How To ComplyWith

Collateral Data Delivery

FNC, Inc. Web ConferenceMarch 16, 2010

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Program

• FNC, Inc.• History / Data Management

• Collateral Data Delivery

• Field Experience

• Data Standards

• Questions & Answers

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Speakers

• FNC, Inc.• Shawn Telford, Director, Product Management

• Mike Mitchell, Chief Strategy Officer

• JJ Neilson• Assistant Vice President, Team Lead Loan Risk and

Recovery, Collateral Management, SunTrust Mortgage

• Kirk Rzasa, • Senior Business Consultant, Quicken Loans

• Carol Luitjens• Chief Marketing Officer, FNC

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Questions

• education@fncinc.com• “Chat” box submission

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Conference Web Page

• Today’s PowerPoint

• Audio

• Questions

Shawn TelfordDirector, Product Manager

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About FNC

• Focused on collateral since 1995

• Collateral management platforms• Collateral Management System® (CMS®)- Enterprise

platform• Collateral Headquarters™ (CHQTM ) - Software-as-a

Service

• AppraisalPort® – work portal for >58,000 appraisal vendors

• Generally Accepted Appraisal Rules™ (GAAR®)

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About FNC

• Platforms are used to ensure:• Appraiser independence• Appraisal/Valuation compliance• Market trends and tracking• Data extraction

• Clients share data through our National Collateral Database™

• Top US financial institutions use FNC platforms, GAARand CDNA analytics to process, review and underwrite appraisals.

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How is FNC Unique?

• FNC focuses on • Regulatory compliance• Data extraction and shared data/documents • Collateral analytics • Deployment of an enterprise application• Process management and automation

• FNC focuses on data extraction, regulatory compliance and streamlining the collateral decision-making process for our clients in all areas including origination, servicing, and secondary/capital markets.

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All About Data

• History of open XML for appraisals• 1997/98

• FNC Worked with Appraisal Institute to create open XML appraisal standard known as AI XML –AI ReadyTM

• FNC wrote objects and gave them to appraisal forms vendors who used them to create XML

• We can deliver any XML standard the client desires including MISMO

• All major appraisal forms companies support AI Ready

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All About Data

• PDFs and paper to data• Developed data extraction from PDFs• First generation PDFs—a term FNC “coined”• Second generation PDFs—essentially faxes we

convert to data

• All services can be returned to institution as data-stream including public record data, tax assessed values, AVMs, BPOs, appraisals, other inspections, and reviews.

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Why is the Data Important?

• Process and Workflow automation• Regulatory Compliance• Standardized Review and Decisioning

• GAAR Compliance• GAAR Risk• Appraisal Score

• Objective, Enterprise-wide Quality Control• Transparency…at the loan level• Vendor performance measurement & tracking• Reporting and internal policy compliance

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What is the CDD?

• Fannie Mae created a stir by announcing the CDD (Collateral Data Delivery) initiative May 2009• Requires lenders to deliver appraisal data prior to

loan delivery• “Effective on a date to be announced, but no earlier

than July 1, 2010”• Appraisal must be delivered as XML or PDF (fees

charged for PDF’s)• Lenders may integrate directly to CDD or use the

CDD web portal to upload

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Fannie is First Out of the Gate

• Fannie’s CDD is the first secondary market initiative requiring appraisal data delivery.• Freddie Mac has publicly indicated they also would

expect appraisal data delivery for loans they purchase

• HUD has indicated a strong interest in accessing appraisal data as part of their insuring process

• Transparency of collateral valuation is becoming a focus, and having the appraisal data is key to creating that transparency

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What is the Status of the Fannie CDD?

• Currently the CDD is in pilot with a limited number of lenders

• Fannie is actively engaging their customers, setting expectations and answering questions

• Quicken Loans working with FNC is currently piloting a direct integration(XIS) to the CDD• The FNC CMS system used at Quicken Loans will

facilitate delivery to the CDD and the associated exception handling process

• Exception handling will include automated overrides, queue managed overrides, and appraiser edits/ re-submission

Mike MitchellChief Strategy Officer

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Updates from the Market

JJ Neilson, Assistant Vice President, Team Lead Loan Risk and Recovery, Collateral Management, SunTrust Mortgage, SunTrust Mortgage

• Importance of Appraisal Data

• Importance of Managing the Appraisal Data

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Updates From The Market

Kirk RzasaSenior Business Consultant, Quicken Loans

• Appraisal Review Management

• Quality Control

• CDD Pilot

• AI Ready

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Moving Forward with Data

• Complying with CDD and other appraisal data delivery initiatives to the secondary market needs a global approach• Standard process for all channels & investors• Leverage enterprise collateral platform for

procurement, review, scoring and investor delivery

• Avoid custom process for each investor

• Data value to enterprise goes beyond CDD

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Have a Single Standard Process

• Simplify a standard “best practice” process• Expect new investor requirements, new XML data

“flavors”, new appraisal requirements, new appraisal vendors or trading partners

• XML is like ice cream…..• “Cleanest” data created by the appraiser• FNC recommends AI Ready

• AI Ready is ALL the data in the appraisal.• The data is validated by the appraiser before

submission to the lender client

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Data Delivery Via FNC GatewayTM

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Four Simple Steps To Comply

1. Trigger: Which files will you send to CDD (Secondary Market) – by specific loans or by status (e.g. clear to close)

2. XML Data Package: Creating the correct package of XML data – MISMO 2.6 vs MISMO 3.0 vs Other with “wrapper” and other attachments

3. Managing the Exceptions: Front end scrubbing with GAAR and back end process of overrides, edits, revisions & resubmissions.

4. Storage and Management: Managing of the CDD (and other Secondary Market) receipts and approvals for inclusion in the loan delivery.

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CDD TAKE AWAYS

• Create a standard, robust process• All Channels• All Investors• All Vendors (current and future)

• Exception Management is Critical Path• Automated Overrides• Queue driven Overrides• Revised Appraisals/Resubmission

• XML is like Ice-cream…

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Questions

• Today’s Questions

• Chat Function

• education@fncinc.com

• sales@fncinc.com

• Collateral Vision.com• On-going discussion (blog)

© 2010 FNC, Inc.

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Thank You

• Questionnaire