1	Welcome to the 5^th Annual National Property Preservation Conference National Property Preservation Conference V November 5-7, 2008 Washington, D.C.
2	Rising to the Challenge
3	Conference Planning Committee
4	Conference Topics Industry challenges Foreclosure prevention Asset collateral preservation REO disposition Property preservation costs HUD new Mortgagee Letter M&M and servicer challenges Fannie Mae/VA/Freddie Mac update
5	Conference Topics REO statistics Preserving the REO asset Disposition options Marketability enhancement Neighborhood stabilization program Protecting our communities Vacant property registration MERS initiative
6	Agenda - Day 1
7	Opening Remarks Vance Morris, HUD Director Of Single Family Asset Management
8	Session 1 – Industry Update
9	Moderator: Deb Oakley, National City Panelists: Vicki Vidal, MBA Senior Director Vance Morris, HUD Director of Single Family Asset Management Laurie Maggiano, HUD Deputy Director, Office of Single Family Asset Management Mike Frueh, VA Assistant Director for Loan Management Rob Caire, Fannie Mae Vice President for Credit Loss Management Operations Kim Hobson, Freddie Mac Senior Default Specialist Joe Schilling, VA Tech Professor and Director of Research & Policy: National Vacant Properties Campaign Caroline Reaves, MCS President and COO Marina Walsh, MBA Director of Policy Research Robert Klein, Safeguard Properties CEO
10	Session Overview Industry leaders discuss critical issues faced as foreclosures mount and public and governmental scrutiny increases
11	Industry Challenges Key initiatives and activities that the industry is deploying to address: Foreclosure prevention Maintaining asset collateral value (pre- and post-sale) REO asset disposition
12	Foreclosure Prevention
13	Outreach and Counseling Increase borrower contact (HOPENOW Alliance) Expand outreach efforts to include: Collections Foreclosure Customer service Simplify loan modification/workout process
14	Asset Collateral Preservation
15	Protecting and Preserving Asset Values Pre-sale/post-sale maintenance of vacant and abandoned properties Investor compliance (HUD, FNMA, VA, Freddie Mac)
16	REO Disposition
17	REO Disposition Neighborhood Stabilization Grant Program ($3.9 billion) Developing action plans REO gifting, communicating with CDCs, and creating land banks Alternative disposition Auctions Bulk sales
18	REO Disposition Neighborhood stabilization tools Vacant Property Registration Code enforcement Maintaining neighborhood values Alternative disposition methods Potential impact from federal bailout
19	What Does the Industry Spend on Preservation Activities?
20	Snapshot: YTD P&P Costs
21	Snapshot: YTD Pre-Sale Property Inspection Costs
22	Break 10:15 a.m. – 10:30 a.m. Sponsored by Superior Home Services
23	Session 2 – Investor Update: HUD
24	Moderator: Leslie Bromer, HUD
25	HUD Vision and Guideline Compliance
26	HUD’s Top 10 P&P Issues Requiring bids for nominal amount Mortgagee Letter 2008-31 provides that bids not be requested for items that are $250.00 or less
27	HUD’s Top 10 P&P Issues Original signatures Mortgagee Letter 2008-31 now provides that extension and over-allowable requests may be submitted via email, but must include a full audit trail
28	HUD’s Top 10 P&P Issues Winterizations ML 2008-31: plumbing and heating systems must be drained in a manner sufficient to prevent freeze and/or other damage Actual damage must occur for demand letter to be issued
29	HUD’s Top 10 P&P Issues
30	HUD’s Top 10 P&P Issues Conveyance of damaged properties without M&M approval Insurance recovery Utility liens
31	HUD’s Top 10 P&P Issues Extension and OA requests Incomplete submissions Duplicate submissions Multiple submissions of different OA items for the same property Misdirected submissions
32	HUD’s Top 10 P&P Issues Property condition at the time of conveyance Mortgagee quality control
33	Lunch 12:00 p.m. – 1:15 p.m. Sponsored by Superior Home Services
34	Investor Update: HUD
35	Servicers’ Top 5 HUD Issues Turnaround Times Calendar vs. business days Timely response to over-allowable and extension requests Escalation process for non-responsiveness
36	Servicers’ Top 5 HUD Issues Bid Requirements Bids required for published allowables if total cost has been exceeded (grass cuts, boarding, winterizations) 2^nd bids requested even if initial bid provided in accordance with HUD pricing matrix (more than 6 tires, oversized pools) Debris allowable limited by cubic yard measurement (bricks, swing sets) Guidelines require re-glazing, but no published allowable defined Bid approval after the fact for non-emergencies
37	Servicers’ Top 5 HUD Issues Denials and Appeals Mortgagee vs. mortgagor neglect Detailed reasoning of denied over-allowable/cut bids Bids denied for technical non-compliance not impacting property condition Appeal process does not provide for time extension denials M&M response delays and extension requests
38	Servicers’ Top 5 HUD Issues Property Damages Insurance claims required for damages even if below policy deductible Mortgagee neglect needs to comprehensively defined and uniformly applied across regions Servicer held responsible for damages caused by mortgagor neglect Is mortgagee responsible for completing unfinished renovations prior to conveyance?
39	Servicers’ Top 5 HUD Issues Documentation Servicers need clarification and uniformity on documentation requirements
40	Break 2:45 p.m. – 3:00 p.m. Sponsored by Safeguard Properties
41	Session 3 - Investor Update: FNMA,VA, and Freddie Mac
42	Moderator: Robert Klein Safeguard Properties CEO
43	Fannie Mae Elonda Crockett
44	Fannie Mae Update Improving communication with servicer and field service partners Release of new over-allowable guidelines and reference guide Web-based technology Home Telos (HomeTracker) to streamline bid approval process
45	Fannie Mae Update Requirements for submitting 1095 request Are expenses reimbursable if OA approval is not received? Are the costs for services reasonable and in line with items to be completed? Hazard insurance filing/recovery
46	VA Carl Wasson
47	VALERI VA Loan Electronic Reporting Interface More loss mitigation incentives Less VA intervention Servicer control over timeframes No buy downs, just write-offs
48	VALERI: Electronic Reporting Mostly transparent Full file reporting VA event interpreter translates Occupancy status change automatic Some events reported in servicer Web portal Claims data semi-automated
49	VA P&P Issues VALERI fees & cost schedule Interior inspections on abandoned properties Access to vacant properties for appraisals New PM contractor
50	Freddie Mac Kim Hobson
51	Freddie Mac Hurricane Ike foreclosure moratorium in federally-declared disaster areas Loss mitigation efforts P&P issues Enhanced over-allowable expense thresholds
52	Session 4 - REO
53	Moderators: Robert Klein, CEO Safeguard Properties Caroline Reaves, COO Mortgage Contracting Services
54	REO Key Topics REO Statistics Preserving the REO Asset Disposition Options
55	REO Statistics
56	REO Filings by Quarter
57	Foreclosure Filings Second Quarter 2007 – 334,712 Second Quarter 2008 – 740,000 Represents an increase of 121%
58	Existing Home Sales by Region Seasonally Adjusted
59	Preserving the REO Asset
60	Critical Factors for REO Success Turnaround times Streamlining and centralizing processes Communication Quality control measures Cost-benefit analysis
61	Initial Services Securing Trashout and maid services Initial grass cut and landscaping (curb appeal approach) Winterization
62	Maid Services Wiping down counters, window sills, cabinets Mopping hard-surface floors Vacuuming carpets Cleaning bathrooms Goal is to have the property in “marketable condition,” ready to be shown to potential buyers
63	Ongoing Property Management Services Bi-monthly grass cuts to maintain curb appeal Monthly maid refresh to ensure optimal presentation to potential buyer Re-securing and debris removal (if necessary) Winterizations and de-winterizations
64	Disposition Options
65	Disposition Options Sell as-is Cosmetic repairs Marketability enhancement Gifting
66	Property Upgrade or Sell As-Is? Impact to sales price Impact to market time
67	Sell As-Is Key determining factors Market value Neighborhood factors Competitive properties Condition of asset Investors (non-occupants)
68	Cosmetic Improvements First impressions make or break sales Cost effective interior items like new paint or carpeting greatly add to marketability Cost effective exterior items like painting, mulching, new plantings, etc. greatly improve curb appeal
69	High-End Marketability Enhancement Focuses on investment in properties to ensure comparability to competitive properties in the community Enables clients to target investment with properties where there is a reasonable return on investment for the activities Provides opportunity to upgrade homes at a cost effective investment for the purpose of shortening the sales cycle
70	Gifting Donation of properties for community reinvestment Land banks
71	Thank You Servicers, please join us for the Roundtable Discussion at 5:30 p.m. Everyone, please join us at 6:30 p.m. for our evening reception. Dinner is at 7:30 p.m., followed by entertainment provided by extraordinist Craig Karges!
72	Welcome to the 5^th Annual National Property Preservation Conference
73	Rising to the Challenge
74	Agenda - Day 2
75	Session 1 – Community Impact
76	Moderator: Deb Oakley, National City Mortgage Senior VP Homeownership Preservation
77	Moderator: Deb Oakley, National City Mortgage Senior VP Homeownership Preservation
78	Session Overview As the country faces challenges brought on by the increase in vacant properties, industry and community leaders discuss initiatives in place to address vacant blight.
79	Neighborhood Stabilization Program
80	NSP Overview Authorized under the Housing and Economic Recovery Act of 2008 Provides emergency assistance to state/local governments to acquire and redevelop foreclosed properties that might otherwise become sources of abandonment and blight within their communities September 2008 announcement of $3.92 million allocated to cities eligible for direct funding (pending approved application)
81	Permitted Use of Funds Acquire land and property Demolish or rehabilitate abandoned properties Provide down payment and closing cost assistance to low- to moderate-income homebuyers
82	Key Requirements Applications for funding must be submitted to HUD by December 1, 2008 Following approval of the application, cities will have: eighteen (18) months to obligate the funds four (4) years to spend the funds
83	US Conference of Mayors Survey Results: Use of Federal Funds 61% said they would use the funds to acquire vacant/abandoned properties 56% would clean up land or rehabilitate structures on properties 54% would demolish structures on properties
84	US Conference of Mayors Survey Results: Use of Federal Funds 42% would maintain already acquired properties 29% would establish land banks 20% would establish financing mechanisms for purchase and redevelopment of vacant and abandoned properties
85	Protecting our Communities The industry is committed to preserving properties and maintaining neighborhoods in the interests of our communities and in support of local code enforcement officials
86	Servicer Benefit Prevents decreases in neighborhood property values as a result of property deterioration Ensures timely compliance with local code requirements Protects neighborhoods from nuisances, vandals, and other dangers associated with vacant properties
87	Community Benefit Prevents decreases in neighborhood property values as a result of property deterioration Ensures timely compliance with local code requirements Protects neighborhoods from nuisances, vandals, and other dangers associated with vacant properties
88	Initiatives Create Transparency Code Enforcement/Community Contacts (MBA Website) Coordinate Work with local CDC’s and city officials to build productive relationships to benefit all affected parties Educate Servicers to understand and appreciate the impact of vacant/blighted properties on community resources Code Enforcement to understand the guidelines servicers must follow in managing vacant/blighted properties
89	Break 10:15 a.m. – 10:30 a.m. Sponsored by Safeguard Properties
90	Session 2 – Vacant Property Registration
91	Vacant Property Registration Municipalities throughout the country are enacting new ordinances, or enforcing existing ones, centered around the registration of vacant properties. Registration ordinances require owners of properties that have become vacant or abandoned for a certain length of time to register formally with the local government.
92	Vacant Property Registration As a response to the foreclosure crisis, many cities struggling with new inventories of vacant homes are creating ordinances to help mitigate damage to communities and recover costs incurred. Disparate non uniform VPR ordinances have been challenging for industry compliance
93	VPR Industry Challenges Distinguishing between pre-sale and post-sale registration Pre-sale ordinance requirements sometimes raise potential conflicts with other laws and regulations (i.e., requirement to remove personals, re-keying of all access doors) Definition of vacancy status not uniform Local contact requirements are challenging for those utilizing national field service vendors
94	VPR Industry Challenges Penalty provisions in some ordinances were considered to be confusing and potentially costly Example: some require maintaining property in accordance with building codes De-registration of properties Securing requirements sometimes unrealistic (metal doors) Signage requirements invite vandals
95	MBA VPR Committee National Vacant Property Registration Committee, consisting of cross-industry participants, was formed to reach out to cities and offer industry help, support and expertise. The foundation behind the committee’s efforts has been to identify key provisions that raise concerns and develop consensus on a set of recommendations to address those concerns.
96	MBA VPR Committee Key initiatives currently undertaken by the committee: Educate communities nationwide as to what is encountered in the field Creation of a “model ordinance” combining best practices from around the country as a starting point for cities to consider as they enact their own legislation. MERS (Mortgage Electronic Registration System) initiative
97	MERS Solution to VPR Created by the mortgage banking industry to streamline the mortgage process by using electronic commerce to eliminate paper Acts as nominee in the county land records for the lender and servicer The MERS system will include contact information for the servicer and field service/property preservation company
98	MERS Solution to VPR iRegistration provides servicers with a cost-effective additional option to utilize the MERS system strictly for this initiative Municipalities will receive access and training at no cost to utilize the system to identify the property preservation contact
99	MERS Solution to VPR Contact information including name, title, phone number and email Pilot program to begin in: Boston, MA Stockton, CA St. Paul, MN Saint Louis County, MO Chula Vista, CA
100	Thank You for Attending the 5^th Annual National Property Preservation Conference Please join us for lunch, and have a safe trip home!
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