Green River Capital - MORN - 201310
Transcript of Green River Capital - MORN - 201310
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2013 Morningstar Credit Ratings, LLC. All Rights Rese
Operational RiskGreen River Capital, L
October 2013
OperationalClassifications: Resi
Resi
Assigned Rankings! ResiResi
Forecast: %avo
Analyst! Ri$h
Rationale
Morningstar Assigns Green River Capita
Asset Manage'ent) MR R "#Favora$
Morningstar Credit Ratings, LLC (Morningstarservi$er (short sales and assigns its *MOR Vranings. -he assigned ranings rele$t o/r ares"e$tive d/ties as a residential $om"onentasset manager ranings rele$t a "ervasive aregimen, $om"rehensive and $lientdriven "ote$hnolog and overall sstems inrastr/$t/ro""ort/nities and la/n$h ne "rod/$ts /i$l"rovide )RC, &oth as a $om"onent servi$er a&/siness vent/res s/$h as $ollateral /nderr
se$/riti5ation maret. 6n 7an/ar, 2012, )RCanalti$s "rovider to the residential and $om$an &e leveraged a$ross the to $om"anies"osition.
6n "arti$/lar, Morningstar+s assessment and
Com"onent #ervi$er and REO Asset Manage
E..e$tive -raining 9rograms O/r "&eneits rom a &lend o internal an
rved.
AssessmentC
ential Vendor (REO Asset Management
ential Com"onent #ervi$er (#hort #ales, Loss Mitigation an
ential Vendor! MOR RV2ential Com"onent #ervi$er! MOR R#2
ra&le :oth Ranings
rd '. o$h, ri$hard.o$h;morningstar.$om,
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Colle$tion 9ra$ti$es A$t (%@C9A ,$om"an in$or"orates e4ternal advCons/mer %inan$ial 9rote$tion :/r$onsisting o re/ired and o"tionalenter"rise in 201=. 'e &elieve thaits organi5ation.
Com"rehensive 9oli$ies and 9ro$e
$lientdriven "ro$esses that ma4imagreements. 'eel &est "ra$ti$ethe &/siness "latorm. Morningstara shared drive to a $om"an intran
Ro&/st -e$hnolog1 EnvironmentBthat s/""orts )RC+s "rod/$ts and"rovides the $om"an ith the ne
Additionall, )RC+s te$hnolog inrdelivering "erorman$e to $lients aand "rioriti5ing te$hnolog "roe$ts/tili5ing s/&e$t matter e4"erts rotraining. #stem enhan$ements ar
@isaster Re$over1 and :/siness C
in "la$e. )RC has migrated over tinrastr/$t/re and te$hnolog and in$l/ding the im"lementation o a glo$ation &e$ome red/ndant data o
Ris Management O/r vie is thaso/nd internal $ontrols. -hese $on$ontin/o/s "erorman$e monitorin
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a$le f Contents (Hyperlinks)
Co'pany -rofile and ./siness vervie
perational 1nfrastr/ct/re+++++++++++++++++++ ++++
Organi5ational #tr/$t/reManagement and #ta E4"erien$eManagement and #ta -/rnover
Assessment!-raining
AssessmentA/dit, Com"lian$e, and 9ro$ed/ral Com"le
Assessment
Legal Lia&ilit and Cor"orate 6ns/ran$eAssessment#stems Ar$hite$t/re, 9roe$t Manageme
Assessment
-erfor'ance Manage'ent: !endor -erf
Loan :oarding and 9reListingAssessment
-itle, 8OA and Real Estate -a4 Administrati Assessment
REO Asset ManagementAssessment
-erfor'ance Manage'ent: Co'ponentLoss Mitigation #ervi$es: Asset :oarding a
AssessmentLoss Mitigation #ervi$es! 8omeoner Co/
AssessmentLoss Mitigation #ervi$es! #hort #ale 9ro$e
Assessment#ingle %amil Rental 9ro"ert Val/ation and
AssessmentA$$o/nting and 6nvoi$e Management
Assessment
Ranking 2efinitions33333333
2isclos/res33333333333
1nde4 of C*arts (*yperlinks)
%ig/re 1! Cor"orate -imeline%ig/re 2 (O"erational #tr/$t/re%ig/re 3! REO Asset -imeline%ig/re =! Closing @e"artment 9ro$ess%ig/re >! #hort #ale 9ro$essing -imeline%ig/re
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%ig/re 1! Cor"orate -imeline
Co'pany -rofile and ./siness vervie
)reen River Ca"ital LLC is a holl oned s/o/nded in 2003 to meet the /ni/e re/ire
o/nding in 2003, )RC has develo"ed a $lien%inan$ial, LLC (F)R%G as la/n$hed and serv$o/nseling and short sale and deedinlie/ oa de&t $olle$tor. 6n 200?, )RC $reated a divio/tside o val/ations, a $om"onent servi$esdiligen$e or, in$l/ding an REO and D9L iles/&sidiar o Claton. Claton is a leading "r$ommer$ial mortgage ind/stries. Claton is=,000 REO asse es as a sister $om"an to )RC, oering a loss mitigation "r
ore$los/re negotiation and li/idation. )R% is li$ensed in >sion that s"e$iali5es in "ro"ert val/ations. 6n order to meee"artment as develo"ed that "rovides traditional val/atiorevie de"artment. 6n 7an/ar 2012, )RC as a$/ired &vider o d/e diligen$e, s/rveillan$e and dea/lt administratioead/artered in #helton, C-, ith oi$es in )eorgia, Colora
rrentl has a""ro4imatel 1I.>00 REO assets /nder manage#E+s, &an and non&an loan servi$ers, "ension /nds andrtolio o a""ro4imatel >,000 assets /nder management anas 10 $lients re"resenting &an and non&an servi$ers andat are leveraged ithin the organi5ation. )RC $/rrentl em"l
08
nancialated
2009
GRC valuation
Division Created
GRC AClato
00 2!!"1##$
in 'est Valle Cit, Htah, )RC astial ho/sing ind/str. #in$e its+
ts d/ring that times"an. 6n 200I, )Rgram that "rovides homeoner#tates and the @istri$t o Col/m&ia asind/str demands or other servi$esor in addition to real estate d/eClaton maing )RC a hollonedn servi$es to the residential ando, and %lorida and has a""ro4imatel
ment $onsisting o 1I $lients that$redit /nions.d is a li$ensed de&t $olle$tor in all >0ension /nds. -here are 1> dedi$ated
los 1
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%ig/re 2 (O"erational #tr/$t/re
perational 1nfrastr/ct/re and Risk Man
(MR R"#MR R!")
rganiational tr/ct/re)RC has 12< "eo"le allo$ated to REO asset
)RC $ond/$ts its REO asset management an
REO Asset Management -he REOassets. )RC "rovides $lients end t"lans or ea$h asset. )RC managere$on$iled maret val/es and "redLoss mitigation servi$es in$l/de hointervies at a &orroer+s residensale and deedinlie/ o ore$los/re
ACCOUNTING
ACCOUNTS PAYABLE
ACCOUNTS RECEIVABLE
BILLING
COORDINATORS
INVESTOR
REPORTING
GENERAL LEDGER
MANAGEMENT
HUMARESOUR
pital LLC| October 2013 | ratingagency.morningstar.com |
rved.
age'ent
anagement and $om"onent servi$es.
d $om"onent servi$es a$tivities mainl thro/gh to de"art
management team s"e$iali5es in val/ing, servi$ing, managiend REO #ervi$es in$l/ding detailed re"air inormation, $o
s the entire "ro$ess to ea$h individ/al asset+s /ni/e $hara$termined e4"enses.
meoner $o/nseling, also non as Fenhan$ed &orroer o/e as ell as $alling $am"aigns and letter $am"aigns. Lossnegotiation and li/idation. )R% has develo"ed a 9reerred
Green River Capital
(GRC)
NES
INORMATIONTECHNOLOGY GRC!GR
VALUATION
REO ASMANEGEM
MAR"E
GR INA
SHORT SALEMITIGATION
COMPONENT
DIVISI
00 2!!"1##$
ents!
ng and mareting its $lients+ REO"ara&le val/e analsis, and maretingteristi$s, mareting strateg,
trea$hG that in$l/des "ersonalitigation servi$es also in$l/de short
:roer Detor (9:D that $onsists o
SERVICES AGENT RELATIONS
SETNT ANDING
CIAL
ND LOSSSERVICES
SERVICING
ON
CLIENT RELATIONSBUSINESS
DEVELOPMENT
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s"e$ii$ "arameters in$l/ding $/stomi5ed "roem"loees m/st sign a $or"orate $om"lian$overseeing sstems and netor se$/rit.the &/siness /nits and roll /" to the e4e$/tiv
)RC maintains do$/mented "oli$ies and "rote$hni$al riter is on sta to $oordinate, rit$/stomi5ed &ased on s"e$ii$ $lient re/irem&/siness /nit to dis$/ss and im"lement "oli$
Assess'ent: 6n o/r vie, )RC h$ontrols and adheren$e to esta&liso vendor &/siness "ro$esses. )Rintranet site or in$reased ease o
Legal Lia$ility and Corporate 1ns/rance
)RC management dis$losed it is not a "arti$&/siness ins/ran$e $overage to "rote$t againins/red as re/ired "/rs/ant to the "arties a
Assess'ent:Overall, e &elieveand is not s/&e$t to an o/tstandi
yste's Arc*itect/re, -ro;ect Manage
)RC /tili5es a variet o "ro"rietar and thirds$ala&le and le4i&le rom a "ro$essing and &
monitor and tra$ all as"e$ts o the Real Estnegotiation and $losing. -he a""li$ation is ala""l i$at ion that serves as a $omm/ni$at ion imareting "ro$ess in$l/ding evi$tion "ro$essi$lient invoi$ing. -he $om"an+s "ro"rietar Ainormation and $onta$t details. Realt 9ilot iins"e$tion ordering and "ro$essing. M# Ligh@nami$ )9 sotare is /sed or all general l9ro$essing #ervi$es, 6n$. or "ro$essing $lienvario/s data and inormation to $lients via thi
)RC has /tili5ed an e4ternal vendor or "ortiores"onsi&le or drating /"dates to the glo&al
restores are $om"leted ith a /ll disaster redigital &a$/" ta"es are stored at an osite)RC+s te$hnolog is &/ilt aro/nd e&&asedsite. @/ring 2013, )RC is emå on an enstrateg. )RC ill engage in oint inrastr/$t&/siness $ontin/it and instead ill im"lemeClaton+s #helton, C- head/arters as 10K da$ilitate &/siness re$over time and "rovideto rele$t the $hanges.
)RC re"orts /" to a Chie 6normation Oi$erin$or"orated into an ann/al road ma". A "ro
pital LLC| October 2013 | ratingagency.morningstar.com |
rved.
$essing and delegated a/thorit levels that hel" to ens/re $"oli$ do$/ment on an ann/al &asis. A dedi$ated se$/ritonthl re"orts en$om"assing o"erating "erorman$e metri
e team.
ed/res on its shared netor drive that en$om"ass its $oree and distri&/te "oli$ and "ro$ed/re /"dates enter"riseients to ens/re $om"lian$e ith servi$e level agreements.
and "ro$ed/re /"dates.
s so/nd m/ltilevel a/diting and /alit $ontrol me$hanisms ed "ro$ed/res. 'e &elieve the $om"an+s "oli$ies and "ro$
sho/ld $onsider migrating the storage o "oli$ and "ro$edse, retrieval and $onsisten$.
i"ant in an "ending material litigation related to its o"eratio st vario/s lia&ilities and $ontingen$ies. Most )RC and )R%
reement.
hat )RC, &ased on its re"resentations, ee$tivel addresseg material litigation.
ent,
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& &/siness leaders. #/&e$t matter e4"ertsiss/ed $ontaining sstem enhan$ement inorand /ser "assord "roto$ols. Hser "assor$omm/ni$ated in real time &eteen h/man r/na/thori5ed sstem a$$ess. -he $om"an"rote$t the integrit o $onidential data as itintr/sion "revention sstems designed to ide"erormed to identi sstem v/lnera&ilities.
Assess'ent:Morningstar &elievemanagement re/irements as ell"ro"rietar te$hnolog "rovides thintrod/$e ne "rod/$ts and servi$
is leveraging Claton+s te$hnolog$ontin/it regimen.
-erfor'ance Manage'ent: !endor -erf
(MR R!8) R& Asset Manage'ent
)RC "rovides REO asset management servi$$lients. -hese servi$es in$l/de determiningstrateg or asset mareting. )RC ill monitre"air &ids. )RC ill oversee oer negotiatioa/thori5ation a""roval levels are determined
Loan .oarding and -re=Listing
)RC /tili5es its "ro"ietar REOConne4 sstemanagers and real estate agents to notate aolloing "ro$esses!
Evi$tion 9ro$ess -ra$ing
Val/ation Revie
6ns"e$tion -ra$ing
Mareting 9lans and #tat
Oer Degotiation
Closing 9ro$ess -ra$ing
Client Oversight and
Client 6nvoi$ing.
De assets $an &e &oarded in a n/m&er ore$ord. -he asset set/" $ler (A#C "ro$ee)RCs"e$ii$ details s/$h as the stat/s o ththe Asset #etH" Manager ho "erorms a $relevant asset details are $om"lete and $orreile and re$on$ile that inormation ith the $"/rs/ant to esta&lished $lient and $om"anestate agent ill &e assigned. As an additio&oarded stat/s &/t have aged more than onethe asset is timel reerred to an agent. A Controls Analst and e4e$/tive management.
pital LLC| October 2013 | ratingagency.morningstar.com |
rved.
in the &/siness gro/"s "arti$i"ate in /ser a$$e"tan$e testination. A dedi$ated enter"riseide se$/rit oi$er is res"
ds are tas and role s"e$ii$ ithin the organi5ation and "aseso/r$es and inormation te$hnolog and revieed monthlas $om"rehensive enter"riseide en$r"tion and ireall "is stored or $omm/ni$ated internall or e4ternall. )RC+s $onti and minimi5e mali$io/s a$tivit. A$tive netor s$anni
s that )RC o"erates ithin a highl ee$tive te$hnolog ar$as its internal "ro$essing needs and e4ternal $lient "erormle4i&ilit ne$essar to meet individ/al $lient re/irementss into the maret"la$e. )RC has $om"rehensive data integ
latorm and geogra"hi$ lo$ation to "rovide a more ro&/st gl
r'ance Metrics
s or third "art $lients. )RC has a&o/t 1I.>00 assets /ndethe estimated maret val/e (EMV or FasisG and Fre"airedGr maret l/$t/ations, listing a$tivit, $hanges in "ro"ert $o
ns as ell as the $losing "ro$ess and inal asset dis"osition.& o& level among sales s"e$ialists, senior sales s"e$ialists
, as ell as other third "art sstems, as a $omm/ni$ationtions d/ring the mareting "ro$ess on a realtime &asis. -h
/s Re"orts
as in$l/ding! email, se$/re ile transer "roto$ol (%-9 site,s ith the &oarding o the asset validating all asset details"ro"ert (a$/ired, redem"tion or $onirmation. On$e re$
om"rehensive revie o the &oarded assets to monitor that$t. As "art o this "ro$ess, the manager ill $he$ the datem"letion date o the A#C+s email to determine i assets are/idelines. -he $lient ile is then orarded to the Vendor Maal level o revie, the Vendor Manager (VM revies a dailda itho/t &eing assigned to an e4ternal real estate agent
eel re"ort o aged assets is revieed, along ith s/""orti.
00 2!!"1##$
and monthl te$hnolog releases arensi&le or ens/ring netor se$/ritord $hanges and deletions areand semiann/all to minimi5eoli$ies and methodologies in "la$e tom"/ter netor in$or"orates severalg and se$/rit monitoring is ro/tinel
ite$t/re designed to meet its datan$e management. -he $om"an+snd "rovides the agilit re/ired torit and se$/rit "roto$ols in "la$e and
o&al disaster re$over and &/siness
management on average ith 22assets and sele$ting the a""ro"riatenditions, mareting e4"enses and
%/n$tional res"onsi&ilities andand managers.
ortal &eteen the $om"an+s assete sstems are /sed to manage the
and dire$t rom a $lient+s sstem orovided & the $lient as ell as othern$iled, the A#C orards an email to&oarding as $om"leted and that alland time stam" o the in$oming $lient&oarded ithin an a$$e"ta&le timelinenagement de"artment here a realre"ort that lists all assets that have a
. -he VM ill ollo/" to see thatg notes, and es$alated to an 6nternal
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Assess'ent:Morningstar &elievete$hnolog or &oarding assets anda$$/ratel in a$$ordan$e ith esta
itle, HA and Real &state a4 Ad'inist
Hnen$/m&ered title is an integral as"e$t oan asset. -he title order re"ort is revieed d$om"anies designated & the $lient and main"o"/lated in REOConne4 or tra$ing "/r"osemissing title re"ort is revieed & the A#C t$ommitments are es$alated to management/sing REOConne4, ill revie the title $ommand moving the asset to /nder $ontra$t stat/
D/m&er o aged assets
9er$entage o assets it
D/m&er o title orders re
D/m&er o assets assign
-he -itle Manager revies the re"ort to iden
8omeoner Asso$iation (8OA ees and realmareting "ro$ess. 9ost&oarding, the 8OAin$l/ding "ar$el n/m&er and ta4ing a/thoritinto REOConne4 or tas tra$ing "/r"oses.ho ill advise and a""rove "ament amo/nthat in$l/des o"erational metri$s s/$h as!
Client s"e$ii$ asset stat
Aged asets &eond 30 d
#"e$ialist s"e$ii$ n/m&
-he Asset :oarding8OA Manager revies tre/ires.
)RC also "rovides $ode violation servi$es to im/ni$i"alit to o&tain $ode violation inormativiolation inormation that is /sed to "rioriti5e
m/ni$i"ali t to resolve violations in$l/ding nethat in$l/des o"erational metri$s s/$h as!
Client s"e$ii$ asset stat
Aged asets &eond 30 d
CVC s"e$ii$ n/m&er o a
Assess'ent:Morningstar &elieveenvironment that in$l/des ee$tive8OA ees, "ro"ert ta4es and $ode
pital LLC| October 2013 | ratingagency.morningstar.com |
rved.
s that )RC o"erates ithin a el l $ontrolled loan &oarding ere$on$iling data integrit. -he m/lti"le levels o revie ser
&lished $om"an g/idelines and $lient dire$tives.
ration
areting an REO asset. )RC+s -itle @e"artment assigns a tiail & an A#C to monitor that title has &een ordered on alltains individ/al state and $lient s"e$ii$ $riteria or title $oms. -itle $ommitments are s$hed/led to &e re$eived ithin 1ens/re that title is re$eived ithin the 1> da t/rnaro/nd ti
and the title $om"an. 'ithin three das o re$eiving the t itment and notate an o/tstanding iss/es ith an estimated
s. A $om"rehensive monthl re"ort is "re"ared ith "eror
ith o/tstanding title iss/es ithin 120 das o title re"ort
h $lear title as a ratio to total asset $o/nt
/ested and re$eived as ell as timeline e4$e"tions and
ed to title s"e$ialists as ell as their individ/al "erorman$e
i "erorman$e trends and "rovides eed&a$ to title s"e$ia
estate ta4es are revieed to monitor that o/tstanding or "oordinator ill re/est the re/isite inormation rom the ag$onta$t inormation ithin a three da t/rnaro/nd time. H"RC ill ollo /" ith the ta4ing m/ni$i"alit and 8OA and
ts. A monthl "erorman$e re"ort is "rod/$ed and reviee
s (n/m&er &oarded and $losed (&eginning and ending mon
s re/iring ollo/" and resol/tion, and
r o assets and monthl "erorman$e, in$l/ding e4$e"tions.
e re"ort to identi "erorman$e trends and "rovides eed&a
its $lients. A Code Violation Coordinator (CVC ors ith tion hi$h is then /"loaded to REOConne4 or tra$ing. -heassets &ased on violation t"e and e4"os/re. -he CVC then
gotiation and "ament. A monthl "erorman$e re"ort is "r
s (D/m&er &oarded and $losed &eginning and ending mont
s ith $ode violations re/iring ollo/" and resol/tion, a
ssets and monmthl "erorman$e, in$l/ding e4$e"tions.
s that )RC o"erates ithin a ell $ontrolled title, 8OA and rte$hnolog or identiing and resear$hing o/tstanding itemviolations. )RC has ell esta&lished timelines or investiga
00 2!!"1##$
nvironment that in$l/des ee$tivee to monitor that assets are &oarded
itle re/est ithin =I ho/rs o &ordinge/isite assets. -he A#C /ses titlean sele$tion. -he title order date is
> das o the order date and a eele. An delas in re$eiving title
itle $ommitment, a -itle #"e$ialist,$om"letion time "rior to $learing titlean$e metri$s in$l/ding the!
metri$s.
lists as "erorman$e re/ires.
st d/e items do not im"ede the REOent or 8OA and "ro"ert ta4esn re$ei"t, the inormation is entered$omm/ni$ate the res/lts to the $lient& the Asset :oarding8OA Manager
hl &alan$es
$ to s"e$ialists as "eorman$e
e agent, title de"artment andCVC revies a dail re"ort o $ode$omm/ni$ates ith the agent and
od/$ed and revieed & management
hl &alan$es
nd
eal estate ta4 administrations related to title iss/es, o/tstandinging and re/esting data and invoi$es
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as ell as olloing /" on aged itea$$ordan$e ith esta&lished $om"
R& Asset Manage'ent
)RC "rovides REO management servi$es to vinvestment &ans and investors o non"eroro the REO dis"osit ion lie$$le rom "ostor
%ig/re 3! REO Asset -imeline
As "art o the REO management "ro$ess )Rval/e (RMV or ea$h asset. )RC /tili5es a "$onta$t data, li$ense inormation and ins/ran)RC+s netor o a""ro4imatel J,>00 agent
)RC+s teams o sale s"e$ialists are res"onsi&
@etermining the estimat
#ele$ting the a""ro"riat
Monitoring the "ro"ert
that ma re/ire re"airs
Degotiating oers and
Oversee $losing and inal
-he organi5ational str/$t/re is em&edded itsales s"e$ialists &/t have a higher level o a/)RC has develo"ed standard timelines to traasset rom va$ant to listed stat/s. 6n generalo this "ro$ess )RC ill determine the estim/ni/eness, e$onomi$ $ondit ions, "ro"ert aill "a in the asset+s $/rrent maret. A detstrateg. -he de$ision to sell FasisG or Fre"aman/al and a/tomated tools are /sed to analma &e ordered to re$on$ile the inal estimat
On$e a val/ation has &een determined, )RCdetermining re"airs so the &id "ro$ess $an $mold, dee$tive drall, metham"hetamine lins"e$tions and environmental "ro"ert iss/ere"air. Emergen$ re"air or to remed aninto a mareta&le $ondition and $onsist o "ri$ondition. )RC has develo"ed $a"ital re"air"rovides re$ommendations to the $lient on r
A##etRe$erral t%
GRC
Pre&Mar'etin
(O*pie+!Vaant)
pital LLC| October 2013 | ratingagency.morningstar.com |
rved.
s. -he m/lti"le levels o revie serve to monitor that assetan g/idelines and $lient dire$tives.
ario/s $lients in$l/ding )#E+s, inan$ial instit/tions, &an anming loans and residential mortgage &a$ed se$/rities (RM$los/re a$/isition thro/gh mareting and $losing.
ill o&tain re"air inormation, "ro"ert $om"ara&les, maro"rietar e&&ased a""li$ation non as AgentConne4 to$e. Agent assignments are managed via this sstem. -hes and oversees agent sele$tion, s$oring, training and $omm
le or the olloing REO asset management /n$tions!
d maret val/e (EMV or asis and re"aired "ro"erties
mareting strateg (asis or re"aired
areting stat/s in$l/ding maret l/$t/ations, listing a$tivit
asset dis"osition.
h additional levels o $he$s and &alan$es. #enior sales s"ethorit. Managers a""rove maret strategies, re"air &ids, e
the REO dis"osition lie$$le. A "relist timeline identiiesl, the timeline $riteria is 1I das or an asis "ro"ert and =0ted maret val/e hi$h $onsists o a $onsideration o m/ltienities and overall $ondition. -he estimated maret val/e i
rmination is made hether to maret the "ro"ert in an FasiredG is determined & anal5ing the &roer "ri$e o"inion (:9l5e the val/ations and re$on$ile an varian$es. :ased on "red maret val/e.
ill $reate a mareting strateg hi$h in$l/des esta&lishingmmen$e and tra$ing "ro"ert ins"e$tions and ne$essar&s, et$. )RC has detailed "oli$ies and "ro$esses o/tlinings. 9ro"ert re"air or is $onsidered either a $a"ital re"air/nsae "ro"ert $ondition is "erormed immediatel. Ca"italmaril $osmeti$ im"rovements and re"airs to &ring the "ro"anagement team that has $reated &id $riteria herein the r/ired and re$ommended re"airs. 'hen $a"ital re"airs are
Mar'etinUn+er
C%ntrat
00 2!!"1##$
s are &oarded a$$/ratel in
non &an servi$ers, hedge /nds,#. -he $om"an servi$es all as"e$ts
ting "lans and a re$on$iled maretmanage &roer inormation, in$l/dinggent Relations @e"artment overseesni$ation.
, and $hanges in "ro"ert $ondition
$ialists "erorm the same /n$tions as"enses and oers, as re/ired.
the ste"s ne$essar in &ringing andas or re"aired "ro"erties. As "artle varia&les in$l/ding marets a "roe$tion o hat a illing &/erisG $ondition vers/s a Fre"airedGO and a se$ond o"inion val/e. :othedetermined $riteria, a third val/ation
a &/dget or all mareting $ostsis$los/res in$l/ding! lead &ased "aint,ario/s state re/irements regardingr a "reservation and maintenan$e
l re"airs are done to &ring the "ro"ertrt into ha&ita&ilit or inan$ea&le
e"air s"e$ialist revies the &ids and$om"lete, the asset moves into a
Cl%#inA##et
Li,*i+ati%n
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2013 Morningstar Credit Ratings, LLC. All Rights Rese9 a g e 11
listed stat/s. 9reservation and maintenan$ema in$l/de interior $leaning, trash o/t, sno"reservation and maintenan$e $ontra$tors ora$$ording to initial and ongoing timeline matrsele$t an inde"endent $ontra$tor. )RC has d-he $om"an has an e4"ense varian$e re$on
)RC maintains an REO &roer s$ore$ard thatmeas/rements in$l/de the olloing!
@as to re$eive a re/ested :9O
@as on maret ith agent
)ross sales "ri$e to initial agent :9
@as in es$ro.
-he s$ore$ard rele$ts a si4 month rolling ave"erorman$e meas/rement.
On$e an asset has &een listed or mareting,and that an ei$ient and timel dis"osition osales s"e$ialist to revie &roer stat/s re"orrevisions ma in$l/de a list "ri$e red/$tion, rto determine i there have &een signii$ant mstrateg and &/dget and ill &e or loed
9/r$hase oers on REO "ro"erties are $onsid$al$/lation. As an oer is revieed, the ollo
:/er re/ested $on$es
Oner o$$/"ant vers/s i
:/er /alii$ations
Mortgage ins/ran$e $ov
Re"/r$hases.
%ig/re =! Closing @e"artment 9ro$ess
-he oer "ro$ess, in$l/ding oer revie, a$$&roer is res"onsi&le or $om"leting the oeragent. -he oer is sstem $oded as a""rovamanager, as el l as a""li$a&le third "art m
A##et Set&Up
pital LLC| October 2013 | ratingagency.morningstar.com |
rved.
re"airs are initial and $ontin/ing servi$es to maintain the asremoval, reeing, "ool $leaning and ard maintenan$e. )ill /se a $lient+s third "art $ontra$tor to "erorm "ro"erti$es. 6 there is no a""roved "ro"ert and maintenan$e venevelo"ed s"e$ii$ "reservation and maintenan$e a""roval g
$iliation "ro$ess or those e4"enses not in$l/ded in the origi
meas/res the "erorman$e and ee$tiveness o its &roer n
O and
rage, and "rovides val/a&le eed&a$ to the vendor as ell
)RC ill monitor the "ro"ert on a reg/lar &asis to see that the "ro"ert taes "la$e. . #stemgenerated tas reminds to eval/ate a$tivit and $onsider revising the $/rrent marvising the mareting strateg andor "erorming re"airs. -he
aret $hanges sin$e the asset as listed. A sstem tem"latto the a""ro"riate manager or signo, i re/ired.
ered &ased on a n/m&er o $riteria altho/gh "rimaril an oeing a$tors are among the $onsiderations!
ions
nvestor
rage and
e"tan$e, $o/nter or ree$tion, and a""roval are all re$orded"a$age and o&taining the re/isite &/er signat/res and ol "ending and ma re/ire additional levels o a""roval &eortgage ins/rers or $lients.
viti%n#Title an+ HOA
Revie- an+ Pa./ent
00 2!!"1##$
et in mareta&le $ondition. -his orC has develo"ed a netor omaintenan$e and "reservation oror in a geogra"hi$ area, the &roer illidelines and dis&/rsement thresholds.al &/dget or that e4$eed the &/dget.
etor. e "erorman$e
s internall to )RC or internal
the "ro"ert $ondition is maintainedrs a""ear ea$h month reminding theet strateg. Mareting strategsales s"e$ialist ma order a ne :9O
e ill re$ord $hanges to the mareting
r is vieed in relation to the net ret/rn
nd "ro$essed via a/tomation. -herarding the "a$age to the $losingd the sales s"e$ialist, in$l/ding a
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#ales s"e$ialists are revieed monthl & this &ased /"on "rod/$tion $riteria (t/rn rate,)RC re$eives rom $lients and a monthl /al
On$e an oer is inali5ed and agreed /"on &("/r$hase agreement ith the re/isite adde$losing date, s$hed/le d/ring the negotiation$oordinator manages all timeline ste"s &etminimi5ed. -he $losing $oordinator a$ilitate/"$oming $losing dates or ollo /". Closingand ma &e granted d/e to tenant evi$tion is&ased on the olloing $onsiderations!
Maret $onditions 9ro"ert $ondition
%inan$ing timelines
8istor o m/lti"le e4ten
Re"air, title or evi$tion is
-he $losing $oordinator ill also veri third "and re$on$ile an varian$e in e4"e$ted $ash
On an enter"riseide level, )RC re$eives e4data s/""lied to )RC $an in$l/de!
Monthl inventor
-otal dis"ositions and as
Aged inventor
9ortolio t/rn rate
@is"osition t/rn rate
#ales re$over (asis ver
A$$/ra$ rate and
-itle resol/tion (N das.
'e have revieed vario/s s$ore$ards "rovidre/irements as o/tlined in their servi$e level
Assess'ent:)RC, in o/r vie, h9oli$ies, "ro$ed/res and "ro$essesmanage ea$h "hase o the REO lies/""orted & a ro&/st te$hnologmanagement. -he organi5ational s$learl esta&lished via matri$es thadetermining servi$e level agreemestandards are ell deined and em)RC+s $lients and is revieed to deim"rovement.
pital LLC| October 2013 | ratingagency.morningstar.com |
rved.
ir managers on their individ/al "erorman$e as ell as "eroales rate, tass "ast d/e and e4$e"tions "erorman$e $rit
lit $ontrol revie that meas/res adheren$e to "oli$ies and
&oth the &/er and )RC, the listing &roer m/st s/&mit a /lnda and dis$los/res to the $losing agent and the asset is th"ro$ess, is esta&lished or the &/er and $losing agent to ien $ontra$t e4e$/tion and $losing, so that all e dates $a$omm/ni$ation among the "arties to the transa$tion and ndate e4tensions are $onsidered & the $losing $oordinator i
s/es, title iss/es or an event o/tside o the &/er+s $ontrol.
sions and
s/es.
art e4"enses, revie the 8H@ 1 settlement statement, and"ro$eeds.
tensive "erorman$e eed&a$ rom vario/s $lients regarding
signments
s/s re"aired sales
.
ed to )RC & e4ternal $lients and note that )RC s/&stantialll agreements.
s e4$ellent internal $ontrols and orlo management oveare ver $learl deined together ith a high level o te$hno
$$le. Ever as"e$t o REO asset management, rom &oardinnvironment or orlo ei$ien$, tas tra$ing and ollo
tr/$t/re is designed to "rovide or vario/s levels o em"loet delineate re"orting lines and signo a/thorit. 9erorman$t $om"lian$e, is m/ltilaered and $onsists o internal and eloee "erorman$e is $olle$ted and revieed ith sta . 9etermine servi$e level agreement $om"lian$e as ell as iden
00 2!!"1##$
rman$e vers/s "eers. -he inal raningria e4tra$ted rom s$ore$ards thatro$ed/res.
l e4e$/ted $ontra$t "a$ageen $oded as F/nder $ontra$tG. Aali5e the transa$tion. A )RC $losingn &e met and aged inventor isotates the sstem ith "ast d/e and
$ons/ltation ith the sales s"e$ialist8oever, an e4tension ma &e denied
tra$ the timel re$ei"t o ired /nds
its servi$es. 9ortolio "erorman$e
$onorms to "erorman$e
r its REO asset management "ro$ess.log, ena&ling )RC to ee$tivelg and "relisting to inal dis"osition is/" as ell as "erorman$e
res"onsi&ilit and a/thorit levels aree management, es"e$iall henternal revies. /alit $ontrol
rorman$e eed&a$ is "rovided &tiing internal "erorman$e areas or
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2013 Morningstar Credit Ratings, LLC. All Rights Rese9 a g e 13
Loss Mitigation ervices: Asset .oardin
)R% "rovides $lients ith a "rogram that "ro$am"aigns. -his servi$e in$l/des door no$)R% is a li$ensed de&t $olle$tor in all >0 stat$lients.
-he )RC asset transer de"artment /"loadsdata s$r/& and validation "ro$ess &eore /"ldas "rior to the a$$o/nt assignment a$$om$om"lete the assignment and the irst o/t&ohome are mandated in an attem"t to mae $
Assess'ent: )R%, in o/r vie, hvalidations to ens/re a$$o/nt a$$/the res/lts o those intera$tions.
Loss Mitigation ervices: Ho'eo0ner C
-his area is &i/r$ated /nder )R% and has m/o/trea$hG that in$l/des "ersonal intervies a"rovided /nder $om"onent servi$ing is short:roer Detor (9:D that $onsists o a nati"roessionals m/st "ass )RC+s de&t $olle$tordelin/ent &orroers & ed/$ating and g/idi
)R% has develo"ed a netor o real estate
in the homeoner $o/nseling "ro$ess. D8C"ro$ess. D8C re"resentatives /ndergo e4teidentiing the &orroer+s illingness and a&istrateg and most via&le alternative to ore$lstrateg is a short sale, the D8C ma &e$omto )R% a$$ordingl /sing the olloing g/ideli
Do $onta$t! D8C is /na
Conta$t (no interest or s
Conta$t (arm transer
short sale. A tele"hone
Conta$t (intervie and i
o"tions availa&le ith ththe mortgage servi$er le
Conta$t (interested in a
All D8C $onta$t attem"ts are revieed andorm andor inan$ial inormation to the assetvisit to the &orroer, the asset manager ill$onversations and ollo/" $ond/$ted & thordering. On$e a short sale order is inali5ed,
pital LLC| October 2013 | ratingagency.morningstar.com |
rved.
g and Agent Assign'ent
ides "ersonal intera$tion ith &orroers ho ma not &e ring, in"erson intervies and arm transers to the $lient os and the @istri$t o Col/m&ia ith a""ro4imatel >,000 ass
ro"ert re$ords to )R% via REOConne4 ith data "rovided &ading assets. )R% generates an %@C9A $om"liant notii$atianied & inan$ial orms. -he Deigh&orhood 8ome Cons/ltnd attem"t at homeoner $onta$t m/st &e made ithin =I
onta$t and a minim/m o to visits m/st &e attem"ted ate
s ee$tive sstems in "la$e to &oard in$oming assets andra$. -he $om"an has ell deined methodologies in "la$e
o/nseling
lti"le $om"onents that in$l/de homeoner $o/nseling, alsot a &orroer+s residen$e as ell as $alling $am"aigns and lesale and deedinlie/ o ore$los/re negotiation and li/idatinide netor o real estate "roessionals ith distressedand $om"lian$e training and testing "rograms. 9:D "roes
g them thro/gh loss mitigation alternatives.
roessionals designated as neigh&orhood home $ons/ltant (
re"resentatives /se the 8omeoner Resol/tion #stem (8Rsive training in the %air @e&t Colle$tion 9ra$ti$es A$t. -he o lit to "a o&taining inan$ial statement inormation! "rovidi
os/re $olle$ting "hotos o the "ro"ert e4terior and interiore the listing agent. D8C re"resentatives ill attem"t to manes!
le to mae $onta$t ith the &orroer or "ro"ert o$$/"ant
ort sale lead D8C maes $onta$t, &/t the homeoner is n
D8C maes $onta$t and the homeoner is interested in loa
all is made to the mortgage servi$erlender hile at the "ro
an$ials arm transer D8C maes $onta$t and the homeo
mortgage servi$erlender. D8C o&tains inan$ial inormatioder hile at the "ro"ert.
hort sale o"tion D8C maes $onta$t and the homeoner i
eriied & the asset manager assigned to the a$$o/nt. -hemanager and the orm is /"loaded into 8R#. 6 a arm tran
$onta$t the mortgage servi$erlender to veri that a arme asset manager is notated in the sstem as ell as the inathe asset is transerred to the REOConne4 sstem or /rthe
00 2!!"1##$
s"onding to tele"hone and letterre"ament "lans or modii$ations.
ets /nder management and n/mero/s
the $lient. -he sstem "erorms an to the de&tor a""ro4imatel o/r
ant (FD8CG has ten (10 das toho/rs. -hree visits to the de&tor+s>"m or on a eeend.
erorm the re/isite data integritto initiate &orroer $onta$t and re$ord
non as Fenhan$ed &orroertter $am"aigns. Another servi$en. )R% has develo"ed a 9reerredro"ert oro/t e4"erien$e. 9:Dionals are res"onsi&le or oring ith
D8C ho have agreed to "arti$i"ate
# to tra$ and manage the $o/nselinge$tives o the "rogram in$l/de!ng $o/nseling to determine the &est(i "ossi&le. 6 the &est alternativee $onta$t ith the de&tor and re"ort
.
t interested in an "rogram.
modii$ation o"tions other than a
"ert.
ner is interested in alternative
n rom the homeoner and tele"hones
s interested in a short sale.
8C $om"letes the re/isite $onta$tser has o$$/rred d/ring the D8C+stranser a$t/all o$$/rred. Alln$ial inormation, "hotos, and :9Or "ro$essing and tra$ing.
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Assess'ent! 6n o/r vie, )R% ha"rogram. Ro&/st te$hnolog s/""res/lts and "rovides asset manage
Loss Mitigation ervices: *ort ale -ro
%ig/re >! #hort #ale 9ro$essing -imeline
A short sale "a$age is sent to the &orroer
6n$ome and e4"ense sta
8ardshi" aidavit
-o most re$ent ta4 ret
-o months o the &/er
9/r$hase $ontra$t
Estimated 8H@
Listing agreement and
9roo o /nds andor a""
A )R% asset manager retains onershi" o ta""li$a&le. -he asset manager assigns an Dthree visits, the "a$age is not o&tained, the$lient ill "erorm a "reliminar revie or 8/"date the sstem a$$ordingl. 6 a "a$agelisted or the homeoner (i it is not listed t(:9O or a""raisal de"ending on Client s"e$iiand anal5e an oers against the re$on$iledthe oer to the )R% sales manager or /rthe
Initial S0%rt SalePa'ae an+
Te/plate Veri$iati%n
S0%rt Sale Pa'aeRevie-
O+erin A Pr%pert.Val*e
Revie-in An O$$er
pital LLC| October 2013 | ratingagency.morningstar.com |
rved.
ell develo"ed methodologies in "la$e or assigning assetrts all as"e$ts o the $o/nseling "rogram and allos the $o
rs ith an ee$tive to tool manage asset dis"ositions.
cessing and Facilitation
re/esting most or all o the olloing inormation!
ement
rns o the &/er
+s most re$ent &an statements
roval letter.
e a$$o/nt and ill revie the ile or data a$$/ra$ and detC to mae a series o visits to the &orroer to o&tain a $o
asset manager ill notate the a$$o/nt a$$ordingl. H"on reme Aorda&le %ore$los/re Alternative (8A%A eligi&ilit andis re$eived &/t there is no oer, the asset manager ill $ondetermine "ro"ert stat/s and the air maret val/e, i the
$ations ill &e ordered & )R%. -he )R% asset manager illmaret val/e (RMV and &ased on esta&lished $riteria, ma
r determination. 6 a s/&ordinate lien is identiied, the asset
I+enti$. an+Ne%tiate
S*1%r+inate Lien#
O$$er Ne%titati%n
M%rtae In#*raneAppr%val
S0%rt SaleDei#i%nin Pr%e##
Preli/inar. HUDRevie-
Un+er-iritn Revie-2 A##et /anaer
Appr%val
S0%rt Sale Cl%#in
00 2!!"1##$
to its neigh&orhood $o/nselingnselors to a$$/ratel re"ort their
rmine i mortgage ins/ran$e is"leted short sale "a$age. 6, ater$ei"t o a $om"leted "a$age, the)RC ill revie the "a$age anda$t the listing agent (i the "ro"ert isro"ert is listed. A "ro"ert val/ationrevie a $om"leted val/ation "a$ages/ggest a $o/nteroer or ma reer
anager ma negotiate a short "ao
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2013 Morningstar Credit Ratings, LLC. All Rights Rese9 a g e 1>
to the s/&ordinate lien holder &ased on esta&sees a""roval rom the mortgage ins/rer an$lient $riteria that determines i the short salon esta&lished $riteria ma re/ire revie anoer and /"date the asset stat/s to F/nder $/" & a letter rom the asset manager ith d$ontin/e to ollo /" ith the "arties "eriodi
Assess'ent! 6n o/r vie, )R% hamethodolog is ell deined and is$losing "ro$ess. )R% has develo"eand oer negotiation.
-erfor'ance Manage'ent: Co'ponent
(MR R8) Residential Co'ponent ervi
Real &state !al/ation, 2/e 2iligence an
%ig/re
Val/ation desto" revie
9re and "ostreha&ilitati
Reha&ilitation :/dget Re
-itle Revie and $/rative
Collateral ile revie
6ns/ran$e revie and ver
9ro"ert ta4 revie and
Val*ati%*l$ill/en
(3 TE)
pital LLC| October 2013 | ratingagency.morningstar.com |
rved.
lished $riteria and a""roval & the $lient. 6 mortgage ins/rad ill ollo /" /ntil resol/tion. A ro&/st de$isioning tool is
oer ill "ro$eed. A "reliminar 8H@ revie is /ndertaend a""roval & senior )R% management. -he asset managerontra$tG in the sstem o re$ord and noti the listing agentetails s/$h as the $losing date, net amo/nt d/e and iring i$all to monitor that the $losing taes "la$e as s$hed/led.
ell develo"ed "ro$esses in "la$e to generate, revie ands/""orted & ro&/st te$hnolog at ea$h ste" o the short sad ell deined $riteria, &ased on $lient "arameters, or short
ervicer -erfor'ance Metrics
cer
-roperty Manage'ent versig*t
i5ational Chart
amil rental REO asset se$/riti5ation, )RC esta&lished thee needs o instit/tional investors and lenders o single amilario/s servi$es related to $ollateral /nderriting on more th
n$ as an REO asset manager to "rovide a /ll s/ite o servi$-he Com"onent #ervi$es @ivision ill "erorm the olloing
s
n "ro"ert ins"e$tions
on$iliation
servi$es
ii$ation
erii$ation
C%/p%nentServiin Divi#i%n
(Vie Pre#)
t
Val*ati%n Revie-an+
4*alit. C%ntr%l
(3 TE)
ile Revie
(3 TE)
00 2!!"1##$
n$e is a""li$a&le to the asset, )R%/sed to "re/ali the oer &ased onto as$ertain $losing $osts and &ased
ill revie and a""rove the short salend &orroer o the a""roval, olloedstr/$tions. -he asset manager ill
a$ilitate short sale oers. -hele do$/mentation revie, val/ation andsale ile "ro$essing, val/ation revie
Com"onent #ervi$es @ivision in 3rental "ro"erties as ell as &/ers andn 2.J> &illion in single amil rental
es or individ/al $om"onents or/n$tions!
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Operational Risk Assessment: Green River Ca
2013 Morningstar Credit Ratings, LLC. All Rights Rese9 a g e 1K.
RC has develo"ed a "ro"ert management s/rveillan$e andregional or nationide single amil rental REO netor his
management netor. )RC has addressed the need or a $s oring ith its "arent, Claton, to develo" a sstemati$ "agement. -he $om"an+s "ro"ert management oversightironment & ass/ming $ontrol o rental streams and "hsi$a
l, regional and national servi$e "roviders to develo" GhotG or to ass/me management o large, m/ltisite residential "ors ma re/ire shortterm interim meas/res or a more longtenario )RC ill "rovide s/rveillan$e over a national "ro"ertria (li$ensing, &a$gro/nd $he$s, ins/ran$e and "roviding
ded at the individ/al "ro"ert, maret"la$e, and "ortolio levro"ert management $om"an and other so/r$es and &en$deled $ash lo "roe$tions, and a$t/al maret data. @etail
00 2!!"1##$
o these assets. )RC is sele$ting andvid/al :9O+s ill &e "ersonallor a$$/ra$, $om"leteness andtion de"artment ill re/est aenan$e and "otential environmental"ro"ert, in its "resent $ondition, ise$tion ill &e $om"leted tot. )RC ill "erorm &/dgetined in the :9O or "ro"ert ins"e$tion.
ie g/idelines. )RC ill revie title toilit. )RC assigns a title gradeevelo"ed, a$$om"anied & anm"an and the oner+s title $/rativeion and $/rative "ro$esses.
at the deed inormation is $orre$t.
e and
ings.
i e4$e"tions or re"orting to theoner. )RC re$on$iles the maret
rming that the ins/red val/e amo/ntre re"orted to all staeholders. -a4"art on a 10K sam"ling si5e o the
oversight "rogram or "arti$i"ants intori$all, there has &een no demand or
oherent, ell managed single amilro$ess to identi and monitor the ris"rogram ill $reate sta&ilit or lendersl $ollateral.
FarmG "ro"ert management &a$/"tolios on a nationide &asis. -heerm sol/tion, de"ending /"onmanagement netor, /aliing
/alit s$oring on their or on a gols. )RC ill o&tain assetlevelmar the data to servi$ing ind/str
ed asset level "erorman$e re"orting
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Operational Risk Assessment: Green River Ca
2013 Morningstar Credit Ratings, LLC. All Rights Rese9 a g e 1J
ill &e "rovided to $lients and, i ne$essar,$on$erns. : develo"ing a relia&le nationid)RC, investors in the single amil REO rentale4e$/ting a "ermanent management sol/tio
Assess'ent! 6n o/r vie, )RC+sval/ation, and "ro"ert ins"e$tion-he $om"an+s seamless integratioCom"onent #ervi$es @ivision and trate validation "roto$ols "rovide a
Acco/nting and 1nvoice Manage'ent
-he A$$o/nting @e"artment in$l/des A$$o/nRe"orting. -he 6nvoi$e Management (6M s
in$l/de reim&/rsa&le e4"enses, servi$ing ee$om"an via the 6M sstem or man/all viaman/all enter all a""roved e4"ense reim&/rdonloaded dail into REOConne4 or s$r/&&is"e$ii$ $l ient reim&/rsement and "ament gREOConne4 to the Mi$rosot @nami$s )9 a$sotare to veri the alignment o e4"ense-he also "erorm a /alit revie, &ased onassem&led & the :illing Coordinators are the
On$e vendors have &een "aid, )RC m/st &ille4"enses derived rom a $/m/lative list o /"a$$om"lished & vario/s means in$l/ding lat
vendor+s "aid invoi$e to the $lient or reim&/ra$$o/ntant "erorms a re$on$iliation o all /nRe"orting areas to remediate dis$re"an$ies,
6n$oming "aments to )RC are revieed &and orards the $he$s to an A$$o/nts Re$"erorms a dail re$on$iliation o $ash re$ei"site to identi dis$re"an$ies and remediate tas /na""lied $ash and m/st &e resear$hed amanagement to ens/re $om"leteness o thea$$o/nts re$eiva&le Fdee" diveG hi$h $onsimisa""lied "aments, validating $lient re/nd
6ndivid/als in the a$$o/nting de"artment arere$on$iliation re"orts are revieed & the )R
Assess'ent! Morningstar &elievte$hnolog environment. - he orgaamong invoi$ing, &i lling revie, a$m/lti"le levels o revie and a$$o/
Ranking 2efinitions
-he n/meri$al s$ale o *MOR RVR#1+ to *MO
pital LLC| October 2013 | ratingagency.morningstar.com |
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RC ill or ith the "ro"ert management $om"an ande netor o residential "ro"ert managers ith inde"endens"a$e $an sta&ili5e their a$/ired "ortolios and ei$ientl dor a dis"osition strateg.
Com"onent #ervi$es @ivision has s/$$ess/ll leveraged its4"ertise to develo" a s/ite o strategi$ servi$es to the gron o e4isting te$hnolog "rovides a sta&le o/ndation or thehe $om"an+s reha&ilitation &/dget re$on$iliation "ro$ess.ignii$ant added val/e or $lients
ts 9aa&le and Re$eiva&le, :illing Coordinators, )eneral Ledstem is /sed to "ro$ess invoi$es or agent e4"enses and rei
s, $an$ellation ees and management ees. E4"ense reim&/ail or email. -he revie and a""roval "ro$ess is "erormedsement re/ests into REOConne4. A/tomated e4"ense reing and validation. :illing Coordinators revie the e4"ense r/idelines "/rs/ant to a $lients"e$ii$ ee matri4. -he a""rov$o/nting sotare. -he :illing /alit Control analsts "erorto designated $lients and validate all s/""orting &illing inor"redetermined $riteria, or e4"enses "ro$essed via the 6Mn s/&mitted or senior level a""roval and "osted or "amen
$lients or reim&/rsement. -he 6nvestor Re"orting Analst "todate e4"enses e4tra$ted rom the @nami$s )9 a$$o/ntiles or remittan$e s/mmaries via the 6M sstem, /tili5ation
sement, or inal e4"ense re$on$iliation on the 8H@1 $losing&illed e4"enses et to &e &illed to the $lient and intera$ts ihe res/lts o hi$h are revieed & the Controller.
n A$$o/nts 9aa&le em"loee ho $reates a $ash re$ei"tseiva&le em"loee ho also re$ords ele$troni$ "aments ands entered into the a$$o/nting sstem ith the de"osit re$orhem in a timel manner. All "aments that are not immediad "ro$essed & month end. -he re"ort o /na""lied $ash is
re$on$iliation "ro$ess. -he A$$o/nting and 6nvestor Re"ortists o revieing aged $lient re$eiva&les, strategi5ing to $olles, and reerring aged items to an attorne or $olle$tion.
$rosstrained to in$rease noledge de"th and minimi5e t/C Controller and Claton+s Chie %inan$ial Oi$er or a""roval
s that )RC demonstrates solid $ontrols in its a$$o/nting "rni5ational str/$t/re o )RC+s a$$o/nting de"artment "rovideo/nts re$eiva&le and "aa&le, and general ledger managemnta&ilit &oth on the )RC level and ith oversight & its $or
R RVR#=+ is deined as ollos!
00 2!!"1##$
lient to remediate an "erorman$et vetting and s/rveillan$e "erormed &evelo" a transition strateg and hile
4isting enter"riseide d/e diligen$e,ing single amil REO to rental maret./ll s/ite o servi$es oered & thedditionall, lease revie and rental
er Management, and 6nvestorm&/rsements. Client &illings ma
sement re/ests are s/&mitted to the& a gro/" o :illing Coordinators ho/ests re$eived via the 6M sstem aree/ests to veri that the meeted e4"ense data is transerred romm a dail revie ithin the a$$o/ntingmation on man/all entered e4"enses.stem. 9ament "osting &at$hest.
re"ares an invoi$e or reim&/rsa&leing sotare. Client invoi$ing iso the 6M sstem to orard a
orm. A senior general ledgerth the A$$o/nting and 6nvestor
&at$h ithin the a$$o/nting sstemires. A general ledger a$$o/ntant
d rele$ted on the &an a$$o/nt e&tel a""lied to an invoi$e are $lassiiedrevieed monthl & senior sta andng areas meet ti$e monthl or an$t "ast d/e &alan$es, $orre$ting
nover. On a monthl &asis, vario/sand signo.
$ti$es, s/""orted & an ee$tivethe re/isite segregation o d/ties
ent. -he $om"an has em&eddedorate "arent, Claton.
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Operational Risk Assessment: Green River Ca
2013 Morningstar Credit Ratings, LLC. All Rights Rese9 a g e 1I
*1+ E4$e*2+ @em*3+ @em*=+ @em
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Morningstar ranings, ore$asts, and assessthereore, are not $redit ratings ithin the ms/&e$t to the E4$hange A$t re/irements anstatisti$al rating organi5ations.
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-his Material, and the ranings and ore$astss/&e$t to $hange and sho/ld not &e vieedindire$t, in$idental, "/nit ive, s"e$ial or $onseeven i advised o the "ossi&ilit o s/$h damritten "ermission o Morningstar. Morning
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eds "r/dent loan servi$ing standards in e areas o risonstrates "roi$ien$ in e areas o risonstrates $om"lian$e in e areas o risonstrates la$ o $om"lian$e in one or more e areas o ris
R RV3R#3+ is deemed to $om"l ith hat e vie as theor the servi$er+svendor+s o"erational $ategor and role. -o
ndors! Methodolog1 and 9ro$ess and other "/&lished re"ort
is &eing distri&/ted in the Hnited #tates & Morningstar Crl "/r"oses, and sho/ld not &e $onsidered a soli$itation to &/
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ents $ontained in this Material are eval/ations and o"inionsaning o #e$tion 3 o the #e$/rities E4$hange A$t o 1?3= (
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$ontained herein, re"resent Morningstar+s o"inion as o theas "roviding an g/arantee. 6n no event shall Morningstar &/ential damages, $osts, e4"enses, legal ees or losses in $ages. -he Material ma not &e re"rod/$ed, modiied, or disttar Credit Ratings, LLC, =10 8orsham Road, #/ite A, 8orsha
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