LPS M ortgage M onitor

M ay 2 0 1 0 M or tgage Per for mance Obser vations

Data as of April, 2010 Month-end

 Total delinquencies decreased slightly from M arch to April
Total Delinquencies (excluding Foreclosures) = 8 .9 9 %
M onth over M onth Decrease of 1 .4 %, Year over Year Increase of 1 0 .7 %

Lender Pr ocessing Ser vices 2

 Foreclosure inventories dropped in April
April Foreclosure Rate = 3.18%
Month over Month Decrease of 2.8%, Year over Year Increase of 20.4%

Lender Pr ocessing Ser vices 3

Prime product, both Agency and Non-Agency have experienced the highest rates of
deterioration since January 2008.

Lender Pr ocessing Ser vices 4

The relative impact of foreclosures for Prime product is higher in the more recent
vintages

Lender Pr ocessing Ser vices 5

Delinquent and Foreclosure inventories are starting to stabilize

Lender Pr ocessing Ser vices 6

Despite improvements, there remains an elevated pool of distressed loans in the
market

Lender Pr ocessing Ser vices 7

9 0 Day Default % remained stable at the M arch level of 0 .4 9 %
Slightly above the 2 year low of 0 .4 6 %

Lender Pr ocessing Ser vices 8

 LPS Servicing Database 1 st liens – Non-Performing Loan Counts
Extrapolated Assuming M arket Share = 7 0 % Servicing and 4 0 % REO
Total Non-Current has declined by almost 7 9 0 k since January

Lender Pr ocessing Ser vices 9

Delinquency and Foreclosure Rate Table
Ranked based on Non-Current %

Lender Pr ocessing Ser vices 10

 Foreclosure Inventory by State
8 States are above the National Average (3.27%): Florida, Nevada, New Jersey, Arizona,
Hawaii, Illinois, Indiana, and Ohio

Lender Pr ocessing Ser vices 11

 Total Non-Current (including Delinquencies and Foreclosures) by State
National Average = 12.17%

3.9%
8.5%
6.4%

7.9%
10.4%
12.7%
4.7% 9.7%
8.2% 9.5% 8.9%
5.8% 11.5%

7.6%
6.5% 10.6%
9.7%
12.6%
13.2%
9.5% 12.6%
21.9%
7.5% 12.0%
8.1% 9.2% 11.5%

9.9% 8.6%

14.0%
11.6% 10.6%
9.1%
9.4%
8.9%
14.6%
11.4%
15.8% 11.3%
14.4%
9.3%

12.5%

22.3%

Lender Pr ocessing Ser vices 12

 Change in Total Non-Current by State in the last 6 months
Despite the national decline of 3.9% there are 8 states that still showed an increase
Alaska, Washington, Hawaii, Nevada, Oregon are the top 5

-9%
5%
0%

-6%
-8% -1%

-4% -5%
-2%
3% -4% -3%
-5% 0%

-6%
-9% -2% -3%
-5%
-6%
0%
1% -8%
3%
-5% -6% -8% -4%0%
-7%

-5% -6%

-4%
-7%
-5% -3%
-8%
-7% -3%
-4%
-7% -7%
-4%
-10%

-5%

-2%

Lender Pr ocessing Ser vices 13

The percentage of new problem loans is lower than 2009, but still remains elevated
when compared to 2008 and prior vintages

Lender Pr ocessing Ser vices 14

Approximately 439k loans were current at the beginning of January and are at least 60
days delinquent or in foreclosure as of April month end
FHA is the only category that did not experience a material decline in the number of
problem loans

Extrapolated to the US market using 70% coverage ratio.

Lender Pr ocessing Ser vices 15

New problem loans are still elevated in Nevada, Arizona, Florida and California

0.2%
0.8%
0.5%

0.7%
0.7%
1.1%
0.3% 0.7%
0.4%
0.8% 0.9% 0.6%
0.5% 0.7%

0.5%
0.4% 0.7%1.0%
0.6%
0.8%
1.1%
1.0% 0.7%
2.5%
0.7% 0.7% 0.9%
0.6% 0.7%

0.6% 0.7%

1.3%
0.7% 0.8%
0.6%
0.6%
0.7%
1.6%
0.8%
0.9% 0.7%
1.1%
0.6%

0.7%

1.5%

Lender Pr ocessing Ser vices 16

Volume of loans rolling further into delinquency remain stable at relatively low levels
Loans moving into REO status increased to a new all-time high

Loan counts are not extrapolated

Lender Pr ocessing Ser vices 17

Overall volume of loans curing to current declined to a 3 month low

Loan counts are not extrapolated

Lender Pr ocessing Ser vices 18

 Cure rates from early stage delinquency declined as the seasonal improvement period
concludes
Late stage delinquencies remain elevated as HAM P trial modifications are converted to
“permanent”

Loan counts are not extrapolated

Lender Pr ocessing Ser vices 19

Deterioration rates increased after the sharp decline in M arch while improvement rates
declined as cure rates dropped
Rolls of loans to a “W orse” status remain high in context of historical averages
3 .8 % of loans deteriorated in status vs. 1 .9 % that improved

Lender Pr ocessing Ser vices 20

Six month average deterioration ratio declined again in April
Approximately 2 Loans Deteriorated for every 1 Improved

Lender Pr ocessing Ser vices 21

Roll rates into Foreclosure declined in April

Lender Pr ocessing Ser vices 22

Advanced delinquency rolls remain elevated from a historical perspective

Lender Pr ocessing Ser vices 23

 The volume of loans deteriorating beyond 90 days declined further in April
Total foreclosure starts for 2010 are at 617k compared to 678k for the same period last
year

Loan counts are not extrapolated

*As servicers continue to identify ways to assist borrowers there may be instances where the
process impacts the month to month figures.

Lender Pr ocessing Ser vices 24

Foreclosure sale rate (as a percent of total loans) = 0.21%

Lender Pr ocessing Ser vices 25

Refinance opportunities are dwindling even for borrowers who are current

Lender Pr ocessing Ser vices 26

Production by Origination M onth – January 2 0 0 7 to December 2 0 0 9 by Product
FHA is 2 8 .4 % of origination for 2 0 0 9 vs. 2 4 .0 % for 2 0 0 8 and 5 .7 % in 2 0 0 7

Loan counts are not extrapolated

Lender Pr ocessing Ser vices 27

Jumbo Originations remain relatively insignificant and are focused primarily in
California

Loan counts are not extrapolated

Lender Pr ocessing Ser vices 28

Across all loan products the 2009 Vintage has returned to pre-2004 levels of default

Lender Pr ocessing Ser vices 29

FHA Product displays similar vintage default performance as the overall loan
population when not adjusting for risk characteristics

Lender Pr ocessing Ser vices 30

When accounting for FICO ranges, default performance for the FHA 2009 vintage is
performing better than only the 2007 and 2008 vintages
FHA Vintage default curves: FICO 660-679

Lender Pr ocessing Ser vices 31

FHA Vintage default curves: FICO 680-699

Lender Pr ocessing Ser vices 32

FHA Vintage default curves: FICO greater than or equal to 720

Lender Pr ocessing Ser vices 33