Crescent Mortgage Company | Title | Name Industry Update Fowler Williams, CMB President & CEO Crescent Mortgage Company October 19th , 2017 www.crescentmortgage.com Crescent Mortgage Company | 2017

Crescent Mortgage Company | Title | Name Looking Backwards – 2008-2015 HMDA Source: FFIEC and Mortgage Bankers Association Crescent Mortgage Company | 2017

Crescent Mortgage Company | Title | Name Looking Backwards – 2015 HMDA – Credit Unions Source: FFIEC and Mortgage Bankers Association Crescent Mortgage Company | 2017

Crescent Mortgage Company | Title | Name Looking Backwards – 2015 HMDA – Credit Unions Source: FFIEC and Mortgage Bankers Association Crescent Mortgage Company | 2017

Crescent Mortgage Company | Title | Name 2017 Looking Forward - Mortgage Finance Forecast Slight increase in purchase transactions. Refinance share cut by 50% from year end 2016 to year end 2019. 100 bps rise in interest rates from year end 2016 to year end 2019. Crescent Mortgage Company | 2017

Crescent Mortgage Company | Title | Name 2017 New Housing Crisis | Supply Monthly Supply of Homes for Sale in United States – shaded areas indicate recessions Sellers market in most areas of US Supply of homes under $250,000 still lowest. (builders and realtors site cost of goods, regulation, and insurance) Fairly consistent / stagnant rate since 2013. 1965 through May 2017 Crescent Mortgage Company | 2017

Crescent Mortgage Company | Title | Name 2017 New Housing Crisis | Supply Housing Starts in United States – shaded areas indicate recessions Good upward trend Still barely above the lows of last 50 years 1958 through May 2017 Crescent Mortgage Company | 2017

Crescent Mortgage Company | Title | Name 2017 New Housing Crisis | Supply Year over Year Change in Builder Application Survey Index Crescent Mortgage Company | 2017

Crescent Mortgage Company | Title | Name 2017 New Housing Crisis | Supply Homeownership Rate – shaded areas indicate recessions Not proven to have recovered from housing crisis. Still barely above the lows of last 50 years Chicken or Egg? Low homeownership rate caused by lack of available housing, or is lack of available housing caused by low homeownership rate? 1965 through May 2017 Crescent Mortgage Company | 2017

Crescent Mortgage Company | Title | Name 2018 and Beyond – Looking Ahead Looking Ahead Crescent Mortgage Company | 2017

Crescent Mortgage Company | Title | Name 2017 Looking Ahead Home Mortgage Disclosure Act (HMDA) HMDA - October 15,2015 Home Mortgage Disclosure Act Rule (HMDA) New collection on loans/applications based on FINAL ACTION date on or after Jan. 1, 2018. New Rule 48 Data Points Current Rule =23 (20 are modified for new rule) New = 25 Tick-Tock Will require data collection in 2017 for applications whose FINAL ACTION is on or after 1/1/2018 One Exception - GMI (ethnicity, race, sec) based on application date on or after 1/1/2018   Crescent Mortgage Company | 2017

Crescent Mortgage Company | Title | Name 2017 Looking Ahead Home Mortgage Disclosure Act (HMDA) Data Point Categories - BEFORE App/Company Elements Application Date Application/Loan Number Reporter ID Preapproval Request Race, Ethnicity, Sex Underwriting Elements Action Taken/Date Reasons for Denial (optional) Income Type of Purchaser Loan Features Loan Type Loan Purpose Loan Amount Property Elements Property Type Occupancy Type Lien Status Property Location Pricing Elements Rate Spread (only if above threshold) HOEPA Status Crescent Mortgage Company | 2017

Crescent Mortgage Company | Title | Name 2017 Looking Ahead Home Mortgage Disclosure Act (HMDA) Data Point Categories - AFTER App/Company Elements Application Date Universal Loan ID Legal Entity Identifier Pre-Approval Request Application/Loan Number Reporter ID Preapproval Request Race, Ethnicity, Sex Age Application Channel MLO NMLSR ID Underwriting Elements Action Taken/Date Reasons for Denial (optional) Income Type of Purchaser Credit Scores DTI Ratio Combined LTV Ratio AUS type Loan Features Loan Type Loan Purpose Loan Amount Loan Term Business or Commercial Purpose Reverse Open –End Line of Credit Prepayment Penalty Term Introductory Rate Period Non-Amortizing Features Property Elements Construction Method Property Location Occupancy Type Lien Status Property Address Property Value Manufactured Home Secured Property Type Manufactured Home Land Property Interest Multifamily Affordable Units Total Units Pricing Elements Rate Spread (all) HOEPA Status Origination Charges Discount Points Lender Credits Interest Rate Total Loan Costs / Points and Fees Crescent Mortgage Company | 2017

Crescent Mortgage Company | Title | Name 2017 Looking Ahead New Uniform Residential Loan Application New Loan Application On August 23, 2016, Fannie Mae and Freddie Mac (the GSEs) published the redesigned Uniform Residential Loan Application (URLA) to provide the industry with sufficient time to begin analysis and planning for the future URLA implementation, system updates, and the transition to the new automated underwriting system (AUS) specifications. Original Implementation Date 1/1/2018 but now: July 1, 2019, and will be required to use it beginning in Feb. 2020 for all new loan applications. The CFPB reviewed the redesigned URLA under ECOA and Regulation B. On September 23, 2016, CFPB issued a notice of Bureau Official Approval of the URLA establishing a safe harbor for use of the URLA under the Equal Credit Opportunity Act (ECOA) and Regulation B. Not a “blank PDF” as in the past – dynamic based on application characteristics Separate pages for each borrower Crescent Mortgage Company | 2017

Crescent Mortgage Company | Title | Name 2017 Looking Ahead – Financial Markets Driven by Financial Stocks Promise of Corporate Tax Cuts Promise of Regulatory Relief Crescent Mortgage Company | 2017

Crescent Mortgage Company | Title | Name Market Disruption Potential 1. North Korea 2. Twitter 3. Not Passing Corporate Tax Reform “To the extent we get the tax deal done, the stock market will go up higher. But there’s no question in my mind that if we don’t get it done, you’re going to see a reversal of a significant amount of these gains.” -Treasury Secretary Steve Mnuchin (Yesterday) Crescent Mortgage Company | 2017

Crescent Mortgage Company | Title | Name 2017 Washington D.C. Update Housing Holdovers Mel Watt , Director FHFA Term Expires January 1,2019 Richard Cordray, Director CFPB Term Expires July 1, 2018 PHH Corp v. CFPB 2016 US Court of Appeals “single director” structure unconstitutional. Can only be removed from office for Inefficiency Neglect of duty Malfeasance Rumored to run for Governor of Ohio Crescent Mortgage Company | 2017

Crescent Mortgage Company | Title | Name 2017 Washington D.C. Update Trump Housing Administration Dr. Ben Carson - HUD Secretary Literally Hundreds of Empty Desks in Housing Brian Montgomery, FHA Commissioner (nominee) Served as FHA chair in Bush Administration Ginnie Mae = (nominee not official) David Kittle Crescent Mortgage Company | 2017

Crescent Mortgage Company | Title | Name 2018 and Beyond GSE Reform – Kick the can or get something done? Fannie Mae Freddie Mac Single Security Big Data Blockchain Reputational damage to financial industry Crescent Mortgage Company | 2017

Crescent Mortgage Company | Title | Name 2018 and Beyond How to NOT Succeed Don’t Focus on First Time Homebuyer Don’t Focus on Hispanic Homebuyer No longer “emerging market” Don’t cater to Millennium Members Don’t focus on Construction / Permanent (supply) Ignore Technology Disruptors Don’t Believe Big Bank Return to Government Lending, Servicing Basel III, False Claims Act Ignore Member / Borrower Experience Ignore the Cost to manufacture loans Don’t Choose partners / vendors wisely! Crescent Mortgage Company | 2017

Crescent Mortgage Company | Title | Name Information | Access | Training | Support | Technology | Compliance | Fulfillment | Partnership | Advocacy As Crescent enters our 25th year of operation, and on behalf of the entire Crescent Mortgage Family – we would like to say a very sincere thank you. We have the best partners in the world, and, the best is yet to come… Questions, Comments, or Ideas on how we can be a better partner for YOU: Fowler Williams, CMB | President & CEO | Crescent Mortgage Company (800) 851-0263 x 2051 fwilliams@crescentmortgage.net Crescent Mortgage Company | 2017