Identify
Slide 42: Proof of Liquidation Example
Proof of Liquidation Example Applicable for loans submitted to Loan Product Advisor and manually underwritten loans; Applies to – Stocks, Bonds, Mutual funds, U.S. government Securities, retirement accounts and other securities needed for closing Answer is proof of liquidation of the non-liquid asse
Slide 43: Gift Funds - Documentation Requirement
Gift Funds - Documentation Requirement 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 the donor’s statement that no repayment is expected; and –
Slide 44: Gift Funds - Availability & Transfer of Funds
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 dep
Slide 45: Freddie Mac Required Reserves
Freddie Mac Required Reserves http://www.freddiemac.com/learn/pdfs/uw/reserves.pdf Advanced Loan Product Advisor 45
Slide 46: Freddie Mac Required Reserves
Freddie Mac Required Reserves Advanced Loan Product Advisor 46
Slide 47: Credit and Liabilities Messages
Credit and Liabilities Messages Read! Guidance when no payment is listed or liability is not on the credit report; option to verify funds to pay off open ended accounts Advanced Loan Product Advisor 47
Slide 48: Liabilities
Liabilities Revolving: Indicate both the balance and monthly payment on all revolving accounts. Do not “omit” the debt even when 10 or fewer payments remain. These payments should always be included in the applicant’s debt ratio. 30-Day Charge: Monthly payments on open-end accounts are not re
Slide 49: Liabilities
Liabilities Student Loans: Indicate both the balance and monthly payment on all student loans. – All student loans in repayment, forbearance or deferment • If the payment amount is greater than zero, use the payment reported on the credit report or other documentation, or • If the monthly paymen
Slide 50: Liabilities
Liabilities Leases: Indicate both the balance and monthly payment on all leases. Do not “omit” the debt even when 10 or fewer payments remain. Lease payments should always be included in the applicant’s debt ratio. Advanced Loan Product Advisor 50
Slide 51: Other Liabilities
Other Liabilities Child Support: Indicate both the balance and monthly payment on all support accounts. If less than 10 payments remain, the payment should not be included in the applicant’s debt ratio. Alimony: Must be deducted from the monthly income. Advanced Loan Product Advisor 51
Slide 52: Excluding Contingent Liabilities From DTI
Excluding Contingent Liabilities From DTI Page 27 of Matrix http://www.freddiemac.com/learn/pdfs/uw/docmatrix.pdf Advanced Loan Product Advisor 52
Slide 53: Total Monthly Debt
Total Monthly Debt Advanced Loan Product Advisor 53
Slide 54: Property and Appraisal
Property and Appraisal Advanced Loan Product Advisor 54
Slide 55: Property Eligibility Requirements
Property Eligibility Requirements Page 30 and 31 of matrix http://www.freddiemac.com/learn/pdfs/uw/docmatrix.pdf Advanced Loan Product Advisor 55
Slide 56: Loan Collateral Advisor
Loan Collateral Advisor® Advanced Loan Product Advisor 56
Slide 57: Loan Collateral Advisor
Loan Collateral Advisor Simplified Risk Scoring System – Scale of 1-5 provided in .5 increments, with one representing the lowest valuation risk score. This score is found in Loan Collateral Advisor and does not print on the feedback certificate – Eligible Mortgages with LTV/TLTV/HTLTV ratios <
Slide 58: Automated Collateral Evaluation (ACE)
Automated Collateral Evaluation (ACE) – Must receive “feedback message transaction is eligible for appraisal waiver” and be “Accept/Eligible” for LPA – Transaction must be: – 1 unit primary or second home including condos – LTV/TLTV 80% or less – No cash-out refinance – Feedback must indicate eligib
Slide 59: Home Value Explorer Point Value Estimate
Home Value Explorer® Point Value Estimate http://www.freddiemac.com/hve/hve.html Advanced Loan Product Advisor 59
Slide 60: HVE FAQ's
HVE® FAQ’s http://www.freddiemac.com/hve/faq.html Advanced Loan Product Advisor 60
Slide 61: General Messages
General Messages Advanced Loan Product Advisor 61
Slide 62: Home Possible Overview and Benefits
Home Possible Overview and Benefits http://www.freddiemac.com/singlefamily/factsheets/sell/pdf/home_possible_factsheet.pdf Advanced Loan Product Advisor 62
Slide 63: Current Home Possible Quick Facts
Current Home Possible Quick Facts – Owner Occupied (Program does allow for non-occupying co- borrowers) – Purchase and no cash out refinancing – Maximum 97% LTV and 105% TLTV ratios for Home Possible with Affordable Seconds® – Single Family, 2-4 unit properties, condos, manufactured homes – Borrower
Slide 64: Home Possible Quick Facts
Home Possible Quick Facts Simple income eligibility – Low Income where median income at or below 80% of the AMI • No income limit – Low Income property locations • 100% of area median income – Easy to Use Income Eligibility Tool • Home Possible Income and Property Eligibility Tool Advanced Loan Prod
Slide 65: Freddie Mac Credit Fees in Price
Freddie Mac Credit Fees in Price Advanced Loan Product Advisor 65
Slide 66: Freddie Mac Credit Fees in Price Differences
Freddie Mac Credit Fees in Price Differences Standard Home Possible 95% LTV- 1.25 95% LTV- 0.0% – *$2,500 – $0 97% LTV – 1.50 95.01-97% LTV- 0.0% -* $3,000 – $0 Example- 1 family, owner occupied, purchase, primary residence, fixed rate, non-manufactured property with a borrower u
Slide 67: Mortgage Insurance Requirements
Mortgage Insurance Requirements Advanced Loan Product Advisor 67
Slide 68: The Checklist - Use It!
The Checklist - Use It! Advanced Loan Product Advisor 68
Slide 69: Read ALL Messages and Validate; Resubmit if Necessary
Read ALL Messages and Validate; Resubmit if Necessary Advanced Loan Product Advisor 69
Slide 70: Common Errors
Common Errors Double Check Your Data – Address information wrong – Property Type entered incorrectly (condo, but entered as single family) – HOA, Condo or PUD dues not included in DTI – Liabilities omitted without supporting documentation – Inquires not cleared as either a new account opened or
Slide 71: Always Remember
Always Remember A Few Reminders: – Use FULL vested value of the borrower’s 401k, IRA, KEOGH, 403b or other IRS qualified plan as reserves IF borrower has access to the funds currently without restriction; Ensure loans taken are subtracted from the value of the asset account and that applicant is
Slide 72: Always Remember
Always Remember A Few Reminders: – If a revolving debt, open-ended accounts or deferred non-student loan do not show a payment on the credit report, you are required to use 5% of the balance, or obtain a copy of a statement evidencing lower payment. – For open-ended debt (AmEx O type accounts),
Slide 73: FAQ's
FAQ’s http://www.freddiemac.com/loanadvisorsuite/faq/loanproductadvisor.html Advanced Loan Product Advisor 73
Slide 74: Genworth Underwriting Guidelines
Genworth Underwriting Guidelines Advanced Loan Product Advisor 74
Slide 75: Genworth Rate Express
Genworth Rate Express® Advanced Loan Product Advisor 75
Slide 76: LOS Connections
LOS Connections Advanced Loan Loan Product Product Advisor Advisor 76
Slide 77: Training Tools and Information
Training Tools and Information Advanced Loan Product Advisor 77
Slide 78: Training Tools and Information
Training Tools and Information Advanced Loan Product Advisor 78
Slide 79: Additional MI Site Information
Additional MI Site Information Loan Product Advanced LoanAdvisor Product Advisor 79
Slide 80: Your Genworth Resources
Your Genworth Resources ActionCenter®: 800 444.5664 Your Local Genworth Regional Underwriter Your Genworth Sales Representative Advanced Loan Product Advisor 80
Slide 81: 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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