1. Advanced Data Jobless Borrower Index
(AD-JBI)

2. What is the AD-JBI?
The Advanced Data Jobless Borrower Index (AD-JBI ) measures the average percentage of
borrowers that were unemployed within a week of their mortgage closing. The index is produced on a quarterly basis.

3. Pinpointing Exposure
The AD-JBI pinpoints a potentially significant risk that lenders are exposed to. It's one they often have no way to identify or prevent. So
often, lenders don't learn of a defect until it's found during a regulatory audit.

4. 0.73% AD-JBI Q1, 2017 By The Numbers:
To put Q1's performance in perspective, the results were slightly higher than the previous quarter. The index reached its high of 4% in Q2, 2011, reached a three-year low of 0.53% in Q4, 2013; and 0.54% in Q4, 2012.

5. 0.71% AD-JBI Q4, 2016 By the Numbers
Q4, 2016's results, 0.71%, represented an increase from Q3, 2016's 0.62%, and a significant decrease from the same time period a year earlier--when the index hit 1.01%.

6. 2016
AD-JBI Index
0.8%
Average Performance for the Calendar Year

8. A Changing Market
The move from a refi market to a purchase market, has often meant an increase in fraud--because lenders collect more documents than during a refi market.
As a result, the possibility of fraud is greater and that makes a second VOE, or Re-VOE more important than ever. Also, it could also cause an increase in the AD-JBI.

9. Regulatory Scrutiny Risk
Fannie Mae and Freddie Mac require a VOE for every borrower that receives a W-2 from an employer, but there is a loophole.They don't require lenders to order a second, or Re-VOE, before the loan closes. It's during that time interval, which can last for several weeks, that a borrower might have lost his job. But without a Re-VOE, neither the lender nor Fannie Mae, would be aware the borrower lost his job.

10. Regulatory Scrutiny 04. Dinged Reputations
The Alternative: Re-VOE Many lenders conclude they need to order Re-VOEs to insulate themselves from ri a borrower lost his job. They recognize the inherent risks of not performing them, and
run Re-VOEs through a third-party or in-house.
Some Take Their Chances
Other lenders don't order them and instead accept the risk that they might close a loan with an unemployed borrower. If uncovered during an audit, penalties could include buy-backs or other stiff penalties. E y
sk ey
04. Dinged Reputations
The risk of not ordering a Re-VOE is that a lender violates QM regulations or the Know Before You Owe rule that subjects lenders to buy-backs, other penalties, and damage to their reputations. That notoriety could have been averted if in addition to a VOE a
Re-VOE had been ordered a few days before the loan was scheduled to close..

11. Fannie Mae's Day 1 Certainty
Day 1 Certainty (D1C) holds the promise of regulatory relief, and in exchange, lenders will be expected to take steps to mitigate risk. For instance, Fannie Mae requires lenders that participate in D1C to perform a second VOE, or Re-VOE.

12. Fannie Mae's Day 1 Certainty Requires a Second VOE
Fannie Mae requires loans that are originated through Day 1 Certainty (D1C) to have a second verification of employment (VOE) within 10 days of the loan closing.
A second VOE ensures that the lender and Fannie are protected against a borrower that became unemployed between when he applied for the mortgage and a VOE was
pulled--and the the closing that often takes place weeks later.
The D1C program provides enforcement relief from the reps and warrants related to the calculation and verification of employment, income and assets.

13. Electronic Verification of Employment
An Automated Solution
Electronic Verification of Employment
E enables employers to tirely online, throug
shorter turn times, reduced costs, a h traditional, paper-based VOEs.
0% of VOEs are returned with inaccurate or m er is responsible for correcting or for making a second
ect.
rors slow the origination process and increases costs. With electronic Es, however, the technology is configured so that VOEs cannot be rned to the lender until they are 100% completed.

14. Allen Johnson, CEO of Advanced Data
"... regulatory scrutiny of the mortgage market remains high, so taking
steps to eliminate risk through advanced technology and automating manual processes, especially if they can be embedded in lenders’ origination processes, is of critical importance."
Allen Johnson, CEO of Advanced Data

15. Research Method of the AD-JBI
Each time Advanced Data completes a VOE, data is collected, aggregated and analyzed. The AD-JBI Index reflects the practices of a representative, cross-section of the mortgage business and transactions over the past few years.

16. Thank you.