Enact Holdings, Inc. · NASDAQ:ACT
Enact — Investor Presentation (January 2021)
55 slides from Enact's investor presentation, January 2021
Slide 1: Understanding Desktop Underwriter - Advanced Guidelines and Updates
Understanding Desktop Underwriter® - Advanced Guidelines and Updates January 2021 ©2020 Genworth Financial, Inc. All rights reserved.
Slide 2: Agenda
Agenda In Today’s Session – Fannie Mae Website – COVID 19 Resources – Credit, Income and Asset and Appraisal Messages – Data Integrity Reminders and Fannie Mae Updates – Genworth Website Today’s Session Addresses Only Conventional Loans Understanding Desktop Underwriter Advanced 1
Slide 3: Genworth Training
Genworth Training https://new.mi.genworth.com/training/course/understanding-desktop-underwriter-basics#watchnow Understanding Desktop Underwriter Advanced 2
Slide 4: Fannie Mae News and Events
https://singlefamily.fanniemae.com/news-events Understanding Desktop Underwriter Advanced 3
Slide 5: Selling and Servicing Guide, Forms and Communications
https://singlefamily.fanniemae.com/selling-and-servicing-guide-forms-and-communications Understanding Desktop Underwriter Advanced
Slide 6: In Case You Missed It!
In Case You Missed It! https://singlefamily.fanniemae.com/media/22181/display Understanding Desktop Underwriter Advanced 5
Slide 7: Fannie Mae COVID-19 Resources
Fannie Mae COVID-19 Resources Fannie Mae Updates, FAQs, Fannie Mae’s COVID 19 webpage https://singlefamily.fanniemae.com/ Understanding Desktop Underwriter Advanced 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- https://singlefamily.fanniemae.com/media/22326 underwriting#selling-promo /display Understanding Desktop Underwriter Advanced 7
Slide 9: Genworth Training
Genworth Training https://new.mi.genworth.com/training/course/fannie-mae-covid-19-updates#watchnow Understanding Desktop Underwriter Advanced 8
Slide 10: Desktop Underwriter Release Notes
Desktop Underwriter Release Notes https://singlefamily.fanniemae.com/applications-technology/desktop-underwriter-desktop-originator Understanding Desktop Underwriter Advanced 9
Slide 11: Release Notes
Release Notes https://singlefamily.fanniemae.com/media/24521/display Understanding Desktop Underwriter Advanced 10
Slide 12: Desktop Underwriter Potential Red Flag Messages - Updated
Desktop Underwriter Potential Red Flag Messages - Updated Messages Must Be Cleared – Provides message text – Why message appeared – Possible ways to clear or resolve https://singlefamily.fanniemae.com/media/5611/display Understanding Desktop Underwriter Advanced
Slide 13: Selling Guide Announcement 2020-07
Selling Guide Announcement 2020-07 Selling Guide Updates Include: ▪ Single-width manufactured homes: expanded eligibility to allow the sale of loans secured by single-width manufactured homes ▪ Retirement, government annuity, and pension income and employment-related assets as income: updated requir
Slide 14: Check for Full Details
Check for Full Details Understanding Desktop Underwriter Advanced 13
Slide 15: General Messages
General Messages Clear Potential Erroneous Information – Confirm SS# Understanding Desktop Underwriter Advanced 14
Slide 16: General Messages
General Messages See temporary guidelines Watch the expiration date of your documents! It’s 4 months - not 120 days! Understanding Desktop Underwriter Advanced 15
Slide 17: General Messages: Check Pricing
General Messages Check Pricing Reminder- If the loan can be submitted as a HomeReady loan - All LLPA waived for transactions with credit score of 680 or greater and LTV of 80% or greater. https://www.fanniemae.com/content/pricing/llpa-matrix.pdf Understanding Desktop Underwriter Advanced 16
Slide 18: General Messages
General Messages • Check for MI coverage • Check MI guidelines Reminder - If the loan can be submitted as a HomeReady loan or is an HFA loan, the MI coverage requirement is lower when the LTV is greater than 90%! Understanding Desktop Underwriter Advanced 17
Slide 19: Credit and Liabilities
Credit and Liabilities • Check for overlay of minimum credit score • Check for overlay of minimum number of credit scores • Check for overlay of minimum number of tradelines used in credit score Understanding Desktop Underwriter Advanced 18
Slide 20: Credit and Liabilities
Credit and Liabilities Borrowers with Credit Freeze – DU will underwrite if only one repository is frozen • A warning message will be issued by DU reminding lenders of their responsibility – If two repositories are frozen DU will issue an error message – If no credit score is generated by the two re
Slide 21: Credit and Liabilities
Credit and Liabilities If consumers ask for a freeze online or by phone, the credit reporting agency must have the freeze in place within one business day. And when consumers want to lift the freeze, the credit reporting agencies have to make that happen within one hour. (If consumers make the r
Slide 22: Credit and Liabilities
Credit and Liabilities Verification Messages Broken out by Topic: –Credit and Liabilities •Bankruptcy, foreclosures, charge offs, late pays, omitted accounts •What accounts were indicated as “to be paid off” •Mortgage payment that need additional attention This message is NOT on your sample findings
Slide 23: Credit and Liabilities
Credit and Liabilities – When DU issues “Approve/Eligible” using the disputed trade lines: • Include the payment, if any, in the DTI but no further documentation is required. – When loan casefile does not receive Approve recommendation including the disputed trade line, risk will be assessed EXCLUDI
Slide 24: Liabilities
Liabilities ✓ To exclude a liability that someone else pays requires documentation for 12 months showing timely payment and to exclude a mortgage, they must be a co- signer ✓ When excluding a mortgage payment that someone else has been verified making the payments, it is the PITIA that can be exclud
Slide 25: Credit and Liabilities
Credit and Liabilities Accounts Paid off at Closing – Funds must be verified to pay off the account (if indicated in DU loan to be paid, DU will add amount to be verified); Underwriters will use discretion and MAY include a payment even if the account is being paid off. The account may remain open a
Slide 26: Credit and Liabilities
Credit and Liabilities For loan casefiles underwritten through DU – DU determines the maximum allowable debt-to income ratio based on the overall risk assessment of the loan casefile – DU will apply a maximum allowable DTI ratio of 50% Understanding Desktop Underwriter Advanced 25
Slide 27: Credit and Liabilities...cont
Credit and Liabilities...cont Student Loans – Is it Deferred or in Repayment? – Student Loans in repayment: • Use the actual payment documented from credit report; If no payment listed – Use verified loan terms from student loan lender – Documentation supplied by the borrower or – 1% of the outstand
Slide 28: Credit and Liabilities...cont
Credit and Liabilities...cont The total monthly obligation is the sum of the following: – Monthly alimony, child support, or maintenance payments that extend beyond ten months SEL 2017-06 allows option to reduce income by the monthly Alimony obligation in lieu of a liability – Business debt in the b
Slide 29: Credit and Liabilities...cont
Credit and Liabilities...cont The total monthly obligation is the sum of the following: SEL 2018-01 allows option to include a payment in the DTI if certain requirements are met – Selling Guide requirements are: Understanding Desktop Underwriter Advanced 28
Slide 30: Credit and Liabilities...cont
Credit and Liabilities...cont The total monthly obligation is the sum of the following: SEL 2018-09 requires SBA loans secured by the subject to be treated as a subordinated lien : Understanding Desktop Underwriter Advanced 29
Slide 31: Documenting Employment and Income
Documenting Employment and Income Break Out Income Type For Proper AUS Results Understanding Desktop Underwriter Advanced 30
Slide 32: Assets
Assets Do not enter gift funds in Section 2. Gifts are entered in Section 4. Understanding Desktop Underwriter Advanced
Slide 33: Assets
Assets Observation Section Lists Total Assets Entered By Type; Underwriting Analysis Report Lists Total Funds Required, Including Any Reserves Assets Entered By Type Total Funds Required Additional Reserves May Need To Be Verified If Paying Down Accounts, Paying Off Collections Or Judgments Or Tax L
Slide 34: Minimum Borrower Contribution
Minimum Borrower Contribution 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 borrower’s own funds and may be used to satisfy the minimum borrower contribution requi
Slide 35: Assets
Assets Standard Depository Messages: – Number of months documentation Best Practices: – Do you have All of the pages? –Truncated account numbers allowed as long as the last four digits are displayed Understanding Desktop Underwriter Advanced 34
Slide 36: Assets
Assets See temporary guidelines Mutual Funds and Other Non-liquid Account Types: – Proof of liquidation Proof Of Liquidation – When used for the down payment or closing costs, if the value of the asset is at least 20% more than the amount of funds needed for the down payment and closing cost
Slide 37: Assets
Assets See temporary guidelines Stocks or Bond Account Messages: – Non-vested stock options and non-vested restricted stock are not acceptable sources of funds for the transaction Understanding Desktop Underwriter Advanced 36
Slide 38: Assets
Assets See temporary guidelines Retirement accounts (401k or IRA) – Accounts that allow for withdrawals only in connection with the borrower’s employment termination, retirement, or death, or the account does not allow for any type of withdrawal should not be entered Look For Indications That the Ac
Slide 39: Assets
Assets DU uses the number of financed properties to apply the following eligibility guidelines for casefiles when the borrower has multiple financed properties and the subject property is an investment or second home.: – A minimum credit score of 720 is required for borrowers with 7-10 financed prop
Slide 40: Assets
Assets ✓ Are all the assets per DU verified plus any additional that are needed to payoff a judgment or collection? ✓ Evidence of liquidation if needed? ✓ Additional reserves? Understanding Desktop Underwriter Advanced 39
Slide 41: Property Type and PITIA
Property Type and PITIA ✓ Is Property type entered correctly (condo, PUD, manufactured home) ✓ Are the HOA dues, flood insurance or MI payments included in the housing payment, if applicable? Do you have written support? ✓ Does the occupancy make sense? Borrower Section Lender Loan Info Understandin
Slide 42: Refinance
Refinance Paying off a second mortgage? ✓ Verify it was used to purchase the property or treat the loan as a cash out. ✓ Verify seasoning requirements for ownership and taking cash out. ✓ Is the property currently offered for sale or has it been offered for sale in the past six months? ✓ For refinan
Slide 43: Underwriting Analysis Report
Underwriting Analysis Report Page #2 Validate the Details Understanding Desktop Underwriter Advanced 42
Slide 44: Underwriting Analysis Report
Underwriting Analysis Report Amortization Type –Fixed or ARM? –ARM •Note Rate vs. Qualifying Rate Understanding Desktop Underwriter Advanced 43
Slide 45: Underwriting Analysis Report
Underwriting Analysis Report ARM Qualifying Rate https://selling-guide.fanniemae.com/Selling-Guide/Origination-thru-Closing/Subpart-B3-Underwriting- Borrowers/Chapter-B3-6-Liability-Assessment/1736872401/B3-6-04-Qualifying-Payment-Requirements-04- 15-2014.htm Always Enter The Index And Margin On ARM
Slide 46: ARMS: LIBOR-SOFR Transition
ARMS: LIBOR-SOFR Transition https://www.fanniemae.com/content/news/libor-sofr-transition?utm_campaign=ssn- sell2019iss&utm_source=sfsfmc&utm_medium=email&utm_content=eml-noa-1120b-o-n&utm_term=b2b Understanding Desktop Underwriter Advanced 45
Slide 47: Property
Property ✓ Field reviews are no longer required for properties with values over $1,000,000 with LTV/CLTV over 75% ✓ Lenders required to choose the most reliable appraisal when two appraisals are obtained ✓ Waiver of project reviews for all detached condo units (excluding manufactured homes) and allo
Slide 48: Genworth Underwriting Guidelines
Genworth Underwriting Guidelines
Slide 49: Genworth Rate Express
Genworth Rate Express® &, 800 444.5664 a|Q Genwort a, Mortgage Insurance : UNDERWRITING & GUIDES | LOS & CONNECTIONS | GENWORTH TOOLKIT | TRAINING OUR BLOG | ABOUT US Rate Express ITIONS THAT MATTER Genworth Mortgage Insurance Rate Cards GenRATE ga YOU year! Master Policy Quote Sweepstakes Resources
Slide 50: LOS Connections
LOS Connections &, 800 444.5664 a|Q Genwort a, Mortgage Insurance MI & RATES | UNDERWRITING & GUIDES LOS & CONNECTIONS | GENWORTH TOOLKIT TRAINING YOU-CENTRIC SOLUTIONS THAT MAT submit on Our Site LOS Connections PPE Quotes & Doc Delivery Application Forms _ Rate Quote Sweepstakes We're celebrating
Slide 51: Training Tools and Information
Training Tools and Information
Slide 52: Training Tools and Information
Training Tools and Information 51
Slide 53: Additional MI Site Information
Additional MI Site Information
Slide 54: Your Genworth Resources
Your Genworth Resources ➢ ActionCenter®: 800 444.5664 ➢ Your Local Genworth Regional Underwriter ➢ Your Genworth Sales Representative
Slide 55: 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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