Wingspan Portfolio AdvisorsDefault Servicing Solutions

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Executive Summary

Market Context

Competitive Advantage

The Wingspan Difference

Profiles of Management Team

Contents

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Executive Summary A new default servicing specialist focused on creating and maintaining long-term

paying relationships with highly delinquent borrowers by rebuilding their financial strength through strategies tailored to each borrower’s unique situation

Battle-tested and proven senior management team with a successful track record building start-ups

Unparalleled understanding of the servicing industry, servicer characteristics, best practices, and performance drivers

A unique strategic alliance with DRI Default Management, the industry-leading default technology provider, enables unsurpassed technological solutions

A founding partner of the Coalition for Mortgage Industry Solutions

Performance focused and analytics driven

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• Executive Summary

• Market Context

• Competitive Advantage

• The Wingspan Difference

• Profiles of Management Team

Contents

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Credit losses growing industry-wide Additional staff and new strategies are

required

Current state of the WorldExpected state of the World

Credit losses remain contained Existing staff and strategies maintain

losses at an acceptable level

Poor loan resolution performance no longer offset by home price appreciation Unprecedented volume of defaults More delinquent loans than servicers can work Some loan types requires unique strategies and skills Insufficient internal capacity to maximize the value of every loan type Servicers require specialists to supplement their core capacity

Servicers Need a Wingman

Wingspan complements servicer strengths

“The wingman is absolutely indispensable. It's another set of eyes protecting you. That the defensive part. Offensively, it gives you a lot more firepower.” -Lt. Col. Francis S. "Gabby" Gabreski, USAF, 28 victories in WWII and 6.5 MiGs over Korea.

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Second Mortgages Require Unique Strategies

Second mortgage originations were at all-time highs.

Now, nonperforming second mortgages are exploding in volume.

Source, National Mortgage News.

Case Study

There are very few servicers with the skills and tools necessary to cure nonperforming second mortgages.

The ultimate value of a nonperforming second mortgage does not principally depend on collateral value but on the borrower’s psychology.

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Executive Summary

Market Context

Competitive Advantage

The Wingspan Difference

Profiles of Management Team

Contents

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Strategies guided by a deep understanding of best practices, servicing technology, and servicers’ operational practices

Servicer practices are frequently not apparent to third parties but if known beforehand increase performance lift, for example: Portfolios from servicers with collateral-focused

late stage workout processes will benefit from Wingspan’s reperformance-focused workflow

Portfolios from servicers with strict NPV-based workout approval criteria will benefit from Wingspan’s Behavioral Outcome Decisioning

Portfolios from servicers that overlook second lien workout opportunities will benefit from Wingspan’s specialized recovery processes

Experience working with many servicers highlights hidden areas of risk or opportunity

Experience

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Total LossUnder-served borrowersUnder-incented staff

Total LossIgnores borrower psychologyNPV-based decisioning

Loss SeverityLeave money on the tableLimited third party data

Loss SeverityMiss reperforming opportunitiesForeclosure outsourcing

Loss FrequencyReject viable opportunitiesStrict workout qualification

Loss FrequencyDon’t call delinquent borrowersScoring

Loss Frequency80% of skips are still in their homesDialer-based calling

Implications/ImpactPotential ShortcomingStrategy

Traditional Strategies Reduce Cost but Increase Loss

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Advanced Special Servicer

Typical Special Servicer

Fully-incentivized Workout Group

Reperformance-Focused Workflow

Proactive Information Management

NPV-Based Workout Decisioning

Scoring-Based Contact Strategy

Legal Network Management

Dialer-Driven Outbound Calls

Timeline-Based Event Tracking

Investor-Focused Strategies Reduce Net Loss

Behavioral Outcome Decisioning

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Executive Summary

Market Context

Competitive Advantage

The Wingspan Difference

Profiles of Management Team

Contents

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The Wingspan Difference

Proactive Information Management Focus on Reperformance

Fully Staffed/Fully Incentivized Behavioral Outcome-Based Decisioning

Fully automated data gathering prior to borrower contact

Advanced analytics consider the factors that affect each loan and determine servicing strategy

Incentives targeted to maximize reperforming loans

Logical consequences of noncooperation encourage continued payments

Loans with greatest opportunity concentrated with highest skill positions

Aligned incentives ensure servicing intensity

Psychological equity creates leverage

Informed listening establishes trust

Legal remedies initiated only to return borrower to negotiating table

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Wingspan’s loan resolution logic evaluates the factors influencing each loan andidentifies those loan resolution strategies best suited for a given borrower’s situation

Maximum Results through Superior Information Management

When Wingspan initiates contact with the borrower, we are prepared with an in-depth understanding of the borrower’s circumstances and the recovery potential of the loan

Factor Indicates Source

Current Credit Condition Borrower’s Capacity Credit Report, BK Info

Credit at Origination Propensity to Pay Loan File

Payment Pattern Probability of Future Payment Placement Data

Current Market Conditions Collateral Risk Trend HPA Trend Data

Lien Position Collateral Impairment Property Report

Effective Equity Foreclosure Value AVM, BPO, Reviewed Value

Prior Servicer Strategies Remaining Workout Value Servicer Knowledge

Psychological Equity Borrower’s Commitment Value, History, HPA Trend

Wingspan’s advanced analytics determine the servicing strategy for each loan

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Loan Resolution

Bankruptcy

Reperforming

BK Reperforming

Performing

BK Performing

After 3Payments

< 30 DaysDelinquent

BorrowerNon-Cooperation

Legal Strategies/Logical Consequences

Focus on ReperformanceLike Traditional Servicing Only Backwards Logical Consequences of Non-Cooperation

Strong incentives to return to reperforming

Focused on cure - not collateral

Designed to motivate resumed negotiations

Workout efforts continue throughout

Foreclosure Suit on Note BK Relief

BorrowerResumes

Cooperation

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Wingspan’s reperformance-focused workflow concentrates servicing intensive assets with the highest skilled individuals Loan Resolution Specialists earn more than 50% of their incentive income from returning loans to a paying

status Outbound call volume is moderated to ensure sufficient time is spent with each borrower

The reperforming workflow transfers loans that resume monthly payments to reperforming specialists who maintain payments until contractually current Larger work queues Lower compensation potential

Contractually current loans transfer to performing collections Sole focus is maintaining payments Still larger work queues

Properly Aligned Incentives Create Powerful Lift

Wingspan is both fully staffed and fully productive Borrowers receive dedicated attention from specialists who are ready and eager to talk to them

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Leaving room for flexibility in an inherently rules-based process Relying solely on Net Present Value based decisioning:

Overlooks how the borrower’s feelings affect workout success Neglects to consider the probability a non-qualifying workout will succeed

We also listen and learn: Forms bond between the parties Establishes mutual respect Establishes our authority

Command of the facts through superior information management Unambiguous willingness to help reinforced by incentive alignment

We recognize that borrowers frequently respond to non-monetary considerations that we call psychological equity: Borrowers always think the house is worth more Appreciate the social cost of losing the house Recognize the inability to replace right away

Most borrowers do not wish to lose their home and will eventually reach out for help if someone is there

Behavioral Outcome Decisioning

Panic Points: Using our legal rights, data, and psychology to overcome borrower denial, motivate borrower cooperation, and maximize recoveries in the shortest possible time.

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The Power of Informed Workflow

DRI seamlessly integrates vendor and third party data into Wingspan’s proprietary workflow and decisioning processes

Clients and vendors may access their relevant information and reporting in real time through DRI’s .Net interface

Wingspan’s workflow intelligently automates vendor referrals, performance instructions, and product ordering

The Default Solutionby DRI

Servicing System

data exchange

Internetwww.TheReoBrokerSolution.com web portal(information automated back to default system)

Reo Broker

Reo Broker

Reo Broker

www.TheAttorneySolution.com web portal(information automated back to default system)

ü Loss Mitigation Decision Modelü Foreclosureü Bankruptcyü Reoü Claimsü Auto/Consumer Loans & Decision Modelü Pre-Foreclosureü Litigationü Property Preservation

Attorney

Attorney

Attorney

DRIWebservices

Hub

ü Artemis Enterprises, LLCü Credit Reportsü Appraisalsü Automated Valuationsü BPOsü Title Reportsü Flood Certification & Insuranceü Skip Tracingü Second Lien Analysisü IRS Liensü Vendor Performance

DRI Provided

Provider Provider

Provider

data exchange

exchange data

ü Mortgage Servü MSPü LSAMSü Interlinqü Proprietaryü “all others”

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Develop Action Plans Reporting and performance analysis identifies

underperforming or high-risk loans or processes Work with the servicers to remediate Ensure adequate resources are available Frequent contact ensures follow-through

Continuing Follow-up and Onsite Reviews Ensure servicing intensity and loan resolution

strategies meet best practices and preferred strategies

Validate data provided by the servicer Monitor servicing liquidations, advances, charge-offs

Implement Changes and Best Practices Recommend outsourcing solutions where warranted Implement servicer performance incentives where

advantageous

Active Servicer Management

Wingspan Also Creates Lift Through The Proactive Oversight of Third Party Servicers

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Acquire

Score Card

Select Portfolios

Price

ImprovedPerformance

Develop Action Plans

ID PerformanceExceptions

Ensure Follow-Through

Analyze Performance

ActiveServicer

Management

ActiveServicer

ManagementPricing

AnalyticsPricing

Analytics

Active Servicer ManagementWingspan has the tools and the experience necessary to manage third party servicer performance and to identify areas where proactive intervention will improve performance

The ability to create servicing “lift” drives improved investment returns, uncovers hidden opportunities, and sharpens future bids

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Executive Summary

Market Context

Competitive Advantage

The Wingspan Difference

Profiles of Management Team

Contents

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Recently completed the reorganization of Fannie Mae’s National Servicing Organization. Developed new servicer scorecard, risk-targeted strategies, and performance incentives.

Formerly a partner with Sherman Financial Group Led the creation of 3 successful business lines:

Delinquent second mortgage purchasing and servicing Chapter 13 credit card purchasing and servicing Mexican unsecured consumer lending and servicing

Developed innovative loan resolution strategies, systems solutions, and workflow. Earlier Positions

MSV - developed start-up into a leading provider of outsourcing services for Freddie Mac. Ocwen Financial - Director of Default Servicing during Ocwen’s period of most rapid growth. RTC - Lead attorney for asset teams that recovered over $5 billion from portfolios of

complex commercial loans, participations, securities, and real estate. Frank, Bernstein, Conaway & Goldman – Successfully defended high profile financial

institutions in complex securities fraud and lender liability suits. Cases featured twice in Forbes.

JD from George Washington and BAs in Economics and English from Emory.

Steven Horne, President

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Currently an AVP with Option One responsible for developing and executing secondary market strategies for Option One’s mortgage assets including sub-prime, Alt-A, and scratch and dent Develop models to optimize secondary market execution Coordinate secondary market transactions with investment banks, GSEs, and other

counterparties Previously, as Vice President of Business Analysis for Resurgent Capital Services, served as the

principal architect of Resurgent’s automated placement and recall strategy used to manage the recovery strategy for approximately 14 million unsecured consumer accounts. Instrumental in developing Resurgent’s: Price modeling, Collateral valuation modeling,and Business process reengineering

Earlier positions: VP for Market Research and Analysis with Homegold, Inc. AVP for Fleet Mortgage Group focused on portfolio valuation and hedging strategies

M.S. in Applied Mathematics from the University of South Carolina Motorola-certified six sigma black belt.

Catherine Castle, Analytics

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Most recently, Ms. Singer was a Director in the Institutional Client segment at GMAC-RFC, working with large subprime mortgage companies, banks, and mortgage bankers.

Before rejoining GMAC-RFC, Ms. Singer was the National Sales Executive for Option One Mortgage Corp., where she identified, developed, and managed all sub-servicing relationships.

Ms. Singer began her career at GMAC-RFC in the Distressed Mortgage Services Group, where she sourced the acquisition of non-performing assets and REO through customized programs that met the clients’ needs and provided solutions to most effectively manage their balance sheets.

Previously, Ms. Singer was a Manager in the Servicer Division at Freddie Mac where she developed, implemented, and managed Freddie Mac’s Helping Hand Outsource program where she managed key servicer relationships and established policies, procedures, and controls for the program. Prior to Freddie Mac, Ms. Singer was a senior consultant in the real estate services practice at Laventhol & Horwath.

Ms. Singer has a bachelor of arts in economics from The College of William & Mary.

Suzanne Singer, Business Development

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Twenty-five years of overall servicing experience including conforming and non-conforming loans; management of investor and mortgage portfolio accounting; origination and servicing quality control; and strategic servicing initiatives (e.g. servicing system conversions and major portfolio transfers). Additional experience in the area of risk management and acquisitions due diligence focusing on default servicing functions. Previously worked with MacAndrews and Forbes Holdings Group and served as Senior Operations Manager of Millenium Mortgage.

Most recently, Ms. Moses spent ten years with Fannie Mae as a Servicing Consultant and as

Business Manager of the National Servicing Organization. In that capacity reviewed new servicers for Fannie Mae approval, worked with servicers to identify operational and process issues. Developed remediation plans and directed the implementation of required process improvements. Supported servicers training needs.

Masters of Business Administration, Accounting – University of Rochester, Rochester, NY

Certified six sigma black belt

Georgia Moses, Operations

For More Information

Steven Horne, PresidentWingspan Portfolio Advisors, LLC

214-789-0943steve@wingspanadvisors.com