Mortgage Market Update September 17, 2010 – Raleigh, NC 2010 North Carolina Affordable Housing Conference Keith Ernst

2 June 2010 Snapshot 54.2 million first lien loans outstanding Note: All sources on last slide

3 Loans 2+ Payments Behind

4 Foreclosures

5 NC Foreclosures Note: 2010 annualized from August foreclosure data and 2009 unit count

6 NC Foreclosures by Region Note: 2010 annualized from August foreclosure data and 2009 unit count

7 Foreclosure Expectations, for Loans Made in 2006

8 Limited Numbers of Modifications  398,000 HAMP modifications completed  1.3 million non-HAMP modifications reported by HOPE NOW in last year  5.7 million mortgages presently 2 or more payments behind

9 Concessionary Mods Starting

10 Payment Reduction Matters

11 Housing Prices

12 Sales Drop

13 Access to Credit

14 Foreclosed and Distressed (60+) as Proportion of 2006 Homeowners

15 Sources  LPS Mortgage Monitor (July 2010): Slide 2  Mortgage Banker’s Association, National Delinquency Survey: Slides 3, 4  S.M. Sherlund, “Mortgage Defaults”, Federal Reserve (3/8/2010): Slide 4  D.B. Bocian, W. Li, K.S. Ernst. “Foreclosures by Race and Ethnicity: The Demographics of a Crisis”, Center for Responsible Lending (6/18/2010): Slides 4, 14  NC AOC, Slides 5 & 6.  US Census, HU-EST (2010), Slides 5 & 6  Fitch Ratings RMBS Loss Metrics (Last Updated Aug. 2010): Slide 5  OCC/OTS Mortgage Metrics Report: Slides 9, 10  FHFA Housing Price Index, Slide 11  National Association of Realtors, Existing Home Sales, Slide 12  Fannie Mae, SEC Filings, Slide 13