HotNeutralWingspan New Powerful Solutions include: Wingspan Specialized Default Servicing Wingspan R

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HotNeutralWingspan New Powerful Solutions
includeWingspan Specialized Default
ServicingWingspan Reperformance-Focused
WorkflowSbiem Shared Built In Equity
Mortgage QBieSam Quarantined Built In Equity
Shared Appreciation ModsOpt In Settlements
Opt In Safe Harbors Litigation Free Zone

• HotNeutral / Wingspan JV

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This presentation was developed by
HotNeutral Litigation Risk Mitigation for
Lenders and Servicers and
Wingspan Portfolio Advisors, LLC In cooperation
with our exclusive legal network
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Market Context

• Traditional servicers are overwhelmed by the
  volume of defaults
• Credit losses are growing industry-wide
• Traditional default servicing practices are
  structured to minimize servicing cost and are
  biased toward foreclosure
• Public sentiment demands an increased focus on
  reperforming outcomes
• Servicers that dont deliver better results face
  ever-increasing legal, regulatory and political
  liability
• Additional capacity and new strategies are
  required to improve servicer performance, reduce
  loss, and decrease risk

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Better Solutions Exist

• 1.  For target populations of high risk loans we
  define solutions for your portfolio that effective
  ly reduce both future liability and current
  liability through the adoption of recommended
  best practices.
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• 2.  Our reperformance-focused strategies
  maximize the number of borrowers staying in their
  homes while responding visibly and convincingly
  to the political realities presented by current
  economic circumstances. 
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• 3.  Furthermore, as a neutral third party, we
  can coordinate the activities of the many players
  involved in any delinquency while establishing
  safe harbors and "litigation free zones" to
  protect you from risk.
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• 4.  We would also be happy to talk to you about
  how these services may be viewed by the rating
  agencies and opportunities that may exist to
  improve your servicing and secondary market
  performance going forward.

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Target High Risk Loans

• Bankruptcy
• Foreclosure
• Loan Resolution
• Subordinate Liens
• Owned Risk

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Identify Risk Profile and Mitigating Solutions

• Review processes to identify legal risks
• Develop targeted solutions to eliminate risk
• Ensure that the proper procedures are defined,
  implemented, and followed
• Coordinate the activities of your staff and all
  third party participants involved in default
  servicing
• Monitor and follow-up to tune processes and
  ensure compliance
• Benefits include reduced legal, regulatory, and
  reputational risk as well as reduced credit
  losses

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Case Study Bankruptcy Servicing

• Case law and conversations with judges and
  trustees show a growing lack of tolerance for
  servicer bankruptcy practices
• Servicers are facing increased sanctions and
  civil liability for Bankruptcy servicing
  practices including
• Failure to show lack of adequate protection prior
  to filing for relief
• Failure to review plan to identify objectionable
  terms
• Failure to manage unique issues pertaining to
  second liens
• Failure to provide notice of post-petition fees
  and costs assessed during the bankruptcy
• Failure to track accurately pre and post-petition
  payments
• Failure to analyze properly scrow balances after
  filing
• Improper recovery of escrow shortages
• Impermissible workouts while under bankruptcy
  protection
• Failure to respond to workout requests from the
  borrower in bankruptcy
• Impermissible reaffirmations

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Litigation Free Zones

• Implementing best practices can not only
  eliminate sources of future liability but also
  reduce liability for alleged infractions already
  committed by establishing your good faith
• Many bankruptcy departments lack the skill,
  capacity, and technology necessary to implement a
  best practice based approach
• Utilizing our services establishes your
  intentions to improve, makes available our
  subject matter expertise and technology, and
  reduces your exposure to allegations of
  impropriety

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Safe Harbors - Beyond Best Practices

• In addition to our advisory services, as a
  neutral third party we can coordinate the
  activities of the many players involved in any
  delinquency while eliminating actual or alleged
  conflicts and operating in safe harbors to
  protect you from risk
• Special Servicing
• Credit Counseling
• Legal
• Our total default solution replaces foreclosure
  referral with default referral
• We coordinate the simultaneous services provided
  by credit counseling agencies, default recovery
  servicers, law firms, and mortgage insurance
  companies in an impartial and borrower-centered
  approach
• At all times you remain the servicer of record

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Our Total Default Solution
Credit Counseling
Recovery Servicing
Legal Services

• Educates Borrower
• Understands the Borrowers Financial Picture
• Creates a Budget
• Provides Unbiased Advice and Guidance

• Intense Borrower Outreach
• Avoids Foreclosure, Reduces Net Credit Loss
• Reduces Risk
• Coordinates Third Party Services and MIs

• Allowed Time for Workouts
• Coordinates with the Recovery Servicer
• Incentivized for Workout Success

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Less Risk, Net Reduction in Credit Loss

• Most of the cost of the Total Default Solution
  strategy is covered by existing fee
  reimbursements, fair share contributions, and
  workout incentive compensation plans
• Additional costs for recovery servicing more than
  offset by reduced credit losses and reduced risk
• Modest flat fee per month
• Success fee

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Added Value Going Forward

• In addition to our solutions for your present
  challenges, we would be happy to work with you to
  enhance future performance
• Providing for our defined default solutions at
  the time of loan origination
• Expanded default insurance solutions may improve
  your secondary market execution.
• Our products and services may be viewed very
  favorably by rating agencies and secondary market
  investors

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For more information please visit us
atwww.HotNeutralWingspan.com