Considerations for Issuers in an Illiquid Market Paul Arvidson

1. Considerations for Issuers in an Illiquid Market Paul Arvidson

2. Presentation • The Securitization/Asset Sale Process • Consideration #1 – Collateral Data • Consideration #2 - Static Pool Reporting • Consideration #3 – Servicing and Reporting • Consideration # 4 – Investor Communications • How has Technology Played a Role? • Q&A

3. Securitization Process Issuer Data Constantly Flows Investors Pool Selection Static Pool Analysis Structuring Rating Agency Presentation Road Show Investor Reporting Issuers/Assets Investors/Securities Banc One Capital Bonds/Notes

4. Consideration # 1: Collateral Data • Don’t Let Your Chief Information Officer Tell You “We Have It” • Put processes in place to ensure it is complete and Accurate • Historical Performance Data for Key Variables • Non-Financial Data Includes Geographic, Industry, Program, Borrower Demographics and Profiles • Financial Data Includes: Repayment Terms, Current Balances, Aging • Need to Manage Missing or Invalid Data - Know where you have Gaps Up Front !

5. Consideration #2: Static Pool - Vintage Reporting • What is it? • A Report that Provides a View to the performance of a “fixed pool” of assets over time • Delinquency • Losses • Prepayments • Why is it a Challenge? • Availability of Data Historical Data Elements • Systems Limitations • Presenting Historical Performance is Critical • This Issue Has Stopped Many Transactions

6. Consideration #2: Static Pool - Vintage Reporting Reg AB and the “Twist” of Materiality • What are the Characteristics of the Pool Being Securitized? • As Examples…. • Asset Type • Product Type • Originator Why a Challenge? • Materiality requires Issuers Track More Detail than ever before • Issuers must Constantly Evaluate Every Transaction for “Materiality” Decisions • Asset/Product Mix • Origination Source

7. Static Pool Data Requirements

8. Consideration #3: Servicing and Reporting • Need to Demonstrate Adequate Servicing Capabilities • Strong Collection and Collateral Management • Disaster Recovery Plans • Loan Documentation • Strong MIS – Support for Securitization Reporting • Automation – Minimize all forms of Manual Processes • Accuracy of Reporting • Auditable Processes - Avoid Spreadsheets

9. Consideration #3: Servicing and Reporting • Pool Selection • Know What you Have • Distribution and Stratification Reporting • Investor/Securitization Reporting • Must be in Accordance with Pooling and Servicing Agreements • Daily/Monthly Reporting • Allocation of P&I • Non-Cash Transactions • Servicer Modifications • Prepayments and Recoveries • Changes in Account Statuses

10. Consideration #4: Investor & Market Communication The Ability to Answer Investor Questions About Your Deal Performance “real time” ! • Financial Reporting Transparency • Goes Beyond Investor Reporting - Access to more data, including Loan Level • Tools for better Collateral Performance Analysis – Both Sold and Unsold Assets • Increased “direct” Access to Information via a Dedicated Website • Provide Additional Insight as to the Your Organization’s Funding Strategy • Control What Information is in the Market

11. How Does Technology Support all of these Considerations? • Providing Software and Data Solutions that Integrate Processes • Support Data Management • Key Reporting Requirements

12. Issuer Solutions Data Flow Servicer Servicing System Other SourceSystem Data Warehouse Pool Selection Collateral Processing Static Pool Reporter Surveillance Account Calculations and Tracking Reports/ Extracts Transaction Processing Deal Reporter Investor Reporting/ Bond Administration Static Pool Filer Cash Flows G/LSystem Trustee Investors General Ledger

13. Collateral Data Reconciliation Services • Data Errors and Omission Reporting • Servicer/3rd Party Data Validation/QA • Trustee Data Validation/QA • Trustee Report Collateral Reconciliation • Capital Structure/Waterfall Reconciliation Quality Control and Data Reconciliation

14. Asset/Pool Selection Data Warehousing Investor Reporting Warehouse Reporting REIT Reporting Accounting Regulatory Reporting Collateral Calculations Cash Flow Analytics Gain-on-Sale Residual Valuation Cash/Bank Reconciliation Shadow Servicing Management Reporting Trustee Waterfall Reconciliation Servicing and Reporting Securitization/Asset Sale Administration From asset selection to clean up call and everything in between

15. Collateral Reporting

16. Data Warehousing Static Pool Reporting Deal Performance Risk Analysis Collateral Performance Investor Presentations Rating Agency Presentations Investor Communication Improves investor communications, deal transparency and liquidity and complies with SEC rules

17. Loan Level Performance AnalysisFICO / LTV / State Bucket - 3 dimension sample

18. Static Pool Output

19. Vintage Year Summary Graphing

20. Who is Lewtan Technologies? Consulting for First Time Issuers Global Leader in Software & Information for Securitizations Industry Portal

21. Consulting Services • Systems Evaluation • Work Flow/Process Evaluation • Software Evaluation • Data Management

22. ABS System The industry standard for meeting pre- and post-securitization issuance requirements ABS Discloser Facilitating transparency by providing a direct connection between issuers & investors. American Honda ANZ Bank Bank of Scotland NationStar CIT Group GMAC - Global HBOS Countrywide Credit Suisss CNH Holdings MEFA Popular Financial Thornburg Mortgage Key Bank Comprehensive Product Set

23. ABSNet The industry's leading resource for surveillance of asset-backed securities ABN AMRO Barclays Capital Deutsche Bank Dresdner Bank Nationwide Building Society NIB Capital Gruppo Santander Societe Generale UBS Comprehensive Product Set

24. Reference Information: Paul Arvidson Vice President, Sales 781-672-1216 parvidson@lewtan.com