The New Old Era How the Collapse of the Mortgage Market Has Made the Old New Again Mary Kay Woodward

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The New (Old) EraHow the Collapse of the
Mortgage Market Has Made the Old New AgainMary
Kay WoodwardVice President, Market Lending
Leader Wells Fargo Home Mortgage
September 2009
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2009 Has Been a Wild Ride
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Manage Risk

• 4506T
• Require a signed 4506T at application and at
  closing
• LoanSafe2
• Assists with identification of potential high
  risk(s) on the loan transaction such as identity
  and occupancy
• HUD-1 reviews prior to close
• Review borrower and seller HUD-1s prior to close
  in order to identify potential fraud
• Credit Policy
• Conservative approach to products and programs
  in order to mitigate risk

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Inspect What We Expect

• Perform pre fund audits on Site
• Dedicated resources perform audits on products
  and programs with high error rates
• Initial file quality reviews
• Facilitates opportunity for real time feedback to
  Sales on the quality of applications
• Reduced initial application data integrity errors
  
• Underwriter Quality Scorecard
• Provides the underwriter with a score based on
  analysis of historical data designed to identify
  potential areas of risk
• Sales Quality Scorecard
• Provides data to Sales Management on
  originators performance against threshold
  related to file and loan quality

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Back to Basics

• Utilize the decision engine as a tool rather than
  a decisioner
• Manage up front risk by making decisions on the
  complete profile of the customer
• Overhauled delegation of authority
• Centralized test case review
• Up- skill underwriters for todays market
• Reduce common errors
• Identify high potential team members

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Summary

• Despite the challenges of doing business in the
  current environment, we have managed to be
  successful by implementing and improving
  processes and controls to mitigate increasing
  fraud and risk across industry
• By doing good business we have been able to gain
  market share and maintain our reputation as The
  Company thats doing the right thing