Title: Wingspan Portfolio Advisors
1- Wingspan Portfolio Advisors
- Default Servicing Solutions
2Contents
- Executive Summary
- Market Context
- Competitive Advantage
- The Wingspan Difference
- Profiles of Management Team
3Executive Summary
- A new default servicing specialist focused on
creating and maintaining long-term paying
relationships with highly delinquent borrowers by
rebuilding their financial strength through
strategies tailored to each borrowers unique
situation - Battle-tested and proven senior management team
with a successful track record building start-ups
- Unparalleled understanding of the servicing
industry, servicer characteristics, best
practices, and performance drivers - A unique strategic alliance with DRI Default
Management, the industry-leading default
technology provider, enables unsurpassed
technological solutions - A founding partner of the Coalition for Mortgage
Industry Solutions - Performance focused and analytics driven
4Contents
- Executive Summary
- Market Context
- Competitive Advantage
- The Wingspan Difference
- Profiles of Management Team
5Servicers Need a Wingman
The wingman is absolutely indispensable. It's
another set of eyes protecting you. That the
defensive part. Offensively, it gives you a lot
more firepower. -Lt. Col. Francis S. "Gabby"
Gabreski, USAF, 28 victories in WWII and 6.5 MiGs
over Korea.
Current state of the World
Expected state of the World
- Credit losses remain contained
- Existing staff and strategies maintain losses at
an acceptable level
- Credit losses growing industry-wide
- Additional staff and new strategies are required
- Poor loan resolution performance no longer offset
by home price appreciation - Unprecedented volume of defaults
- More delinquent loans than servicers can work
- Some loan types requires unique strategies and
skills - Insufficient internal capacity to maximize the
value of every loan type - Servicers require specialists to supplement their
core capacity
Wingspan complements servicer strengths
6Case Study
Second Mortgages Require Unique Strategies
- Second mortgage originations were at all-time
highs. - Now, nonperforming second mortgages are exploding
in volume. - Source, National Mortgage News.
- There are very few servicers with the skills and
tools necessary to cure nonperforming second
mortgages.
- The ultimate value of a nonperforming second
mortgage does not principally depend on
collateral value but on the borrowers psychology.
7Contents
- Executive Summary
- Market Context
- Competitive Advantage
- The Wingspan Difference
- Profiles of Management Team
8Experience
- Strategies guided by a deep understanding of best
practices, servicing technology, and servicers
operational practices - Servicer practices are frequently not apparent to
third parties but if known beforehand increase
performance lift, for example - Portfolios from servicers with collateral-focused
late stage workout processes will benefit from
Wingspans reperformance-focused workflow - Portfolios from servicers with strict NPV-based
workout approval criteria will benefit from
Wingspans Behavioral Outcome Decisioning - Portfolios from servicers that overlook second
lien workout opportunities will benefit from
Wingspans specialized recovery processes - Experience working with many servicers highlights
hidden areas of risk or opportunity
9Traditional Strategies Reduce Cost but Increase
Loss
Implications/Impact
Potential Shortcoming
Strategy
? Loss Frequency
80 of skips are still in their homes
Dialer-based calling
? Loss Frequency
Dont call delinquent borrowers
Scoring
? Loss Frequency
Reject viable opportunities
Strict workout qualification
? Loss Severity
Miss reperforming opportunities
Foreclosure outsourcing
Leave money on the table
? Loss Severity
Limited third party data
? Total Loss
Ignores borrower psychology
NPV-based decisioning
? Total Loss
Under-served borrowers
Under-incented staff
10Investor-Focused Strategies Reduce Net Loss
Advanced Special Servicer
Typical Special Servicer
?
?
?
Dialer-Driven Outbound Calls
?
?
?
Legal Network Management
?
?
?
Timeline-Based Event Tracking
?
?
Scoring-Based Contact Strategy
?
?
NPV-Based Workout Decisioning
?
Proactive Information Management
?
Reperformance-Focused Workflow
?
Fully-incentivized Workout Group
Behavioral Outcome Decisioning
?
11Contents
- Executive Summary
- Market Context
- Competitive Advantage
- The Wingspan Difference
- Profiles of Management Team
12The Wingspan Difference
Proactive Information Management
Focus on Reperformance
- Fully automated data gathering prior to
borrower contact - Advanced analytics consider the factors that
affect each loan and determine servicing strategy
- Incentives targeted to maximize reperforming
loans - Logical consequences of noncooperation
encourage continued payments
Fully Staffed/Fully Incentivized
Behavioral Outcome-Based Decisioning
- Loans with greatest opportunity concentrated
with highest skill positions - Aligned incentives ensure servicing intensity
- Psychological equity creates leverage
- Informed listening establishes trust
- Legal remedies initiated only to return
borrower to negotiating table
13Maximum Results through Superior Information
Management
Wingspans loan resolution logic evaluates the
factors influencing each loan and identifies
those loan resolution strategies best suited for
a given borrowers situation
Factor Indicates Source
Current Credit Condition Borrowers Capacity Credit Report, BK Info
Credit at Origination Propensity to Pay Loan File
Payment Pattern Probability of Future Payment Placement Data
Current Market Conditions Collateral Risk Trend HPA Trend Data
Lien Position Collateral Impairment Property Report
Effective Equity Foreclosure Value AVM, BPO, Reviewed Value
Prior Servicer Strategies Remaining Workout Value Servicer Knowledge
Psychological Equity Borrowers Commitment Value, History, HPA Trend
When Wingspan initiates contact with the
borrower, we are prepared with an in-depth
understanding of the borrowers circumstances and
the recovery potential of the loan
Wingspans advanced analytics determine the
servicing strategy for each loan
14Focus on Reperformance
Like Traditional Servicing Only Backwards
Logical Consequences of Non-Cooperation
- Strong incentives to return to reperforming
- Focused on cure - not collateral
- Designed to motivate resumed negotiations
- Workout efforts continue throughout
Loan Resolution
Reperforming
Performing
After 3 Payments
lt 30 Days Delinquent
Bankruptcy
BK Reperforming
BK Performing
Borrower Non-Cooperation
Borrower Resumes Cooperation
Legal Strategies/Logical Consequences
Foreclosure
Suit on Note
BK Relief
15Properly Aligned Incentives Create Powerful Lift
- Wingspan is both fully staffed and fully
productive -
- Borrowers receive dedicated attention from
specialists who are ready and eager to talk to
them -
- Wingspans reperformance-focused workflow
concentrates servicing intensive assets with the
highest skilled individuals - Loan Resolution Specialists earn more than 50 of
their incentive income from returning loans to a
paying status - Outbound call volume is moderated to ensure
sufficient time is spent with each borrower - The reperforming workflow transfers loans that
resume monthly payments to reperforming
specialists who maintain payments until
contractually current - Larger work queues
- Lower compensation potential
- Contractually current loans transfer to
performing collections - Sole focus is maintaining payments
- Still larger work queues
16Behavioral Outcome Decisioning
- Leaving room for flexibility in an inherently
rules-based process - Relying solely on Net Present Value based
decisioning - Overlooks how the borrowers feelings affect
workout success - Neglects to consider the probability a
non-qualifying workout will succeed - We also listen and learn
- Forms bond between the parties
- Establishes mutual respect
- Establishes our authority
- Command of the facts through superior information
management - Unambiguous willingness to help reinforced by
incentive alignment - We recognize that borrowers frequently respond to
non-monetary considerations that we call
psychological equity - Borrowers always think the house is worth more
- Appreciate the social cost of losing the house
- Recognize the inability to replace right away
- Most borrowers do not wish to lose their home and
will eventually reach out for help if someone is
there
- Panic Points Using our legal rights, data, and
psychology to overcome borrower denial, motivate
borrower cooperation, and maximize recoveries in
the shortest possible time.
17The Power of Informed Workflow
- DRI seamlessly integrates vendor and third party
data into Wingspans proprietary workflow and
decisioning processes - Clients and vendors may access their relevant
information and reporting in real time through
DRIs .Net interface - Wingspans workflow intelligently automates
vendor referrals, performance instructions, and
product ordering
18Active Servicer Management
Wingspan Also Creates Lift Through The Proactive
Oversight of Third Party Servicers
- Develop Action Plans
- Reporting and performance analysis identifies
underperforming or high-risk loans or processes - Work with the servicers to remediate
- Ensure adequate resources are available
- Frequent contact ensures follow-through
- Continuing Follow-up and Onsite Reviews
- Ensure servicing intensity and loan resolution
strategies meet best practices and preferred
strategies - Validate data provided by the servicer
- Monitor servicing liquidations, advances,
charge-offs - Implement Changes and Best Practices
- Recommend outsourcing solutions where warranted
- Implement servicer performance incentives where
advantageous
19Active Servicer Management
- Wingspan has the tools and the experience
necessary to manage third party servicer
performance and to identify areas where proactive
intervention will improve performance - The ability to create servicing lift drives
improved investment returns, uncovers hidden
opportunities, and sharpens future bids
Improved Performance
Acquire
Ensure Follow-Through
Price
Active Servicer Management
Pricing Analytics
Score Card
Select Portfolios
Develop Action Plans
ID Performance Exceptions
Analyze Performance
20Contents
- Executive Summary
- Market Context
- Competitive Advantage
- The Wingspan Difference
- Profiles of Management Team
21Steven Horne, President
- Recently completed the reorganization of Fannie
Maes National Servicing Organization. - Developed new servicer scorecard, risk-targeted
strategies, and performance incentives. - Formerly a partner with Sherman Financial Group
- Led the creation of 3 successful business lines
- Delinquent second mortgage purchasing and
servicing - Chapter 13 credit card purchasing and servicing
- Mexican unsecured consumer lending and servicing
- Developed innovative loan resolution strategies,
systems solutions, and workflow. - Earlier Positions
- MSV - developed start-up into a leading provider
of outsourcing services for Freddie Mac. - Ocwen Financial - Director of Default Servicing
during Ocwens period of most rapid growth. - RTC - Lead attorney for asset teams that
recovered over 5 billion from portfolios of
complex commercial loans, participations,
securities, and real estate. - Frank, Bernstein, Conaway Goldman
Successfully defended high profile financial
institutions in complex securities fraud and
lender liability suits. Cases featured twice in
Forbes. - JD from George Washington and BAs in Economics
and English from Emory.
22Catherine Castle, Analytics
- Currently an AVP with Option One responsible for
developing and executing secondary market
strategies for Option Ones mortgage assets
including sub-prime, Alt-A, and scratch and dent - Develop models to optimize secondary market
execution - Coordinate secondary market transactions with
investment banks, GSEs, and other counterparties - Previously, as Vice President of Business
Analysis for Resurgent Capital Services, served
as the principal architect of Resurgents
automated placement and recall strategy used to
manage the recovery strategy for approximately 14
million unsecured consumer accounts.
Instrumental in developing Resurgents - Price modeling,
- Collateral valuation modeling,and
- Business process reengineering
- Earlier positions
- VP for Market Research and Analysis with
Homegold, Inc. - AVP for Fleet Mortgage Group focused on portfolio
valuation and hedging strategies - M.S. in Applied Mathematics from the University
of South Carolina - Motorola-certified six sigma black belt.
23Suzanne Singer, Business Development
- Most recently, Ms. Singer was a Director in the
Institutional Client segment at GMAC-RFC, working
with large subprime mortgage companies, banks,
and mortgage bankers. - Before rejoining GMAC-RFC, Ms. Singer was the
National Sales Executive for Option One Mortgage
Corp., where she identified, developed, and
managed all sub-servicing relationships. - Ms. Singer began her career at GMAC-RFC in the
Distressed Mortgage Services Group, where she
sourced the acquisition of non-performing assets
and REO through customized programs that met the
clients needs and provided solutions to most
effectively manage their balance sheets. - Previously, Ms. Singer was a Manager in the
Servicer Division at Freddie Mac where she
developed, implemented, and managed Freddie Macs
Helping Hand Outsource program where she managed
key servicer relationships and established
policies, procedures, and controls for the
program. Prior to Freddie Mac, Ms. Singer was a
senior consultant in the real estate services
practice at Laventhol Horwath. - Ms. Singer has a bachelor of arts in economics
from The College of William Mary.
24Georgia Moses, Operations
- Twenty-five years of overall servicing experience
including conforming and non-conforming loans
management of investor and mortgage portfolio
accounting origination and servicing quality
control and strategic servicing initiatives
(e.g. servicing system conversions and major
portfolio transfers). Additional experience in
the area of risk management and acquisitions due
diligence focusing on default servicing
functions. Previously worked with MacAndrews and
Forbes Holdings Group and served as Senior
Operations Manager of Millenium Mortgage. -
- Most recently, Ms. Moses spent ten years with
Fannie Mae as a Servicing Consultant and as
Business Manager of the National Servicing
Organization. In that capacity reviewed new
servicers for Fannie Mae approval, worked with
servicers to identify operational and process
issues. Developed remediation plans and directed
the implementation of required process
improvements. Supported servicers training
needs. - Masters of Business Administration, Accounting
University of Rochester, Rochester, NY - Certified six sigma black belt
25For More Information
- Steven Horne, President
- Wingspan Portfolio Advisors, LLC
- 214-789-0943
- steve_at_wingspanadvisors.com