Cathy Davis ~

Open for Membership – March 2011 Open for Membership – March 2011 Top Sponsorship for all major REO conferences Top Sponsorship for all major REO conferences Half of Founders are experienced in Servicing or Asset Management and many members were asset managers Half of Founders are experienced in Servicing or Asset Management and many members were asset managers Members average over 15 years in REO with 33% average over 24 years Members average over 15 years in REO with 33% average over 24 years

Experienced members from all sectors of the industry Experienced members from all sectors of the industry Reputable members trusted by the industry clients, partners, peers and communities Reputable members trusted by the industry clients, partners, peers and communities Limited membership based on strict criteria to efficiently assist the needs of the industry (over 200 members have met our criteria from over 1200 applications) Limited membership based on strict criteria to efficiently assist the needs of the industry (over 200 members have met our criteria from over 1200 applications)

HECM Home Equity Conversion Mortgage 24 CFR

HECM were established in 1987 by Housing and Community Development Act HECM were established in 1987 by Housing and Community Development Act Expanded over the next couple of decades and during the past few years, has seen major overhaul of initial origination rules due to rising default rates. Expanded over the next couple of decades and during the past few years, has seen major overhaul of initial origination rules due to rising default rates. Recent changes include non-borrowing spouses, limitations on initial draws, requirements for set aside funds for payment towards taxes, insurance, repairs and requirements on financial ability of the borrower Recent changes include non-borrowing spouses, limitations on initial draws, requirements for set aside funds for payment towards taxes, insurance, repairs and requirements on financial ability of the borrower

Basic Rules Borrower must be 62 years or older Borrower must be 62 years or older Spouse does not need to be underwritten on loan if under 62 Spouse does not need to be underwritten on loan if under 62 Lender makes monthly payments to borrower up to a specific LTV Lender makes monthly payments to borrower up to a specific LTV Borrower is responsible for taxes/insurance unless set aside is used Borrower is responsible for taxes/insurance unless set aside is used HUD requires a 2 nd Deed of Trust to secure its advances (this must be released if a DIL is completed) HUD requires a 2 nd Deed of Trust to secure its advances (this must be released if a DIL is completed)

§ Acquisition and sale of the property g) Sale of the acquired property. (1) Upon acquisition of the property by foreclosure or deed in lieu of foreclosure, the mortgagee shall take possession of, preserve and repair the property and shall make diligent efforts to sell the property within six months from the date the mortgagee acquired the property. Repairs shall not exceed those required by local law and, in cases where the sale is made with a mortgage insured by the Secretary or guaranteed by the Secretary of Veterans Affairs, those necessary to meet the objectives of the property standards required for mortgages insured by the Secretary. No other repairs shall be made without the specific advance approval of the Secretary. The mortgagee shall sell the property for an amount not less than the appraised value (as provided under paragraph (b) of this section) unless written permission is obtained from the Secretary authorizing a sale at a lower price.

Whichever occurs the latest: Whichever occurs the latest: The date the DIL was recorded The date the DIL was recorded Expiration of Redemption, Ratification and Confirmation Expiration of Redemption, Ratification and Confirmation Vacancy (Both Humans and Personals) Vacancy (Both Humans and Personals) Foreclosure Deed Recorded Date – transferring the title from the borrower to the servicer Foreclosure Deed Recorded Date – transferring the title from the borrower to the servicer Marketable Title Definition

HUD GUIDELINES APPLY HUD GUIDELINES APPLY Limit on claimable preservation costs Limit on claimable preservation costs Utilities are not required to be turned on Utilities are not required to be turned on Offers must be at appraised value or higher Offers must be at appraised value or higher No concessions – no repairs, no closing costs, no renegotiations No concessions – no repairs, no closing costs, no renegotiations Establish values – accuracy is critical for the BPO and appraisal – should be reconciled Establish values – accuracy is critical for the BPO and appraisal – should be reconciled Property is listed at appraised value Property is listed at appraised value Continually re-evaluate marketing plan Continually re-evaluate marketing plan Update appraisal, no later than day 165 Update appraisal, no later than day 165 Claim filed Claim filed First 180 Days from Marketable Title

§ Application for insurance benefits. § Application for insurance benefits. (a) Mortgagee acquires title. (a) Mortgagee acquires title. (1) The mortgagee shall apply for the payment of the insurance benefits within 15 days after the sale of the property by the mortgagee. Application shall be made by notifying the Secretary of the sale of the property, the sale price, and income and expenses incurred in connection with the acquisition, repair and sale of the property. (2) If the property will not be sold within six months from the date the mortgagee acquired title, the mortgagee shall, at least 15 days prior to the expiration of the six month period, request the Secretary to cause another appraisal of the property to be made. Within 15 days of receipt of the appraisal, the mortgagee shall apply for the insurance benefits as provided in paragraph (a) of this section, substituting the appraised value for the sale price. The mortgagee shall bear the cost of the appraisal. (b) Party other than the mortgagee acquires title. The mortgagee shall apply for the payment of the insurance benefits within 15 days after a party other than the mortgagee acquires title to the property. Application shall be made by notifying the Secretary of the sale of the property and the sale price. (b) Party other than the mortgagee acquires title. The mortgagee shall apply for the payment of the insurance benefits within 15 days after a party other than the mortgagee acquires title to the property. Application shall be made by notifying the Secretary of the sale of the property and the sale price. (c) Mortgagee assigns the mortgage. The mortgagee shall file its claim for the payment of the insurance benefits within 15 days after the date the mortgage is assigned for record to the Secretary. The application for the payment of the insurance benefits shall include the items listed in § (a) of this chapter and the certification required under § of this chapter. (c) Mortgagee assigns the mortgage. The mortgagee shall file its claim for the payment of the insurance benefits within 15 days after the date the mortgage is assigned for record to the Secretary. The application for the payment of the insurance benefits shall include the items listed in § (a) of this chapter and the certification required under § of this chapter.

Claim from Sale during pre 180 day UPB - $150,000 BPO - $110,000 Appraised Value (day 1) - $112,000 UPB$150,000 -Sales Price/Appraised Value$112,000 HUD pays$ 38,000 Investor is whole * (subject to claim limitations)

HUD GUIDELINES NO LONGER APPLY HUD GUIDELINES NO LONGER APPLY Marketing Information is more critical than ever Marketing Information is more critical than ever Market Trend Information Market Trend Information Number of Showings Number of Showings Feedback – what is negatively impacting the marketing efforts Feedback – what is negatively impacting the marketing efforts Pricing recommendations and communication Pricing recommendations and communication Post 180 Day from Marketable Title

Day 180 Claim UPB - $150,000 BPO (day 1) - $ 110,000 BPO (day 165) - $90,000 Appraisal (day 1) - $112,000 Appraisal (day 120) – $115,000 Appraisal (day 165) - $115,000 USB$150,000 -Appraised Value$115,000 HUD pays$ 35,000

Post 180 Sale UPB$150,000 Less HUD payment$ 35,000 Investor’s New Base$115,000 Less Sales Price$ 90,000 Investor’s Loss$ 25,000

USREOP is a member of the NRMLA USREOP is a member of the NRMLA Experienced in overseeing the disposition of HECM properties since October USREOP has been involved in over 12,000 HECM REOs with 6 different servicers Experienced in overseeing the disposition of HECM properties since October USREOP has been involved in over 12,000 HECM REOs with 6 different servicers USREOP has been able to assist with training and increasing agent performance by creating efficient processes to reduce DOM, increase sales during pre 180 which reduces losses. USREOP has been able to assist with training and increasing agent performance by creating efficient processes to reduce DOM, increase sales during pre 180 which reduces losses. USREOP members have been successful in expediting process and obtaining copies of deeds that are needed to establish Marketable Title date. USREOP members have been successful in expediting process and obtaining copies of deeds that are needed to establish Marketable Title date. COMMITMENT ~ EXPERIENCE ~ REPUTATION