My presentation on how housing policy, process and people (resources) can be leveraged to help stabilize the housing market while minimizing both consumer foreclosures and loan investor (particularly taxpayer) losses and strategic defaults. The location was the mid-Winter Housing Finance Conference in Park City, Utah February 11, 2011.

1. February 11, 2011
STRATEGIES TO ADDRESS THE
ELEPHANT IN THE PYTHON: HOUSING
MARKET STABILITY WE ALL WANT
Rayman Mathoda
CEO, AssetPlanUSA
Managing Director, Foreclosure Alternatives USA
This document is highly confidential and solely for the use of AssetPlanUSA and its
clients and/or partners. No part of this document may be circulated or reproduced
without prior written approval from AssetPlanUSA.

2. THE PROBLEM IS NOT YET SOLVED (“THE ELEPHANT
IN THE PYTHON”)
• 13 percent of 1st lien mortgages non-current
• 6.9 million non-current 1st liens (vs. 6.4 million 24 months ago)
• 4.3 million 90 + DQ or in FC vs. 3.4 million 24 months ago
• Average days DQ for 90+: 334 (vs. 196 24 months ago)
• Average days DQ for FC: 507 (vs. 319 24 months ago)
• 6.2 million long term unemployed across USA
• Assuming 66% current homeownership rate, 4.1 million long term
unemployed homeowners
• 522,000 ongoing permanent HAMP modifications and 2181 HAFA short
sales or deeds-in-lieu as of December 31, 2010
• 2.9 million foreclosure filings in 2010; 3+ million expected in 2011
Source: LPS Mortgage Monitor Jan 2011; NY Times Dec 2011; SIGTARP Quarterly Report to Congress, Jan 2011
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3. STATED POLICY GOAL (AND CONSUMER MESSAGING)
• “Making Home Affordable”
• Home Retention
• Loss Mitigation
OR…
• Financial Stability
• Foreclosure Prevention (100% Where Desired)
• Fresh Start | Second Chances
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4. BORROWER OUTREACH & EDUCATION: FIRST
MAJOR POINT OF FAILURE
CONTACT • 50 percent historic no contact rate
• 35-40 percent est. today
• But 100 percent contact achieved after foreclosure
• Why not earlier?
EDUCATION • Consumers poorly informed
• Loan Modification (Principal Reduction)
• Short Sale (e.g., Debt Forgiveness)
• „Homeowners Guide to Foreclosure Alternatives‟
DVD: 45m, minimum level of education required
TIMING • Only one good opportunity (consumers barraged by
confusing, uncoordinated array of calls | letters)
• Earlier the better
Source: Servicer and industry interviews; borrower conversations; industry research
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5. BORROWER OUTREACH & EDUCATION: SIMPLE
IDEAS THAT WORK
1. 100 percent borrower contact goal
2. Sequential, multi-channel, phased outreach
 Coordinated mix of remote (call center, email) and in person
(borrower‟s home, counselor or Bank location)
3. One continuous process (through full ownership & occupancy
resolution)
4. Single point of contact (call center) or client resolution team (call
center | realtor | consumer counselor)
5. Standard minimum consumer education supported by professional
who works for | on behalf of borrower
 All 3 “Doors”
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6. LOAN MODIFICATIONS
• Primary goal should be financial stability not home retention
• Structural shift in economy | unemployment = widespread lack of
affordability | need for labor flexibility
• HAMP has important albeit smaller role
• Principal reductions key to expanding home retention success
• Can mitigate investor losses and strategic default through 75 | 25
equity sharing
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7. SHORT SALES AND DEEDS IN LIEU
• Significant consumer, investor, and neighborhood benefit vs. REO
• Real estate professionals driving most transactions today…but 50-70
percent deals with executed purchase contracts fail
• Proactive models largely failing with 5 to 10 percent closing ratios
• Couple promising generation 2 models being piloted
• Key drivers of failure | Address via industry consortium
• Debt forgiveness
• Subordinate lien holders | negotiation
• HAFA adoption (much more potential than HAMP)
• Fraud | Conflicts of Interest
• Deeds in Lieu
• Significantly under tapped strategy vs. REO
• Standardize for single lien situations
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8. WHO HAS THE MOST TO BENEFIT BY HELPING
CONSUMERS?
• Real estate professionals | Community members
• Good business sense to help clients make decision in their best
interest
• Referral source for life
• Listing ratios | Labor market driven
• REO agents bank facing
• Short sale agents consumer facing | Vast Majority of ~1m
population
• Real estate professionals under broker supervision with honor
code | Needed supplement to HUD approved counselors
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9. ONE LAST PUSH TO STABILIZE THE MARKET
• Stable housing market better for all stakeholders
• 2 different segments | approaches
• Newly DQ borrowers
• “Shadow pipeline”
• One last chance | push with 90+ DQ 4.3 million borrowers
• 100% foreclosure prevention program goal
• Modification to market value UPB at market rate interest with
equity sharing and agreement to cooperate upon re-default
• Single deadline for re-valuing properties…same comps
• All others short sale, deed-in-lieu or deed-for-lease (except those
who choose foreclosure)
• Counseling, education and credit repair supported bridge to
Second Chance for responsible homeowners
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