2005 CitiMortgage, Inc & PHH Mortgage Full Mortgage Choice Offers Benefits to Relocating Employees and the Government Presented to: Government Wide Relocation Advisory Board May 25, 2005 Presented to: Government Wide Relocation Advisory Board May 25, 2005

GRAB May 25, Introductions Trish Berube, SCRP & GMS Vice President, Regional Sales Manager CitiMortgage David Bronder, CRP Director PHH Mortgage Lisa Caravella, CRP & GMS Director, Strategic Partnerships CitiMortgage

GRAB May 25, Expand Existing FSS Contract Language to Permit Full Mortgage Choice Proposal: Permit relocating employees to have real mortgage choice – the ability to choose among multiple relocation lenders. Permit all relocation lenders to provide “direct bill of closing costs”. –The recommended expansion of the current FSS 653 (new FSS 48) contract language would maintain this important employee benefit and allow all participating relocation lenders to provide the “direct bill” service.

GRAB May 25, Full Mortgage Choice is a Win-Win for Everyone The Employee The Operating Agencies The Oversight Agencies The Suppliers

GRAB May 25, The Current Process Makes Real Choice Difficult and Increases Costs Relocation management contractors are partnered with a single relocation lender. “Direct bill of closing costs” is currently only offered to the one relocation lender who is partnered with a Relocation Contractor. Employees wishing to choose a relocation lender not partnered with a Relocation Contractor are not provided the service of “direct bill of closing costs”. The process is less convenient and time consuming for employees to select an alternate relocation lender versus the relocation contractor lender. Both the employee and the alternate relocation lender begin the process at a disadvantage.

GRAB May 25, The Change to provide Full Mortgage Choice can be Easily Implemented (1) Expand Existing Contract Language: 6.3 Mortgage Counseling The contractor shall counsel the employee on relocation mortgage programs that meet the employee’s financial objective and qualifications. Local mortgage counseling is available through the buyers assistance 6.1 representative selected by the contractors Referring to relocation lending sources, to enable the employee to compare financing available and select a mortgage product and lender that meets the employee requirements. Agencies can define relocation lender requirements to ensure the contractor or contractors meet their requirements in providing lender choice to their employees. If available, direct bill capability shall be extended to all agency approved relocation lenders. Direct bill capability shall be defined as the ability to advance closing costs on behalf of the employee and seek reimbursement from the agency and / or contractor.

GRAB May 25, The Change … Define Relocation Lenders (2) Relocation lenders shall be defined as including, but not limited to: Dedicated national account manager for the agency and contractor Service delivery for the employee shall be available via a toll free 800 number Reporting capability to meet agency requirements Capability to offer direct bill benefit if agency permits and employee is eligible Licensed to originate and close residential mortgages in all 50 states Product lists to include but not limited to: Conforming Loans – Fixed and Adjustable FHA / VA Sub-Prime New Construction Combination Home Equity Line of Credit Retention of servicing for loans closed through solicitation

GRAB May 25, Win-Win Perspective: Employee Competition will keep quality service, products, rates, and terms competitive for relocating employees. Direct Bill feature will “free” dollars for down payment or other expenses, approximately $5,400 on average per transaction. Direct Bill feature eliminates the administrative burden of preparing a reimbursement voucher after the loan closes. Relocation lenders have negotiated preferred underwriting guidelines including co-borrower income consideration and streamlined pre- approval to assist with immediate loan decisions and less documentation. Relocation lenders retain servicing of the loan. Monthly mortgage payments are paid to the lender without changing payment information.

GRAB May 25, Win-Win Perspective: Operating Agencies Cost savings will be realized through the use of multiple relocation lenders. Agencies will have the ability to negotiate lender fees and establish a maximum charge to the agency. Miscellaneous fees are increased when choice is limited. Employees utilizing a lender outside of the contract are subject to unnecessary and higher fees. Agency cost reporting and analysis is available from relocation lenders on home purchase closing costs paid. Contractor(s) manage suppliers for compliance. Agencies can provide choice and direct bill service to their employees at no additional expense or administrative burden.

GRAB May 25, Win-Win Perspective: Oversight Agencies Assist agencies in meeting performance based contract objectives: –Performance measurements and metrics including service targets –Cost reporting and analysis –Reduce relocation home purchase closing costs

GRAB May 25, No Other Option Offers the Same Benefits So Easily Doing Nothing – potential cost savings to the government and to the employee are forgone. The benefits of competition are lost. OR Doing Everything –“unbundling” mortgage services provided and creating a separate SIN: –Is not easy. It’s a total rewriting of the current process for contract services for the Agencies. –Adds work. Agencies will be strained managing additional contractor responsibilities. –Is burdensome and costly. No revenue to GSA to manage a separate SIN for national relocation lenders – this service is provided at no cost to the agency. –Increase SIN costs. Potential impact to SIN fees if creating a separate SIN for destination services is requested and approved.

GRAB May 25, Full Mortgage Choice Providing Full Mortgage Choice can: Be Easily Implemented –Dramatically changing the current process is not necessary. Minor improvements are all that are needed. Provide Personal Benefits to the Employee and Financial Savings for the Government –Employees will benefit from competition between lenders with interest rates, products and terms. –The Government is projected to save over $ 9 million annually. Offers Competitive Benefits to the Employee and to the Government –Employees and Agencies will benefit from knowing that lenders will be competing in price, service and product innovation rather than relaxing under the oligopolistic arrangements currently in place.

2005 CitiMortgage, Inc & PHH Mortgage Thank you for your time.