Mortgage Bankers Association Servicing Conference and Expo February 22, 2005

1. Mortgage Bankers Association Servicing Conference and Expo February 22, 2005 U.S. Department of Veterans AffairsVeterans Benefits AdministrationNational Loan Administration Redesign

2. Agenda • Welcome • Opening Remarks: From LARD to VALERI • Introductions • Summary of Significant Program Changes • Regulation Changes • Next Steps • Question and Answer Session

3. From LARD to VALERI LoanAdministrationReDesign

4. Introductions • Dick Fyne Deputy Director, Loan Guaranty Service • Carl Wasson Acting Assistant Director for Loan Management, Loan Guaranty Service • Mike Frueh Financial Analyst, Loan Guaranty Service • Richard Lewis Loan Specialist, Loan Guaranty Service • Dave Davis Loan Guaranty Officer, Roanoke • Barbara Harper Loan Administration Officer, St. Paul • Gloria Randolph Loan Administration Officer, Cleveland • Helen Galer Loan Administration Officer, Houston • Marti Varnum Loan Administration Officer, Phoenix • Chris Peterson CCSi • Jim Satterwhite Fidelity National Default Solutions • David Brent Fidelity National Default Solutions

5. Summary of Significant Program Changes • Substantial increase in delegation of authority to servicers • Paid incentives for workouts and alternatives to foreclosure • Tier rankings for performance • Electronic reporting and claims submissions • Standardization of VA procedures • Nationwide VA distribution of cases – one national jurisdiction • VA role change to servicer monitoring

6. Regulation Changes • Clearer loan modification regulation • New regulations for deeds-in-lieu of foreclosure and compromise sales • Incentives for completion of workout options and alternatives to foreclosure • Tier rankings for servicer performance • Revised data reporting requirements

7. Regulation Changes (continued) • Servicer Appraisal Processing Program • Regulatory time for loan termination • New attorney fee schedule • Servicer calculation of net value and bid • Simpler title evidence requirements • Electronic claims submission and review • Post-audit of claims and incentive cases • Records retention requirements • Increased authority for releases of liability

8. Next Steps • Regulatory process • Completion of VALERI • Training • Implementation

9. Regulatory Process • Proposed regulations were published on February 18, 2005 • Comments are due by April 19, 2005 • VA will consider all comments and draft final regulations • When published, regulations will be effective in thirty (30) days

10. Completion of VALERI • Contract awarded last summer • Customization of existing products • Contractors assimilating proposed VA processes • Roll-out to be coordinated with new regulations

11. Training • Internal VA training will begin in the coming months • Two servicer training conferences will be held on new VA processes and procedures • Both servicing training conferences will cover the same information • CCSI/Fidelity will provide training on the new system and the required data reporting formats • VA will continue to provide ongoing training on VA policies and procedures to the industry

12. Implementation • Implementation timeline to be determined after system and new regulations are finalized • Transition rules will be included in the regulations • We look forward to a continuing partnership with the industry

13. Question and Answers We welcome your questions about the changes

14. Questions and Answers • Moderator: Mike Frueh – Financial Analyst, Loan Guaranty Service • Some topics for discussion: • Current servicing and loss mitigation • Incentives and tier rankings • Foreclosure and bankruptcy • Claims processing • Data reporting • Training

15. VALERI Website WWW.VBAVALERI.COM