Green River Capital - MORN - 201310

2013 Morningstar Credit Ratings, LLC. All Rights Reserved.
Operational Risk Assessment

Green River Capital, LLC
October 2013

Operational Classifications: Residential Vendor (REO Asset Management
Residential
Assigned Rankings! Residential Vendor
Residential Com"onent #ervi$er
Forecast: %avora&le

Analyst! Ri$hard '. (o$h,

Rationale
Morningstar Assigns Green River Capital, LLC (Clayton Holdings LLC) MR R! "#Favora$le% Residential !endor Ranking (R&
Asset Manage'ent)( MR R) "#Favora$le for Residential Co'pon

Morningstar Credit Ratings, LLC (Morningstar has assigned )reen River Ca"ital, LLC ()RC its *MOR R# 2+ ran,ing as a residen
servi$er (short sales and assigns its *MOR V2+ ran,ing as a residential vendor (REO asset management. -he .ore$ast
ran,ings. -he assigned ran,ings re.le$t o/r assessment o. )RC+s o"erational in.rastr/$t/re and $lient
res"e$tive d/ties as a residential $om"onent servi$er and REO asset manager. -he %avora&le .ore$
asset manager ran,ings re.le$t a "ervasive a/dit, 0/alit1 $ontrol and $om"lian$e $/lt/re a$ross the enter"rise arising .rom a
regimen, $om"rehensive and $lient2driven "oli$ies and "ro$ed/res, and intern
te$hnolog1 and overall s1stems in.rastr/$t/re "rovides )RC 3ith a highl1 .le4i&le "lat.orm .rom 3hi$h to e..e$tivel1 "/rs/e n
o""ort/nities and la/n$h ne3 "rod/$ts 0/i$,l1 as ind/str1 d
"rovide )RC, &oth as a $om"onent servi$er and vendor, o""ort/nisti$ mar,et gro3th and a diversi.ied &/siness strateg1 as evid
&/siness vent/res s/$h as $ollateral /nder3riting and "ro"ert1 manager oversight and $om"lian$e .or the emerging
se$/riti5ation mar,et. 6n 7an/ar1, 2012, )RC &e$ame a 3holl1 o3ned s/&sidiar1 o. Cla1ton 8oldings, LLC, a d/e diligen$e, $on
anal1ti$s "rovider to the residential and $ommer$ial mortgage ind/stries. Altho/gh )RC 3ill remain a standalone entit1, there are s1nergies that
$an &e leveraged a$ross the t3o $om"anies .rom &oth a "rod/$t and te$hnolog1 stand"oint that sho/ld onl1 serve to strengthen
"osition.

6n "arti$/lar, Morningstar+s assessment and assigned ran,ings are &ased on these .a$tors!

Com"onent #ervi$er and REO Asset Management Vendor!

E..e$tive -raining 9rograms 2 O/r "ositive o"inion o. )RC is &ased on an e..e$tive training regimen .or ne3 and $/rrent em"lo1ees that
&ene.its .rom a &lend o. internal and e4ternal training sol/tions. E4tensive
All Rights Reserved.
Operational Risk Assessment
Green River Capital, LLC
Residential Vendor (REO Asset Management
Residential Com"onent #ervi$er (#hort #ales, Loss Mitigation and #%R #ervi$es
Residential Vendor! MOR RV2
Residential Com"onent #ervi$er! MOR R#2
%avora&le2 :oth Ran,ings
Ri$hard '. (o$h, ri$hard.,o$h;morningstar.$om, <=<2><02=>1?

Asset Manage'ent)( MR R) "#Favora$le for Residential Co'ponent )ervicer Ranking ()*ort )ales)+
Morningstar Credit Ratings, LLC (Morningstar has assigned )reen River Ca"ital, LLC ()RC its *MOR R# 2+ ran,ing as a residen
servi$er (short sales and assigns its *MOR V2+ ran,ing as a residential vendor (REO asset management. -he .ore$ast
ran,ings. -he assigned ran,ings re.le$t o/r assessment o. )RC+s o"erational in.rastr/$t/re and $lient2driven "er.orman$e res/lts in its
res"e$tive d/ties as a residential $om"onent servi$er and REO asset manager. -he %avora&le .ore$ast .or the $om"onent servi$er and REO
asset manager ran,ings re.le$t a "ervasive a/dit, 0/alit1 $ontrol and $om"lian$e $/lt/re a$ross the enter"rise arising .rom a
driven "oli$ies and "ro$ed/res, and internal "er.orman$e monitoring and re"orting. )RC+s "ro"rietar1
te$hnolog1 and overall s1stems in.rastr/$t/re "rovides )RC 3ith a highl1 .le4i&le "lat.orm .rom 3hi$h to e..e$tivel1 "/rs/e n
o""ort/nities and la/n$h ne3 "rod/$ts 0/i$,l1 as ind/str1 develo"ments o$$/r. )RC+s .le4i&le &/siness model and "ro"rietar1 te$hnolog1
"rovide )RC, &oth as a $om"onent servi$er and vendor, o""ort/nisti$ mar,et gro3th and a diversi.ied &/siness strateg1 as evid
der3riting and "ro"ert1 manager oversight and $om"lian$e .or the emerging
se$/riti5ation mar,et. 6n 7an/ar1, 2012, )RC &e$ame a 3holl1 o3ned s/&sidiar1 o. Cla1ton 8oldings, LLC, a d/e diligen$e, $on
the residential and $ommer$ial mortgage ind/stries. Altho/gh )RC 3ill remain a standalone entit1, there are s1nergies that
$an &e leveraged a$ross the t3o $om"anies .rom &oth a "rod/$t and te$hnolog1 stand"oint that sho/ld onl1 serve to strengthen
6n "arti$/lar, Morningstar+s assessment and assigned ran,ings are &ased on these .a$tors!
Com"onent #ervi$er and REO Asset Management Vendor!
O/r "ositive o"inion o. )RC is &ased on an e..e$tive training regimen .or ne3 and $/rrent em"lo1ees that
&ene.its .rom a &lend o. internal and e4ternal training sol/tions. E4tensive $om"lian$e training is re0/ired

Com"onent #ervi$er (#hort #ales, Loss Mitigation and #%R #ervi$es

=>1?
ent )ervicer Ranking ()*ort )ales)+
Morningstar Credit Ratings, LLC (Morningstar has assigned )reen River Ca"ital, LLC ()RC its *MOR R# 2+ ran,ing as a residential $om"onent
servi$er (short sales and assigns its *MOR V2+ ran,ing as a residential vendor (REO asset management. -he .ore$ast is %avora&le .or &oth
driven "er.orman$e res/lts in its
ast .or the $om"onent servi$er and REO
asset manager ran,ings re.le$t a "ervasive a/dit, 0/alit1 $ontrol and $om"lian$e $/lt/re a$ross the enter"rise arising .rom a solid training
al "er.orman$e monitoring and re"orting. )RC+s "ro"rietar1
te$hnolog1 and overall s1stems in.rastr/$t/re "rovides )RC 3ith a highl1 .le4i&le "lat.orm .rom 3hi$h to e..e$tivel1 "/rs/e ne3 &/siness
evelo"ments o$$/r. )RC+s .le4i&le &/siness model and "ro"rietar1 te$hnolog1
"rovide )RC, &oth as a $om"onent servi$er and vendor, o""ort/nisti$ mar,et gro3th and a diversi.ied &/siness strateg1 as evident in its ne3
der3riting and "ro"ert1 manager oversight and $om"lian$e .or the emerging single .amil1 rental
se$/riti5ation mar,et. 6n 7an/ar1, 2012, )RC &e$ame a 3holl1 o3ned s/&sidiar1 o. Cla1ton 8oldings, LLC, a d/e diligen$e, $ons/lting and
the residential and $ommer$ial mortgage ind/stries. Altho/gh )RC 3ill remain a standalone entit1, there are s1nergies that
$an &e leveraged a$ross the t3o $om"anies .rom &oth a "rod/$t and te$hnolog1 stand"oint that sho/ld onl1 serve to strengthen )RC+s mar,et
O/r "ositive o"inion o. )RC is &ased on an e..e$tive training regimen .or ne3 and $/rrent em"lo1ees that
is re0/ired in$l/ding the %air @e&t

Operational Risk Assessment: Green River Capital LLC

9 a g e A 2
Colle$tion 9ra$ti$es A$t (%@C9A , as 3ell as ann/al testing and $erti.i$ation. As a vendor to the .inan$ial servi$es ind/str1, the
$om"an1 in$or"orates e4ternal advisor1 reso/r$es and internal so/r$es to deliver $om"rehensive advi$e and training on emergin
Cons/mer %inan$ial 9rote$tion :/rea/ (C%9: g/idelines. -he $om"an1 is $/rrentl1 rolling o/t individ/al em"lo1ee learning "lans
$onsisting o. re0/ired and o"tional training $o/rses and a "rogram $onsisting o. minim/m training $redits 3ill &e introd/$ed
enter"rise in 201=. 'e &elieve that )RC has the re0/isite training in.rastr/$t/re, sta.. and reso/r$es $ommens/rate 3ith the si
its organi5ation.
Com"rehensive 9oli$ies and 9ro$ed/res
$lient2driven "ro$esses that ma4imi5e $om"lian$e and "er.orman$e 3ith the re0/irements inherent in $lient mandated servi$e level
agreements. 'ee,l1 &est "ra$ti$e
the &/siness "lat.orm. Morningstar &elieves that )RC sho/l
a shared drive to a $om"an1 intranet site.
Ro&/st -e$hnolog1 Environment B Morningstar &elieves that )RC has an
that s/""orts )RC+s "rod/$ts and servi$es and that is ./ll1 s$ala&le $ommens/rate 3ith &/siness goals. )RC+
"rovides the $om"an1 3ith the ne$essar1 .le4i&ilit1 to develo" ne3 &/siness strategies and e..e$tivel1 e4e$/te on those strat
Additionall1, )RC+s te$hnolog1 in.rastr/$t/re "rovides the ne$essar1 "er.orman$e management tools
delivering "er.orman$e to $lients as o/tlined in servi$e level agreements. )RC has a $om"rehensive regimen in "la$e .or deve
and "rioriti5ing te$hnolog1 "roCe$ts in$l/ding an ann/al "roCe$t road ma" and data&ase, "roCe$t s
/tili5ing s/&Ce$t matter e4"erts .rom &/siness areas, a te$hni$al 3riter to /"date man/als and a te$hni$al trainer to deliver
training. #1stem enhan$ements are iss/ed in monthl1 releases.
@isaster Re$over1 and :/siness Contin/it1
in "la$e. )RC has migrated over to Cla1ton+s net3or, and
in.rastr/$t/re and te$hnolog1 and ./rther strengthen )RC+s relia&ilit1 as a vendor.
in$l/ding the im"lementation o. a geogra"hi$al red/ndan$1 strateg1 3herein )RC+s #alt La,e Cit1 lo$ation and Cla1ton+s #helto
lo$ation &e$ome red/ndant data o"erations "roviding an enhan$ed testing environment and im"roved &/siness res/m"tion time.
Ris, Management 2 O/r vie3 is that )RC has im"lemented an e..e$tive $ontrol environment thro/gho/t the organi5ation &1 instit/ting
so/nd internal $ontrols. -hese $ontrols in$l/de, &/t are not limited to, e..e$tive training "rograms, $om"rehensive "ro$ed/res,
$ontin/o/s "er.orman$e monitoring and revie3, internal ris, assessment methodologies and $ontrol monitoring.
##AEDo.1<, Re"orting on Controls at a #ervi$e Organi5ation,
revie3 o. the 2012 e4am re"ort revealed no
#olid 9er.orman$e Re$ord B )RC is led &1 a highl1 ten/r
ind/str1 e4"erien$e and has a$$e"ta&le organi5ational t/rnover rates. :ased on o/r assessment, )RC has a s/$$ess./l re$ord o
asset management "ra$ti$es .or a 3ide variet1 o. $li
o""ort/nities and delin0/ent a$$o/nt $olle$tion 3or,, in$l/ding on
"er.orman$e monitoring and re"orting in.rastr/$t/re to
s$ore$ards are /sed to grade and eval/ate "er.orman$e on n/mero/s &en$hmar,s to
level agreements are s/&stantiall1 met or e4$eeded. A monthl1 "er.orman$e s/mmar1 is "resented to management .or revie3. )RC
"rovides REO management and val/ation servi$es and, thro/gh its
management servi$es to a 3ide s$o"e o. .inan$ial instit/tions.

Forecast

%avora&le

Morningstar &elieves that )RC is ./ll1 $a"a&le o. serving as an e..e$tive residential $om"onent servi$er and as a residential
variet1 o. .inan$ial instit/tion $lients. -he %avora&le .ore$ast .or &oth ran,ings is &ased on o/r
sta&ilit1E "rovide high 0/alit1 servi$e and "er.orman$e to its $lients, and re$ogni5e additional "er.orman$e e..i$ien$ies and te$hn
enhan$ements as it $ontin/es to integrate &est "ra$ti$es and leverage s1nergies 3ith its+ "arent, Cla1ton 8oldings. Additiona
te$hnolog1 environment sho/ld "rovide the $ontin/ing agilit1 to la/n$h ne3 "rod/$ts, s/$h as REO
management net3or, $erti.i$ation and s/rveillan$e as short sale and REO asset management vol/me "otentiall1 re$edes in the $o

Capital LLC| October 2013 | ratingagency.morningstar.com | 00 2!!
ti$es A$t (%@C9A , as 3ell as ann/al testing and $erti.i$ation. As a vendor to the .inan$ial servi$es ind/str1, the
$om"an1 in$or"orates e4ternal advisor1 reso/r$es and internal so/r$es to deliver $om"rehensive advi$e and training on emergin
nan$ial 9rote$tion :/rea/ (C%9: g/idelines. -he $om"an1 is $/rrentl1 rolling o/t individ/al em"lo1ee learning "lans
$onsisting o. re0/ired and o"tional training $o/rses and a "rogram $onsisting o. minim/m training $redits 3ill &e introd/$ed
er"rise in 201=. 'e &elieve that )RC has the re0/isite training in.rastr/$t/re, sta.. and reso/r$es $ommens/rate 3ith the si
Com"rehensive 9oli$ies and 9ro$ed/res B 6t is o/r vie3 that )RC has $om"rehensive "oli$ies and "ro$ed/res that in$or"orate s"e$i.i$
driven "ro$esses that ma4imi5e $om"lian$e and "er.orman$e 3ith the re0/irements inherent in $lient mandated servi$e level
agreements. 'ee,l1 &est "ra$ti$es meetings and monthl1 "oli$1 and "ro$ed/re revie3s serve to ens/re $onsistent "ra$ti$es a$ross
Morningstar &elieves that )RC sho/ld $onsider, at some ./t/re "oint, migrating
n1 intranet site.
Morningstar &elieves that )RC has an e..e$tive te$hnolog1 ar$hite$t/re and s1stems in.rastr/$t/re
that s/""orts )RC+s "rod/$ts and servi$es and that is ./ll1 s$ala&le $ommens/rate 3ith &/siness goals. )RC+
"rovides the $om"an1 3ith the ne$essar1 .le4i&ilit1 to develo" ne3 &/siness strategies and e..e$tivel1 e4e$/te on those strat
Additionall1, )RC+s te$hnolog1 in.rastr/$t/re "rovides the ne$essar1 "er.orman$e management tools
delivering "er.orman$e to $lients as o/tlined in servi$e level agreements. )RC has a $om"rehensive regimen in "la$e .or deve
and "rioriti5ing te$hnolog1 "roCe$ts in$l/ding an ann/al "roCe$t road ma" and data&ase, "roCe$t s
/tili5ing s/&Ce$t matter e4"erts .rom &/siness areas, a te$hni$al 3riter to /"date man/als and a te$hni$al trainer to deliver
training. #1stem enhan$ements are iss/ed in monthl1 releases.
siness Contin/it1 2 6t is o/r vie3 that )RC has an a$$e"ta&le disaster re$over1 and &/siness $ontin/it1 "lan
)RC has migrated over to Cla1ton+s net3or, and signi.i$ant im"rovements are /nder3a1 that 3ill leverage Cla1ton+s
e$hnolog1 and ./rther strengthen )RC+s relia&ilit1 as a vendor. Other Coint in.rastr/$t/re "roCe$ts are /nder3a1,
in$l/ding the im"lementation o. a geogra"hi$al red/ndan$1 strateg1 3herein )RC+s #alt La,e Cit1 lo$ation and Cla1ton+s #helto
&e$ome red/ndant data o"erations "roviding an enhan$ed testing environment and im"roved &/siness res/m"tion time.
O/r vie3 is that )RC has im"lemented an e..e$tive $ontrol environment thro/gho/t the organi5ation &1 instit/ting
ternal $ontrols. -hese $ontrols in$l/de, &/t are not limited to, e..e$tive training "rograms, $om"rehensive "ro$ed/res,
$ontin/o/s "er.orman$e monitoring and revie3, internal ris, assessment methodologies and $ontrol monitoring.
Re"orting on Controls at a #ervi$e Organi5ation, (#OC 1 e4am is $ond/$ted &1 an e4ternal .irm on an ann/al &asis.
revie3 o. the 2012 e4am re"ort revealed no material adverse .indings.
RC is led &1 a highl1 ten/red management team 3ith an average o. a""ro4imatel1 20 1ears o. relevant
ind/str1 e4"erien$e and has a$$e"ta&le organi5ational t/rnover rates. :ased on o/r assessment, )RC has a s/$$ess./l re$ord o
asset management "ra$ti$es .or a 3ide variet1 o. $lients. -he $om"an1 also has so/nd "ra$ti$es in "la$e to assist $lients 3ith short sale
o""ort/nities and delin0/ent a$$o/nt $olle$tion 3or,, in$l/ding on2site &orro3er intervie3s and re.errals. )RC has develo"ed a $ontin/o/s
ting in.rastr/$t/re to "rovide $om"lian$e 3ith $lient e4"e$tations. E4tensive data is $olle$ted dail1 and
s$ore$ards are /sed to grade and eval/ate "er.orman$e on n/mero/s &en$hmar,s to monitor that
ents are s/&stantiall1 met or e4$eeded. A monthl1 "er.orman$e s/mmar1 is "resented to management .or revie3. )RC
management and val/ation servi$es and, thro/gh its )R %inan$ial ()R% s/&sidiar1, "rovides loss mitigation and short sale
gement servi$es to a 3ide s$o"e o. .inan$ial instit/tions.
Morningstar &elieves that )RC is ./ll1 $a"a&le o. serving as an e..e$tive residential $om"onent servi$er and as a residential
instit/tion $lients. -he %avora&le .ore$ast .or &oth ran,ings is &ased on o/r &elie. that )RC 3ill maintain organi5ational
"rovide high 0/alit1 servi$e and "er.orman$e to its $lients, and re$ogni5e additional "er.orman$e e..i$ien$ies and te$hn
enhan$ements as it $ontin/es to integrate &est "ra$ti$es and leverage s1nergies 3ith its+ "arent, Cla1ton 8oldings. Additiona
te$hnolog1 environment sho/ld "rovide the $ontin/ing agilit1 to la/n$h ne3 "rod/$ts, s/$h as REO2to2renta
management net3or, $erti.i$ation and s/rveillan$e as short sale and REO asset management vol/me "otentiall1 re$edes in the $o
.com | 00 2!!"1##$
ti$es A$t (%@C9A , as 3ell as ann/al testing and $erti.i$ation. As a vendor to the .inan$ial servi$es ind/str1, the
$om"an1 in$or"orates e4ternal advisor1 reso/r$es and internal so/r$es to deliver $om"rehensive advi$e and training on emerging
nan$ial 9rote$tion :/rea/ (C%9: g/idelines. -he $om"an1 is $/rrentl1 rolling o/t individ/al em"lo1ee learning "lans
$onsisting o. re0/ired and o"tional training $o/rses and a "rogram $onsisting o. minim/m training $redits 3ill &e introd/$ed a$ross the
er"rise in 201=. 'e &elieve that )RC has the re0/isite training in.rastr/$t/re, sta.. and reso/r$es $ommens/rate 3ith the si5e o.
6t is o/r vie3 that )RC has $om"rehensive "oli$ies and "ro$ed/res that in$or"orate s"e$i.i$
driven "ro$esses that ma4imi5e $om"lian$e and "er.orman$e 3ith the re0/irements inherent in $lient mandated servi$e level
s meetings and monthl1 "oli$1 and "ro$ed/re revie3s serve to ens/re $onsistent "ra$ti$es a$ross
d $onsider, at some ./t/re "oint, migrating all "oli$ies and "ro$ed/res .rom
e..e$tive te$hnolog1 ar$hite$t/re and s1stems in.rastr/$t/re
that s/""orts )RC+s "rod/$ts and servi$es and that is ./ll1 s$ala&le $ommens/rate 3ith &/siness goals. )RC+s "ro"rietar1 te$hnolog1
"rovides the $om"an1 3ith the ne$essar1 .le4i&ilit1 to develo" ne3 &/siness strategies and e..e$tivel1 e4e$/te on those strategies.
Additionall1, )RC+s te$hnolog1 in.rastr/$t/re "rovides the ne$essar1 "er.orman$e management tools $riti$al in monitoring and
delivering "er.orman$e to $lients as o/tlined in servi$e level agreements. )RC has a $om"rehensive regimen in "la$e .or develo"ing
and "rioriti5ing te$hnolog1 "roCe$ts in$l/ding an ann/al "roCe$t road ma" and data&ase, "roCe$t s$ore$ards, /ser a$$e"tan$e testing
/tili5ing s/&Ce$t matter e4"erts .rom &/siness areas, a te$hni$al 3riter to /"date man/als and a te$hni$al trainer to deliver s1stems
6t is o/r vie3 that )RC has an a$$e"ta&le disaster re$over1 and &/siness $ontin/it1 "lan
signi.i$ant im"rovements are /nder3a1 that 3ill leverage Cla1ton+s
ther Coint in.rastr/$t/re "roCe$ts are /nder3a1,
in$l/ding the im"lementation o. a geogra"hi$al red/ndan$1 strateg1 3herein )RC+s #alt La,e Cit1 lo$ation and Cla1ton+s #helton, C-
&e$ome red/ndant data o"erations "roviding an enhan$ed testing environment and im"roved &/siness res/m"tion time.
O/r vie3 is that )RC has im"lemented an e..e$tive $ontrol environment thro/gho/t the organi5ation &1 instit/ting
ternal $ontrols. -hese $ontrols in$l/de, &/t are not limited to, e..e$tive training "rograms, $om"rehensive "ro$ed/res,
$ontin/o/s "er.orman$e monitoring and revie3, internal ris, assessment methodologies and $ontrol monitoring. Additionall1, an
(#OC 1 e4am is $ond/$ted &1 an e4ternal .irm on an ann/al &asis. A
ed management team 3ith an average o. a""ro4imatel1 20 1ears o. relevant
ind/str1 e4"erien$e and has a$$e"ta&le organi5ational t/rnover rates. :ased on o/r assessment, )RC has a s/$$ess./l re$ord o. REO
ents. -he $om"an1 also has so/nd "ra$ti$es in "la$e to assist $lients 3ith short sale
site &orro3er intervie3s and re.errals. )RC has develo"ed a $ontin/o/s
$om"lian$e 3ith $lient e4"e$tations. E4tensive data is $olle$ted dail1 and
that delivera&les /nder $lient2&ased servi$e
ents are s/&stantiall1 met or e4$eeded. A monthl1 "er.orman$e s/mmar1 is "resented to management .or revie3. )RC
%inan$ial ()R% s/&sidiar1, "rovides loss mitigation and short sale
Morningstar &elieves that )RC is ./ll1 $a"a&le o. serving as an e..e$tive residential $om"onent servi$er and as a residential vendor .or a 3ide
&elie. that )RC 3ill maintain organi5ational
"rovide high 0/alit1 servi$e and "er.orman$e to its $lients, and re$ogni5e additional "er.orman$e e..i$ien$ies and te$hnolog1
enhan$ements as it $ontin/es to integrate &est "ra$ti$es and leverage s1nergies 3ith its+ "arent, Cla1ton 8oldings. Additionall1, )RC+s .le4i&le
rental $ollateral /nder3riting and "ro"ert1
management net3or, $erti.i$ation and s/rveillan$e as short sale and REO asset management vol/me "otentiall1 re$edes in the $oming 1ear.


9 a g e A 3

,a$le f Contents (Hyperlinks)

Co'pany -rofile and ./siness vervie0

perational 1nfrastr/ct/re++++++++++++++++++++++++++++++++++++++++++++++++++++++++++++++++++++++++++++++++++++
Organi5ational #tr/$t/re
Management and #ta.. E4"erien$e
Management and #ta.. -/rnover
Assessment!
-raining
Assessment
A/dit, Com"lian$e, and 9ro$ed/ral Com"leteness
Assessment
Legal Lia&ilit1 and Cor"orate 6ns/ran$e
Assessment
#1stems Ar$hite$t/re, 9roCe$t Management, Det3or, #e$/rit1 and @isaster Re$over1
Assessment

-erfor'ance Manage'ent: !endor -erfor'ance Metrics
Loan :oarding and 9re2Listing
Assessment
-itle, 8OA and Real Estate -a4 Administration
Assessment
REO Asset Management
Assessment

-erfor'ance Manage'ent: Co'ponent )ervicer
Loss Mitigation #ervi$es: Asset :oarding and Agent Assignment
Assessment
Loss Mitigation #ervi$es! 8omeo3ner Co/nseling
Assessment
Loss Mitigation #ervi$es! #hort #ale 9ro$essing and %a$ilitation
Assessment
#ingle %amil1 Rental 9ro"ert1 Val/ation and @/e @iligen$e
Assessment
A$$o/nting and 6nvoi$e Management
Assessment

Ranking 2efinitions3333333333333333333333333333

2isclos/res3333333333333333333333333333333+

1nde4 of C*arts (*yperlinks)
%ig/re 1! Cor"orate -imeline
%ig/re 2 (O"erational #tr/$t/re
%ig/re 3! REO Asset -imeline
%ig/re =! Closing @e"artment 9ro$ess
%ig/re >! #hort #ale 9ro$essing -imeline
%ig/re <! Com"onent #ervi$es @ivision Organi5

-age
Co'pany -rofile and ./siness vervie0333333333333++333333335
+++++++++++++++++++++++++++++++++++++++++++++++++++++++++++++++++++++++++++++++++++++++++++++++++++++++++++6

A/dit, Com"lian$e, and 9ro$ed/ral Com"leteness
#1stems Ar$hite$t/re, 9roCe$t Management, Det3or, #e$/rit1 and @isaster Re$over1
-erfor'ance Manage'ent: !endor -erfor'ance Metrics333333++333333337
-itle, 8OA and Real Estate -a4 Administration
Co'ponent )ervicer -erfor'ance Metrics+++++++++++++++++++++++++++++++++++86
Asset :oarding and Agent Assignment
Loss Mitigation #ervi$es! 8omeo3ner Co/nseling
Loss Mitigation #ervi$es! #hort #ale 9ro$essing and %a$ilitation
#ingle %amil1 Rental 9ro"ert1 Val/ation and @/e @iligen$e
2efinitions3333333333333333333333333333++++89
2isclos/res3333333333333333333333333333333++++87
%ig/re <! Com"onent #ervi$es @ivision Organi5ational Chart
.com | 00 2!!"1##$
-age

7
6
9
7


9 a g e A =

%ig/re 1! Cor"orate -imeline

)reen River Ca"ital LLC is a 3holl1 o3ned s/&sidiar1 o. Cla
.o/nded in 2003 to meet the /ni0/e re0/irements o. real estate o3ned (REO management in the residential ho/sing ind/str1.
.o/nding in 2003, )RC has develo"ed a $lient &ase o.
%inan$ial, LLC (F)R%G 3as la/n$hed and serves as a sister $om"an1 to )RC, o..ering a
$o/nseling and short sale and deed2in2lie/ o. .ore$los/re negot
a de&t $olle$tor. 6n 200?, )RC $reated a division
o/tside o. val/ations, a $om"onent servi$es de"artment 3as develo"ed that "rovides traditional val/ation 3or, in addition to real estate d/e
diligen$e 3or,, in$l/ding an REO and D9L .ile revie3 de"artment. 6n
s/&sidiar1 o. Cla1ton. Cla1ton is a leading "rovider o. d/e diligen$e, s/rveillan$e and de.a/lt administration servi$es to the resident
$ommer$ial mortgage ind/stries. Cla1ton is head0/artered in #helton, C-, 3ith o..i$es in
=<0 em"lo1ees and >00 $ontra$tors. )RC $/rrentl1 has a""ro4imatel1
in$l/de government2s"onsored enter"rises ()#E+s, &an, and non
)R% "rovides loss mitigation servi$es on a "ort.olio o. a""ro4imatel1
states and in the @istri$t o. Col/m&ia. )R% has
em"lo1ees irres"e$tive o. )RC em"lo1ees that are leveraged 3ithin the organi5ation.
@enver, CO.

2003
Green River
Capital (GRC)
Founded
2008
GR Financial
Created
a 3holl1 o3ned s/&sidiar1 o. Cla1ton 8oldings LLC (FCla1tonG. 8ead0/artered in 'est Valle1 Cit1, Htah, )RC 3as
.o/nded in 2003 to meet the /ni0/e re0/irements o. real estate o3ned (REO management in the residential ho/sing ind/str1.
.o/nding in 2003, )RC has develo"ed a $lient &ase o. 1I REO $lients and manages over J>,000 REO assets
3as la/n$hed and serves as a sister $om"an1 to )RC, o..ering a loss mitigation "rogram that "rovides homeo3ner
lie/ o. .ore$los/re negotiation and li0/idation. )R% is li$ensed in >0 #tates and the @istri$t o. Col/m&ia as
division that s"e$iali5es in "ro"ert1 val/ations. 6n order to meet ind/str1 demands .or other servi$es
de"artment 3as develo"ed that "rovides traditional val/ation 3or, in addition to real estate d/e
.ile revie3 de"artment. 6n 7an/ar1 2012, )RC 3as a$0/ired &1 Cla1ton ma,ing )RC a 3holl1
o. Cla1ton. Cla1ton is a leading "rovider o. d/e diligen$e, s/rveillan$e and de.a/lt administration servi$es to the resident
$ommer$ial mortgage ind/stries. Cla1ton is head0/artered in #helton, C-, 3ith o..i$es in )eorgia, Colorado
)RC $/rrentl1 has a""ro4imatel1 1I.>00 REO assets /nder management $onsisting o.
s"onsored enter"rises ()#E+s, &an, and non2&an, loan servi$ers, "ension ./nds and $redit /nions.
on a "ort.olio o. a""ro4imatel1 >,000 assets /nder management and is a li$ensed de&t $olle$tor in
states and in the @istri$t o. Col/m&ia. )R% has 10 $lients re"resenting &an, and non2&an, servi$ers and "ension ./nds. -here are 1
em"lo1ees irres"e$tive o. )RC em"lo1ees that are leveraged 3ithin the organi5ation. )RC $/rrentl1 em"lo1s
2008
GR Financial
Created
2009
GRC valuation
Division Created
2012
GRC Acquired b
Claton !oldin"s#
.com | 00 2!!"1##$

red in 'est Valle1 Cit1, Htah, )RC 3as
.o/nded in 2003 to meet the /ni0/e re0/irements o. real estate o3ned (REO management in the residential ho/sing ind/str1. #in$e its+
over J>,000 REO assets d/ring that times"an. 6n 200I, )R
"rogram that "rovides homeo3ner
)R% is li$ensed in >0 #tates and the @istri$t o. Col/m&ia as
that s"e$iali5es in "ro"ert1 val/ations. 6n order to meet ind/str1 demands .or other servi$es
de"artment 3as develo"ed that "rovides traditional val/ation 3or, in addition to real estate d/e
2012, )RC 3as a$0/ired &1 Cla1ton ma,ing )RC a 3holl12o3ned
o. Cla1ton. Cla1ton is a leading "rovider o. d/e diligen$e, s/rveillan$e and de.a/lt administration servi$es to the residential and
Colorado, and %lorida and has a""ro4imatel1
REO assets /nder management $onsisting o. 1I $lients that
./nds and $redit /nions.
>,000 assets /nder management and is a li$ensed de&t $olle$tor in all >0
n, servi$ers and "ension ./nds. -here are 1> dedi$ated
)RC $/rrentl1 em"lo1s 1<? sta.. in #alt La,e Cit1, H- and
2012
GRC Acquired b
Claton !oldin"s#
$$C


9 a g e A >

%ig/re 2 (O"erational #tr/$t/re

perational 1nfrastr/ct/re and Risk Manage'ent
(MR R)"#MR R!")

rgani:ational )tr/ct/re
)RC has 12< "eo"le allo$ated to REO asset management and $om"onent

)RC $ond/$ts its REO asset management and $om"onent

REO Asset Management 2 -he REO management team s"e$iali5es in val/ing, servi$ing, managing and mar,eting its $lients+ REO
assets. )RC "rovides $lients end to end REO #ervi$es in$l/ding
"lans .or ea$h asset. )RC manages the entire "ro$ess to ea$h individ/al asset+s /ni0/e $hara$teristi$s, mar,eting strateg1,
re$on$iled mar,et val/es and "redetermined e4"enses.
Loss mitigation servi$es in$l/de homeo3ner $o/nseling, also ,no3n as Fenhan$ed &orro3er o/trea$hG that in$l/des "ersonal
intervie3s at a &orro3er+s residen$e as 3ell as $alling $am"aigns and letter $am"aigns. Loss mitigation servi$es also in$l/d
sale and deed2in2lie/ o. .ore$los/re negotiation and li0/idation. )R% has develo"ed a 9re.erred :ro,er Det3or, (9:D that $onsists o.
ACCOUNTING
ACCOUNTS PAYABLE
ACCOUNTS RECEIVABLE
BILLING
COORDINATORS
INVESTOR
REPORTING
GENERAL LEDGER
MANAGEMENT
HUMAN
RESOURCES
and Risk Manage'ent
REO asset management and $om"onent servi$es.
REO asset management and $om"onent servi$es a$tivities mainl1 thro/gh t3o de"artments!
REO management team s"e$iali5es in val/ing, servi$ing, managing and mar,eting its $lients+ REO
end to end REO #ervi$es in$l/ding detailed re"air in.ormation, $om"ara&le val/e anal1sis, and mar,eting
re$on$iled mar,et val/es and "redetermined e4"enses.
in$l/de homeo3ner $o/nseling, also ,no3n as Fenhan$ed &orro3er o/trea$hG that in$l/des "ersonal
intervie3s at a &orro3er+s residen$e as 3ell as $alling $am"aigns and letter $am"aigns. Loss mitigation servi$es also in$l/d
ore$los/re negotiation and li0/idation. )R% has develo"ed a 9re.erred :ro,er Det3or, (9:D that $onsists o.
Green River Capital
(GRC)
HUMAN
RESOURCES
INORMATION
TECHNOLOGY
GRC!GR
VALUATION SERVICES
REO ASSET
MANEGEMENT AND
MAR"ETING
GR INANCIAL
SHORT SALE AND LOSS
MITIGATION SERVICES
COMPONENT SERVICING
DIVISION
.com | 00 2!!"1##$

a$tivities mainl1 thro/gh t3o de"artments!
REO management team s"e$iali5es in val/ing, servi$ing, managing and mar,eting its $lients+ REO
in.ormation, $om"ara&le val/e anal1sis, and mar,eting
in$l/de homeo3ner $o/nseling, also ,no3n as Fenhan$ed &orro3er o/trea$hG that in$l/des "ersonal
intervie3s at a &orro3er+s residen$e as 3ell as $alling $am"aigns and letter $am"aigns. Loss mitigation servi$es also in$l/de short
ore$los/re negotiation and li0/idation. )R% has develo"ed a 9re.erred :ro,er Det3or, (9:D that $onsists o.
VALUATION SERVICES
AGENT RELATIONS
REO ASSET
MANEGEMENT AND
MAR"ETING
GR INANCIAL
SHORT SALE AND LOSS
MITIGATION SERVICES
COMPONENT SERVICING
DIVISION
CLIENT RELATIONS
BUSINESS
DEVELOPMENT


9 a g e A <
a nation3ide net3or, o. real estate "ro.essionals 3ith distressed "ro"ert1 3or,o/t e4"erien$e. 9:D "ro.essionals m/st "ass )
de&t $olle$tor and $om"lian$e training and testing "rograms. 9:D "ro.essionals are res"onsi&le .or 3or,ing 3ith delin0/ent
&orro3ers, ed/$ating and g/iding them thro/gh loss mitigation alternatives.
Com"onent #ervi$ing B -his area is &i./r$ated /nder )R% and has
traditional val/ation 3or, in addition to real estate d/e diligen$e 3or,, in$l/ding an REO and D9L .ile revie3 de"artment, an
management oversight and s/rveillan$e

Manage'ent and )taff &4perience
'ithin the overall organi5ation re"resenting &oth )RC and )R%, the senior e4e$/tive team has
relevant ind/str1 e4"erien$e. -he senior management team also averages an im"ressive 1J 1ears o. ind/str1 e4"erien$e. -he m
team in the .inan$e area has an average o. ove

Manage'ent and )taff ,/rnover
-he $om"an1 had no sta.. or management t/rnover d/ring

Assess'ent: 'e &elieve that )RC
organi5ational str/$t/re s/ita&l1 designed .or its $/rrent &/siness needs and
Morningstar &elieves that )RC has the ov
servi$es and $om"onent servi$ing $a"a&ilities. )RC+s organi5ational str/$t/re and a&ilit1 to leverage Cla1ton+s in.rastr/$t/re "rovide
)RC 3ith the ne$essar1 .le4i&ilit1 to la/n$h ne3 "rod/$ts and servi$es

,raining
)RC maintains a dedi$ated training .a$ilit1 on
$olle$tion and related a$tivities. %air @e&t Colle$tion 9ra$ti$es
Lea$h :lile1 A$t ()L:A training is also re0/ired
ho/rs o. h/man reso/r$e training 3hi$h $onsists o. a $or"orate overvie3.
em"hasi5ed sin$e )RC+s $ore &/sinesses en$o/rage an inter$hangea&le s,ill set among its em"lo1ees.
im"lementation teams are assigned .or ea$h $lient.
$ore Co& ./n$tions, and s/""ort "ositions 3hi$h /s/all1 $onsist o. $leri$al or administrative ./n$tions. #ome Co& re0/ir
$onsidered F$lient2drivenG and there.ore in$or"orate
$oin$ide 3ith develo"ments and reg/lations iss/ed &1 the Cons/mer %inan$ial 9rote$tion :/rea/ (C%9: to
/"2to2date and in $om"lian$e 3ith a""li$a&le reg/lations
in a .ormal str/$t/red environment and 3ill in$l/de re0/ired learning mod/les that 3ill "rovide the .o/ndation .or individ/al em"lo1ee learning
"lans $onsisting o. re0/ired and o"tional training $o
3ide in 201= to so that all em"lo1ees have the o""ort/nit1 to o&tain
#/""lemental training is "rovided via e4ternal vendors, in$l/ding la3 .irms, title $om"anies, and real estate agent.
least 3ee,l1 to dis$/ss &est "ra$ti$es and to dis$/ss and im"lement &/siness "ro$ess $hanges. @ail1 Fstand/"G meetings are a
the teams to dis$/ss hot to"i$s, training iss/es or ind/str1 ne3s.
&et3een the 8/man Reso/r$es, :/siness Hnits, and E4e$/tive Management

Assess'ent: 'e $onsider )RC to have an
o. its &/siness "rod/$ts. 'e &elieve
&e enhan$ed thro/gh vario/s initiatives s/$h as re0/ired learning "lans and minim/m training $redits over the

A/dit, Co'pliance, and -roced/ral Co'pleteness
As a vendor, )RC and )R% /ndergo an ann/al
7an/ar1 1, 2012 thro/gh #e"tem&er 30, 2012 did not indi$ate an1 s1stemi$ $ontrol iss/es.
a$$o/nting .irm. Enter"rise23ide 0/alit1 $ontrol is em&edded thro/gho/t vario/s "ro$esses and transa$tions $ond/$ted &1 the $om"an1.
6nternal a$$o/nting $ontrols are in "la$e and are delineated &1 segregation o. d/ties, m/lti"le revie3s and signo..s &1 )RC and Cla
9er.orman$e meas/rement "/rs/ant to servi$e level agreements is a$$om"lished thro/gh vario/s s$ore$ards that tra$,
metri$s 3hi$h are then rolled /" dail1, 3ee,l1 and monthl1 and es$alated thro/gh vario/s management $hannels.
a room "rote$ted &1 $ard ,e1 a$$ess and video monitors. )RC+s "ro"rietar1 te$hnolog1 environm
a nation3ide net3or, o. real estate "ro.essionals 3ith distressed "ro"ert1 3or,o/t e4"erien$e. 9:D "ro.essionals m/st "ass )
d $om"lian$e training and testing "rograms. 9:D "ro.essionals are res"onsi&le .or 3or,ing 3ith delin0/ent
&orro3ers, ed/$ating and g/iding them thro/gh loss mitigation alternatives.
-his area is &i./r$ated /nder )R% and has m/lti"le $om"onents that "rovide title revie3 and $/rative servi$es,
traditional val/ation 3or, in addition to real estate d/e diligen$e 3or,, in$l/ding an REO and D9L .ile revie3 de"artment, an
management oversight and s/rveillan$e.
the overall organi5ation re"resenting &oth )RC and )R%, the senior e4e$/tive team has e4"erien$e 3ith
relevant ind/str1 e4"erien$e. -he senior management team also averages an im"ressive 1J 1ears o. ind/str1 e4"erien$e. -he m
over20 1ears o. relevant ind/str1 e4"erien$e and an average o. = 1ears ten/re 3ith )RC.
-he $om"an1 had no sta.. or management t/rnover d/ring the .irst hal. o. 2013.
)RC $ontin/es to have a seasoned e4e$/tive management and "ro.essional team 3ithin an
organi5ational str/$t/re s/ita&l1 designed .or its $/rrent &/siness needs and $ontin/ed gro3th in vario/s &/siness lines
has the overall "ro.essional e4"ertise and $om"eten$1 to $ontin/e to "rovide REO asset management
$om"onent servi$ing $a"a&ilities. )RC+s organi5ational str/$t/re and a&ilit1 to leverage Cla1ton+s in.rastr/$t/re "rovide
t1 to la/n$h ne3 "rod/$ts and servi$es.
)RC maintains a dedi$ated training .a$ilit1 on2site. -he $om"an1 "rovides .ormali5ed training .or an1 em"lo1ee or agent involved in de&t
. %air @e&t Colle$tion 9ra$ti$es A$t (%@C9A training, testing and ongoing $erti.i$ation is mandator1. )raham
Lea$h :lile1 A$t ()L:A training is also re0/ired. :oth "rograms 3ere develo"ed &1 o/tside legal $o/nsel. All ne3 )RC em"lo1ees re$eive 3
hi$h $onsists o. a $or"orate overvie3. -e$hnolog1 training is "rovided .or all ne3 hires and $rosstraining is
em"hasi5ed sin$e )RC+s $ore &/sinesses en$o/rage an inter$hangea&le s,ill set among its em"lo1ees. Ea$h &/siness /nit has a trainer and
ation teams are assigned .or ea$h $lient. -raining is tailored and strati.ied among several levels
$ore Co& ./n$tions, and s/""ort "ositions 3hi$h /s/all1 $onsist o. $leri$al or administrative ./n$tions. #ome Co& re0/ir
in$or"orate more $/stomi5ed training. -he $om"an1 is develo"ing a s"e$i.i$ training mod/le to
$oin$ide 3ith develo"ments and reg/lations iss/ed &1 the Cons/mer %inan$ial 9rote$tion :/rea/ (C%9: to
3ith a""li$a&le reg/lations. -he $om"an1 is develo"ing an enter"rise23ide learning h/& that 3il
3ill in$l/de re0/ired learning mod/les that 3ill "rovide the .o/ndation .or individ/al em"lo1ee learning
"lans $onsisting o. re0/ired and o"tional training $o/rses. -he $om"an1 "lans to in$or"orate a minim/m training $redits re0/irement enter"rise
have the o""ort/nit1 to o&tain the re0/isite Co& s,ills, ,no3ledge, and $areer "ath o""ort/nities.
via e4ternal vendors, in$l/ding la3 .irms, title $om"anies, and real estate agent.
least 3ee,l1 to dis$/ss &est "ra$ti$es and to dis$/ss and im"lement &/siness "ro$ess $hanges. @ail1 Fstand/"G meetings are a
dis$/ss hot to"i$s, training iss/es or ind/str1 ne3s. )RC maintains an in$entive $om"ensation "lan that is revie3ed
, :/siness Hnits, and E4e$/tive Management .or reasona&leness.
to have an e..e$tive training ./n$tion $ommens/rate 3ith the si5e o. the organi5ation and
'e &elieve that the e..e$tiveness and diversit1 o. the training "rogram and deliver1 methods
&e enhan$ed thro/gh vario/s initiatives s/$h as re0/ired learning "lans and minim/m training $redits over the
A/dit, Co'pliance, and -roced/ral Co'pleteness
As a vendor, )RC and )R% /ndergo an ann/al #ervi$e Organi5ation Control 1 (#OC 1 re"ort . A revie3 o. the #OC 1 re"ort .or the "eriod
m&er 30, 2012 did not indi$ate an1 s1stemi$ $ontrol iss/es. An ann/al .inan$ial a/dit is "er.ormed &1 an e4ternal
3ide 0/alit1 $ontrol is em&edded thro/gho/t vario/s "ro$esses and transa$tions $ond/$ted &1 the $om"an1.
al a$$o/nting $ontrols are in "la$e and are delineated &1 segregation o. d/ties, m/lti"le revie3s and signo..s &1 )RC and Cla
"/rs/ant to servi$e level agreements is a$$om"lished thro/gh vario/s s$ore$ards that tra$,
metri$s 3hi$h are then rolled /" dail1, 3ee,l1 and monthl1 and es$alated thro/gh vario/s management $hannels.
a room "rote$ted &1 $ard ,e1 a$$ess and video monitors. )RC+s "ro"rietar1 te$hnolog1 environment ena&les the $om"an1 to store $lient
.com | 00 2!!"1##$
a nation3ide net3or, o. real estate "ro.essionals 3ith distressed "ro"ert1 3or,o/t e4"erien$e. 9:D "ro.essionals m/st "ass )RC+s
d $om"lian$e training and testing "rograms. 9:D "ro.essionals are res"onsi&le .or 3or,ing 3ith delin0/ent
"rovide title revie3 and $/rative servi$es,
traditional val/ation 3or, in addition to real estate d/e diligen$e 3or,, in$l/ding an REO and D9L .ile revie3 de"artment, and "ro"ert1
e4"erien$e 3ith an average o. 22 1ears o.
relevant ind/str1 e4"erien$e. -he senior management team also averages an im"ressive 1J 1ears o. ind/str1 e4"erien$e. -he management
average o. = 1ears ten/re 3ith )RC.
management and "ro.essional team 3ithin an
ro3th in vario/s &/siness lines. Overall,
erall "ro.essional e4"ertise and $om"eten$1 to $ontin/e to "rovide REO asset management
$om"onent servi$ing $a"a&ilities. )RC+s organi5ational str/$t/re and a&ilit1 to leverage Cla1ton+s in.rastr/$t/re "rovide
.or an1 em"lo1ee or agent involved in de&t
ongoing $erti.i$ation is mandator1. )raham
develo"ed &1 o/tside legal $o/nsel. All ne3 )RC em"lo1ees re$eive 3
-e$hnolog1 training is "rovided .or all ne3 hires and $rosstraining is
Ea$h &/siness /nit has a trainer and
-raining is tailored and strati.ied among several levels o. em"lo1ees &ased /"on designated
$ore Co& ./n$tions, and s/""ort "ositions 3hi$h /s/all1 $onsist o. $leri$al or administrative ./n$tions. #ome Co& re0/irements ma1 &e
-he $om"an1 is develo"ing a s"e$i.i$ training mod/le to
$oin$ide 3ith develo"ments and reg/lations iss/ed &1 the Cons/mer %inan$ial 9rote$tion :/rea/ (C%9: to determine that $ore "ro$esses are
3ide learning h/& that 3ill o..er E2Learning
3ill in$l/de re0/ired learning mod/les that 3ill "rovide the .o/ndation .or individ/al em"lo1ee learning
/rses. -he $om"an1 "lans to in$or"orate a minim/m training $redits re0/irement enter"rise2
the re0/isite Co& s,ills, ,no3ledge, and $areer "ath o""ort/nities.
via e4ternal vendors, in$l/ding la3 .irms, title $om"anies, and real estate agent. :/siness teams meet at
least 3ee,l1 to dis$/ss &est "ra$ti$es and to dis$/ss and im"lement &/siness "ro$ess $hanges. @ail1 Fstand/"G meetings are also held among
m"ensation "lan that is revie3ed $olle$tivel1
the si5e o. the organi5ation and the s$o"e
that the e..e$tiveness and diversit1 o. the training "rogram and deliver1 methods 3ill $ontin/e to
&e enhan$ed thro/gh vario/s initiatives s/$h as re0/ired learning "lans and minim/m training $redits over the ne4t 12 months.
. A revie3 o. the #OC 1 re"ort .or the "eriod
An ann/al .inan$ial a/dit is "er.ormed &1 an e4ternal
3ide 0/alit1 $ontrol is em&edded thro/gho/t vario/s "ro$esses and transa$tions $ond/$ted &1 the $om"an1.
al a$$o/nting $ontrols are in "la$e and are delineated &1 segregation o. d/ties, m/lti"le revie3s and signo..s &1 )RC and Cla1ton.
"/rs/ant to servi$e level agreements is a$$om"lished thro/gh vario/s s$ore$ards that tra$, internal "er.orman$e
metri$s 3hi$h are then rolled /" dail1, 3ee,l1 and monthl1 and es$alated thro/gh vario/s management $hannels. :lan, $he$, sto$, is stored in
ent ena&les the $om"an1 to store $lient


9 a g e A J
s"e$i.i$ "arameters in$l/ding $/stomi5ed "ro$essing and delegated a/thorit1 levels that hel" to ens/re $om"lian$e 3ith $lient
em"lo1ees m/st sign a $or"orate $om"lian$e "oli$1 do$/ment on an ann/al &a
overseeing s1stems and net3or, se$/rit1. Monthl1 re"orts en$om"assing o"erating "er.orman$e metri$s and .inan$ial data are
the &/siness /nits and roll /" to the e4e$/tive tea
)RC maintains do$/mented "oli$ies and "ro$ed/res on its shared net3or, drive that
te$hni$al 3riter is on sta.. to $oordinate, 3rite and distri&/te "oli$1 and "ro$ed/re /"dates enter"rise
$/stomi5ed &ased on s"e$i.i$ $lient re0/irements
&/siness /nit to dis$/ss and im"lement "oli$1 and "ro$ed/re /"dates.

Assess'ent: 6n o/r vie3, )RC has
$ontrols and adheren$e to esta&lished "ro$ed/res
o. vendor &/siness "ro$esses. )RC sho/ld $onsider migrating the storage o. "oli$1 and "ro$ed/re man/als .rom a shared drive to an
intranet site .or in$reased ease o. /se, retrieval and $onsisten$1.

Legal Lia$ility and Corporate 1ns/rance
)RC management dis$losed it is not a "arti$i"ant in an1 "ending material
&/siness ins/ran$e $overage to "rote$t against vario/s lia&ilities and $ontingen$ies.
ins/red as re0/ired "/rs/ant to the "arties agreement.

Assess'ent: Overall, 3e &elieve that
and is not s/&Ce$t to an1 o/tstanding material litigation

)yste's Arc*itect/re, -ro;ect Manage'ent,
)RC /tili5es a variet1 o. "ro"rietar1 and third "art1
s$ala&le and .le4i&le .rom a "ro$essing and &/siness gro3th "ers"e$tive.
monitor and tra$, all as"e$ts o. the Real Estate O3ned asset management li.e $1$l
negotiation and $losing. -he a""li$ation is also /sed .or short sale and deed
a""li$ation that serves as a $omm/ni$ation inter.a$e &et3een )RC
mar,eting "ro$ess in$l/ding evi$tion "ro$essing, val/ation revie3s, "ro"ert1 ins"e$tions, mar,eting "lans, o..er negotiation,
$lient invoi$ing. -he $om"an1+s "ro"rietar1 AgentConne4 a""li$ation manages real estate agent in.ormation in$l/ding li$ensing, ins/ran$e
in.ormation and $onta$t details. Realt1 9ilot is a
ins"e$tion ordering and "ro$essing. M# Light#3it$h is similarl1 /sed .or
@1nami$ )9 so.t3are is /sed .or all general ledger and a$$o/nting ./n$tions and the $om"an1 /ses 6nvoi$e Management o..ered &
9ro$essing #ervi$es, 6n$. .or "ro$essing $lient invoi$ing and reim&/rsements. 6n addition to its internal REOConne4 s1stem,
vario/s data and in.ormation to $lients via third "art1 3e&

)RC has /tili5ed an e4ternal vendor .or "ortions o.
res"onsi&le .or dra.ting /"dates to the glo&al disaster re$over1 man/al 3hi$h is revie3ed &1 the e4e$/tive team ann/all1.
restores are $om"leted 3ith a ./ll disaster re$over1 test a$$om"lished ann/all1. -i
digital &a$,/" ta"es are stored at an o..2site .a$ilit1
)RC+s te$hnolog1 is &/ilt aro/nd 3e&2&ased a""
site. @/ring 2013, )RC is em&ar,ing on an enter"rise
strateg1. )RC 3ill engage in Coint in.rastr/$t/re "roCe$ts 3ith its "arent, Cla1ton. )RC 3ill migrate a3a1 .rom a third "art1 vendor "rovider .or
&/siness $ontin/it1 and instead 3ill im"lement a red/ndan$1 strateg1 /tili5ing )RC+s #alt La,e Cit1 head0/arters as a $o
Cla1ton+s #helton, C- head0/arters as 10K data $a"t/re is a$$om"lished via
.a$ilitate &/siness re$over1 time and "rovide more $om"rehensive testing. -he disaster re$over1 and &/sin
to re.le$t the $hanges.

)RC re"orts /" to a Chie. 6n.ormation O..i$er at the Cla1ton $or"orate level. 6nternal te$hnolog1 "roCe$ts are
in$or"orated into an ann/al road ma". A "roCe$t ma
s"e$i.i$ "arameters in$l/ding $/stomi5ed "ro$essing and delegated a/thorit1 levels that hel" to ens/re $om"lian$e 3ith $lient
em"lo1ees m/st sign a $or"orate $om"lian$e "oli$1 do$/ment on an ann/al &asis. A dedi$ated se$/rit1 o..i$er .rom Cla1ton is res"onsi&le .or
overseeing s1stems and net3or, se$/rit1. Monthl1 re"orts en$om"assing o"erating "er.orman$e metri$s and .inan$ial data are
the &/siness /nits and roll /" to the e4e$/tive team.
maintains do$/mented "oli$ies and "ro$ed/res on its shared net3or, drive that en$om"ass its $ore
te$hni$al 3riter is on sta.. to $oordinate, 3rite and distri&/te "oli$1 and "ro$ed/re /"dates enter"rise23ide. 9oli$1 a
$/stomi5ed &ased on s"e$i.i$ $lient re0/irements to ens/re $om"lian$e 3ith servi$e level agreements. Monthl1 meetings are held among the
&/siness /nit to dis$/ss and im"lement "oli$1 and "ro$ed/re /"dates.
has so/nd m/lti2level a/diting and 0/alit1 $ontrol me$hanisms
and adheren$e to esta&lished "ro$ed/res. 'e &elieve the $om"an1+s "oli$ies and "ro$ed/res ade0/atel1 address $ore areas
)RC sho/ld $onsider migrating the storage o. "oli$1 and "ro$ed/re man/als .rom a shared drive to an
intranet site .or in$reased ease o. /se, retrieval and $onsisten$1.

it is not a "arti$i"ant in an1 "ending material litigation related to its o"erations.
&/siness ins/ran$e $overage to "rote$t against vario/s lia&ilities and $ontingen$ies. Most )RC and )R% $
ins/red as re0/ired "/rs/ant to the "arties agreement.
Overall, 3e &elieve that )RC, &ased on its re"resentations, e..e$tivel1 addresses its $or"orate ins/ran$e re0/irements
ding material litigation.
-ro;ect Manage'ent, <et0ork )ec/rity and 2isaster Recovery
third "art1 te$hnolog1 a""li$ations in its dail1 &/siness transa$tions.
s$ala&le and .le4i&le .rom a "ro$essing and &/siness gro3th "ers"e$tive. REOConne4 is a "ro"rietar1 3e&
monitor and tra$, all as"e$ts o. the Real Estate O3ned asset management li.e $1$le, in$l/ding "ro"ert1 maintenan$e, mar,eting, sale
negotiation and $losing. -he a""li$ation is also /sed .or short sale and deed2in2lie/ o. .ore$los/re "ro$essing. REOConne4 is a real time
a""li$ation that serves as a $omm/ni$ation inter.a$e &et3een )RC asset managers and real estate agents
mar,eting "ro$ess in$l/ding evi$tion "ro$essing, val/ation revie3s, "ro"ert1 ins"e$tions, mar,eting "lans, o..er negotiation,
"rietar1 AgentConne4 a""li$ation manages real estate agent in.ormation in$l/ding li$ensing, ins/ran$e
in.ormation and $onta$t details. Realt1 9ilot is a third "art1 3e&2&ased a""li$ation that is /tili5ed .or :ro,er 9ri$e O"inion (:9O and "ro"ert1
ion ordering and "ro$essing. M# Light#3it$h is similarl1 /sed .or $ollateral revie3 and do$/ment tra$,ing
@1nami$ )9 so.t3are is /sed .or all general ledger and a$$o/nting ./n$tions and the $om"an1 /ses 6nvoi$e Management o..ered &
9ro$essing #ervi$es, 6n$. .or "ro$essing $lient invoi$ing and reim&/rsements. 6n addition to its internal REOConne4 s1stem,
vario/s data and in.ormation to $lients via third "art1 3e&2&ased a""li$ations s/$h as the E0/ator 'or,statio
"ortions o. disaster re$over1 and &/siness $ontin/it1 "rovisioning.
res"onsi&le .or dra.ting /"dates to the glo&al disaster re$over1 man/al 3hi$h is revie3ed &1 the e4e$/tive team ann/all1.
restores are $om"leted 3ith a ./ll disaster re$over1 test a$$om"lished ann/all1. -ier 1 a""li$ations are restored 3ithin 3< ho/rs
site .a$ilit1. A generator $an "rovide $ontin/o/s "o3er d/ring an interr/"tion at the main .a$ilit1.
&ased a""li$ations, em"lo1ees $an 3or, .rom home, i. ne$essar1, d/ring an interr/"tion at the main 3or,
@/ring 2013, )RC is em&ar,ing on an enter"rise23ide &/siness $ontin/it1 "lat.orm that 3ill in$or"orate a geogra"hi$al red/ndan$1
in Coint in.rastr/$t/re "roCe$ts 3ith its "arent, Cla1ton. )RC 3ill migrate a3a1 .rom a third "art1 vendor "rovider .or
&/siness $ontin/it1 and instead 3ill im"lement a red/ndan$1 strateg1 /tili5ing )RC+s #alt La,e Cit1 head0/arters as a $o
as 10K data $a"t/re is a$$om"lished via2dis,2to dis, Co/rnaling. -he "lat.orm
.a$ilitate &/siness re$over1 time and "rovide more $om"rehensive testing. -he disaster re$over1 and &/sin
)RC re"orts /" to a Chie. 6n.ormation O..i$er at the Cla1ton $or"orate level. 6nternal te$hnolog1 "roCe$ts are
in$or"orated into an ann/al road ma". A "roCe$t management data&ase is /"dated 0/arterl1 and te$hnolog1 "roCe$ts are "rioriti5ed 3ith in"/t
.com | 00 2!!"1##$
s"e$i.i$ "arameters in$l/ding $/stomi5ed "ro$essing and delegated a/thorit1 levels that hel" to ens/re $om"lian$e 3ith $lient g/idelines. All
A dedi$ated se$/rit1 o..i$er .rom Cla1ton is res"onsi&le .or
overseeing s1stems and net3or, se$/rit1. Monthl1 re"orts en$om"assing o"erating "er.orman$e metri$s and .inan$ial data are develo"ed &1
&/siness "ra$ti$es. A dedi$ated
3ide. 9oli$1 and "ro$ess man/als are
to ens/re $om"lian$e 3ith servi$e level agreements. Monthl1 meetings are held among the
s in "la$e to monitor o"erational
he $om"an1+s "oli$ies and "ro$ed/res ade0/atel1 address $ore areas
)RC sho/ld $onsider migrating the storage o. "oli$1 and "ro$ed/re man/als .rom a shared drive to an
litigation related to its o"erations. -he $om"an1 maintains a""ro"riate
Most )RC and )R% $lients are listed as an additional
, &ased on its re"resentations, e..e$tivel1 addresses its $or"orate ins/ran$e re0/irements
te$hnolog1 a""li$ations in its dail1 &/siness transa$tions. -he s1stems ar$hite$t/re is ./ll1
a "ro"rietar1 3e&2&ased a""li$ation that is /sed to
e, in$l/ding "ro"ert1 maintenan$e, mar,eting, sale
lie/ o. .ore$los/re "ro$essing. REOConne4 is a real time
asset managers and real estate agents that tra$, vario/s ste"s in the REO
mar,eting "ro$ess in$l/ding evi$tion "ro$essing, val/ation revie3s, "ro"ert1 ins"e$tions, mar,eting "lans, o..er negotiation, $losing "ro$ess and
"rietar1 AgentConne4 a""li$ation manages real estate agent in.ormation in$l/ding li$ensing, ins/ran$e
a""li$ation that is /tili5ed .or :ro,er 9ri$e O"inion (:9O and "ro"ert1
revie3 and do$/ment tra$,ing "/r"oses. Mi$roso.t+s
@1nami$ )9 so.t3are is /sed .or all general ledger and a$$o/nting ./n$tions and the $om"an1 /ses 6nvoi$e Management o..ered &1 Lender
9ro$essing #ervi$es, 6n$. .or "ro$essing $lient invoi$ing and reim&/rsements. 6n addition to its internal REOConne4 s1stem, )RC "rovides
&ased a""li$ations s/$h as the E0/ator 'or,station, RE#.DE- and 91ramid 9lat.orm.
disaster re$over1 and &/siness $ontin/it1 "rovisioning. A dedi$ated te$hni$al 3riter is
res"onsi&le .or dra.ting /"dates to the glo&al disaster re$over1 man/al 3hi$h is revie3ed &1 the e4e$/tive team ann/all1. L/arterl1 s1stem
er 1 a""li$ations are restored 3ithin 3< ho/rs and nightl1
A generator $an "rovide $ontin/o/s "o3er d/ring an interr/"tion at the main .a$ilit1. #in$e
li$ations, em"lo1ees $an 3or, .rom home, i. ne$essar1, d/ring an interr/"tion at the main 3or,
3ide &/siness $ontin/it1 "lat.orm that 3ill in$or"orate a geogra"hi$al red/ndan$1
in Coint in.rastr/$t/re "roCe$ts 3ith its "arent, Cla1ton. )RC 3ill migrate a3a1 .rom a third "art1 vendor "rovider .or
&/siness $ontin/it1 and instead 3ill im"lement a red/ndan$1 strateg1 /tili5ing )RC+s #alt La,e Cit1 head0/arters as a $o2lo$ation .a$ilit1 3ith
-he "lat.orm red/ndan$1 strateg1 3ill
.a$ilitate &/siness re$over1 time and "rovide more $om"rehensive testing. -he disaster re$over1 and &/siness $ontin/it1 "lan is &eing re3ritten
)RC re"orts /" to a Chie. 6n.ormation O..i$er at the Cla1ton $or"orate level. 6nternal te$hnolog1 "roCe$ts are $oordinated 3ith Cla1ton and
nagement data&ase is /"dated 0/arterl1 and te$hnolog1 "roCe$ts are "rioriti5ed 3ith in"/t


9 a g e A I
&1 &/siness leaders. #/&Ce$t matter e4"erts in the &/siness gro/"s "arti$i"ate in /ser a$$e"tan$e testing and monthl1 te$hnolog1 releases are
iss/ed $ontaining s1stem enhan$ement in.ormation.
and /ser "ass3ord "roto$ols. Hser "ass3ords are tas, and role s"e$i.i$ 3ithin the organi5ation and "ass3ord $hanges and dele
$omm/ni$ated in real time &et3een h/man reso/r$es and in.ormation te$hnolog1
/na/thori5ed s1stem a$$ess. -he $om"an1 has $om"rehensive enter"rise
"rote$t the integrit1 o. $on.idential data as it is stored or $omm/ni$ated internall1 or e4ternall1.
intr/sion "revention s1stems designed to identi.1 and minimi5e mali$io/s a$tivit1. A$tive net3or, s$anning and se$/rit1 moni
"er.ormed to identi.1 s1stem v/lnera&ilities.

Assess'ent: Morningstar &elieves that
management re0/irements as 3ell as its internal "ro$essing needs and e4ternal $lient "er.orman$e management. -he $om"an1+s
"ro"rietar1 te$hnolog1 "rovides the .le4i&ilit1 ne$essar1 to meet individ/al $lient re0/irements and "rovides the agilit1 re0
introd/$e ne3 "rod/$ts and servi$es into the mar,et"la$e.
is leveraging Cla1ton+s te$hnolog1 "lat.orm and geogra"hi$ lo$ation to "rovide a more ro&/st
$ontin/it1 regimen.

(MR R!8) R& Asset Manage'ent

)RC "rovides REO asset management servi$es .or third "art1 $lients.
$lients. -hese servi$es in$l/de determining the estimated mar,et val/e (EMV .or
strateg1 .or asset mar,eting. )RC 3ill monitor mar,et .l/$t/ations, l
re"air &ids. )RC 3ill oversee o..er negotiations as 3ell as the $losing "ro$ess and .inal asset dis"osition.
a/thori5ation a""roval levels are determined &1 Co& level among sales s"e$ialists, senior sales s"e$ialists and managers.

Loan .oarding and -re=Listing
)RC /tili5es its "ro"ietar1 REOConne4 s1stem
managers and real estate agents to notate a$tions d/ring the mar,eting "ro$ess on a real
.ollo3ing "ro$esses!

Evi$tion 9ro$ess -ra$,ing
Val/ation Revie3E
6ns"e$tion -ra$,ingE
Mar,eting 9lans and #tat/s Re"orts
O..er DegotiationE
Closing 9ro$ess -ra$,ingE
Client OversightE and
Client 6nvoi$ing.
De3 assets $an &e &oarded in a n/m&er o. 3a1s in$l/ding! email, se$/re .ile trans.er "roto$ol (%-9 site,
re$ord. -he asset set2/" $ler, (A#C "ro$eeds 3ith the &oarding o. the asset validating all asset details "rovided &1 the $lient as 3ell as other
)RC2s"e$i.i$ details s/$h as the stat/s o. the "ro"ert1 (a$0/ired, redem
the Asset #et2H" Manager 3ho "er.orms a $om"rehensive revie3 o. the &oarded assets to
relevant asset details are $om"lete and $orre$t. As "art o. this "ro$ess, the manager 3ill $he$, the date and time stam" o.
.ile and re$on$ile that in.ormation 3ith the $om"letion date o. the A
"/rs/ant to esta&lished $lient and $om"an1 g/idelines. -he $lient .ile is then .or3arded to the Vendor Management de"artment
estate agent 3ill &e assigned. As an additional level o. revie3, the Vendor Manager (VM revie3s a dail1 re"ort that lists all assets that have a
&oarded stat/s &/t have aged more than one da1 3itho/t &eing assigned to an e4ternal real estate agent. -he VM 3ill .ollo3
the asset is timel1 re.erred to an agent. A 3ee,l1 re"ort o. aged assets is revie3ed, along 3ith s/""orting notes, and es$alated to an
Controls Anal1st and e4e$/tive management.
#/&Ce$t matter e4"erts in the &/siness gro/"s "arti$i"ate in /ser a$$e"tan$e testing and monthl1 te$hnolog1 releases are
iss/ed $ontaining s1stem enhan$ement in.ormation. A dedi$ated enter"rise23ide se$/rit1 o..i$er is res"onsi&le .or ens/ring net3or, se$
and /ser "ass3ord "roto$ols. Hser "ass3ords are tas, and role s"e$i.i$ 3ithin the organi5ation and "ass3ord $hanges and dele
$omm/ni$ated in real time &et3een h/man reso/r$es and in.ormation te$hnolog1 and revie3ed monthl1 and semi
-he $om"an1 has $om"rehensive enter"rise23ide en$r1"tion and .ire3all "oli$ies and methodologies in "la$e to
"rote$t the integrit1 o. $on.idential data as it is stored or $omm/ni$ated internall1 or e4ternall1. )RC+s $om"/ter net3or, in$or"orates several
intr/sion "revention s1stems designed to identi.1 and minimi5e mali$io/s a$tivit1. A$tive net3or, s$anning and se$/rit1 moni

ar &elieves that )RC o"erates 3ithin a highl1 e..e$tive te$hnolog1 ar$hite$t/re designed
"ro"rietar1 te$hnolog1 "rovides the .le4i&ilit1 ne$essar1 to meet individ/al $lient re0/irements and "rovides the agilit1 re0
introd/$e ne3 "rod/$ts and servi$es into the mar,et"la$e. )RC has $om"rehensive data integrit1 and se$/rit1 "roto$ols in "la$e and
is leveraging Cla1ton+s te$hnolog1 "lat.orm and geogra"hi$ lo$ation to "rovide a more ro&/st glo&al

)RC "rovides REO asset management servi$es .or third "art1 $lients. )RC has a&o/t 1I.>00 assets /nder management on average 3ith 22
-hese servi$es in$l/de determining the estimated mar,et val/e (EMV .or Fas2isG and Fre"airedG
strateg1 .or asset mar,eting. )RC 3ill monitor mar,et .l/$t/ations, listing a$tivit1, $hanges in "ro"ert1 $onditions
re"air &ids. )RC 3ill oversee o..er negotiations as 3ell as the $losing "ro$ess and .inal asset dis"osition.
ned &1 Co& level among sales s"e$ialists, senior sales s"e$ialists and managers.
)RC /tili5es its "ro"ietar1 REOConne4 s1stem, as 3ell as other third "art1 s1stems, as a $omm/ni$ation "ortal &et3een the $om"an1+s asset
managers and real estate agents to notate a$tions d/ring the mar,eting "ro$ess on a real2time &asis. -he s1stems are
Evi$tion 9ro$ess -ra$,ingE
Mar,eting 9lans and #tat/s Re"ortsE
E
De3 assets $an &e &oarded in a n/m&er o. 3a1s in$l/ding! email, se$/re .ile trans.er "roto$ol (%-9 site,
"ro$eeds 3ith the &oarding o. the asset validating all asset details "rovided &1 the $lient as 3ell as other
s"e$i.i$ details s/$h as the stat/s o. the "ro"ert1 (a$0/ired, redem"tion or $on.irmation. On$e re$on$iled, the A#C .or3ards an email to
3ho "er.orms a $om"rehensive revie3 o. the &oarded assets to monitor that &oarding 3as $om"leted and that all
relevant asset details are $om"lete and $orre$t. As "art o. this "ro$ess, the manager 3ill $he$, the date and time stam" o.
.ile and re$on$ile that in.ormation 3ith the $om"letion date o. the A#C+s email to determine i. assets are &oarded 3ithin an a$$e"ta&le timeline
"/rs/ant to esta&lished $lient and $om"an1 g/idelines. -he $lient .ile is then .or3arded to the Vendor Management de"artment
tional level o. revie3, the Vendor Manager (VM revie3s a dail1 re"ort that lists all assets that have a
&oarded stat/s &/t have aged more than one da1 3itho/t &eing assigned to an e4ternal real estate agent. -he VM 3ill .ollo3
is timel1 re.erred to an agent. A 3ee,l1 re"ort o. aged assets is revie3ed, along 3ith s/""orting notes, and es$alated to an
Controls Anal1st and e4e$/tive management.
.com | 00 2!!"1##$
#/&Ce$t matter e4"erts in the &/siness gro/"s "arti$i"ate in /ser a$$e"tan$e testing and monthl1 te$hnolog1 releases are
3ide se$/rit1 o..i$er is res"onsi&le .or ens/ring net3or, se$/rit1
and /ser "ass3ord "roto$ols. Hser "ass3ords are tas, and role s"e$i.i$ 3ithin the organi5ation and "ass3ord $hanges and deletions are
and revie3ed monthl1 and semi2ann/all1 to minimi5e
"oli$ies and methodologies in "la$e to
+s $om"/ter net3or, in$or"orates several
intr/sion "revention s1stems designed to identi.1 and minimi5e mali$io/s a$tivit1. A$tive net3or, s$anning and se$/rit1 monitoring is ro/tinel1
ar$hite$t/re designed to meet its data
"ro"rietar1 te$hnolog1 "rovides the .le4i&ilit1 ne$essar1 to meet individ/al $lient re0/irements and "rovides the agilit1 re0/ired to
)RC has $om"rehensive data integrit1 and se$/rit1 "roto$ols in "la$e and
glo&al disaster re$over1 and &/siness
assets /nder management on average 3ith 22
assets and sele$ting the a""ro"riate
isting a$tivit1, $hanges in "ro"ert1 $onditions, mar,eting e4"enses and
re"air &ids. )RC 3ill oversee o..er negotiations as 3ell as the $losing "ro$ess and .inal asset dis"osition. %/n$tional res"onsi&ilities and
ned &1 Co& level among sales s"e$ialists, senior sales s"e$ialists and managers.
as a $omm/ni$ation "ortal &et3een the $om"an1+s asset
-he s1stems are /sed to manage the
De3 assets $an &e &oarded in a n/m&er o. 3a1s in$l/ding! email, se$/re .ile trans.er "roto$ol (%-9 site, and dire$t .rom a $lient+s s1stem o.
"ro$eeds 3ith the &oarding o. the asset validating all asset details "rovided &1 the $lient as 3ell as other
. On$e re$on$iled, the A#C .or3ards an email to
that &oarding 3as $om"leted and that all
relevant asset details are $om"lete and $orre$t. As "art o. this "ro$ess, the manager 3ill $he$, the date and time stam" o. the in$oming $lient
#C+s email to determine i. assets are &oarded 3ithin an a$$e"ta&le timeline
"/rs/ant to esta&lished $lient and $om"an1 g/idelines. -he $lient .ile is then .or3arded to the Vendor Management de"artment 3here a real
tional level o. revie3, the Vendor Manager (VM revie3s a dail1 re"ort that lists all assets that have a
&oarded stat/s &/t have aged more than one da1 3itho/t &eing assigned to an e4ternal real estate agent. -he VM 3ill .ollo32/" to see that
is timel1 re.erred to an agent. A 3ee,l1 re"ort o. aged assets is revie3ed, along 3ith s/""orting notes, and es$alated to an 6nternal


9 a g e A ?

te$hnolog1 .or &oarding assets and re$on$iling data integrit1. -he m/lti"le levels o. revie3 serve to
a$$/ratel1 in a$$ordan$e 3ith esta&lished $om"an1 g/idelines and $lient

,itle, HA and Real &state ,a4 Ad'inistration
Hnen$/m&ered title is an integral as"e$t o. mar,eting an REO asset.
an asset. -he title order re"ort is revie3ed dail1 &1 an A#C to
$om"anies designated &1 the $lient and maintains individ/al state
"o"/lated in REOConne4 .or tra$,ing "/r"oses.
missing title re"ort is revie3ed &1 the A#C to ens/re that title is re$eived 3ithin the 1> da1 t/rnaro/nd time. An1 dela1s in re$eiving title
$ommitments are es$alated to management and the title $om"an1. 'ithin three da1s o. re$eiving the title
/sing REOConne4, 3ill revie3 the title $ommitment and notate an1 o/tstanding iss/es 3ith an estimated $om"letion time
and moving the asset to /nder $ontra$t stat/s.

D/m&er o. aged assets 3ith o/tstanding
9er$entage o. assets 3ith $lear title as a ratio to total asset $o/nt
D/m&er o. title orders re0/ested and re$eived as 3ell as timeline e4$e"tions
D/m&er o. assets assigned to title s"e$ialists as 3ell as their individ/al "er.orman$e metri$s
-he -itle Manager revie3s the re"ort to identi.1 "er.orman$e trends and "rovides .eed&a$, to title s"e$ialists as "e

8omeo3ner Asso$iation (8OA .ees and real estate ta4es are revie3ed to
mar,eting "ro$ess. 9ost2&oarding, the 8OA Coordinator 3ill re0/est the
in$l/ding "ar$el n/m&er and ta4ing a/thorit1 $onta$t in.ormation 3ithin a three da1 t/rnaro/nd time. H"on re$ei"t, the in.or
into REOConne4 .or tas, tra$,ing "/r"oses. )RC 3ill .ollo3 /" 3ith the ta4ing m/ni$i"alit1 and 8
3ho 3ill advise and a""rove "a1ment amo/nts. A monthl1 "er.orman$e re"ort is "rod/$ed and revie3ed &1 the Asset :oardingM8OA
that in$l/des o"erational metri$s s/$h as!

Client s"e$i.i$ asset stat/s (
Aged asets &e1ond 30 da1s re0/iring .ollo3
#"e$ialist s"e$i.i$ n/m&er o. assets and monthl1 "er.orman$e, in$l/ding e4$e"tions
-he Asset :oardingM8OA Manager revie3s the
re0/ires.

)RC also "rovides $ode violation servi$es to its $lients. A Code Violation Coordinator (CVC 3or,s 3ith the agent, title de"
m/ni$i"alit1 to o&tain $ode violation in.ormation 3hi$h is then /"loaded to REOConne4 .or tra$,ing. -he CVC revie3s a dail1 re"o
violation in.ormation that is /sed to "rioriti5e assets &ased on violation t1"e and e4"os/re. -he CVC then $omm/ni$ates
m/ni$i"alit1 to resolve violations in$l/ding negotiation and "a1ment.
that in$l/des o"erational metri$s s/$h as!

Client s"e$i.i$ asset stat/s (D/m&er &oarded and $l
Aged asets &e1ond 30 da1s 3ith $ode violations re0/iring .ollo3
CVC s"e$i.i$ n/m&er o. assets and monmthl1 "er.orman$e, in$l/ding e4$e"tions

environment that in$l/des e..e$tive te$hnolog1 .or identi.1ing and resear$hing o/tstanding items related to title iss/es, o/t
8OA .ees, "ro"ert1 ta4es and $ode violati
Morningstar &elieves that )RC o"erates 3ithin a 3ell $ontrolled loan &oarding environment that in$l/des e..e$tive
te$hnolog1 .or &oarding assets and re$on$iling data integrit1. -he m/lti"le levels o. revie3 serve to
a$$/ratel1 in a$$ordan$e 3ith esta&lished $om"an1 g/idelines and $lient dire$tives.
,itle, HA and Real &state ,a4 Ad'inistration
Hnen$/m&ered title is an integral as"e$t o. mar,eting an REO asset. )RC+s -itle @e"artment assigns a title re0/est 3ithin =I ho/rs o. &ording
an asset. -he title order re"ort is revie3ed dail1 &1 an A#C to monitor that title has &een ordered on all re0/isite assets. -he A#C /ses title
$om"anies designated &1 the $lient and maintains individ/al state and $lient s"e$i.i$ $riteria .or title $om"an1 sele$tion. -he title order date is
"o"/lated in REOConne4 .or tra$,ing "/r"oses. -itle $ommitments are s$hed/led to &e re$eived 3ithin 1> da1s o. the order date and a 3ee,l1
&1 the A#C to ens/re that title is re$eived 3ithin the 1> da1 t/rnaro/nd time. An1 dela1s in re$eiving title
$ommitments are es$alated to management and the title $om"an1. 'ithin three da1s o. re$eiving the title
EOConne4, 3ill revie3 the title $ommitment and notate an1 o/tstanding iss/es 3ith an estimated $om"letion time
and moving the asset to /nder $ontra$t stat/s. A $om"rehensive monthl1 re"ort is "re"ared 3ith "er.orman$e metri$s in$l/
D/m&er o. aged assets 3ith o/tstanding title iss/es 3ithin 120 da1s o. title re"ortE
9er$entage o. assets 3ith $lear title as a ratio to total asset $o/ntE
D/m&er o. title orders re0/ested and re$eived as 3ell as timeline e4$e"tionsE and
o. assets assigned to title s"e$ialists as 3ell as their individ/al "er.orman$e metri$s
-he -itle Manager revie3s the re"ort to identi.1 "er.orman$e trends and "rovides .eed&a$, to title s"e$ialists as "e
8omeo3ner Asso$iation (8OA .ees and real estate ta4es are revie3ed to monitor that o/tstanding or "ast d/e items do not im"ede the REO
&oarding, the 8OA Coordinator 3ill re0/est the re0/isite in.ormation .rom the agent .or 8OA and
in$l/ding "ar$el n/m&er and ta4ing a/thorit1 $onta$t in.ormation 3ithin a three da1 t/rnaro/nd time. H"on re$ei"t, the in.or
into REOConne4 .or tas, tra$,ing "/r"oses. )RC 3ill .ollo3 /" 3ith the ta4ing m/ni$i"alit1 and 8OA and $omm/ni$ate the res/lts to the $lient
3ho 3ill advise and a""rove "a1ment amo/nts. A monthl1 "er.orman$e re"ort is "rod/$ed and revie3ed &1 the Asset :oardingM8OA
Client s"e$i.i$ asset stat/s (n/m&er &oarded and $losedE (&eginning and ending monthl1 &alan$es
Aged asets &e1ond 30 da1s re0/iring .ollo32/" and resol/tion, and
#"e$ialist s"e$i.i$ n/m&er o. assets and monthl1 "er.orman$e, in$l/ding e4$e"tions.
revie3s the re"ort to identi.1 "er.orman$e trends and "rovides .eed&a$, to
)RC also "rovides $ode violation servi$es to its $lients. A Code Violation Coordinator (CVC 3or,s 3ith the agent, title de"
i"alit1 to o&tain $ode violation in.ormation 3hi$h is then /"loaded to REOConne4 .or tra$,ing. -he CVC revie3s a dail1 re"o
violation in.ormation that is /sed to "rioriti5e assets &ased on violation t1"e and e4"os/re. -he CVC then $omm/ni$ates
m/ni$i"alit1 to resolve violations in$l/ding negotiation and "a1ment. A monthl1 "er.orman$e re"ort is "rod/$ed and revie3ed &1 management
Client s"e$i.i$ asset stat/s (D/m&er &oarded and $losedE &eginning and ending monthl1 &alan$es
Aged asets &e1ond 30 da1s 3ith $ode violations re0/iring .ollo32/" and resol/tion, and
CVC s"e$i.i$ n/m&er o. assets and monmthl1 "er.orman$e, in$l/ding e4$e"tions.
Morningstar &elieves that )RC o"erates 3ithin a 3ell $ontrolled title, 8OA and real estate ta4 administration
environment that in$l/des e..e$tive te$hnolog1 .or identi.1ing and resear$hing o/tstanding items related to title iss/es, o/t
8OA .ees, "ro"ert1 ta4es and $ode violations. )RC has 3ell esta&lished timelines .or investigating and re0/esting data and invoi$es
.com | 00 2!!"1##$
oan &oarding environment that in$l/des e..e$tive
te$hnolog1 .or &oarding assets and re$on$iling data integrit1. -he m/lti"le levels o. revie3 serve to monitor that assets are &oarded
a title re0/est 3ithin =I ho/rs o. &ording
ordered on all re0/isite assets. -he A#C /ses title
and $lient s"e$i.i$ $riteria .or title $om"an1 sele$tion. -he title order date is
$eived 3ithin 1> da1s o. the order date and a 3ee,l1
&1 the A#C to ens/re that title is re$eived 3ithin the 1> da1 t/rnaro/nd time. An1 dela1s in re$eiving title
$ommitments are es$alated to management and the title $om"an1. 'ithin three da1s o. re$eiving the title $ommitment, a -itle #"e$ialist,
EOConne4, 3ill revie3 the title $ommitment and notate an1 o/tstanding iss/es 3ith an estimated $om"letion time "rior to $learing title
A $om"rehensive monthl1 re"ort is "re"ared 3ith "er.orman$e metri$s in$l/ding the!

o. assets assigned to title s"e$ialists as 3ell as their individ/al "er.orman$e metri$s.
-he -itle Manager revie3s the re"ort to identi.1 "er.orman$e trends and "rovides .eed&a$, to title s"e$ialists as "er.orman$e re0/ires.
that o/tstanding or "ast d/e items do not im"ede the REO
re0/isite in.ormation .rom the agent .or 8OA and "ro"ert1 ta4es
in$l/ding "ar$el n/m&er and ta4ing a/thorit1 $onta$t in.ormation 3ithin a three da1 t/rnaro/nd time. H"on re$ei"t, the in.ormation is entered
OA and $omm/ni$ate the res/lts to the $lient
3ho 3ill advise and a""rove "a1ment amo/nts. A monthl1 "er.orman$e re"ort is "rod/$ed and revie3ed &1 the Asset :oardingM8OA Manager
&eginning and ending monthl1 &alan$esE

s and "rovides .eed&a$, to s"e$ialists as "e.orman$e
)RC also "rovides $ode violation servi$es to its $lients. A Code Violation Coordinator (CVC 3or,s 3ith the agent, title de"artment and
i"alit1 to o&tain $ode violation in.ormation 3hi$h is then /"loaded to REOConne4 .or tra$,ing. -he CVC revie3s a dail1 re"ort o. $ode
violation in.ormation that is /sed to "rioriti5e assets &ased on violation t1"e and e4"os/re. -he CVC then $omm/ni$ates 3ith the agent and
A monthl1 "er.orman$e re"ort is "rod/$ed and revie3ed &1 management
osedE &eginning and ending monthl1 &alan$esE
, and
in a 3ell $ontrolled title, 8OA and real estate ta4 administration
environment that in$l/des e..e$tive te$hnolog1 .or identi.1ing and resear$hing o/tstanding items related to title iss/es, o/tstanding
ons. )RC has 3ell esta&lished timelines .or investigating and re0/esting data and invoi$es


9 a g e A 10
as 3ell as .ollo3ing /" on aged items. -he m/lti"le levels o. revie3 serve to
a$$ordan$e 3ith esta&lished $om"an1 g/id

R& Asset Manage'ent
)RC "rovides REO management servi$es to vario/s $lients in$l/ding
investment &an,s and investors o. non2"er.orming loans and
o. the REO dis"osition li.e$1$le .rom "ost2.ore$los/re a$0/isition thro/gh mar,eting and $losing.

%ig/re 3! REO Asset -imeline

As "art o. the REO management "ro$ess )RC 3ill
val/e (RMV .or ea$h asset. )RC /tili5es a "ro"rietar1 3e&
$onta$t data, li$ense in.ormation and ins/ran$e. Agent assignments are managed via this s1stem.
)RC+s net3or, o. a""ro4imatel1 J,>00 agents and oversees agent sele$tion, s$oring, training and $omm/ni$ation.

)RC+s teams o. sale s"e$ialists are res"onsi&le .or the .ollo3ing REO asset management ./n$tions!

@etermining the estimated mar,et val/e (EMV .or as
#ele$ting the a""ro"riate mar,eting strateg1 (as
Monitoring the "ro"ert1 mar,eting stat/s in$l/ding mar,et .l/$t/ations, listing a$tivit1,
that ma1 re0/ire re"airsE
Degotiating o..ersE and
Oversee $losing and .inal asset dis"osition
-he organi5ational str/$t/re is em&edded 3ith a
sales s"e$ialists &/t have a higher level o. a/thorit1.

)RC has develo"ed standard timelines to tra$, the REO dis"osition li.e$1$le. A "re
asset .rom va$ant to listed stat/s. 6n general, the timeline $riteria is 1I da1s .or an as
o. this "ro$ess )RC 3ill determine the estimated mar,et val/e 3hi$h $onsists o. a $onsideration o. m/lti"le varia&les in$l/di
/ni0/eness, e$onomi$ $onditions, "ro"ert1 amenities and overall $ondition.
3ill "a1 in the asset+s $/rrent mar,et. A determination is made 3hether to mar,et the "ro"ert1 in an
strateg1. -he de$ision to sell Fas2isG or Fre"aired
man/al and a/tomated tools are /sed to anal15e the val/ations and re$on$ile an1 varian$es.
ma1 &e ordered to re$on$ile the .inal estimated mar,et val/e.

On$e a val/ation has &een determined, )RC 3ill $reate a mar,eting strateg1 3hi$h in$l/des esta&lishing a &/dget .or all mar,e
determining re"airs so the &id "ro$ess $an $ommen$eE and tra$,ing "ro"ert1 ins"e$tions and ne$e
mold, de.e$tive dr13all, metham"hetamine la&s, et$. )RC has detailed "oli$ies and "ro$esses o/tlining vario/s state re0/irements regarding
ins"e$tions and environmental "ro"ert1 iss/es. 9ro"ert1 re"air 3or, is $onsidered
re"air. Emergen$1 re"air 3or, to remed1 an /nsa.e "ro"ert1 $ondition is "er.ormed immediatel1. Ca"ital re"airs a
into a mar,eta&le $ondition and $onsist o. "rimaril1 $osmeti$ im"rovements and
$ondition. )RC has develo"ed $a"ital re"air management team that has $reated
"rovides re$ommendations to the $lient on re0/ired and re$ommended re"airs.
A##et
Re$erral t%
GRC
Pre&
Mar'etin(
(O))*pie+!Va)ant)
as 3ell as .ollo3ing /" on aged items. -he m/lti"le levels o. revie3 serve to monitor that assets are &oarded a$$/ratel1 in
a$$ordan$e 3ith esta&lished $om"an1 g/idelines and $lient dire$tives.
management servi$es to vario/s $lients in$l/ding )#E+s, .inan$ial instit/tions, &an, and non &an, servi$ers,
"er.orming loans and residential mortgage &a$,ed se$/rities (RM:#. -he $om"an1 servi$es all as"e$ts
.ore$los/re a$0/isition thro/gh mar,eting and $losing.
As "art o. the REO management "ro$ess )RC 3ill o&tain re"air in.ormation, "ro"ert1 $om"ara&les, mar,eting "lans and a re$on$iled mar,et
)RC /tili5es a "ro"rietar1 3e&2&ased a""li$ation ,no3n as AgentConne4 to manage &ro,er in.ormation, in$l/ding
ation and ins/ran$e. Agent assignments are managed via this s1stem. -he Agent Relations @e"artment oversees
00 agents and oversees agent sele$tion, s$oring, training and $omm/ni$ation.
are res"onsi&le .or the .ollo3ing REO asset management ./n$tions!
the estimated mar,et val/e (EMV .or as2is and re"aired "ro"ertiesE
the a""ro"riate mar,eting strateg1 (as2is or re"airedE
the "ro"ert1 mar,eting stat/s in$l/ding mar,et .l/$t/ations, listing a$tivit1,

Oversee $losing and .inal asset dis"osition.
-he organi5ational str/$t/re is em&edded 3ith additional levels o. $he$,s and &alan$es. #enior sales s"e$ialists "er.orm the same ./n$tions as
sales s"e$ialists &/t have a higher level o. a/thorit1. Managers a""rove mar,et strategies, re"air &ids, e4"enses and o..ers, as re0/ired.
standard timelines to tra$, the REO dis"osition li.e$1$le. A "re2list timeline identi.ies the ste"s ne$essar1 in &ringing an
asset .rom va$ant to listed stat/s. 6n general, the timeline $riteria is 1I da1s .or an as2is "ro"ert1 and =0 da1s .or re"aired "
o. this "ro$ess )RC 3ill determine the estimated mar,et val/e 3hi$h $onsists o. a $onsideration o. m/lti"le varia&les in$l/di
/ni0/eness, e$onomi$ $onditions, "ro"ert1 amenities and overall $ondition. -he estimated mar,et val/e is a "roCe$tion o. 3hat a 3illing &/1er
3ill "a1 in the asset+s $/rrent mar,et. A determination is made 3hether to mar,et the "ro"ert1 in an Fas2
re"airedG is determined &1 anal15ing the &ro,er "ri$e o"inion (:9O and a se$ond o"inion val/e.
tools are /sed to anal15e the val/ations and re$on$ile an1 varian$es. :ased on "redetermined $riteria, a third val/ation
imated mar,et val/e.
On$e a val/ation has &een determined, )RC 3ill $reate a mar,eting strateg1 3hi$h in$l/des esta&lishing a &/dget .or all mar,e
determining re"airs so the &id "ro$ess $an $ommen$eE and tra$,ing "ro"ert1 ins"e$tions and ne$essar1 dis$los/res in$l/ding! lead &ased "aint,
la&s, et$. )RC has detailed "oli$ies and "ro$esses o/tlining vario/s state re0/irements regarding
ins"e$tions and environmental "ro"ert1 iss/es. 9ro"ert1 re"air 3or, is $onsidered either a $a"ital re"air or a "reservation and maintenan$e
re"air. Emergen$1 re"air 3or, to remed1 an /nsa.e "ro"ert1 $ondition is "er.ormed immediatel1. Ca"ital re"airs a
into a mar,eta&le $ondition and $onsist o. "rimaril1 $osmeti$ im"rovements and re"airs to &ring the "ro"ert1 into ha&ita&ilit1 or .inan$ea&le
management team that has $reated &id $riteria 3herein the re"air s"e$ialist revie3s the &ids and
"rovides re$ommendations to the $lient on re0/ired and re$ommended re"airs. 'hen $a"ital re"airs are $om"lete
Mar'etin(
Un+er
C%ntra)t
.com | 00 2!!"1##$
that assets are &oarded a$$/ratel1 in
&an, and non &an, servi$ers, hedge ./nds,
ential mortgage &a$,ed se$/rities (RM:#. -he $om"an1 servi$es all as"e$ts

o&tain re"air in.ormation, "ro"ert1 $om"ara&les, mar,eting "lans and a re$on$iled mar,et
&ased a""li$ation ,no3n as AgentConne4 to manage &ro,er in.ormation, in$l/ding
-he Agent Relations @e"artment oversees
00 agents and oversees agent sele$tion, s$oring, training and $omm/ni$ation.
the "ro"ert1 mar,eting stat/s in$l/ding mar,et .l/$t/ations, listing a$tivit1, and $hanges in "ro"ert1 $ondition
#enior sales s"e$ialists "er.orm the same ./n$tions as
Managers a""rove mar,et strategies, re"air &ids, e4"enses and o..ers, as re0/ired.
list timeline identi.ies the ste"s ne$essar1 in &ringing an
is "ro"ert1 and =0 da1s .or re"aired "ro"erties. As "art
o. this "ro$ess )RC 3ill determine the estimated mar,et val/e 3hi$h $onsists o. a $onsideration o. m/lti"le varia&les in$l/ding mar,et
e is a "roCe$tion o. 3hat a 3illing &/1er
2isG $ondition vers/s a Fre"airedG
l15ing the &ro,er "ri$e o"inion (:9O and a se$ond o"inion val/e. :oth
:ased on "redetermined $riteria, a third val/ation
On$e a val/ation has &een determined, )RC 3ill $reate a mar,eting strateg1 3hi$h in$l/des esta&lishing a &/dget .or all mar,eting $ostsE
ssar1 dis$los/res in$l/ding! lead &ased "aint,
la&s, et$. )RC has detailed "oli$ies and "ro$esses o/tlining vario/s state re0/irements regarding
a $a"ital re"air or a "reservation and maintenan$e
re"air. Emergen$1 re"air 3or, to remed1 an /nsa.e "ro"ert1 $ondition is "er.ormed immediatel1. Ca"ital re"airs are done to &ring the "ro"ert1
re"airs to &ring the "ro"ert1 into ha&ita&ilit1 or .inan$ea&le
teria 3herein the re"air s"e$ialist revie3s the &ids and
'hen $a"ital re"airs are $om"lete, the asset moves into a
Cl%#in(
A##et
Li,*i+ati%n


9 a g e A 11
listed stat/s. 9reservation and maintenan$e re"airs
ma1 in$l/de interior $leaning, trash o/t, sno3 removal, re,e1ing, "ool $leaning
"reservation and maintenan$e $ontra$tors or 3ill /se a $lient+s third "art1 $ontra$tor
a$$ording to initial and ongoing timeline matri$es. 6. there is no a""roved "ro"ert1 and maintenan$e vendor in a geogra"hi$
sele$t an inde"endent $ontra$tor. )RC has develo"ed s"e$i.i$ "reservation and maintenan$e a""roval g/idelines
-he $om"an1 has an e4"ense varian$e re$on$iliation "ro$ess .or those e4"enses not in$l/ded in the original &/dget or that

)RC maintains an REO &ro,er s$ore$ard that meas/res the
meas/rements in$l/de the .ollo3ing!

@a1s to re$eive a re0/ested :9OE
@a1s on mar,et 3ith agentE
)ross sales "ri$e to initial agent :9O
@a1s in es$ro3.
-he s$ore$ard re.le$ts a si4 month rolling average,
"er.orman$e meas/rement.

On$e an asset has &een listed .or mar,eting, )RC 3ill monitor the "ro"ert1 on a
and that an e..i$ient and timel1 dis"osition o. the "ro"ert1 ta,es "la$e.
sales s"e$ialist to revie3 &ro,er stat/s re"orts
revisions ma1 in$l/de a list "ri$e red/$tion, revising the mar,eting strateg1
to determine i. there have &een signi.i$ant mar,et $hanges sin$e the asset 3as listed.
strateg1 and &/dget and 3ill &e 3or, .lo3ed

9/r$hase o..ers on REO "ro"erties are $onsidered &ased on a n/m&er o. $riteria altho/gh "rimaril1 an o..er is vie3ed in relat
$al$/lation. As an o..er is revie3ed, the .ollo3ing .a$tors ar

:/1er re0/ested $on$essions
O3ner o$$/"ant vers/s investor
:/1er 0/ali.i$ationsE
Mortgage ins/ran$e $overage
Re"/r$hases.

%ig/re =! Closing @e"artment 9ro$ess

-he o..er "ro$ess, in$l/ding o..er revie3, a$$e"tan$e
&ro,er is res"onsi&le .or $om"leting the o..er "a$,age and o&taining the re0/isite &/1er signat/res and .or3arding the "a$,ag
agent. -he o..er is s1stem $oded as a""roval "ending and ma1 re0/ire additional levels o. a""roval &e1ond the sales s"e$ialist
manager, as 3ell as a""li$a&le third "art1 mortgage ins/rers
A##et Set&Up
Evi)ti%n#
listed stat/s. 9reservation and maintenan$e re"airs are initial and $ontin/ing servi$es to maintain the asset in mar,eta&le $ondition. -his 3or,
ma1 in$l/de interior $leaning, trash o/t, sno3 removal, re,e1ing, "ool $leaning and 1ard maintenan$e. )RC has develo"ed a net3or, o.
s or 3ill /se a $lient+s third "art1 $ontra$tor to "er.orm "ro"ert1 maintenan$e and "reservation 3or,
a$$ording to initial and ongoing timeline matri$es. 6. there is no a""roved "ro"ert1 and maintenan$e vendor in a geogra"hi$
an inde"endent $ontra$tor. )RC has develo"ed s"e$i.i$ "reservation and maintenan$e a""roval g/idelines
-he $om"an1 has an e4"ense varian$e re$on$iliation "ro$ess .or those e4"enses not in$l/ded in the original &/dget or that
an REO &ro,er s$ore$ard that meas/res the "er.orman$e and e..e$tiveness o. its &ro,er net3or,. (e1 "er.orman$e

:9OE and
re.le$ts a si4 month rolling average, and "rovides val/a&le .eed&a$, to the vendor as 3ell as internall1 to )RC .or internal
On$e an asset has &een listed .or mar,eting, )RC 3ill monitor the "ro"ert1 on a reg/lar &asis to see that
o. the "ro"ert1 ta,es "la$e. . #1stem2generated tas, reminders a"
sales s"e$ialist to revie3 &ro,er stat/s re"orts to eval/ate a$tivit1 and $onsider revising the $/rrent mar,et strateg1. Mar,et
revisions ma1 in$l/de a list "ri$e red/$tion, revising the mar,eting strateg1 andMor "er.orming re"airs. -he sales s"e$ialist ma1 order a ne3 :9O
to determine i. there have &een signi.i$ant mar,et $hanges sin$e the asset 3as listed. A s1stem tem"late 3ill re$ord $hanges to the mar,eting
to the a""ro"riate manager .or signo.., i. re0/ired.
9/r$hase o..ers on REO "ro"erties are $onsidered &ased on a n/m&er o. $riteria altho/gh "rimaril1 an o..er is vie3ed in relat
$al$/lation. As an o..er is revie3ed, the .ollo3ing .a$tors are among the $onsiderations!
:/1er re0/ested $on$essionsE
O3ner o$$/"ant vers/s investorE
Mortgage ins/ran$e $overageE and
-he o..er "ro$ess, in$l/ding o..er revie3, a$$e"tan$e, $o/nter or reCe$tion, and a""roval are all re$orded and "ro$essed via a/tomation. -he
&ro,er is res"onsi&le .or $om"leting the o..er "a$,age and o&taining the re0/isite &/1er signat/res and .or3arding the "a$,ag
$oded as a""roval "ending and ma1 re0/ire additional levels o. a""roval &e1ond the sales s"e$ialist
as 3ell as a""li$a&le third "art1 mortgage ins/rers or $lients.
Evi)ti%n#
Title an+ HOA
Revie- an+ Pa./ent
.com | 00 2!!"1##$
the asset in mar,eta&le $ondition. -his 3or,
and 1ard maintenan$e. )RC has develo"ed a net3or, o.
to "er.orm "ro"ert1 maintenan$e and "reservation 3or,
a$$ording to initial and ongoing timeline matri$es. 6. there is no a""roved "ro"ert1 and maintenan$e vendor in a geogra"hi$ area, the &ro,er 3ill
an inde"endent $ontra$tor. )RC has develo"ed s"e$i.i$ "reservation and maintenan$e a""roval g/idelines and dis&/rsement thresholds.
-he $om"an1 has an e4"ense varian$e re$on$iliation "ro$ess .or those e4"enses not in$l/ded in the original &/dget or that e4$eed the &/dget.
&ro,er net3or,. (e1 "er.orman$e
and "rovides val/a&le .eed&a$, to the vendor as 3ell as internall1 to )RC .or internal
see that the "ro"ert1 $ondition is maintained
tas, reminders a""ear ea$h month reminding the
and $onsider revising the $/rrent mar,et strateg1. Mar,eting strateg1
"er.orming re"airs. -he sales s"e$ialist ma1 order a ne3 :9O
A s1stem tem"late 3ill re$ord $hanges to the mar,eting
9/r$hase o..ers on REO "ro"erties are $onsidered &ased on a n/m&er o. $riteria altho/gh "rimaril1 an o..er is vie3ed in relation to the net ret/rn

and a""roval are all re$orded and "ro$essed via a/tomation. -he
&ro,er is res"onsi&le .or $om"leting the o..er "a$,age and o&taining the re0/isite &/1er signat/res and .or3arding the "a$,age to the $losing
$oded as a""roval "ending and ma1 re0/ire additional levels o. a""roval &e1ond the sales s"e$ialist, in$l/ding a
Cl%#in(


9 a g e A 12

#ales s"e$ialists are revie3ed monthl1 &1 their managers on their in
is &ased /"on "rod/$tion $riteria (t/rn rate, sales rate, tas,s "ast d/e and e4$e"tionsE "er.orman$e $riteria e4tra$ted .rom s$ore$ards th
)RC re$eives .rom $lients and a monthl1 0/alit1 $ontrol revie3 that meas/res adheren$e to "oli$ies and "ro$ed/res.

On$e an o..er is .inali5ed and agreed /"on &1 &oth the &/1er and )RC, the listing &ro,er m/st s/&mit a ./ll1 e4e$/ted $ontra$
("/r$hase agreement 3ith the re0/isite addenda and
$losing date, s$hed/le d/ring the negotiation "ro$ess, is esta&lished .or the &/1er and $losing agent to .inali5e the transa$
$oordinator manages all timeline ste"s &et3een $ontra$t e4e$/tion and $losing,
minimi5ed. -he $losing $oordinator .a$ilitates $omm/ni$ation among the "arties to the transa$tion and notates the s1stem 3ith "ast
/"$oming $losing dates .or .ollo3 /". Closing date e4tensions are $onsidered &1 the $losing $oordinator in $ons/ltation 3ith
and ma1 &e granted d/e to tenant evi$tion iss/es
&ased on the .ollo3ing $onsiderations!

Mar,et $onditionsE
9ro"ert1 $onditionE
%inan$ing timelinesE
8istor1 o. m/lti"le e4tensions
Re"air, title or evi$tion iss/es

-he $losing $oordinator 3ill also veri.1 third "art1 e4"enses, revie3 the 8H@ 1
and re$on$ile an1 varian$e in e4"e$ted $ash "ro$eeds.

On an enter"rise23ide level, )RC re$eives e4tensive "er.orman$e .eed&a$, .rom vario/s $lients
data s/""lied to )RC $an in$l/de!

Monthl1 inventor1E
-otal dis"ositions and assignments
Aged inventor1E
9ort.olio t/rn rateE
@is"osition t/rn rateE
#ales re$over1 (as2is vers/s re"aired sales
A$$/ra$1 rateE and
-itle resol/tion (N da1s.
'e have revie3ed vario/s s$ore$ards "rovided to )RC &1 e4ternal $lients and note that )RC s/&stantiall1 $on.orms to
re0/irements as o/tlined in their servi$e level agreements.

Assess'ent: )RC, in o/r vie3, has
9oli$ies, "ro$ed/res and "ro$esses are ver1 $learl1 de.ined together 3ith a high level o. te$hnolog1, ena&ling )RC to e..e$tivel1
manage ea$h "hase o. the REO li.e$1$le. Ever1 as"e$t o. REO asset management, .rom &oarding and "re
s/""orted &1 a ro&/st te$hnolog1 environment .or 3or,.lo3 e..i$ien$1, tas, tra$,ing and .ollo3
management. -he organi5ational str/$t/re is designed to "rovide .or vario/s levels o. em"lo1ee res"onsi&ilit1 and a/thorit1
$learl1 esta&lished via matri$es that delineate re"orting lines and signo.. a/thorit1. 9er.orman$e management, es"e$iall1 3hen
determining servi$e level agreement $om"lian$e, is m/lti
standards are 3ell de.ined and em"lo1ee "er.orman$e is $olle$ted and revie3ed 3ith sta... 9er.orman$e .eed&a$, is "rovided &1
)RC+s $lients and is revie3ed to determine servi$e level agreement $om"lian$e as 3ell as identi.1ing internal "er.orman$e
im"rovement.

#ales s"e$ialists are revie3ed monthl1 &1 their managers on their individ/al "er.orman$e as 3ell as "er.orman$e vers/s "eers. -he .inal ran,ing
"rod/$tion $riteria (t/rn rate, sales rate, tas,s "ast d/e and e4$e"tionsE "er.orman$e $riteria e4tra$ted .rom s$ore$ards th
thl1 0/alit1 $ontrol revie3 that meas/res adheren$e to "oli$ies and "ro$ed/res.
On$e an o..er is .inali5ed and agreed /"on &1 &oth the &/1er and )RC, the listing &ro,er m/st s/&mit a ./ll1 e4e$/ted $ontra$
ddenda and dis$los/res to the $losing agent and the asset is then $oded as F/nder $ontra$tG. A
$losing date, s$hed/le d/ring the negotiation "ro$ess, is esta&lished .or the &/1er and $losing agent to .inali5e the transa$
anages all timeline ste"s &et3een $ontra$t e4e$/tion and $losing, so that all ,e1 dates $an &e
. -he $losing $oordinator .a$ilitates $omm/ni$ation among the "arties to the transa$tion and notates the s1stem 3ith "ast
/"$oming $losing dates .or .ollo3 /". Closing date e4tensions are $onsidered &1 the $losing $oordinator in $ons/ltation 3ith
and ma1 &e granted d/e to tenant evi$tion iss/es, title iss/es or an event o/tside o. the &/1er+s $ontrol. 8o3ever, an e4tension ma1 &e denied
8istor1 o. m/lti"le e4tensionsE and
Re"air, title or evi$tion iss/es.
-he $losing $oordinator 3ill also veri.1 third "art1 e4"enses, revie3 the 8H@ 1 settlement statement, and tra$, the timel1 re$ei"t o. 3ired ./nds
and re$on$ile an1 varian$e in e4"e$ted $ash "ro$eeds.
3ide level, )RC re$eives e4tensive "er.orman$e .eed&a$, .rom vario/s $lients regarding
otal dis"ositions and assignmentsE
is vers/s re"aired salesE
.
'e have revie3ed vario/s s$ore$ards "rovided to )RC &1 e4ternal $lients and note that )RC s/&stantiall1 $on.orms to
re0/irements as o/tlined in their servi$e level agreements.
in o/r vie3, has e4$ellent internal $ontrols and 3or,.lo3 management over its REO asset management "ro$ess.
and "ro$esses are ver1 $learl1 de.ined together 3ith a high level o. te$hnolog1, ena&ling )RC to e..e$tivel1
manage ea$h "hase o. the REO li.e$1$le. Ever1 as"e$t o. REO asset management, .rom &oarding and "re
ro&/st te$hnolog1 environment .or 3or,.lo3 e..i$ien$1, tas, tra$,ing and .ollo32
management. -he organi5ational str/$t/re is designed to "rovide .or vario/s levels o. em"lo1ee res"onsi&ilit1 and a/thorit1
lished via matri$es that delineate re"orting lines and signo.. a/thorit1. 9er.orman$e management, es"e$iall1 3hen
determining servi$e level agreement $om"lian$e, is m/lti2la1ered and $onsists o. internal and e4ternal revie3s. L/alit1 $ontrol
e 3ell de.ined and em"lo1ee "er.orman$e is $olle$ted and revie3ed 3ith sta... 9er.orman$e .eed&a$, is "rovided &1
)RC+s $lients and is revie3ed to determine servi$e level agreement $om"lian$e as 3ell as identi.1ing internal "er.orman$e
.com | 00 2!!"1##$
divid/al "er.orman$e as 3ell as "er.orman$e vers/s "eers. -he .inal ran,ing
"rod/$tion $riteria (t/rn rate, sales rate, tas,s "ast d/e and e4$e"tionsE "er.orman$e $riteria e4tra$ted .rom s$ore$ards that
thl1 0/alit1 $ontrol revie3 that meas/res adheren$e to "oli$ies and "ro$ed/res.
On$e an o..er is .inali5ed and agreed /"on &1 &oth the &/1er and )RC, the listing &ro,er m/st s/&mit a ./ll1 e4e$/ted $ontra$t "a$,age
dis$los/res to the $losing agent and the asset is then $oded as F/nder $ontra$tG. A
$losing date, s$hed/le d/ring the negotiation "ro$ess, is esta&lished .or the &/1er and $losing agent to .inali5e the transa$tion. A )RC $losing
$an &e met and aged inventor1 is
. -he $losing $oordinator .a$ilitates $omm/ni$ation among the "arties to the transa$tion and notates the s1stem 3ith "ast d/e and
/"$oming $losing dates .or .ollo3 /". Closing date e4tensions are $onsidered &1 the $losing $oordinator in $ons/ltation 3ith the sales s"e$ialist
rol. 8o3ever, an e4tension ma1 &e denied
statement, and tra$, the timel1 re$ei"t o. 3ired ./nds
regarding its servi$es. 9ort.olio "er.orman$e
'e have revie3ed vario/s s$ore$ards "rovided to )RC &1 e4ternal $lients and note that )RC s/&stantiall1 $on.orms to "er.orman$e
e4$ellent internal $ontrols and 3or,.lo3 management over its REO asset management "ro$ess.
and "ro$esses are ver1 $learl1 de.ined together 3ith a high level o. te$hnolog1, ena&ling )RC to e..e$tivel1
manage ea$h "hase o. the REO li.e$1$le. Ever1 as"e$t o. REO asset management, .rom &oarding and "re2listing to .inal dis"osition is
2/" as 3ell as "er.orman$e
management. -he organi5ational str/$t/re is designed to "rovide .or vario/s levels o. em"lo1ee res"onsi&ilit1 and a/thorit1 levels are
lished via matri$es that delineate re"orting lines and signo.. a/thorit1. 9er.orman$e management, es"e$iall1 3hen
la1ered and $onsists o. internal and e4ternal revie3s. L/alit1 $ontrol
e 3ell de.ined and em"lo1ee "er.orman$e is $olle$ted and revie3ed 3ith sta... 9er.orman$e .eed&a$, is "rovided &1
)RC+s $lients and is revie3ed to determine servi$e level agreement $om"lian$e as 3ell as identi.1ing internal "er.orman$e areas .or


9 a g e A 13

Loss Mitigation )ervices: Asset .oarding and Agent Assign'ent
)R% "rovides $lients 3ith a "rogram that "rovides "ersonal intera$tion 3ith &orro3ers 3ho
$am"aigns. -his servi$e in$l/des door ,no$,ing, in
)R% is a li$ensed de&t $olle$tor in all >0 states and the @istri$t o. Col/m&ia
$lients.

-he )RC asset trans.er de"artment /"loads "ro"ert1 re$ords to )R% via REOConne4
data s$r/& and validation "ro$ess &e.ore /"loading assets.
da1s "rior to the a$$o/nt assignment a$$om"anied &1 .inan$ial .orms
$om"lete the assignment and the .irst o/t&o/nd attem"t at homeo3ner $onta$t m/st &e made 3ithin =I ho/rs.
home are mandated in an attem"t to ma,e $onta$t and a minim/m o. t3o visits m/st &e attem"ted a.te

Assess'ent: )R%, in o/r vie3, has e..e$tive s1stems in "la$e to &oard in$oming assets and "er.orm the re0/isite data integrit1
validations to ens/re a$$o/nt a$$/ra$1. -he $om"an1 has 3ell de.ined
the res/lts o. those intera$tions.

Loss Mitigation )ervices: Ho'eo0ner Co/nseling
-his area is &i./r$ated /nder )R% and has m/lti"le $om"onents that in$l/de homeo3ner $o/nseling, also ,no3n as Fenhan$ed &orr
o/trea$hG that in$l/des "ersonal intervie3s at a &orro3er+s residen$e as 3ell as $alling $am"aigns and letter $am"aigns. Another servi
"rovided /nder $om"onent servi$ing is short sale and deed
:ro,er Det3or, (9:D that $onsists o. a nation3ide net3or, o. real estate "ro.essionals 3ith distressed "ro"ert1 3or,o/t e4"e
"ro.essionals m/st "ass )RC+s de&t $olle$tor and $om"lian$e training and testing "rograms. 9:D "ro.essio
delin0/ent &orro3ers &1 ed/$ating and g/iding them thro/gh loss mitigation alternatives.

)R% has develo"ed a net3or, o. real estate "ro.essionals designated as neigh&orhood
in the homeo3ner $o/nseling "ro$ess. D8C re"resentatives /se the 8omeo3ner Resol/tion #1stem (8R# to tra$, and manage the $
"ro$ess. D8C re"resentatives /ndergo e4tensive training in
identi.1ing the &orro3er+s 3illingness and a&ilit1 to "a1
strateg1 and most via&le alternative to .ore$los/re
strateg1 is a short sale, the D8C ma1 &e$ome the listing agent.
to )R% a$$ordingl1 /sing the .ollo3ing g/idelines!

Do $onta$t! D8C is /na&le to ma,e $onta$t 3ith the
Conta$t (no interest or short sale lead D8C ma,es $onta$t, &/t the homeo3ner is not interested in an1 "rogram
Conta$t (3arm trans.er D8C ma,es $on
short sale. A tele"hone $all is made to the mortgage servi$erMlender 3hile at the "ro"ert1.
Conta$t (intervie3 and .inan$ialsE 3arm trans.er D8C ma,es $onta$t and the homeo3ne
o"tions availa&le 3ith the mortgage servi$erMlender. D8C o&tains .inan$ial in.ormation .rom the homeo3ner and tele"hones
the mortgage servi$erMlender 3hile at the "ro"ert1
Conta$t (interested in a short sale o"tion D8C ma
All D8C $onta$t attem"ts are revie3ed and veri.ied &1 the asset manager assigned to the a$$o/nt. -he D8C $om"letes the re0/i
.orm andMor .inan$ial in.ormation to the asset manager and the .orm is /"loaded into
visit to the &orro3er, the asset manager 3ill $onta$t the mortgage servi$erMlender to veri.1 that a 3arm trans.er a$t/all1 o$$/rred. All
$onversations and .ollo32/" $ond/$ted &1 the asset manager is notated in the s1stem
ordering. On$e a short sale order is .inali5ed, the asset is trans.erred to the REOConne4 s1ste

Asset .oarding and Agent Assign'ent
)R% "rovides $lients 3ith a "rogram that "rovides "ersonal intera$tion 3ith &orro3ers 3ho ma1 not &e res"onding to tele"hone and letter
$am"aigns. -his servi$e in$l/des door ,no$,ing, in2"erson intervie3s and 3arm trans.ers to the $lient .or re"a1ment "lans or modi.i$ations.
states and the @istri$t o. Col/m&ia 3ith a""ro4imatel1 >,000 assets /nder management and n/mero/s
-he )RC asset trans.er de"artment /"loads "ro"ert1 re$ords to )R% via REOConne4 3ith data "rovided &1 the $lient. -he s1stem "er.orms a
oading assets. )R% generates an %@C9A $om"liant noti.i$ation to the de&tor
da1s "rior to the a$$o/nt assignment a$$om"anied &1 .inan$ial .orms. -he Deigh&orhood 8ome Cons/ltant (F
$om"lete the assignment and the .irst o/t&o/nd attem"t at homeo3ner $onta$t m/st &e made 3ithin =I ho/rs.
home are mandated in an attem"t to ma,e $onta$t and a minim/m o. t3o visits m/st &e attem"ted a.ter >"m or on a 3ee,end.
)R%, in o/r vie3, has e..e$tive s1stems in "la$e to &oard in$oming assets and "er.orm the re0/isite data integrit1
to ens/re a$$o/nt a$$/ra$1. -he $om"an1 has 3ell de.ined methodologies in "la$e to initiate

Loss Mitigation )ervices: Ho'eo0ner Co/nseling
-his area is &i./r$ated /nder )R% and has m/lti"le $om"onents that in$l/de homeo3ner $o/nseling, also ,no3n as Fenhan$ed &orr
that in$l/des "ersonal intervie3s at a &orro3er+s residen$e as 3ell as $alling $am"aigns and letter $am"aigns. Another servi
"rovided /nder $om"onent servi$ing is short sale and deed2in2lie/ o. .ore$los/re negotiation and li0/idation. )R% has develo"ed
:ro,er Det3or, (9:D that $onsists o. a nation3ide net3or, o. real estate "ro.essionals 3ith distressed "ro"ert1 3or,o/t e4"e
"ro.essionals m/st "ass )RC+s de&t $olle$tor and $om"lian$e training and testing "rograms. 9:D "ro.essio
delin0/ent &orro3ers &1 ed/$ating and g/iding them thro/gh loss mitigation alternatives.
)R% has develo"ed a net3or, o. real estate "ro.essionals designated as neigh&orhood home $ons/ltant (D8C 3ho
in the homeo3ner $o/nseling "ro$ess. D8C re"resentatives /se the 8omeo3ner Resol/tion #1stem (8R# to tra$, and manage the $
/ndergo e4tensive training in the %air @e&t Colle$tion 9ra$ti$es A$t. -he o&Ce$ti
3illingness and a&ilit1 to "a1E o&taining .inan$ial statement in.ormation! "roviding
strateg1 and most via&le alternative to .ore$los/reE $olle$ting "hotos o. the "ro"ert1 e4terior and interior (i. "ossi&le. 6. the &est alternative
strateg1 is a short sale, the D8C ma1 &e$ome the listing agent. D8C re"resentatives 3ill attem"t to ma,e $onta$t 3ith the de&tor and re"ort
.ollo3ing g/idelines!
Do $onta$t! D8C is /na&le to ma,e $onta$t 3ith the &orro3er or "ro"ert1 o$$/"ants
Conta$t (no interest or short sale lead D8C ma,es $onta$t, &/t the homeo3ner is not interested in an1 "rogram
Conta$t (3arm trans.er D8C ma,es $onta$t and the homeo3ner is interested in loan modi.i$ation o"tions other than a
Conta$t (intervie3 and .inan$ialsE 3arm trans.er D8C ma,es $onta$t and the homeo3ne
the mortgage servi$erMlender 3hile at the "ro"ert1.
Conta$t (interested in a short sale o"tion D8C ma,es $onta$t and the homeo3ner is interested in a short sale
All D8C $onta$t attem"ts are revie3ed and veri.ied &1 the asset manager assigned to the a$$o/nt. -he D8C $om"letes the re0/i
.orm andMor .inan$ial in.ormation to the asset manager and the .orm is /"loaded into 8R#. 6. a 3arm trans.er has o$$/
, the asset manager 3ill $onta$t the mortgage servi$erMlender to veri.1 that a 3arm trans.er a$t/all1 o$$/rred. All
/" $ond/$ted &1 the asset manager is notated in the s1stem as 3ell as the .inan$ial in.ormation, "hotos, and :9O
On$e a short sale order is .inali5ed, the asset is trans.erred to the REOConne4 s1stem .or ./rther "ro$essing and tra$,ing
.com | 00 2!!"1##$
res"onding to tele"hone and letter
"erson intervie3s and 3arm trans.ers to the $lient .or re"a1ment "lans or modi.i$ations.
3ith a""ro4imatel1 >,000 assets /nder management and n/mero/s
data "rovided &1 the $lient. -he s1stem "er.orms a
)R% generates an %@C9A $om"liant noti.i$ation to the de&tor a""ro4imatel1 .o/r
Deigh&orhood 8ome Cons/ltant (FD8CG has ten (10 da1s to
$om"lete the assignment and the .irst o/t&o/nd attem"t at homeo3ner $onta$t m/st &e made 3ithin =I ho/rs. -hree visits to the de&tor+s
r >"m or on a 3ee,end.
)R%, in o/r vie3, has e..e$tive s1stems in "la$e to &oard in$oming assets and "er.orm the re0/isite data integrit1
methodologies in "la$e to initiate &orro3er $onta$t and re$ord
-his area is &i./r$ated /nder )R% and has m/lti"le $om"onents that in$l/de homeo3ner $o/nseling, also ,no3n as Fenhan$ed &orro3er
that in$l/des "ersonal intervie3s at a &orro3er+s residen$e as 3ell as $alling $am"aigns and letter $am"aigns. Another servi$e
lie/ o. .ore$los/re negotiation and li0/idation. )R% has develo"ed a 9re.erred
:ro,er Det3or, (9:D that $onsists o. a nation3ide net3or, o. real estate "ro.essionals 3ith distressed "ro"ert1 3or,o/t e4"erien$e. 9:D
"ro.essionals m/st "ass )RC+s de&t $olle$tor and $om"lian$e training and testing "rograms. 9:D "ro.essionals are res"onsi&le .or 3or,ing 3ith
(D8C 3ho have agreed to "arti$i"ate
in the homeo3ner $o/nseling "ro$ess. D8C re"resentatives /se the 8omeo3ner Resol/tion #1stem (8R# to tra$, and manage the $o/nseling
-he o&Ce$tives o. the "rogram in$l/de!
ing $o/nseling to determine the &est
"hotos o. the "ro"ert1 e4terior and interior (i. "ossi&le. 6. the &est alternative
D8C re"resentatives 3ill attem"t to ma,e $onta$t 3ith the de&tor and re"ort
or "ro"ert1 o$$/"ants.
Conta$t (no interest or short sale lead D8C ma,es $onta$t, &/t the homeo3ner is not interested in an1 "rogram.
ta$t and the homeo3ner is interested in loan modi.i$ation o"tions other than a
Conta$t (intervie3 and .inan$ialsE 3arm trans.er D8C ma,es $onta$t and the homeo3ner is interested in alternative
,es $onta$t and the homeo3ner is interested in a short sale.
All D8C $onta$t attem"ts are revie3ed and veri.ied &1 the asset manager assigned to the a$$o/nt. -he D8C $om"letes the re0/isite $onta$t
. 6. a 3arm trans.er has o$$/rred d/ring the D8C+s
, the asset manager 3ill $onta$t the mortgage servi$erMlender to veri.1 that a 3arm trans.er a$t/all1 o$$/rred. All
the .inan$ial in.ormation, "hotos, and :9O
m .or ./rther "ro$essing and tra$,ing.


9 a g e A 1=
Assess'ent! 6n o/r vie3, )R% has 3ell develo"ed methodologies in "la$e .or
"rogram. Ro&/st te$hnolog1 s/""orts all as"e$ts o. the $o/nseling "rogram and allo3s the $o/nselors to a$$/ratel1 re"ort the
res/lts and "rovides asset managers 3ith an e..e$tive to tool manage asset dis"o

Loss Mitigation )ervices: )*ort )ale -rocessing and Facilitation

%ig/re >! #hort #ale 9ro$essing -imeline

A short sale "a$,age is sent to the &orro3er re0/esting

6n$ome and e4"ense statement
8ardshi" a..idavitE
-3o most re$ent ta4 ret/rns
-3o months o. the &/1er+s
9/r$hase $ontra$tE
Estimated 8H@E
Listing agreementE and
9roo. o. ./nds andMor a""roval letter
A )R% asset manager retains o3nershi" o. th
a""li$a&le. -he asset manager assigns an D8C to
three visits, the "a$,age is not o&tained, the asset manager 3ill notate the a$$o/nt a$$ordingl1. H"on re$ei"t o. a $om"leted "a$,age, the
$lient 3ill "er.orm a "reliminar1 revie3 .or 8ome A..orda&le %ore$los/re Alternative (8A%A eligi&ilit1 and )RC 3ill revie3 t
/"date the s1stem a$$ordingl1. 6. a "a$,age is re$eived &/t there is no o..er, the asset manager 3ill $onta$t the listing ag
listed or the homeo3ner (i. it is not listed to determine "ro"ert1 stat/s and the .air mar,et val/e, i.
(:9O or a""raisal de"ending on Client s"e$i.i$ations
and anal15e an1 o..ers against the re$on$iled mar,et val/e (RMV an
the o..er to the )R% sales manager .or ./rther determination. 6. a s/&ordinate lien is identi.ied, the asset manager ma1 negotiate a short "a1o..
Initial S0%rt Sale
Pa)'a(e an+
Te/plate Veri$i)ati%n
S0%rt Sale Pa)'a(e
Revie-
O+erin( A Pr%pert.
Val*e
Revie-in( An O$$er
! 6n o/r vie3, )R% has 3ell develo"ed methodologies in "la$e .or assigning assets to its neigh&orhood $o/nseling
"rogram. Ro&/st te$hnolog1 s/""orts all as"e$ts o. the $o/nseling "rogram and allo3s the $o/nselors to a$$/ratel1 re"ort the
res/lts and "rovides asset managers 3ith an e..e$tive to tool manage asset dis"ositions.
Loss Mitigation )ervices: )*ort )ale -rocessing and Facilitation
A short sale "a$,age is sent to the &orro3er re0/esting most or all o. the .ollo3ing in.ormation!
6n$ome and e4"ense statementE
-3o most re$ent ta4 ret/rns o. the &/1erE
o. the &/1er+s most re$ent &an, statementsE

9roo. o. ./nds andMor a""roval letter.
A )R% asset manager retains o3nershi" o. the a$$o/nt and 3ill revie3 the .ile .or data a$$/ra$1 and determine i. mortgage ins/ran$e is
assigns an D8C to ma,e a series o. visits to the &orro3er to o&tain a $om"leted short sale "a$,age. 6., a.ter
age is not o&tained, the asset manager 3ill notate the a$$o/nt a$$ordingl1. H"on re$ei"t o. a $om"leted "a$,age, the
$lient 3ill "er.orm a "reliminar1 revie3 .or 8ome A..orda&le %ore$los/re Alternative (8A%A eligi&ilit1 and )RC 3ill revie3 t
/"date the s1stem a$$ordingl1. 6. a "a$,age is re$eived &/t there is no o..er, the asset manager 3ill $onta$t the listing ag
listed or the homeo3ner (i. it is not listed to determine "ro"ert1 stat/s and the .air mar,et val/e, i. the "ro"ert1 is
or a""raisal de"ending on Client s"e$i.i$ations 3ill &e ordered &1 )R%. -he )R% asset manager 3ill revie3 a $om"leted val/ation "a$,age
and anal15e an1 o..ers against the re$on$iled mar,et val/e (RMV and &ased on esta&lished $riteria, ma1 s/ggest a $o/ntero..er or ma1 re.er
sales manager .or ./rther determination. 6. a s/&ordinate lien is identi.ied, the asset manager ma1 negotiate a short "a1o..
I+enti$. an+
Ne(%tiate
S*1%r+inate Lien#
O$$er Ne(%titati%n
M%rt(a(e In#*ran)e
Appr%val
S0%rt Sale
De)i#i%nin( Pr%)e##
Preli/inar. HUD
Revie-
Un+er-iritn( Revie-
2 A##et /ana(er
Appr%val
S0%rt Sale Cl%#in(
.com | 00 2!!"1##$
assigning assets to its neigh&orhood $o/nseling
"rogram. Ro&/st te$hnolog1 s/""orts all as"e$ts o. the $o/nseling "rogram and allo3s the $o/nselors to a$$/ratel1 re"ort their

e a$$o/nt and 3ill revie3 the .ile .or data a$$/ra$1 and determine i. mortgage ins/ran$e is
to the &orro3er to o&tain a $om"leted short sale "a$,age. 6., a.ter
age is not o&tained, the asset manager 3ill notate the a$$o/nt a$$ordingl1. H"on re$ei"t o. a $om"leted "a$,age, the
$lient 3ill "er.orm a "reliminar1 revie3 .or 8ome A..orda&le %ore$los/re Alternative (8A%A eligi&ilit1 and )RC 3ill revie3 the "a$,age and
/"date the s1stem a$$ordingl1. 6. a "a$,age is re$eived &/t there is no o..er, the asset manager 3ill $onta$t the listing agent (i. the "ro"ert1 is
the "ro"ert1 is listed. A "ro"ert1 val/ation
3ill revie3 a $om"leted val/ation "a$,age
d &ased on esta&lished $riteria, ma1 s/ggest a $o/ntero..er or ma1 re.er
sales manager .or ./rther determination. 6. a s/&ordinate lien is identi.ied, the asset manager ma1 negotiate a short "a1o..


9 a g e A 1>
to the s/&ordinate lien holder &ased on esta&lished $riteria and a""roval &1 the $lient. 6. mortgage ins/ran$e is a""li$a&le to the asset, )R%
see,s a""roval .rom the mortgage ins/rer and 3ill .ollo3 /" /ntil resol/tion. A
$lient $riteria that determines i. the short sale o..er 3ill "ro$eed
on esta&lished $riteria ma1 re0/ire revie3 and a""roval &1 senior )R% management. -he asset manager 3ill rev
o..er and /"date the asset stat/s to F/nder $ontra$tG in
/" &1 a letter .rom the asset manager 3ith details s/$h as the $losing date, ne
$ontin/e to .ollo3 /" 3ith the "arties "eriodi$all1 to

Assess'ent! 6n o/r vie3, )R% has 3ell develo"ed
methodolog1 is 3ell de.ined and is s/""orted &1 ro&/st te$hnolog1 at ea$h ste" o. the short sale
$losing "ro$ess. )R% has develo"ed 3ell de.ined $riteria, &ased on $lient "aramete
and o..er negotiation.

-erfor'ance Manage'ent: Co'ponent )ervicer -erfor'ance Metrics
(MR R)8) Residential Co'ponent )ervicer

Real &state !al/ation, 2/e 2iligence and -roperty Manage'ent versig*t

%ig/re <! Com"onent #ervi$es @ivision Organi5ational Chart

6n re$ognition o. the gro3ing interest in single .amil1 rental REO asset se$/riti5ation, )RC esta&lished the Com"onent #ervi$
2013. -he division 3as $reated to servi$e the needs o. instit/tional investors and lenders o. single .amil1 rental "ro"erties
sellers o. D9L "ort.olios. )RC has "rovided vario/s servi$es related to $ollateral /nder3riting on more than O
assets. )RC has leveraged its $ore $om"eten$1 as an REO asset manager to "rovide a ./ll s/ite o. servi$es or individ/al $om"
"arti$i"ants in the single .amil1 rental s"a$e.

9ro"ert1 val/ationsE
Val/ation des,to" revie3s
9re2 and "ost2reha&ilitation "ro"ert1 ins"e$tions
Reha&ilitation :/dget Re$on$iliation
-itle Revie3 and $/rative servi$es
Collateral .ile revie3E
6ns/ran$e revie3 and veri.i$ation
9ro"ert1 ta4 revie3 and veri.i$ation
Val*ati%n
*l$ill/ent
(3 TE)
esta&lished $riteria and a""roval &1 the $lient. 6. mortgage ins/ran$e is a""li$a&le to the asset, )R%
see,s a""roval .rom the mortgage ins/rer and 3ill .ollo3 /" /ntil resol/tion. A ro&/st de$isioning tool is /sed to
$lient $riteria that determines i. the short sale o..er 3ill "ro$eed. A "reliminar1 8H@ revie3 is /nderta,en to as$ertain $losing $osts and &ased
on esta&lished $riteria ma1 re0/ire revie3 and a""roval &1 senior )R% management. -he asset manager 3ill rev
o..er and /"date the asset stat/s to F/nder $ontra$tG in the s1stem o. re$ord and noti.1 the listing agent and &orro3er o. the a""roval, .ollo3ed
/" &1 a letter .rom the asset manager 3ith details s/$h as the $losing date, net amo/nt d/e and 3iring instr/$tions. -he asset manager 3ill
$ontin/e to .ollo3 /" 3ith the "arties "eriodi$all1 to monitor that the $losing ta,es "la$e as s$hed/led.
! 6n o/r vie3, )R% has 3ell develo"ed "ro$esses in "la$e to generate, revie3 and
methodolog1 is 3ell de.ined and is s/""orted &1 ro&/st te$hnolog1 at ea$h ste" o. the short sale
"ro$ess. )R% has develo"ed 3ell de.ined $riteria, &ased on $lient "arameters, .or short sale .ile "ro$essing, val/ation revie3
-erfor'ance Manage'ent: Co'ponent )ervicer -erfor'ance Metrics
(MR R)8) Residential Co'ponent )ervicer
and -roperty Manage'ent versig*t
@ivision Organi5ational Chart
6n re$ognition o. the gro3ing interest in single .amil1 rental REO asset se$/riti5ation, )RC esta&lished the Com"onent #ervi$
servi$e the needs o. instit/tional investors and lenders o. single .amil1 rental "ro"erties
. )RC has "rovided vario/s servi$es related to $ollateral /nder3riting on more than O
assets. )RC has leveraged its $ore $om"eten$1 as an REO asset manager to "rovide a ./ll s/ite o. servi$es or individ/al $om"
"arti$i"ants in the single .amil1 rental s"a$e. -he Com"onent #ervi$es @ivision 3ill "er.orm the .ollo3ing ./n$t
Val/ation des,to" revie3sE
reha&ilitation "ro"ert1 ins"e$tionsE
Reha&ilitation :/dget Re$on$iliationE
-itle Revie3 and $/rative servi$esE
6ns/ran$e revie3 and veri.i$ationE
e3 and veri.i$ationE
C%/p%nent
Servi)in( Divi#i%n
(Vi)e Pre#)
Val*ati%n
*l$ill/ent
Val*ati%n Revie-
an+
4*alit. C%ntr%l
(3 TE)
ile Revie-
(3 TE)
.com | 00 2!!"1##$
esta&lished $riteria and a""roval &1 the $lient. 6. mortgage ins/ran$e is a""li$a&le to the asset, )R%
de$isioning tool is /sed to "re0/ali.1 the o..er &ased on
. A "reliminar1 8H@ revie3 is /nderta,en to as$ertain $losing $osts and &ased
on esta&lished $riteria ma1 re0/ire revie3 and a""roval &1 senior )R% management. -he asset manager 3ill revie3 and a""rove the short sale
and noti.1 the listing agent and &orro3er o. the a""roval, .ollo3ed
t amo/nt d/e and 3iring instr/$tions. -he asset manager 3ill

and .a$ilitate short sale o..ers. -he
methodolog1 is 3ell de.ined and is s/""orted &1 ro&/st te$hnolog1 at ea$h ste" o. the short sale do$/mentation revie3, val/ation and
rs, .or short sale .ile "ro$essing, val/ation revie3

6n re$ognition o. the gro3ing interest in single .amil1 rental REO asset se$/riti5ation, )RC esta&lished the Com"onent #ervi$es @ivision in L3
servi$e the needs o. instit/tional investors and lenders o. single .amil1 rental "ro"erties as 3ell as &/1ers and
. )RC has "rovided vario/s servi$es related to $ollateral /nder3riting on more than O2.J> &illion in single .amil1 rental
assets. )RC has leveraged its $ore $om"eten$1 as an REO asset manager to "rovide a ./ll s/ite o. servi$es or individ/al $om"onents .or
@ivision 3ill "er.orm the .ollo3ing ./n$tions!
ile Revie-


9 a g e A 1<
#/rveillan$eE and
Mortgage "ro$ess administration

:ased /"on the /ni0/e $hara$teristi$s o. single .amil1 REO rentals, )RC "rovides a high to/$h a""roa$h to these assets.
training agents in ea$h target mar,et area and 3ill man/all1 assign :9O re0/ests .or greater $ontrol. 6ndivid/al :9O+s 3ill &e "ersonall1
revie3ed 3ith $omments entered. )RC 3ill also revie3 :9O+s and a""raisals "er.ormed &1 third "arties .or a$$/ra$1, $om"leten
reasona&leness and 3ill re$on$ile third "art1 val/ations 3ith material dis$re"an$ies.
detailed "ro"ert1 ins"e$tion .rom a li$ensed real estate agent
iss/es and the "roCe$ted $ost to remediate an1 o. these $onditions
ha&ita&le and i. it $on.orms to t1"i$al residential mortgage /nder3riting $riteria.
determine 3hether the 3or, 3as "er.ormed $onsistent 3ith the "ro"osed s$o"e and val/e o. the "ro"ert1.
re$on$iliation .or "re and "ost2$onstr/$tion assets $om"aring &/dget estimates 3ith the estimates

)RC+s $ollateral .ile revie3 gro/" "rovides title revie3 and $/rative servi$es &ased on the $lient+s title revie3 g/idelines
identi.1 an1 en$/m&ran$es, e4$e"tions, vesting errors tha
re.le$tive o. overall title 0/alit1 and "roCe$ted $/rative a$tivit1. An itemi5ed list o. all title de.i$ien$ies is develo"ed
estimated time.rame to $/re de.i$ien$ies. )RC 3ill 3or, to .a$ilitate $omm/ni$ation &et3een the title $om"an1 and the o3ner+s title $/rative
agent &/t )RC itsel. "rovides ver1 limited $/rative servi$es to maintain inde"enden$e &et3een the validation and $/rative "ro

-he $om"an1 "er.orms deed revie3 and veri.i$ation servi$es to monitor the deed re$ording "ro$ess
)RC 3ill "er.orm the .ollo3ing tas,s related to deed revie3 and validation!

Revie3ing "eriodi$ /"dates to title as "rovided &1 o3ner+s title vendor
Conta$ting tr/stee andMor re$ording o..i$e to determine stat/s and
)enerating stat/s re"orts listing e4$e"tions .or .ollo3

)RC 3ill also "er.orm a lease revie3 to determine 3hether the
$lient. -he $om"an1 3ill re$on$ile the lease amo/nt to the F/nder3rittenG lease amo/nts "rovided &1 the o3ner. )RC r
rental rates $ontained in the :9O 3ith the rental estimates "rovided &1 the o3ner.

)RC revie3s ins/ran$e and real estate ta4 in.ormation to veri.1 that the "ro"erl1 is "ro"erl1 ins/red, $on.irming that the ins/red val/e amo/nt
"rovided to the ins/ran$e $arrier is e0/al, at least, to the re"la$ement val/e o. the "ro"ert1. E4$e"tions are re"orted to all st
estimates are "rovided &1 the &orro3er and )RC 3ill veri.1 the a$$/ra$1 o. ta4ing in.ormation 3ith a third "art1 o
mar,et area and 3ill re"ort varian$es in e4$ess o. >K.

As "art o. its Com"onent #ervi$es @ivision, )RC has develo"ed
this se$tor. @/e to the la$, o. a $on$entrated regional or nation3ide single .amil1
a $orres"onding single .amil1 rental "ro"ert1 management
rental "ro"ert1 management net3or,. )RC is 3or,ing 3ith its "arent, Cla1ton, to develo" a s1stemati$ "ro$ess to identi.1 and
that $omes 3ith *s$attered site+ "ro"ert1 management.
and investors in the "ost2.ore$los/re sale environment &1 ass/ming $ontrol o. rental streams and "h1si$al $ollateral.

)RC is in the "ro$ess o. negotiating 3ith lo$al, regional and national servi$e "roviders to develo"
./n$tion that 3ill have &oth s$ale and .le4i&ilit1 to ass/me management o. large, m/lti
ass/m"tion o. "ro"ert1 management ./n$tions ma1 re0/ire short
individ/al asset $ir$/mstan$es. Hnder this s$enario )RC 3ill "rovide s/rveillan$e
"ro"ert1 managers &ased on esta&lished $riteria (li$ensing, &a$,gro/nd $he$,s, ins/ran$e
.or3ard &asis. -his assessment 3ill &e "rovided at the individ/al "ro"ert1, mar,et"la$e, and "ort.olio lev
o"erating and .inan$ial in.ormation .rom the "ro"ert1 management $om"an1 and other so/r$es and &en$hmar, the data to servi$in
&est "ra$ti$es, /nder3riting ass/m"tions, modeled $ash .lo3 "roCe$tions, and a$t/al ma
Mortgage "ro$ess administration
:ased /"on the /ni0/e $hara$teristi$s o. single .amil1 REO rentals, )RC "rovides a high to/$h a""roa$h to these assets.
and 3ill man/all1 assign :9O re0/ests .or greater $ontrol. 6ndivid/al :9O+s 3ill &e "ersonall1
revie3ed 3ith $omments entered. )RC 3ill also revie3 :9O+s and a""raisals "er.ormed &1 third "arties .or a$$/ra$1, $om"leten
on$ile third "art1 val/ations 3ith material dis$re"an$ies. 6nitiall1, )RC+s val/ation de"artment
real estate agent to identi.1 damage, negle$t, de.erred maintenan$e and "otential environmental
and the "roCe$ted $ost to remediate an1 o. these $onditions. -he ins"e$tion re"ort $on.irms i. the "ro"ert1, in its "resent $ondition, is
ha&ita&le and i. it $on.orms to t1"i$al residential mortgage /nder3riting $riteria. A "ost2reha&ilitation ins"e$tion 3ill &e $om"leted to
the 3or, 3as "er.ormed $onsistent 3ith the "ro"osed s$o"e and val/e o. the "ro"ert1.
$onstr/$tion assets $om"aring &/dget estimates 3ith the estimates $ontained in the :9O or "ro"ert1 ins"e$tion.
"rovides title revie3 and $/rative servi$es &ased on the $lient+s title revie3 g/idelines
identi.1 an1 en$/m&ran$es, e4$e"tions, vesting errors that $o/ld adversel1 im"a$t mar,eta&ilit1 or ins/ra&ilit1. )RC assigns a title grade
re.le$tive o. overall title 0/alit1 and "roCe$ted $/rative a$tivit1. An itemi5ed list o. all title de.i$ien$ies is develo"ed
de.i$ien$ies. )RC 3ill 3or, to .a$ilitate $omm/ni$ation &et3een the title $om"an1 and the o3ner+s title $/rative
agent &/t )RC itsel. "rovides ver1 limited $/rative servi$es to maintain inde"enden$e &et3een the validation and $/rative "ro
m"an1 "er.orms deed revie3 and veri.i$ation servi$es to monitor the deed re$ording "ro$ess, so that the
)RC 3ill "er.orm the .ollo3ing tas,s related to deed revie3 and validation!
"eriodi$ /"dates to title as "rovided &1 o3ner+s title vendorE
tr/stee andMor re$ording o..i$e to determine stat/s and "roCe$ted time.rame
stat/s re"orts listing e4$e"tions .or .ollo32/" and $om"leted deed re$ordings
determine 3hether the standardi5ed .orms 3ere /sed and identi.1 e4$e"tions .or re"orting to the
$lient. -he $om"an1 3ill re$on$ile the lease amo/nt to the F/nder3rittenG lease amo/nts "rovided &1 the o3ner. )RC r
rental rates $ontained in the :9O 3ith the rental estimates "rovided &1 the o3ner.
in.ormation to veri.1 that the "ro"erl1 is "ro"erl1 ins/red, $on.irming that the ins/red val/e amo/nt
ded to the ins/ran$e $arrier is e0/al, at least, to the re"la$ement val/e o. the "ro"ert1. E4$e"tions are re"orted to all st
estimates are "rovided &1 the &orro3er and )RC 3ill veri.1 the a$$/ra$1 o. ta4ing in.ormation 3ith a third "art1 o
mar,et area and 3ill re"ort varian$es in e4$ess o. >K.
@ivision, )RC has develo"ed a "ro"ert1 management s/rveillan$e and
a $on$entrated regional or nation3ide single .amil1 rental REO net3or, histori$all1,
"ro"ert1 management net3or,. )RC has addressed the need .or a $oherent, 3ell managed single .amil1
rental "ro"ert1 management net3or,. )RC is 3or,ing 3ith its "arent, Cla1ton, to develo" a s1stemati$ "ro$ess to identi.1 and
management. -he $om"an1+s "ro"ert1 management oversight "rogram 3ill
.ore$los/re sale environment &1 ass/ming $ontrol o. rental streams and "h1si$al $ollateral.
3ith lo$al, regional and national servi$e "roviders to develo" GhotG or F3armG "ro"ert1 management &a$,/"
that 3ill have &oth s$ale and .le4i&ilit1 to ass/me management o. large, m/lti2site residential "ort.olios on a nation3ide &asis. -he
tion o. "ro"ert1 management ./n$tions ma1 re0/ire short2term interim meas/res or a more long2term sol/tion, de"ending /"on
individ/al asset $ir$/mstan$es. Hnder this s$enario )RC 3ill "rovide s/rveillan$e over a national "ro"ert1 management net3or,, 0/ali
"ro"ert1 managers &ased on esta&lished $riteria (li$ensing, &a$,gro/nd $he$,s, ins/ran$e and "roviding 0/alit1 s$oring on their 3or, on a go
-his assessment 3ill &e "rovided at the individ/al "ro"ert1, mar,et"la$e, and "ort.olio levels. )RC 3ill o&tain asset
o"erating and .inan$ial in.ormation .rom the "ro"ert1 management $om"an1 and other so/r$es and &en$hmar, the data to servi$in
&est "ra$ti$es, /nder3riting ass/m"tions, modeled $ash .lo3 "roCe$tions, and a$t/al mar,et data. @etailed asset level "er.orman$e re"orting
.com | 00 2!!"1##$
:ased /"on the /ni0/e $hara$teristi$s o. single .amil1 REO rentals, )RC "rovides a high to/$h a""roa$h to these assets. )RC is sele$ting and
and 3ill man/all1 assign :9O re0/ests .or greater $ontrol. 6ndivid/al :9O+s 3ill &e "ersonall1
revie3ed 3ith $omments entered. )RC 3ill also revie3 :9O+s and a""raisals "er.ormed &1 third "arties .or a$$/ra$1, $om"leteness and
+s val/ation de"artment 3ill re0/est a
to identi.1 damage, negle$t, de.erred maintenan$e and "otential environmental
re"ort $on.irms i. the "ro"ert1, in its "resent $ondition, is
"e$tion 3ill &e $om"leted to
the 3or, 3as "er.ormed $onsistent 3ith the "ro"osed s$o"e and val/e o. the "ro"ert1. )RC 3ill "er.orm &/dget
$ontained in the :9O or "ro"ert1 ins"e$tion.
"rovides title revie3 and $/rative servi$es &ased on the $lient+s title revie3 g/idelines. )RC 3ill revie3 title to
t $o/ld adversel1 im"a$t mar,eta&ilit1 or ins/ra&ilit1. )RC assigns a title grade
re.le$tive o. overall title 0/alit1 and "roCe$ted $/rative a$tivit1. An itemi5ed list o. all title de.i$ien$ies is develo"ed, a$$om"anied &1 an
de.i$ien$ies. )RC 3ill 3or, to .a$ilitate $omm/ni$ation &et3een the title $om"an1 and the o3ner+s title $/rative
agent &/t )RC itsel. "rovides ver1 limited $/rative servi$es to maintain inde"enden$e &et3een the validation and $/rative "ro$esses.
, so that the deed in.ormation is $orre$t.
"roCe$ted time.rameE and
/" and $om"leted deed re$ordings.
/sed and identi.1 e4$e"tions .or re"orting to the
$lient. -he $om"an1 3ill re$on$ile the lease amo/nt to the F/nder3rittenG lease amo/nts "rovided &1 the o3ner. )RC re$on$iles the mar,et
in.ormation to veri.1 that the "ro"erl1 is "ro"erl1 ins/red, $on.irming that the ins/red val/e amo/nt
ded to the ins/ran$e $arrier is e0/al, at least, to the re"la$ement val/e o. the "ro"ert1. E4$e"tions are re"orted to all sta,eholders. -a4
estimates are "rovided &1 the &orro3er and )RC 3ill veri.1 the a$$/ra$1 o. ta4ing in.ormation 3ith a third "art1 on a 10K sam"ling si5e o. the
s/rveillan$e and oversight "rogram .or "arti$i"ants in
histori$all1, there has &een no demand .or
)RC has addressed the need .or a $oherent, 3ell managed single .amil1
rental "ro"ert1 management net3or,. )RC is 3or,ing 3ith its "arent, Cla1ton, to develo" a s1stemati$ "ro$ess to identi.1 and monitor the ris,
-he $om"an1+s "ro"ert1 management oversight "rogram 3ill $reate sta&ilit1 .or lenders
.ore$los/re sale environment &1 ass/ming $ontrol o. rental streams and "h1si$al $ollateral.
GhotG or F3armG "ro"ert1 management &a$,/"
site residential "ort.olios on a nation3ide &asis. -he
term sol/tion, de"ending /"on
a national "ro"ert1 management net3or,, 0/ali.1ing
and "roviding 0/alit1 s$oring on their 3or, on a go2
els. )RC 3ill o&tain asset2level
o"erating and .inan$ial in.ormation .rom the "ro"ert1 management $om"an1 and other so/r$es and &en$hmar, the data to servi$ing ind/str1
r,et data. @etailed asset level "er.orman$e re"orting


9 a g e A 1J
3ill &e "rovided to $lients and, i. ne$essar1, )RC 3ill 3or, 3ith the "ro"ert1 management $om"an1 and $lient to remediate an1
$on$erns. :1 develo"ing a relia&le nation3ide net3or, o. resid
)RC, investors in the single .amil1 REO rental s"a$e $an sta&ili5e their a$0/ired "ort.olios and e..i$ientl1 develo" a transi
e4e$/ting a "ermanent management sol/tion or a dis"osition strateg1.

Assess'ent! 6n o/r vie3, )RC+s Com"onent
val/ation, and "ro"ert1 ins"e$tion e4"ertise to develo" a s/ite o. strategi$ servi$es to the gro3ing single .amil1 REO
-he $om"an1+s seamless integration o. e4isting te$hnolog1 "rovides a sta&le .o/ndation .or the ./ll s/ite o. servi$e
Com"onent #ervi$es @ivision and the $om"an1+s reha&ilitation &/dget re$on$iliation "ro$ess
rate validation "roto$ols "rovide a signi.i$ant added val/e .or $lients

Acco/nting and 1nvoice Manage'ent
-he A$$o/nting @e"artment in$l/des A$$o/nts 9a1a&le and Re$eiva&le, :illing Coordinators, )eneral Ledger Management, and 6nve
Re"orting. -he 6nvoi$e Management (6M s1stem is /sed
in$l/de reim&/rsa&le e4"enses, servi$ing .ees, $an$ellation .ees and management .ees. E4"ense reim&/rsement re0/ests are s/&
$om"an1 via the 6M s1stem or man/all1 via mail or email. -he revie3 and a""roval "ro$ess is "er.ormed &1
man/all1 enter all a""roved e4"ense reim&/rsement re0/ests into REOConne4. A/tomated e4"ense re0/ests re$eived via the 6M s
do3nloaded dail1 into REOConne4 .or s$r/&&ing and validation. :illing Coordinators r
s"e$i.i$ $lient reim&/rsement and "a1ment g/idelines "/rs/ant to a $lient
REOConne4 to the Mi$roso.t @1nami$s )9 a$$o/nting so.t3are. -h
so.t3are to veri.1 the alignment o. e4"enses to designated $lients and validate all s/""orting &illing in.ormation on man/all1 entered e4"enses
-he1 also "er.orm a 0/alit1 revie3, &ased on "re
assem&led &1 the :illing Coordinators are then s/&mitted .or senior level a""roval and "osted .or "a1ment.

On$e vendors have &een "aid, )RC m/st &ill $lients .or reim&/rsement. -he 6nvestor Re"orting Anal1st "re"ares an invoi$e .or reim&/rsa&le
e4"enses derived .rom a $/m/lative list o. /"
a$$om"lished &1 vario/s means in$l/ding .lat .iles or remittan$e s/mmaries via the 6M s1stem,
vendor+s "aid invoi$e to the $lient .or reim&/rsement, or
a$$o/ntant "er.orms a re$on$iliation o. all /n&illed e4"enses 1et to &e &illed to the $lient and intera$ts 3ith the A$$o/ntin
Re"orting areas to remediate dis$re"an$ies, the res/lts o. 3hi$h are revie3ed &1 the Controller.

6n$oming "a1ments to )RC are revie3ed &1 an A$$o/nts 9a1a&le em"lo1ee 3ho $reates a $ash re$ei"ts &at$h 3ithin the a$$o/nting
and .or3ards the $he$,s to an A$$o/nts Re$eiva&le em"lo1ee 3ho also re$ords ele$troni$ "a1ments and 3ires. A general led
"er.orms a dail1 re$on$iliation o. $ash re$ei"ts entered into the a$$o/nting s1stem 3ith the de"osit re$ord re.le$ted on the
site to identi.1 dis$re"an$ies and remediate them in a timel1 manner. All "a1ments that are not im
as /na""lied $ash and m/st &e resear$hed and "ro$essed &1 month
management to ens/re $om"leteness o. the re$on$iliation "ro$ess.
a$$o/nts re$eiva&le Fdee" diveG 3hi$h $onsists o. revie3ing aged
misa""lied "a1ments, validating $lient re./nds, and

6ndivid/als in the a$$o/nting de"artment are $ross
re$on$iliation re"orts are revie3ed &1 the )RC Controller and

Assess'ent! Morningstar &elieves that )RC demonstrates solid $ontrols in its a$$o/nting "ra$ti$es, s/""orted &1 an e..e$tive
te$hnolog1 environment. -he organi5ational str/$t/re o. )RC+s a$$o/n
among invoi$ing, &illing revie3, a$$o/nts re$eiva&le and "a1a&le, and general ledger management. -he $om"an1 has em&edded
m/lti"le levels o. revie3 and a$$o/nta&ilit1 &oth on the )RC level and 3

Ranking 2efinitions
-he n/meri$al s$ale o. *MOR RVMR#1+ to *MOR RVMR#
3ill &e "rovided to $lients and, i. ne$essar1, )RC 3ill 3or, 3ith the "ro"ert1 management $om"an1 and $lient to remediate an1
:1 develo"ing a relia&le nation3ide net3or, o. residential "ro"ert1 managers 3ith inde"endent
)RC, investors in the single .amil1 REO rental s"a$e $an sta&ili5e their a$0/ired "ort.olios and e..i$ientl1 develo" a transi
ement sol/tion or a dis"osition strateg1.
)RC+s Com"onent #ervi$es @ivision has s/$$ess./ll1 leveraged its e4isting enter"rise
val/ation, and "ro"ert1 ins"e$tion e4"ertise to develo" a s/ite o. strategi$ servi$es to the gro3ing single .amil1 REO
-he $om"an1+s seamless integration o. e4isting te$hnolog1 "rovides a sta&le .o/ndation .or the ./ll s/ite o. servi$e
@ivision and the $om"an1+s reha&ilitation &/dget re$on$iliation "ro$ess. Additionall1,
rate validation "roto$ols "rovide a signi.i$ant added val/e .or $lients
-he A$$o/nting @e"artment in$l/des A$$o/nts 9a1a&le and Re$eiva&le, :illing Coordinators, )eneral Ledger Management, and 6nve
-he 6nvoi$e Management (6M s1stem is /sed to "ro$ess invoi$es .or agent e4"enses and reim&/rsements.
in$l/de reim&/rsa&le e4"enses, servi$ing .ees, $an$ellation .ees and management .ees. E4"ense reim&/rsement re0/ests are s/&
$om"an1 via the 6M s1stem or man/all1 via mail or email. -he revie3 and a""roval "ro$ess is "er.ormed &1
man/all1 enter all a""roved e4"ense reim&/rsement re0/ests into REOConne4. A/tomated e4"ense re0/ests re$eived via the 6M s
do3nloaded dail1 into REOConne4 .or s$r/&&ing and validation. :illing Coordinators revie3 the e4"ense re0/ests to
s"e$i.i$ $lient reim&/rsement and "a1ment g/idelines "/rs/ant to a $lient2s"e$i.i$ .ee matri4. -he a""roved e4"ense data is trans.erred .rom
o.t @1nami$s )9 a$$o/nting so.t3are. -he :illing L/alit1 Control anal1sts "er.orm a dail1 revie3 3ithin the a$$o/nting
alignment o. e4"enses to designated $lients and validate all s/""orting &illing in.ormation on man/all1 entered e4"enses
"er.orm a 0/alit1 revie3, &ased on "re2determined $riteria, .or e4"enses "ro$essed via the 6M s1stem. 9a1ment "osting &at$hes
en "aid, )RC m/st &ill $lients .or reim&/rsement. -he 6nvestor Re"orting Anal1st "re"ares an invoi$e .or reim&/rsa&le
e4"enses derived .rom a $/m/lative list o. /"2to2date e4"enses e4tra$ted .rom the @1nami$s )9 a$$o/nting so.t3are. Client invoi$ing is
$$om"lished &1 vario/s means in$l/ding .lat .iles or remittan$e s/mmaries via the 6M s1stem, /tili5ation
vendor+s "aid invoi$e to the $lient .or reim&/rsement, or .inal e4"ense re$on$iliation on the 8H@21 $losing .orm.
a$$o/ntant "er.orms a re$on$iliation o. all /n&illed e4"enses 1et to &e &illed to the $lient and intera$ts 3ith the A$$o/ntin
Re"orting areas to remediate dis$re"an$ies, the res/lts o. 3hi$h are revie3ed &1 the Controller.
6n$oming "a1ments to )RC are revie3ed &1 an A$$o/nts 9a1a&le em"lo1ee 3ho $reates a $ash re$ei"ts &at$h 3ithin the a$$o/nting
and .or3ards the $he$,s to an A$$o/nts Re$eiva&le em"lo1ee 3ho also re$ords ele$troni$ "a1ments and 3ires. A general led
"er.orms a dail1 re$on$iliation o. $ash re$ei"ts entered into the a$$o/nting s1stem 3ith the de"osit re$ord re.le$ted on the
site to identi.1 dis$re"an$ies and remediate them in a timel1 manner. All "a1ments that are not immediatel1 a""lied to an invoi$e are $lassi.ied
as /na""lied $ash and m/st &e resear$hed and "ro$essed &1 month end. -he re"ort o. /na""lied $ash is revie3ed monthl1 &1 senior sta.. and
management to ens/re $om"leteness o. the re$on$iliation "ro$ess. -he A$$o/nting and 6nvestor Re"orting areas meet t
a$$o/nts re$eiva&le Fdee" diveG 3hi$h $onsists o. revie3ing aged $lient re$eiva&les, strategi5ing to $olle$t "ast d/e &alan$es, $orre$ting
misa""lied "a1ments, validating $lient re./nds, and re.erring aged items to an attorne1 .or $olle$tion.
6ndivid/als in the a$$o/nting de"artment are $ross2trained to in$rease ,no3ledge de"th and minimi5e t/rnover. On a monthl1 &asis, vario/s
re$on$iliation re"orts are revie3ed &1 the )RC Controller and Cla1ton+s Chie. %inan$ial O..i$er .or a""roval and signo...
Morningstar &elieves that )RC demonstrates solid $ontrols in its a$$o/nting "ra$ti$es, s/""orted &1 an e..e$tive
te$hnolog1 environment. -he organi5ational str/$t/re o. )RC+s a$$o/nting de"artment "rovides the re0/isite segregation o. d/ties
m/lti"le levels o. revie3 and a$$o/nta&ilit1 &oth on the )RC level and 3ith oversight &1 its $or"orate "arent, Cla1ton.
RVMR#1+ to *MOR RVMR#=+ is de.ined as .ollo3s!
.com | 00 2!!"1##$
3ill &e "rovided to $lients and, i. ne$essar1, )RC 3ill 3or, 3ith the "ro"ert1 management $om"an1 and $lient to remediate an1 "er.orman$e
inde"endent vetting and s/rveillan$e "er.ormed &1
)RC, investors in the single .amil1 REO rental s"a$e $an sta&ili5e their a$0/ired "ort.olios and e..i$ientl1 develo" a transition strateg1 and 3hile
@ivision has s/$$ess./ll1 leveraged its e4isting enter"rise23ide d/e diligen$e,
val/ation, and "ro"ert1 ins"e$tion e4"ertise to develo" a s/ite o. strategi$ servi$es to the gro3ing single .amil1 REO to rental mar,et.
-he $om"an1+s seamless integration o. e4isting te$hnolog1 "rovides a sta&le .o/ndation .or the ./ll s/ite o. servi$es o..ered &1 the
. Additionall1, lease revie3 and rental
-he A$$o/nting @e"artment in$l/des A$$o/nts 9a1a&le and Re$eiva&le, :illing Coordinators, )eneral Ledger Management, and 6nvestor
to "ro$ess invoi$es .or agent e4"enses and reim&/rsements. Client &illings ma1
in$l/de reim&/rsa&le e4"enses, servi$ing .ees, $an$ellation .ees and management .ees. E4"ense reim&/rsement re0/ests are s/&mitted to the
$om"an1 via the 6M s1stem or man/all1 via mail or email. -he revie3 and a""roval "ro$ess is "er.ormed &1 a gro/" o. :illing Coordinators 3ho
man/all1 enter all a""roved e4"ense reim&/rsement re0/ests into REOConne4. A/tomated e4"ense re0/ests re$eived via the 6M s1stem are
evie3 the e4"ense re0/ests to veri.1 that the1 meet
-he a""roved e4"ense data is trans.erred .rom
e :illing L/alit1 Control anal1sts "er.orm a dail1 revie3 3ithin the a$$o/nting
alignment o. e4"enses to designated $lients and validate all s/""orting &illing in.ormation on man/all1 entered e4"enses.
, .or e4"enses "ro$essed via the 6M s1stem. 9a1ment "osting &at$hes
en "aid, )RC m/st &ill $lients .or reim&/rsement. -he 6nvestor Re"orting Anal1st "re"ares an invoi$e .or reim&/rsa&le
date e4"enses e4tra$ted .rom the @1nami$s )9 a$$o/nting so.t3are. Client invoi$ing is
o. the 6M s1stem to .or3ard a
1 $losing .orm. A senior general ledger
a$$o/ntant "er.orms a re$on$iliation o. all /n&illed e4"enses 1et to &e &illed to the $lient and intera$ts 3ith the A$$o/nting and 6nvestor
6n$oming "a1ments to )RC are revie3ed &1 an A$$o/nts 9a1a&le em"lo1ee 3ho $reates a $ash re$ei"ts &at$h 3ithin the a$$o/nting s1stem
and .or3ards the $he$,s to an A$$o/nts Re$eiva&le em"lo1ee 3ho also re$ords ele$troni$ "a1ments and 3ires. A general ledger a$$o/ntant
"er.orms a dail1 re$on$iliation o. $ash re$ei"ts entered into the a$$o/nting s1stem 3ith the de"osit re$ord re.le$ted on the &an, a$$o/nt 3e&
mediatel1 a""lied to an invoi$e are $lassi.ied
. -he re"ort o. /na""lied $ash is revie3ed monthl1 &1 senior sta.. and
A$$o/nting and 6nvestor Re"orting areas meet t3i$e monthl1 .or an
$lient re$eiva&les, strategi5ing to $olle$t "ast d/e &alan$es, $orre$ting
,no3ledge de"th and minimi5e t/rnover. On a monthl1 &asis, vario/s
Chie. %inan$ial O..i$er .or a""roval and signo...
Morningstar &elieves that )RC demonstrates solid $ontrols in its a$$o/nting "ra$ti$es, s/""orted &1 an e..e$tive
ting de"artment "rovides the re0/isite segregation o. d/ties
ith oversight &1 its $or"orate "arent, Cla1ton.


9 a g e A 1I
*1+ E4$eeds
*2+ @emonstrates "ro.i$ien$1 in ,e1 areas o. ris,
*3+ @emonstrates $om"lian$e
*=+ @emonstrates la$, o. $om"lian$e
A servi$er assigned a ran,ing o. at least *MOR
servi$ingMvendor standards and re0/irements .or the servi$er+s
Assessments o. Residential #ervi$ers and Vendors
htt"!MMratingagen$1.morningstar.$om.

2isclos/res

-he material $ontained herein (the FMaterialG is &eing distri&/ted in the Hnited #tates &1 Morningstar Credit Ratings, LLC
(FMorningstarG and is solel1 .or in.ormational "/r"oses, and sho/ld not &e $onsidered a soli$itation to &/1 or sell an1 se$/
MA-ER6AL 9ROV6@E@ 6# FA# 6#G AD@ DO- #H:7EC- -O ADP 'ARRAD-6E#, EQ9RE## OR 6M9L6E@, 6DCLH@6D), :H- DO- L6M6-E@
-O, ADP 'ARRAD-6E# O% ACCHRACP, -6MEL6DE##, COM9LE-EDE##, MERC8AD-A:6L6-P OR %6-DE## %OR A 9AR-6CHLAR
9HR9O#E OR H#E. Morningstar does not /nderta,e to /"date an1 in.ormation or o"inions $ontained in the Material. %rom time to
time, Morningstar and its a..iliates andMor or their o..i$ers and em"lo1ees ma1 "er.orm other servi$es .or the $om"an1 andMor
a..iliates mentioned in the Material.
Morningstar ran,ings, .ore$asts, and assessments $ontained in this Material are eval/ations and o"inions o. non
there.ore, are not $redit ratings 3ithin the meaning o. #e$tion 3 o. the #e$/rities E4$hange A$t o. 1?3= (FE4$hange
s/&Ce$t to the E4$hange A$t re0/irements and reg/lations "rom/lgated there/nder 3ith res"e$t to $redit ratings iss/ed &1 nati
statisti$al rating organi5ations.

-he "ast "er.orman$e o. the $om"anies des$ri&ed in this Material is not ne$essaril1 indi$ative o. the ./t/re "er.orman$e. 'h
o&tains in.ormation .or its assessment $ontained .rom so/r$es it &elieves are relia&le, Morningstar does not a/dit
.rom third2"arties in $onne$tion 3ith its assessment and ran,ings $ontained in these Materials, and it does not and $annot inde"endentl1
that in.ormation, nor is s/$h in.ormation s/&Ce$t to an1 3arrant1, g/arant1, or re"r
an ass/m"tion that the in.ormation re$eived .rom third
made &1 Morningstar in "re"aring the Material that has
methodolog1, "lease visit htt"!MMratingagen$1.morningstar.$om.

-his Material, and the ran,ings and .ore$asts $ontained herein, re"resent Morningstar+s o"inion as o.
s/&Ce$t to $hange and sho/ld not &e vie3ed as "roviding an1 g/arantee. 6n no event shall Morningstar &e lia&le to an1 "art1
indire$t, in$idental, "/nitive, s"e$ial or $onse0/ential damages, $osts, e4
even i. advised o. the "ossi&ilit1 o. s/$h damages. -he Material ma1 not &e re"rod/$ed, modi.ied, or distri&/ted in an1 .orm
3ritten "ermission o. Morningstar. Morningstar Credit Ratings, LLC, =10 8orsham Road, #/ite A, 8orsham, 9A 1?0== (I00 2??

E4$eeds "r/dent loan servi$ing standards in ,e1 areas o. ris,
@emonstrates "ro.i$ien$1 in ,e1 areas o. ris,
@emonstrates $om"lian$e in ,e1 areas o. ris,
@emonstrates la$, o. $om"lian$e in one or more ,e1 areas o. ris,
A servi$er assigned a ran,ing o. at least *MOR RV3MR#3+ is deemed to $om"l1 3ith 3hat 3e vie3 as the minim/m "r/dent loan
standards and re0/irements .or the servi$er+sMvendor+s o"erational $ategor1 and role. -o a$$ess
and Vendors! Methodolog1 and 9ro$ess and other "/&lished re"orts
(FMorningstarG and is solel1 .or in.ormational "/r"oses, and sho/ld not &e $onsidered a soli$itation to &/1 or sell an1 se$/
/nderta,e to /"date an1 in.ormation or o"inions $ontained in the Material. %rom time to
time, Morningstar and its a..iliates andMor or their o..i$ers and em"lo1ees ma1 "er.orm other servi$es .or the $om"an1 andMor
Morningstar ran,ings, .ore$asts, and assessments $ontained in this Material are eval/ations and o"inions o. non
there.ore, are not $redit ratings 3ithin the meaning o. #e$tion 3 o. the #e$/rities E4$hange A$t o. 1?3= (FE4$hange
s/&Ce$t to the E4$hange A$t re0/irements and reg/lations "rom/lgated there/nder 3ith res"e$t to $redit ratings iss/ed &1 nati
-he "ast "er.orman$e o. the $om"anies des$ri&ed in this Material is not ne$essaril1 indi$ative o. the ./t/re "er.orman$e. 'h
o&tains in.ormation .or its assessment $ontained .rom so/r$es it &elieves are relia&le, Morningstar does not a/dit
"arties in $onne$tion 3ith its assessment and ran,ings $ontained in these Materials, and it does not and $annot inde"endentl1
that in.ormation, nor is s/$h in.ormation s/&Ce$t to an1 3arrant1, g/arant1, or re"resentation. Certain ass/m"tions, in$l/ding, &/t not limited to,
an ass/m"tion that the in.ormation re$eived .rom third2"arties is $om"lete and a$$/rate, in $onne$tion 3ith its assessment, ma1 have &een
made &1 Morningstar in "re"aring the Material that has res/lted in the o"inion "rovided. %or more in.ormation a&o/t Morningstar+s assessment
methodolog1, "lease visit htt"!MMratingagen$1.morningstar.$om.
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