Georgia Mortgage Servicing Meeting

Welcome Mr. Dan Maddox Executive Vice President & COO Atlanta Habitat for Humanity

Mr. Bob Boyd President Habitat for Humanity of Georgia Introduction Mr. Bob Boyd President Habitat for Humanity of Georgia

Mrs. Natosha Reid Rice Associate General Counsel Habitat for Humanity International

Purpose Make a recommendation to Affiliates for how best to handle mortgage servicing Educate Affiliates on how to ensure their mortgages are properly serviced

Habitat Georgia’s Recommendation Habitat Georgia recommends Habitat Affiliates outsource the servicing of their mortgage to a reputable third-party vendor.

How We Decided HFHGA has investigated different solutions for mortgage servicing for an extended period of time. HFHGA currently services 7 mortgages, but is in the process of outsourcing these. HFHGA has performed a high degree of due diligence in making its recommendation.

Due Diligence Affiliate surveys Conference calls Affiliate interviews / feedback Roundtable discussions Professional inquiries

Affiliate Concerns Laws are changing and difficult to keep up with Spending large amount of staff time handling collections and loss mitigation Current methods not effective (high delinquency rates) Departure from mission

Habitat’s Mission “We just want to help families, not be debt collectors.” -- Habitat Affiliate Representative

Calculating Costs How to calculate what you spend on mortgage servicing without a third-party: Salaries (including taxes and benefits paid) Equipment and software Postage Office space Legal fees Costs of multiple staff involvement

Offsetting Costs All newly originated mortgages should include the cost of mortgage servicing (even if you do not outsource). All loan modifications should include the cost of mortgage servicing (even if you do not outsource).

Utilizing Benefits Homeowners can work with trained professionals to help them with any issues Staff can focus on mission-critical activities (volunteers, building, partner family recruitment, etc.) Delinquency rates can decrease and unrestricted revenue can increase

The Questions Could you spend less money and get a better result? YES Will that result allow you to focus on your mission?

How?

Synovus Partnership Habitat Georgia has spent several months working on a partnership with Synovus Mortgage Company. Our goal was to develop a Habitat-centric method of mortgage servicing Habitat Georgia has performed extensive due diligence and vetting of Synovus Mortgage Company

Habitat-Minded We wanted someone who understands Habitat Affiliates and understands Habitat families. We needed to work with someone who could provide all of the services an affiliate require. We wanted someone who would take care of our families.

Synovus Mortgage Company Servicer Comparison Other Servicers Synovus Mortgage Company Á la carte services (pay as you go) All-inclusive (turn-key) No hazard insurance claim responsibility Full-service handling of all hazard insurance claims Send delinquent mortgages back to affiliates after certain date Handle delinquencies from beginning to end Focus on large lenders (Fannie Mae, Freddie Mac) Emphasis on local lending and servicing Inexperienced staff (unfamiliar with Habitat model) Professional staff with decades in the mortgage servicing industry Fits Habitat into their model Shapes their model to fit Habitat Based in other states Founded in Georgia Payments through mail and credit card only Families can make payments at any Synovus bank branch

Habitat Georgia October 12, 2015 The Opportunity to Serve Underserved Communities

Who they are Stated Goals: The Consumer Financial Protection Bureau (CFPB) is an independent agency of the United States government responsible for consumer protection in the financial sector Stated Goals: Educate – consumers against abusive practices Enforce – federal consumer financial laws Study – gather and analyze information

CFPB -Who they are Core Function Write rules, supervise and enforce federal consumer protection laws Restrict unfair, deceptive or abusive acts or practices Take consumer complaints, promote education and analyze behavior Monitor financial markets for new risks to consumers Enforce laws that outline discrimination and other unfair treatment in consumer finance

CFPB Servicing Compliance Requirements Guide

National Flood Insurance Program Created by Congress in 1968 Reduce future flood damage through floodplain management Government subsidy of insurance premiums Servicer responsibility to maintain updated flood maps Servicer responsibility to force place insurance Servicer responsibility to notify borrower of map changes

Today’s Regulatory environment has created pitfalls There is no safety net for best intentions Servicers are held financially liable for actions and inactions Fair Lending dictates consistent policies and procedures Treating borrowers differently is considered discriminatory What amount of risk you are willing to accept?

Do nothing and hope for the best?

Read the regulations Review your current operation Report your risk to your respective Boards Put together a comprehensive plan to achieve compliance Consider outsourcing servicing Or