TBW Final Reconciliation

IN THE UNITED STATES BANKRUPTCY COURT FOR THE MIDDLE DISTRICT OF FLORIDA

JACKSONVILLE DIVISION

In re: TAYLOR, BEAN & WHITAKER MORTGAGE CORP., REO SPECIALISTS, LLC, and HOME AMERICA MORTGAGE, INC., Debtors.

Chapter 11 Case No. 3:09-bk-07047-JAF Case No. 3:09-bk-10022-JAF Case No. 3:09-bk-10023-JAF

TAYLOR, BEAN & WHITAKER MORTGAGE CORP., Applicable Debtor.

Case No. 3:09-bk-07047-JAF

FINAL RECONCILIATION REPORT OF

DEBTOR TAYLOR, BEAN & WHITAKER MORTGAGE CORP.

Jeffrey W. Kelley (Ga. Bar No. 412296) [email protected] Ezra H. Cohen (Ga. Bar No. 173800) [email protected] J. David Dantzler, Jr. (Ga. Bar No. 205125) [email protected] TROUTMAN SANDERS LLP 600 Peachtree Street, Suite 5200 Atlanta, Georgia 30308 Telephone: (404) 885-3000 Facsimile: (404) 885-3900

Russell M. Blain (FBN 236314) [email protected] Edward J. Peterson, III (FBN 014612) [email protected] Amy Denton Harris (FBN 0634506) [email protected] STICHTER, RIEDEL, BLAIN & PROSSER, P.A. 110 East Madison Street, Suite 200 Tampa, Florida 33602 Telephone: (813) 229-0144 Facsimile: (813) 229-1811

SPECIAL COUNSEL TO DEBTOR TAYLOR, BEAN & WHITAKER MORTGAGE CORP.

ATTORNEYS FOR DEBTOR TAYLOR, BEAN & WHITAKER MORTGAGE CORP.

Case 3:09-bk-07047-JAF Doc 1644 Filed 07/01/10 of 93

mailto:[email protected]






TABLE OF CONTENTS

Page

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TABLE OF EXHIBITS .............................................................................................................ii NOTICE AND DISCLAIMER ..................................................................................................1

SUMMARY OF FINDINGS......................................................................................................2 I. BACKGROUND............................................................................................................9

II. TBW’S BUSINESS OPERATIONS.............................................................................13 A. Origination, Underwriting and Funding ............................................................13

B. Mortgage Loan Funding Process.......................................................................17 C. Sales of Mortgages to Investors ........................................................................19

D. TBW’s Mortgage Servicing Operations ............................................................22 E. Real Estate Owned (“REO”) .............................................................................26

III. SUPPORTING DATA AND DATABASE...................................................................28 IV. SERVICING RECONCILIATION ...............................................................................30

A. Affected Funds Reconciliation..........................................................................30 B. Book-to-Bank Reconciliations ..........................................................................37

C. Servicing Advances Reconciliation...................................................................41 D. Borrower Protocol Update ................................................................................43

V. ASSET RECONCILIATION........................................................................................51 A. Ocala Funding ..................................................................................................53

B. Colonial COLB.................................................................................................68 C. Colonial AOT Facilities and BoA EPF..............................................................71

D. Uses of Cash and Funding Sources ...................................................................77 E. REO .................................................................................................................83

VI. NEXT STEPS...............................................................................................................84


TABLE OF EXHIBITS

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Exhibit A Overview of Servicing Reconciliation Procedures Exhibit B Overview of Asset Reconciliation Procedures

Exhibit C “Gross” Affected Funds as of April 30, 2010 Exhibit D Reductions to the “Gross” Affected Funds as of April 30, 2010

Exhibit E “Net” Affected Funds as of April 30, 2010 Exhibit F Summary of Funds Identified in the Colonial Bank Custodial Funds Clearing

Account (“CFCA”) Exhibit G Custodial Funds Clearing Account as of April 30, 2010

Exhibit H Colonial Bank Custodial Funds Clearing Account Roll Forward from August 1, 2009 through April 30, 2010

Exhibit I Summary of Funds “Still Under Review” and Proposed Final Steps Exhibit J Colonial Bank Account Balances

Exhibit K Regions Account Balances Exhibit L Summary of the Regions Refunds Account Allocation as of April 30, 2010

Exhibit M P&I Book-to-Bank Reconciliation by Investor Exhibit N P&I Book-to-Bank Reconciliation – Other P&I Items

Exhibit O Escrow Fund Book-to-Bank Reconciliation by Investor Exhibit P EDCA Reconciliation by Investor as of April 30, 2010

Exhibit Q Other Unreimbursed Items Exhibit R Advance Reimbursement as of April 30, 2010

Exhibit S Databases Created for the Asset Reconciliation Exhibit T Discrepancies Between Data Sources that Identify Freddie Mac as the Investor

for Ocala Funding Loans Exhibit U Discrepancies Between Data Sources that Identify Freddie Mac as the Investor

for COLB Loans Exhibit V Example of bailee letter for shipment of loans from Colonial to LGTS

Exhibit W Example of bailee letter for shipment of loans from LGTS Exhibit X Form 996


NOTICE AND DISCLAIMER

This Final Reconciliation Report (the “Report”) is intended to provide the Court,

mortgage investors, creditors, and other stakeholders with the final results of the Servicing

Reconciliation and the Asset Reconciliation performed by Taylor, Bean & Whitaker Mortgage

Corp., as the Debtor and the Debtor in Possession in this Chapter 11 case (“TBW” or the

“Debtor”). The information set forth herein is the result of work performed by the Debtor, its

Chief Restructuring Officer and associated support staff and legal counsel. The findings set forth

in this Report (including the tables and exhibits) are the result of reconciliation activities

conducted in accordance with processes designed by the Debtor and are not intended to be in

conformance with Generally Accepted Accounting Principles, Generally Accepted Auditing

Standards, or Attest Engagement Standards as defined by the American Institute of Certified

Public Accountants.

While this Report is intended to be final, it is important to emphasize that because of the

circumstances of this case, it is conceivable that specific findings could change as additional

facts are discovered. The findings set forth below are intended to be factual and are not intended

to be and should not be construed as an opinion or assurance of any lawyer, accountant, or other

professional involved in the reconciliation process.

Due to the time and expense required, the Debtor has not undertaken a comprehensive

analysis of all receipts and disbursements of money by TBW in the course of its business

operation. It may be necessary and appropriate to perform such an analysis, at least for specific

time periods, at some future stage of this case.


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SUMMARY OF FINDINGS

By July 2009, TBW had grown into one of the largest mortgage lenders in the United

States. At that time, TBW was originating approximately 14,500 mortgage loans per month

through a nationwide network of mortgage brokers and community banks. TBW then sold those

loans to the Federal Home Loan Mortgage Corporation (“Freddie Mac”) and other mortgage

investors, who used these assets to support the issuance of mortgage-backed securities or held

them as investments. In general, TBW retained the right to service the mortgage loans – i.e.,

collect monthly mortgage payments from borrowers, pay principal and interest to the mortgage

investors, manage tax and insurance “escrows,” and perform other related activities. By July

2009, TBW was servicing more than 512,000 mortgages having an unpaid principal balance in

excess of $80 billion.

On Monday, August 3, 2009, federal law enforcement agents simultaneously executed

search warrants at TBW’s Ocala headquarters and at the Orlando offices of Colonial Bank

(“Colonial”), TBW’s primary bank. The following day:

• The United States Department of Housing and Urban Development (“HUD”)

delivered written notice suspending TBW’s HUD/FHA origination and

underwriting approval;

• The Government National Mortgage Association (“Ginnie Mae”) delivered

written notice of termination of TBW as a Ginnie Mae issuer and servicer of its

$26 billion mortgage portfolio; and,

• Freddie Mac delivered written notice of the termination of TBW’s eligibility to

sell loans to Freddie Mac and to service its $51.2 billion portfolio.


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In combination, these terminations and suspensions rendered TBW unable to conduct its

business.

After TBW’s emergency request for reconsideration of HUD’s termination was denied on

Wednesday, August 5, 2009, TBW immediately laid off the vast majority of its approximately

2,500 employees. On that same day, Colonial placed an administrative hold on all of TBW’s

accounts, making it impossible for TBW to access more than 100 bank accounts. By Friday,

August 7, 2009, TBW was effectively out of business.

In the midst of the company’s collapse, mortgage investors demanded that TBW transfer

servicing responsibility for their respective loan portfolios to other servicers. At the same time,

more than 40 state regulatory agencies commenced emergency enforcement proceedings against

TBW, further constraining its ability to conduct any business activity.

On August 14, 2009, Colonial was closed by the Alabama State Banking Department,

and the Federal Deposit Insurance Corp. was appointed as receiver in accordance with the

statutory receivership process provided for in 12 U.S.C. §1821, et seq. (“FDIC-Receiver”). The

monies on deposit at Colonial, including the servicing-related accounts, remained subject to the

administrative hold. All the while, borrowers continued to send mortgage payments to TBW

(including payments sent to a lockbox maintained at Colonial), and checks written by TBW on

Colonial accounts were not honored.

On August 24, 2009, TBW filed a voluntary petition for relief pursuant to Chapter 11 of

the United States Bankruptcy Code (the “Petition”). Prior to the Chapter 11 filing, TBW’s

directors and officers resigned; two new, independent restructuring professionals were appointed

to comprise TBW’s board of directors; and, Neil Luria of Navigant Capital Advisors, LLC was

appointed by the new board as Chief Restructuring Officer. In addition, new bank accounts were


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established at Regions Bank (“Regions”) to be used by the Debtor in the administration of the

bankruptcy estate.

In the earliest stages of this bankruptcy case, issues emerged regarding the ownership of

mortgages that were claimed to be collateral securing payment of promissory notes issued by

TBW’s subsidiary, Ocala Funding, LLC (“Ocala Funding”), pursuant to the terms of a

commercial paper facility. In sum, when TBW collapsed, Ocala Funding did not have

possession and control of mortgages that, when coupled with available cash collateral, were

sufficient to satisfy the amounts owed under the facility. Bank of America, as indenture trustee

of the facility, contended that Colonial was in possession of mortgages (or related sales

proceeds) that were collateral for the facility. Because Ocala Funding and the commercial paper

facility were managed by TBW, these issues are relevant to the administration and ultimate

resolution of this bankruptcy estate.

Given the nature of the relationship between TBW and Colonial, it was important to

establish an interface between the discrete insolvency proceedings of the two institutions. As the

result of extensive negotiations that began prior to the filing of the Petition, the FDIC-Receiver

and the Debtor entered into a Stipulation dated September 10, 2009 [Docket Nos. 202 and 222]

(the “Stipulation”). In relevant part, the Stipulation required the Debtor to perform a

reconciliation of the borrower funds and other servicing-related monies that had been affected by

the sudden collapse of TBW and the failure of Colonial (the “Servicing Reconciliation”), as

well as an analysis of the mortgage loans that were the subject of competing claims of ownership

(the “Asset Reconciliation” and together with the Servicing Reconciliation, the

“Reconciliations”). The Stipulation was approved by this Court in orders entered on September

29, 2009 and October 16, 2009 [Docket Nos. 348 and 468].


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From the outset, it was evident that the reconciliation processes would be complicated

and that the scope of work would likely evolve as facts and circumstances were developed. In

accordance with the Stipulation, the Debtor filed two interim reports regarding the status of its

work. In the course of the Servicing Reconciliation, the Debtor, in collaboration with the

FDIC-Receiver, developed a “protocol” to address myriad problems experienced by borrowers

resulting from TBW’s collapse. In an order entered on February 24, 2010, this Court approved

the Debtor’s recommended “Borrower Protocol.”

The balances reported in the Servicing Reconciliation are “as of” April 30, 2010, which

are updated from the balances reported in the Debtor’s interim reports.1 While the precise cash

amounts will continue to change due to bank activity after April 30, 2010, the reconciliation

processes are concluded. Throughout, the Debtor has worked collaboratively with the FDIC-

Receiver and has endeavored to provide informal updates to the other parties most affected by

the results. Enormous amounts of data have been reviewed and compiled. Electronic databases

have been and/or will be made available to interested parties pursuant to appropriate

confidentiality agreements.

While the Debtor’s analysis is set forth in detail in this Report, the fundamental findings

can be summarized as follows:

Servicing Reconciliation

1. The cumulative amount of servicing-related funds affected by the above-

described events is $860,642,822 (the “Gross Affected Funds”). These Gross Affected Funds

include: (a) deposits in servicing-related accounts at Colonial, Regions, Seaside Bank

(“Seaside”), and Platinum Community Bank; (b) certain money that the Debtor and the FDIC-

1 This Report also includes categories and allocations of funds that were not included in the interim reports.


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Receiver have turned over to mortgage investors since August 5, 2009, including checks in the

lockbox at Colonial; and, (c) electronic payments that were in process, but not completed, as of

August 5, 2009. The Gross Affected Funds do not include additional borrower payments

received by the Debtor and forwarded to new servicers after servicing transfers were

accomplished.

2. As of April 30, 2010, a total of $396,014,173 in servicing-related monies are on

deposit at the following banks:

Colonial $242,304,743 Regions $148,709,430 Seaside $5,000,000

3. As of August 4, 2009 (the day before the administrative hold), there was

$25,145,274 less cash on deposit in the Colonial servicing-related accounts than TBW’s books

indicated should have been in place, indicating a cash shortfall in the servicing accounts in this

amount. Approximately $19 million of this shortfall is in tax and insurance “escrow” accounts

that had not been funded as of that date due to TBW’s business custom and practice regarding

the funding of these accounts.

4. As of the filing of this Report, the cumulative balance of the Debtor’s

unreimbursed servicing advances and unpaid servicing fees is $263,993,800.

Asset Reconciliation

1. As of August 24, 2009, Ocala Funding owed approximately $1.68 billion to

Deutsche Bank and BNP Paribas pursuant to promissory notes issued as part of its commercial

paper facility. As of that date, the value of the collateral in the possession of Bank of America,

as collateral agent for the Ocala Funding commercial paper facility, comprised of cash and 693

loans, was less than $165 million. Eighty-six (86) of these loans are assigned the Ocala Funding


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investor code in the TBW servicing system, but 25 of these are loans that never closed or were

paid off.

2. According to Bank of America’s records, there were 9,111 mortgage loans that

were collateral securing the amounts owed on the Ocala Funding commercial paper facility as of

August 24, 2009. However, it is now evident that Ocala Funding or TBW had previously sold

and been paid for more than 8,600 of these loans, with 7,192 having been sold to Freddie Mac.

Another 301 of the loans that were purportedly collateral for the facility, were either very old,

had never closed, had been paid off, or were sold prior to 2007. Only 183 loans (including the

86 described in Paragraph 1, above) are assigned the Ocala Funding investor code in the TBW

servicing system, and 23 of these loans were apparently sold to and paid for by Freddie Mac.

3. In the months preceding TBW’s collapse, the exclusive source for funding

individual loan closings was the Colonial COLB facility. As loans were funded, they were

assigned to that facility and then sold. As of August 24, 2009, Colonial’s records indicate that

there were 8,714 loans assigned to the COLB facility, with an associated advance balance in

excess of $1.7 billion. Of this total, there were 4,928 loans, with a cumulative advance balance

of $909.6 million, that had been “sold” to Ocala Funding and delivered to LGTS, its collateral

agent, for which Colonial had not been paid. In addition, Ocala Funding or TBW had previously

sold 4,856 of the 8,714 loans to third-party mortgage investors such as Freddie Mac, which

included 4,254 of the loans that had been sold to Ocala Funding (for which Colonial had not

been paid). The result is that the respective records of Colonial, Ocala Funding, and Freddie

Mac (and other investors) each indicate that they are the “owner” of the same 4,254 mortgages.2

2 Throughout this Report, certain statements are made regarding “loans” and the movement of “loans” by and among parties. In this context, “loan” actually refers to original loan documents such as the promissory note and other original documents evidencing the loan and mortgage interest.


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4. As of August 24, 2009, there were 124 pools of loans assigned to the Colonial

AOT facilities with a purported cumulative balance of $1,473,868,368. None of these “trades”

was an actual, pending transaction, and 112 were “duplicative” of actual trades assigned to

another Bank of America financing facility (wholly unrelated to Ocala Funding). Hence, there is

no value in the 124 trades assigned to the AOT facilities.

5. In addition to the 124 worthless “trades,” there were 9,304 individual loans

assigned to the AOT facilities. As of August 24, 2009, a significant portion of these loans had

been sold to other mortgage investors, had been paid off or otherwise had been charged off. Of

the remainder, 1,837 had been foreclosed, with 1,197 of the underlying properties on hand when

the Petition was filed. The net result is that there are 3,278 loans, having a cumulative unpaid

principal balance of $488.5 million, assigned to the AOT that had not been sold and/or

foreclosed as of August 24, 2009. The actual value of these loans is substantially less than the

unpaid principal balance, which means that the AOT facilities are likely under-collateralized by

more than $1 billion.

6. While the amounts have not been quantified precisely, it is evident that since June

30, 2008, hundreds of millions of dollars in proceeds from the Colonial AOT facilities and

proceeds of loan sales by Ocala Funding and TBW were used to pay servicing advances and loan

repurchases, pay off worthless trades assigned to the AOT facilities, and fund other aspects of

TBW’s business operations. These uses were inconsistent with the controlling agreements

governing the facilities.

The Debtor will provide the Court and interested stakeholders with an overview of this

Report during the status conference to be held on July 7, 2010. The Debtor will continue to work

with the FDIC-Receiver and other affected stakeholders to identify, clarify, and, to the extent


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possible, resolve key issues regarding claims and recoveries. With the completion of this Report,

the Debtor, in conjunction with the Committee as a co-proponent, expects to be able to file a

proposed plan of liquidation and disclosure statement by September 21, 2010, if not earlier,

which is consistent with the pending Motion for Second Extension of Exclusivity Periods

[Docket No. 1573] filed by TBW and the other Debtors in these consolidated Chapter 11 cases.

I. BACKGROUND

1. Prior to the commencement of this case, TBW was the largest independent (i.e.,

non-depository owned) mortgage lender in the United States. Headquartered in Ocala, Florida,

TBW employed approximately 2,500 people across the country. The largest offices were in

Ocala, Florida; Atlanta, Georgia; Cincinnati, Ohio; and Tampa, Florida.

2. TBW’s principal banking relationship was with Colonial where it maintained

more than 116 bank accounts, 110 of which were used in TBW’s mortgage servicing operations.

3. On August 3, 2009, federal law enforcement agencies executed search warrants

simultaneously at TBW’s headquarters in Ocala and at Colonial’s mortgage warehouse lending

offices in Orlando.

4. On or about August 5, 2009, a hold was placed on all of TBW’s accounts at

Colonial, which made it impossible for TBW to access funds on deposit at Colonial and/or obtain

information via the Colonial website regarding current balances and other bank account activity.

On the same day, TBW received notices of termination and/or suspension from HUD, Ginnie

Mae, and Freddie Mac.

5. Pursuant to an order of the Alabama State Banking Department dated August 14,

2009, Colonial Bank was closed and the Federal Deposit Insurance Corporation was appointed as

receiver (the “FDIC-Receiver”). As a result, the FDIC-Receiver succeeded to all rights, title,

powers and privileges of Colonial and of any stockholder, member, accountholder, depositor,


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officer, or director of Colonial with respect to the institution and the assets of the institution

pursuant to 12 U.S.C. § 1821(d)(2)(A)(i).

6. Despite the account hold, TBW continued to receive checks directly from

borrowers. Concerned that they might become “stale,” TBW’s prior management made the

decision to deposit these checks into an operating account maintained at Wachovia Bank

(“Wachovia”).

7. On August 24, 2009 (the “Petition Date”), TBW filed a voluntary petition for

relief (the “Petition”) under Chapter 11 of Title 11 of the United States Code (the “Bankruptcy

Code”).

8. Just prior to the filing of the Petition, TBW’s board of directors resigned and a

new board, comprised of two experienced restructuring professionals, was put in place.

9. Neil Luria of Navigant Capital Advisors, LLC (“Navigant”) was appointed as

Chief Restructuring Officer (the “CRO”), and Navigant was employed pursuant to Section 363

of the Bankruptcy Code to provide additional support staff. The final order approving the

employment of the CRO and Navigant was entered by the Bankruptcy Court on November 12,

2009 [Docket No. 635].

10. After the commencement of this bankruptcy case, TBW’s new management

established bank accounts at Regions, which on a much simplified basis mirrors TBW’s account

structure at Colonial. The borrower payments deposited into the Wachovia account were

transferred to the Regions accounts.

11. Before and after the filing of the Petition, TBW and the FDIC-Receiver engaged

in extensive negotiations in an effort to address jurisdictional and other issues arising from the


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separate insolvency proceedings of TBW and Colonial, which are governed by different statutory

schemes.

12. On September 10, 2009, TBW, as Debtor, and the FDIC-Receiver entered into the

Stipulation, which: (a) provided a framework for the interface between the TBW bankruptcy

estate and the Colonial receivership; and, (b) defined a reconciliation process designed to

identify and address issues regarding the appropriate allocation, receipt and disbursement of

borrower funds and other cash (i.e., the Servicing Reconciliation), as well as questions regarding

the nature and ownership of the mortgages and other related assets under TBW’s management

and control as of early August 2009 (i.e., the Asset Reconciliation).

13. The Stipulation was presented at a hearing and initially approved in an order of

this Court dated September 29, 2009, but objections were filed and a further hearing was

conducted. In accordance with consensual modifications intended to address the fundamental

points raised by the objections, the Stipulation was approved in an order entered on October 16,

2009.3

14. As the Debtor gained a better understanding of the facts and circumstances related

to TBW’s business operation and continued to work with the FDIC-Receiver in the

Reconciliations, it became apparent that both the Servicing Reconciliation and the Asset

Reconciliation were more complicated than had first appeared in September 2009.4 Moreover, it

has become abundantly clear that additional work not specifically addressed by the Stipulation

was necessary. Exhibit A to this Report generally describes the activities undertaken in the

3 Bank of America filed a notice of appeal from this order, but that appeal has not further delayed implementation of the provisions of the Stipulation. 4 The combination of the sudden collapse of TBW and the existence of parallel criminal proceedings has resulted in the unavailability of nearly all previous key employees to assist in the reconciliation processes.


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performance of the Servicing Reconciliation, and Exhibit B generally describes the activities

undertaken in the performance of the Asset Reconciliation.

15. The Stipulation established a target of October 30, 2009 for the completion of the

Servicing Reconciliation but provided for the possibility of a longer process, which longer

process has proven necessary. The Debtor’s First Interim Reconciliation Report [Docket No.

555] (the “First Report”) provided general background information regarding TBW’s business

operation and the events surrounding the filing of the Petition on August 24, 2009. The Debtor’s

Second Interim Reconciliation Report, filed on December 15, 2009 (the “Second Report”)

[Docket No. 776], provided a reconciliation and allocation of $811,748,402 in servicing-related

funds that were affected by the Colonial bank account hold beginning on August 5, 2009, by

Colonial’s subsequent failure and by TBW’s Chapter 11 case. Regarding the Servicing

Reconciliation, this Report includes updates to the Second Report to take into bank activity

through April 30, 2010, the resolution of certain reconciling items, and current status of the

resolution of outstanding borrower issues. In addition, this Report provides the Debtor’s analysis

of advances made by TBW on behalf of investors and the custodial bank account balances as of

August 4, 2009, which provides the basis for its determination of the aggregate unreimbursed

advances, unpaid fees and shortfalls in certain custodial accounts.

16. In accordance with the terms of the Stipulation, the Debtor has worked closely

with the FDIC-Receiver in performing the Servicing Reconciliation and the Asset

Reconciliation. Throughout the process, the FDIC-Receiver has reviewed the Debtor’s

procedures and the results of the reconciliation efforts. With respect to the Servicing

Reconciliation, the FDIC-Receiver has devoted substantial time and resources to reviewing the

Debtor’s work product and supporting data. The FDIC-Receiver has reviewed the results of the


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Asset Reconciliation, but has not engaged in a similar in-depth review of the supporting data.

The FDIC-Receiver has not identified any material errors or omissions in the Servicing

Reconciliation or the Asset Reconciliation in the course of these reviews. Despite this

collaboration, it is important to emphasize that the previously filed interim reports, as well as this

Report, have been filed by the Debtor, not the FDIC-Receiver or any other party.

II. TBW’S BUSINESS OPERATIONS

17. TBW’s business was complex and complicated. In general, its principal

operations included:

• Origination, underwriting, processing and funding of conforming and non-

conforming 5 conventional and government-insured residential mortgage loans;

• Sale of mortgage loans and securities into the “secondary market,” principally to

government-sponsored enterprises such as Freddie Mac and to investors in Ginnie

Mae insured securities and financial institutions; and

• Mortgage payment processing and loan servicing.

A. Origination, Underwriting and Funding

18. Through a large network of independent mortgage brokers and community banks,

TBW provided mortgage financing to individual borrowers throughout the United States.

TBW’s ultimate objective was to sell these mortgages to “investors,” including

government-sponsored enterprises (e.g., Freddie Mac) and financial institutions (e.g., Wells

Fargo), and retain the right to service the mortgages for the purchasing investor.

5 Conforming loans are loans that meet the normal Freddie Mac or Ginnie Mae guidelines. Non-conforming loans are all other loans, which include Alt-A loans, jumbo loans, second-lien mortgage loans and subprime loans.


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19. Because TBW intended to sell the mortgage loans that it originated, its

underwriting guidelines conformed with guidelines established by the investors. In effect, the

investors’ guidelines became the underwriting guidelines used by TBW.

20. In the five years prior to the commencement of this bankruptcy case, TBW

experienced tremendous growth in the number of loans it originated. For calendar year 2004,

TBW closed or purchased a total of 59,129 loans representing a dollar value in excess of $9.5

billion. By calendar year 2008, that annual production volume had increased to 184,227 loans

with a dollar value in excess of $32.3 billion. The annual growth in TBW’s production from

2004 through 2008 can be summarized as follows:

Year 2004 2005 2006 2007 2008 Loan Count 59,129 93,375 139,148 195,226 184,227

Dollars $9,516,878,000 $17,358,993,000 $23,501,086,000 $33,727,081,000 $32,332,121,000

By early 2009, TBW was originating approximately 14,500 new loans every month, representing

in excess of $2.7 billion in monthly production.

21. TBW’s mortgage servicing operation experienced similar growth. In December

2004, TBW was servicing 73,345 loans with an unpaid principal balance (“UPB”) in excess of

$10.5 billion. By August of 2009, TBW’s servicing portfolio had grown to more than 512,000

loans with a UPB in excess of $80 billion.

22. In order to fund the individual mortgage loans at closing and then hold them until

they could be sold, TBW required significant financing. At the same time, TBW’s servicing

operations required substantial working capital in order to fund the necessary servicing advances

required under its various servicing agreements. Therefore, TBW financed its loan originations,

mortgage sales, and servicing operations using a variety of funding sources.


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23. A key component of TBW’s financing was its long-standing relationship with

Colonial. Dating back to 1999, Colonial served as one of TBW’s primary sources for loan

funding through a number of different facilities. Beginning in September of 1999, Colonial

provided TBW with a traditional mortgage warehouse lending facility (the “Colonial Mortgage

Warehouse Facility”), which continued in various forms until the hold was placed on all of

TBW’s accounts in August 2009. Included in the Colonial Mortgage Warehouse Facility was an

overline facility (the “Colonial Overline Facility” or the “Overline”), which provided certain

additional funding capacity for TBW.

24. Starting in 2002, Colonial began providing TBW with additional funding options

through various participation facilities. Under the terms of these facilities, which in recent years

were referred to as the COLB facilities (the “COLB”), TBW sold to Colonial a participation

interest (usually 99%) in mortgage loans, which were then sold to a mortgage investor or

allocated to a particular mortgage security for which other financing was available.

25. TBW and Colonial also entered into additional assignment of trade participation

facilities commonly referred to as the AOT facilities (the “AOT”)6 under which Colonial would

purchase participation interests in trades held by TBW with respect to agency securities (both

Freddie Mac and Ginnie Mae) and securities issued by private label issuers. Once TBW

allocated a loan to an agency or private label securitization, a loan that was previously funded on

the COLB (or other facilities) could be moved to the AOT until the ultimate settlement of the

underlying trades.

26. Collectively, the COLB and AOT facilities provided TBW with funding capacity

through Colonial in excess of $3 billion for the origination, purchase, and ultimate sale of loans.

6 In the months leading up to TBW’s collapse, TBW entered into similar AOT facilities with Cole Taylor Bank and USAmeribank.


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27. In addition to the Colonial facilities, TBW had a number of other funding sources

for the origination and sale of mortgage loans, most of which were terminated prior to or at the

beginning of 2009:

a. From 2002 until January of 2009, TBW was a party to a purchase facility

with Credit Suisse First Boston Mortgage Capital, LLC (“CSFB”). The

CSFB facility began as a $125 million facility, ultimately increased to a

$700 million facility, and was thereafter paid in full and terminated in

January of 2009.

b. From 2003 until 2007, TBW and Washington Mutual Bank, FA were

parties to an early purchase facility which initially provided funding of

$300 million, ultimately expanded to provide funding of up to $700

million, and was paid in full by TBW in July 2007.

c. TBW entered into a purchase facility with Dresdner Bank AG in May of

2007 which provided an additional $300 million in funding. The Dresdner

facility was paid in full and terminated in December of 2008.

d. TBW entered into an early purchase facility with Bank of America in

March of 2009 (the “BoA EPF”). The BoA EPF initially provided

funding for up to $500 million and was expanded in May of 2009 to

provide for funding of up to $1 billion. This facility was in effect when

TBW ceased operations in August 2009.

e. As more fully described below, TBW’s subsidiary Ocala Funding LLC

and related commercial paper facility (the “OFCP”) was created in 2005,

ultimately expanded to a $4 billion facility, and was restructured in June


-17-

of 2008 and reduced to a $1.75 billion facility. This facility was in effect

in August 2009.

28. In addition to funding sources used for its loan origination and sale activities,

TBW also had two working capital facilities to fund the company’s servicing operations:

a. From 2001 until May of 2009, Colonial served as the lead in a syndicate

of banks which provided TBW with a working capital facility

collateralized by a security interest in certain of TBW’s mortgage

servicing rights. In May of 2009, Sovereign Bank replaced Colonial as the

lead bank in the syndicate (the “Colonial/Sovereign MSR Facility”).

The Colonial/Sovereign MSR Facility at one time provided working

capital funding of up to $311.5 million, but by August of 2009 had been

reduced to approximately $168.2 million.

b. Natixis Real Estate Capital Inc. provided TBW with another working

capital facility secured by certain other mortgage servicing rights of TBW

(the “Natixis Facility”). The Natixis Facility originally provided up to

$133 million in working capital, was later amended to provide for up to

$200 million, but by August of 2009 had been reduced to approximately

$46.4 million outstanding on the facility.

B. Mortgage Loan Funding Process

29. In general, “wet funding” is the provision of money to an individual borrower at

the time of the closing of the mortgage loan before the delivery of original loan documents to the

lender. Accordingly, because of the risk that there could be some issue with respect to the

perfection of a security interest after funds have been provided, there have historically been

fewer sources of “wet funding” than there are for other types of financing.


-18-

30. Historically, TBW had several sources of available “wet funding,” but over time,

many of those sources diminished or disappeared completely. At the time of the filing of the

Petition, TBW’s sole source of wet funding was the COLB at Colonial.

31. When a mortgage loan “dried” – i.e., the original loan documents were delivered

to TBW – it was eligible for sale to an investor. Most loans were sold to investors in “pools.”

As pools of dry loans were assembled, they were typically moved from a facility that provided

“wet funding” to a facility that provided for “dry funding.” If operating as designed, the net

effect of the transfer of a loan from a wet funding source to a dry funding source would be that

monies were advanced to TBW from the “dry funding” source to be used to reduce the

outstanding balance on the “wet funding” source, so that the “wet funding” source would

continue to be available to originate new loans.

32. As structured, TBW’s dry funding sources provided interim financing and were

available to “warehouse” mortgage loans between the time that they dried and the time that they

were sold to investors (sometimes referred to as “take-out purchasers”).

33. TBW also used available “dry funding” to purchase loans originated and closed

by other mortgage lenders, which could be included in pools sold to investors. Historically, the

volume of purchased dry loans from other originators was much smaller than the volume of

TBW-originated loans financed by its wet funding sources.

34. Depending on the structure of the sale of a pool to an investor, several weeks

could pass between the time that TBW entered into a contract to sell a pool of mortgages and the

date that it received payment for that sale. In general, when sales proceeds were received, they

were or should have been used to pay the associated wet or dry funding balances.


-19-

35. As a result of the processes described above, there was constant movement of

loans among various sources of funding between the time of origination and the ultimate sale to a

take-out purchaser (i.e., investor).

36. TBW’s secondary marketing group was principally responsible for the sale of

loans to investors, and TBW’s treasury group, in conjunction with members of senior

management, was responsible for administering the various funding sources.

C. Sales of Mortgages to Investors

37. In sum, the mortgage loan sale process worked as follows:

a. TBW assimilated pools of loans for sale to investors, which were, most

often, to be used to support mortgage-backed securities.

b. As a part of the sales process, the loan pools were assigned to specific

“trades” at the time that the sales contract was entered into – i.e., the loans

were allocated to a specific issue of mortgage-backed securities.

c. Purchase proceeds were not paid to TBW until the trade to which the

pools were assigned “settled” – i.e., the securities were issued and sold.

38. In general, TBW sold all agency-eligible mortgage loans whether originated by

TBW or purchased from another originator, by one of the following methods:

a. Conforming loans eligible for sale to Freddie Mac were either:

i. aggregated into pools that were exchanged for mortgage-backed

securities; or

ii. individual loans were sold to Freddie Mac for cash through the

Freddie Mac “cash window.”

b. FHA mortgage loans and VA mortgage loans originated by TBW were

generally pooled and sold either in the form of Ginnie Mae mortgage-


-20-

backed securities issued by TBW or on an assignment-of-trade basis to

other approved Ginnie Mae sellers.

c. Freddie Mac and Ginnie Mae securities collateralized by eligible loans

were then sold to approved broker-dealers. TBW paid certain fees to

Freddie Mac and Ginnie Mae in connection with these programs.

Historically, a majority of TBW’s mortgage loans qualified under the

various Freddie Mac and Ginnie Mae program guidelines, which include

specific property and credit standards, including a loan size limit.

TBW generally sold conforming loans within 30 to 90 days of closing.7

39. Loans not eligible to serve as collateral for Freddie Mac or Ginnie Mae securities

– e.g., jumbo loans, certain types of reduced documentation (or Alt-A loans), certain types of

second-lien loans, and subprime loans – were sold through a variety of channels. Starting in

2006, TBW’s primary mode of selling non-eligible Alt-A collateral and certain jumbo loans was

through private-label securitizations. For other types of non-eligible collateral, TBW sold the

loans on a whole loan basis (either individually or in bulk). Buyers of non-Freddie Mac and non-

Ginnie Mae eligible loans and securities included large depository financial institutions, large

mortgage banks, securities dealers, real estate investment trusts, hedge funds and other

institutional loan buyers. These types of loan sales generally were consummated within 60 to 90

days of loan origination. TBW typically retained the servicing rights relating to loans that it

originated, but on occasion TBW sold loans along with their servicing rights, and on occasion

sold servicing rights in bulk.

7 TBW entered into sales contracts with Freddie Mac and Ginnie Mae using their automated selling systems.


-21-

40. TBW’s loan sales were governed by agreements with the mortgage investors.

These agreements established an ongoing program under which investors purchased or

securitized certain loans, as long as the loans offered for sale met agreed-upon underwriting

standards. In the case of conventional loans (i.e., a mortgage loan that is not guaranteed or

insured by the federal government), TBW was generally at risk for any mortgage loan default

until the loan was sold, subject to the obligations of any primary mortgage insurer. Once the

loan was sold, the risk of loss from default and foreclosure generally passed to the purchaser or

insurer of the loan.

41. In the case of FHA and VA loans, TBW generally was required to request

insurance or a guarantee certificate within 60 days of loan closing, and the loan had to be current

at the time of the request. Once the insurance or the guarantee certificate was issued, the

insurance or guarantee generally was available for claims against foreclosure and related losses

as a result of a borrower default. Certain losses related to foreclosures and similar procedures in

connection with FHA mortgage loans were not covered by FHA insurance, nor were losses that

exceeded the VA’s guarantee limitations. Additionally, FHA could request indemnification from

TBW for its failure to comply with applicable guidelines in the origination or servicing of loans

and could curtail insurance claim payments based on failures to comply with FHA’s claims

guidelines. Likewise, the VA could reduce guarantee payments based on failures to comply with

VA requirements, and in certain cases the VA would deny any liability under a guaranty.

42. In connection with its loan sales to investors, TBW made representations and

warranties customary in the industry relating to, among other things, compliance with laws,

regulations, certain program standards and the accuracy of information contained in the loan file.

In the event of a breach of these representations and warranties, TBW could become liable to the


-22-

purchasing investor for certain damages and losses or could be obligated to repurchase the

subject loans and bear any potential related loss on the disposition of those loans.

D. TBW’s Mortgage Servicing Operations

43. In general, mortgage servicing involves the administration of individual

mortgages on behalf of investors, including: the collection of monthly mortgage payments

(including loan payoffs) from individual borrowers; the disbursement of principal and interest

payments to investors; payment of real estate taxes and insurance on behalf of borrowers; and,

the administration of loan defaults and foreclosures.

44. Prior to the events that resulted in the filing of the Petition, TBW’s mortgage

servicing operations were substantial. As of August 3, 2009, TBW serviced approximately

512,000 different mortgage loans (primarily first-lien, fixed-rate mortgages), having a combined

UPB in excess of $80 billion. These mortgages ultimately were securitized through

government-sponsored enterprises, including Freddie Mac and Ginnie Mae (which, collectively,

accounted for approximately 95% of the total UPB), or sold and securitized in “private label”

securitizations and held in trusts for which Wells Fargo and Bayview served as master servicers

(which accounted for roughly 5% of the total UPB). Finally, TBW serviced mortgages for its

own portfolio and those of related entities, such as Platinum Community Bank (“Platinum”),

and serviced mortgages that were outstanding on various warehouse lines.

45. The key tool in TBW’s servicing operation was an automated servicing system

(“Servicing System”), the fundamental component of which is a computer software product

provided by Financial Industry Computer Systems (“FICS”). FICS is used by numerous

mortgage servicers in the United States. Borrower issues and transactions (e.g., mortgage

payments, defaults, payment of taxes and insurance), as well as investor issues and transactions


-23-

(e.g., record of the owner of each mortgage and the allocation and transmittal of borrowers’

payments to the appropriate investor), were administered using the Servicing System.

46. Individual borrowers made mortgage payments to TBW in a variety of ways,

including: (a) by check made payable to TBW and mailed either to a lockbox maintained by

Colonial or directly to TBW; or, (b) by various electronic payment methods. These borrower

payments were initially deposited into a single TBW bank account maintained at Colonial

commonly referred to as the “Custodial Funds Clearing Account” or “CFCA”.

47. As payments were received and deposited into the CFCA, they were recorded in

TBW’s Servicing System. Each day, the prior day’s deposits, if recorded in the Servicing

System, were “pushed down” (i.e., transferred) from the CFCA to various custodial accounts

commonly referred to as “P&I” (Principal and Interest) and “T&I” (Taxes and Insurance)

accounts maintained on behalf of the various investors. Borrower payments were allocated

among the investor P&I and T&I accounts using information maintained and administered in the

Servicing System. TBW’s compensation, in the form of servicing fees, was also paid from the

CFCA account.

48. P&I payments were disbursed to investors each month. With the exception of

Freddie Mac, investors received P&I payments mid-month (usually on or about the 18th) for

monthly mortgage payments and unscheduled payments (e.g., loan pay offs) received in the prior

month. Freddie Mac, TBW’s largest investor, had two programs known as ARC and Gold. For

the ARC program, P&I payments were transmitted to Freddie Mac in the early part of the month

(usually the 6th). For the Gold program, P&I payments were transmitted mid-month (usually the

18th). Other unscheduled payments were transmitted to Freddie Mac on a daily basis.


-24-

49. As borrowers’ tax and insurance premium payments came due, monies were

transferred from the appropriate T&I accounts to Escrow Disbursement Clearing Accounts

(“EDCA”).

50. The following diagram provides a simplified description of the flow of funds

received from borrowers by TBW:

1. ACH - TBW Pymt Ctr.2. Checks - Received at TBW3. Lockbox 4. Wire Transfers5. Telephone Payments6. 3rd Party ACH (Checkfree, etc.)7. Western Union8. Military Allotment9. REO Proceeds

Custodial Funds Clearing AccountColonial Bank#8037152645

EDCA Account at Colonial Bank

#8027625568

EDCA Acct. at Platinum Bank(Checks Written)

#904015

Investor Accounts Corporate Account

Customer / BorrowerPayments

HISTORICAL COLONIAL BANK ACCOUNT SIMPLIFIED SCHEMATIC

Note: This schematic is intended to provide an overview of the complex banking system in place between TBW and Colonial Bank as of August 4, 2009. For purposes of presentation, this schematic is highly simplified--the actual banking system was comprised of approximately 100 separate bank accounts.

InvestorP&I Accounts

at Colonial Bank

InvestorT&I Accounts

at Colonial Bank

InvestorBuydown/Subsidy Accts

at Colonial Bank

TBW Operating Account at Colonial Bank (Service Fees)

#8030377314

51. As indicated in the diagram above, the actual payments of real estate taxes and

insurance premiums (as well as other “escrow” related payments) were made from an EDCA

account maintained at Platinum. In sum, funds were transferred from the investor T&I accounts

into an EDCA account at Colonial. The collected funds were then transferred to the Platinum

EDCA account. As a general rule, checks were written on this account on a daily basis. In

addition, refunds of excess T&I monies were paid to borrowers from the Platinum EDCA

account.


-25-

52. Virtually all of TBW’s servicing arrangements required that

“scheduled/scheduled” payments be made to investors.8 In other words, TBW, as servicer, was

required to make P&I payments to investors in an amount equal to the amount that should have

been received from all borrowers as if they had made payment on a timely basis. The result was

that TBW was required to fund (i.e., “advance”) the payment of principal and interest due on

mortgages for which borrowers failed to make timely payment.

53. Similarly, TBW made tax and insurance advances for mortgages for which

insufficient “escrow” balances were on hand at the time that tax and insurance premium

payments were due.

54. In general, for mortgage loans that were in default, TBW made “Servicing

Advances” (i.e., P&I advances and T&I advances) until the time that a foreclosure was

completed, which in many states was a number of months after the first missed payment by the

borrower.

55. As servicer, TBW also managed the foreclosure process and incurred

foreclosure-related expenses. These expenses are referred to as “Corporate Advances.”

56. Ultimately, the Servicing Advances and the Corporate Advances were recovered

or should have been recovered by TBW from the following: (i) payments received from

borrowers (for which advances were made); (ii) the proceeds of the sale of foreclosed houses or

the proceeds from short sales; or (iii) claim reimbursements from the investors or HUD for

insured loans.

8 The Freddie Mac ARC program required “scheduled/scheduled” payments. The Gold program was a “scheduled/actual” program, which required TBW to advance scheduled interest amounts, but not principal.


-26-

E. Real Estate Owned (“REO”)

57. Following foreclosure, TBW typically administered the underlying real estate in

one of the following ways:

a. For loans sold or securitized through Freddie Mac, once the foreclosure

was completed the property was transferred to Freddie Mac in the ordinary

course of business, and TBW would then file a claim for Servicing

Advances and Corporate Advances made with respect to that property.

b. For loans securitized through Ginnie Mae, once the property was

foreclosed, TBW transferred title to the property to HUD provided that the

property was in “conveyance condition.” If an inspection of the property

revealed that the property did not meet HUD’s requirements for

“conveyance condition,” a property preservation company was retained to

bring the property in compliance prior to conveyance to HUD. TBW filed

claims with HUD for recovery of any available government guaranty of

the principal balance of the loan and Servicing Advances and Corporate

Advances made as the servicer.

c. For other loans held by TBW directly or financed on one of the Colonial

facilities or for loans securitized in “private label” securitizations, TBW

continued to maintain and manage the properties and market them until

their ultimate disposition through TBW’s REO Department (the “REO

Department”). Employees in the REO Department would coordinate the

initial cleanup of the property, arrange for any necessary repairs and

maintenance, schedule periodic visits to the property, and coordinate all

sales activities with respect to the property until it was sold. Rather than


-27-

using a traditional nationwide network of real estate brokers and agents,

TBW’s REO Department relied primarily on a methodology which

employed the placement of signs at each REO property site displaying 1-

800 numbers, which directed prospective buyers to TBW’s REO

Department using certain call-capture technologies. At the time of

commencement of TBW’s Chapter 11 case, TBW had more than 4,400

properties under management in its REO Department.

58. Historically, TBW accounted for REO properties as an on-balance-sheet asset on

its financial statements regardless of whether the property was financed using an

“on-balance-sheet” facility or an “off-balance-sheet” facility. Certain of the facilities used by

TBW, like the COLB and AOT facilities, were accounted for as off-balance-sheet because the

underlying funding transaction was treated as a “true sale” of a participation interest to Colonial.

59. In connection with the release of TBW’s January 2009 interim financial

statements, TBW concluded that REO properties financed on the AOT facilities should be taken

off of the company’s balance sheet, leaving on the balance sheet only the REO assets financed

through an on-balance-sheet facility or that were owned by TBW free and clear of liens. During

the course of TBW’s year-end audit conducted by Deloitte LLP (“Deloitte”), the auditors raised

questions regarding the change in treatment of REO on TBW’s balance sheet. Ultimately,

Deloitte stopped working on the audit and withdrew from the field in June 2009 pending the

outcome of an internal investigation of this and other accounting issues to be conducted by

independent outside counsel. TBW hired the law firm of Troutman Sanders LLP (“Troutman”)

to conduct the investigation, and Troutman was in the process of conducting that investigation

when TBW collapsed in early August 2009.


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III. SUPPORTING DATA AND DATABASE

60. In performing the Reconciliations and related analysis and investigation, the

Debtor determined that it was reasonable and appropriate to rely upon the information in TBW’s

Servicing System. As with any large servicing operation, the Debtor found errors and a very

limited number of transactions that had not been recorded timely in the Servicing System as of

TBW’s cessation of business operations (e.g., borrower escrow balances from origination and

upfront mortgage insurance payments). However, these limited occurrences did not have a

material impact on the overall quality of the information or the results of the Reconciliations.

61. TBW’s Servicing System uses a series of investor codes (the “Investor Codes”)

to track ownership of loans. From the time of origination (or acquisition) by TBW, loans

initially were coded to Investor Code 001 regardless of the financing facility to which the loan

was assigned.9 When the loans were sold to an investor, the designation in the Servicing System

was changed to the purchasing investor’s Investor Code. Therefore, the assigned Investor Code

in the TBW Servicing System was fundamental to making payments to investors and in the

compilation of servicing-related reports.

62. In and around late July and early August, TBW continued to sell loans to

investors. However, as the company suddenly collapsed and ceased business operations, the

change from 001 to the Investor Code of the purchasing investor was not made for certain loan

sales made during that time period. As servicing was transferred to subsequent servicers in

accordance with each investor’s instructions after August 4, 2009, the change from 001 to the

Investor Code for the purchasing investor was made by the Debtor. However, rather than

9 Historically, a similar practice was used for loans originated or acquired using the OFCP, and the related Investor Code was 002. However, the use of the 002 Investor Code declined after June 30, 2008 and, ultimately, was not used by TBW. As more fully explained elsewhere in this Report, there are only 183 loans with the 002 Investor Code.


-29-

making these adjustments in TBW’s Servicing System, the changes in Investor Code were made

in the “Lookup Database,” which is a database compiled by the Debtor for use in the

Reconciliations. In short, the Lookup Database included the information for all loans in TBW’s

Servicing System,10 which was then adjusted to reflect the identity of the purchasing investor.

Accordingly, it is the identity of the investor as reflected in the Lookup Database that has been

used for the Reconciliations.

63. In addition to the Lookup Database, the Debtor developed a number of other

databases based on information extracted from TBW’s Servicing System and records from

TBW’s accounting, treasury, cashiering, investor reporting, and secondary marketing

departments. These databases, which are identified in more detail in Exhibits A, B, and S to the

Report, were also used by the Debtor to perform the Reconciliations and related research and

analysis.

64. The investor allocations made in the Servicing Reconciliation have been made in

the same way that TBW would have made them in the ordinary course of its business operation

absent the Colonial account hold and the Chapter 11 filing. Except as described in Paragraph 62,

above, the Debtor has not made any adjustments regarding the ownership of the underlying

mortgage assets or the corresponding monies based upon the results of the Asset Reconciliation.

65. The Debtor believes that the findings set forth below, based upon the data in

TBW’s Servicing System and the Debtor’s various databases created in connection with the

Reconciliations, are fair and accurate.

10 TBW maintained an archival database for loans liquidated prior to January 1, 2007. Loan data with respect to such loans is not included in TBW’s active Servicing System and is not included in the Access Database.


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IV. SERVICING RECONCILIATION

66. As a result of TBW’s sudden collapse and the failure of Colonial, $860,642,822 in

affected funds (the “Gross Affected Funds”) were trapped in the Debtor’s servicing complex

and the Company’s servicing-related accounts. The reconciliation of those funds, which

involved approximately 400,000 transactions and more than 512,000 loans, was complicated and

time-intensive.

67. As it evolved, the Servicing Reconciliation included three distinct components:

a. The “Affected Funds Reconciliation,” under which the Debtor performed a

reconciliation and allocation of all monies that were affected by the Colonial

bank account hold beginning on August 5, 2009, Colonial’s subsequent

failure and TBW’s bankruptcy;

b. The “Book-to-Bank Reconciliations,” pursuant to which the Debtor

determined the amount of any shortfalls in investors’ custodial accounts; and

c. The “Servicing Advances Reconciliation,” pursuant to which the Debtor

reconciled and accounted for unreimbursed advances (including Servicing

Advances and Corporate Advances) and servicing fees not paid to the

Debtor.

A. Affected Funds Reconciliation

68. The Affected Funds Reconciliation involved the allocation to investors of the

$860,642,822 in “Gross Affected Funds” (see Table 1, Line 43 and Exhibit C) that were trapped

on and after August 5, 2009 as a result of the administrative hold at Colonial and TBW’s

subsequent bankruptcy filing. Such funds, as described in more detail below, include amounts

currently or previously at Colonial, Regions, Seaside, and Platinum, as well as certain amounts

trapped either in lockboxes or electronic suspense.


-31-

69. As part of the Affected Funds Reconciliation, the Debtor deducted from the Gross

Affected Funds: (i) any Gross Affected Funds that have been turned over to investors by the

Debtor or the FDIC-Receiver since August 5, 2009; and, (ii) the Gross Affected Funds that were

never monetized (i.e., electronic payments trapped in suspense). After subtracting these amounts

from the Gross Affected Funds, the remaining total “Net Affected Funds on Deposit” as of

April 30, 2010 is $396,014,173 (Table 1, Line 43), which represents the amount of Gross

Affected Funds currently on deposit at Colonial ($242,304,744), Regions ($148,709,430), and

Seaside ($5,000,000).

70. In its Second Report, the Debtor provided its allocation of “Gross” and “Net”

Affected Funds, as of November 30, 2009. (See, Second Report, Tables 1 and 3, p. 5 and p. 11,

respectively.) These included:

• Deposits in clearing accounts and custodial accounts at Colonial;

• Deposits in accounts at Regions (including transfers from the Wachovia account);

• Un-deposited checks maintained in the Colonial lockbox;

• Initiated, but not completed, ACH transfers;

• Deposits in a Freddie Mac-related custodial account at Platinum; and

• Checks written on the Platinum EDCA (but not funded).

For this Report, the allocation of affected funds has been updated to reflect the Net Affected

Funds on Deposit as of April 30, 2010 and includes the following additions and revisions from

the Second Report:

• Allocations based upon bank activity after November 30, 2009, the cut-off date

for the Second Report;

• Inclusion of additional categories of affected funds that were not reflected in the


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Second Report;

• Allocation of monies, deposits, wire transfers and REO proceeds not identified or

allocated as of the filing of the Second Report (see, Second Report, Table 2, p. 9);

and,

• Changes in the allocation of certain mortgages to specific investors, primarily

based upon warehouse lender information and feedback received from subsequent

servicers after servicing portfolios were transferred.

71. A high-level review of the results of the Affected Funds Reconciliation and the

investor level allocation of Gross Affected Funds and Net Affected Funds on Deposit is set forth

in greater detail in Table 1 below and in Exhibits C through E to this Report.


-33-

TABLE 1Calculation of Net Affected Funds on Deposit as of April 30, 2010

Line InvestorGross Affected

Funds

Less: Funds Transferred to Investors and Other Parties

Less: FDIC Lockbox Not Distributed

Less: Posted, Not Monetized

Net Affected Funds on Deposit

[A] [B] [C] [D] [E]1 Freddie Mac [F] 562,056,053$ (311,215,060)$ (154,838)$ (47,387,043)$ 203,299,113$ 2 Ginnie Mae 120,761,519 (59,340,492) (4,558) (13,307,411) 48,109,057 3 Wells Fargo 117,282,764 (13,749,525) (145,354) (1,777,984) 101,609,902 4 TBW - Not Service Released 11,624,837 (776,187) (5,392) (14,139) 10,829,119 5 TBW - Net Funded / FHLMC 4,161,355 (93,162) (92,601) (2,390) 3,973,201 6 TBW - Net Funded / GNMA 2,407,588 (40,679) (69,501) (3,017) 2,294,392 7 TBW - Net Funded / Wells Fargo 11,381 (535) - - 10,846 8 Colonial-FDIC 7,260,737 (2,582,550) (4,227) (284,091) 4,389,868 9 BB&T 3,914,393 (90,234) (53,718) (7,061) 3,763,380 10 Bayview Loan Servicing LLC 2,646,568 (733,389) (17,665) (84,853) 1,810,662 11 Bank of America 1,578,206 (619,783) (4,134) (100,963) 853,325 12 UMS - Hudson City 1,469,380 (8,258) (11,739) (9,894) 1,439,489 13 TBW - Selene Interim Serviced 1,545,733 (1,119,473) (8,765) (31,822) 385,674 14 Urban Trust Bank 1,036,752 (51,134) - (12,329) 973,289 15 Bank of Internet 971,126 (34,194) (3,028) (3,254) 930,650 16 Platinum Community Bank-FDIC 1,226,431 (451,448) (3,185) (60,738) 711,060 17 Henley Holdings 826,270 (383,215) (4,505) (109,661) 328,889 18 Seaside 546,663 (196,210) - (7,146) 343,307 19 Mercantile Bank 680,544 (8,168) - - 672,376

20 Ocala Funding - RoundPoint Interim Serviced

475,406 (131,149) (1,450) (19,610) 323,197

21 Cole Taylor 511,022 (175,532) (6,721) (19,851) 308,919 22 IndyMac 175 - (175) - - 23 Five Mile Capital 1,458 - - - 1,458 24 US AmeriBank 113,675 (55,629) (1,788) (14,673) 41,586 25 MGC Mortgage 89,293 (10,230) (13,209) (14,934) 50,920 26 Century National Bank 44,672 - (2,563) (837) 41,271 27 Hyde Park Savings Bank 49,075 (1,787) (1,468) - 45,819 28 CitiMortgage Inc 42,700 - (1,350) (1,982) 39,368 29 First American Bank & Trust 19,728 - - - 19,728 30 MountainView 78,644 (2,889) (1,122) - 74,633 31 Citi Home Equity 3,141 - (3,141) - - 32 RBC Bank 3,537 - - - 3,537 33 Selene 3,091 (3,091) - - - 34 Bayrock Mortgage 21,505 (1,469) - - 20,036 35 Central Mortgage (CMC) 1,342 - - - 1,342 36 Marix Servicing 41,206 - (2,470) - 38,736 37 First Alternative Mortgage Corp 142,410 - - - 142,410 38 Borrower 360,533 - (1,000) - 359,533 39 Returned to Western Union 2,983,562 (2,982,677) - - 885 40 EDCA 8,414,181 (5,473,290) - - 2,940,892 41 Seaside 5,000,000 - - - 5,000,000 42 Still Under Review 234,167 - (401,861) - (167,694) 43 Total 860,642,822$ (400,331,437)$ (1,021,529)$ (63,275,683)$ 396,014,173$

[A] Investor and borrower funds that were trapped in TBW’s servicing account complex on and after August 5, 2009. See Exhibit C for additional information. Certain Gross Affected Funds amounts reflect the full borrower payment which includes unpaid service fees to TBW. In addition, for a small population of loans, the Gross Affected Funds will include insurance premium payments made by borrowers for non-mortgage related insurance policies. Historically, TBW transferred these insurance premium payments to the insurance carriers. The Debtor will consider adjusting the Gross Affected Funds amounts for both the service fee and the insurance premium amounts, as appropriate, subsequent to the issuance of the Report.

[B] Represents Gross Affected Funds that were transferred to other parties through April 30, 2010. See Exhibit D for additional information. [C] As indicated in the Debtor’s prior interim reports, the FDIC-Receiver collected, maintained, and forwarded borrower payments received in the

Colonial lockbox after August 12, 2009. These lockbox checks were not monetized/not deposited in TBW bank accounts and not posted in the Servicing System. The FDIC-Receiver distributed a majority of the $94.7 million of lockbox checks to investors or their subsequent servicers based on information provided by the Debtor. This amount represents the balance of lockbox checks that had not been distributed as of April 30, 2010. See Exhibit D for additional information.

[D] Amounts represent funds that were not monetized/not deposited in TBW bank accounts, but were posted to the TBW Servicing System. The effect is that while the servicing records indicate that a payment was made, no cash was actually received from the borrower in connection with these payments. See Exhibits C, D, and E for additional information.

[E] Net Affected Funds on Deposit at Colonial, Regions, and Seaside as of April 30, 2010 totals $396,014,173. See Exhibit E for additional information.

[F] The Freddie Mac Gross Affected Funds amount includes $210 million of T&I escrow funds that were on deposit in a custodial account at Platinum. Based on discussions with the FDIC, it is the Debtor’s understanding that the FDIC distributed such amount to Freddie Mac in August or September of 2009. See Exhibit C.


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72. Exhibits C through L to this Report provide more detailed information regarding

the Affected Funds Reconciliation than the summary information provided herein. The balances

in a few accounts will continue to change as a result of transactions after April 30, 2010, but it is

not anticipated that any subsequent changes will have a material effect on the Servicing

Reconciliation set forth herein.

73. With the exception of $234,167 (Table 1, Column A, Line 42), all of the Gross

Affected Funds have been allocated to investors. The unallocated amounts consist of various

deposits at Colonial and Regions, certain custodial P&I and T&I balances, and lockbox checks

maintained by the FDIC-Receiver. A schedule of these “Still Under Review” amounts by

category, and the proposed next steps, if any, to reconcile and resolve the items is set forth in

Exhibit I.

74. Importantly, not all affected funds have actually been “monetized” or deposited

into bank accounts under the control of the Debtor or the FDIC-Receiver. Examples of such

non-monetized items include electronic payments caught in suspense by the Colonial

administrative hold and lockbox checks distributed by the FDIC. Moreover, during the course of

this case, certain funds have been transferred to investors and/or their subsequent servicers – e.g.,

lockbox checks and monies used to fund the Borrower Protocol payments. Such amounts as well

have been deducted from the Gross Affected Funds in the analysis.

75. The affected funds do not include amounts on deposit in TBW’s operating

accounts at Colonial, Platinum, Regions, and various other institutions or more than $200 million

in borrower check payments received by the Debtor and forwarded to investors and/or their

subsequent servicers without being posted in the Debtor’s Servicing System. The Debtor’s


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monthly operating reports provide additional information regarding the Debtor’s operating

accounts and the funds not included in this Report.

Summary of Colonial Bank Funds on Deposit

76. The affected funds at Colonial were limited to seven categories of accounts.

These account categories and associated balances as of April 30, 2010 are summarized in Table 2

below. Additionally, Exhibit J provides a detailed schedule of all Colonial accounts – servicing

and non-servicing related – indicating the account balances as of the identified dates.

TABLE 2 Summary of Colonial Bank Funds on Deposit at April 30, 2010

Bank Account Name 4/30/10 Bank

Balance Description

1 Colonial Custodial Funds Clearing Account (“CFCA”)

$ 213,619,182 Account in which borrower funds were initially deposited. See Exhibits E through I for additional information. A portion of these funds represent unpaid servicing fees to TBW.

2 Colonial Investor P&I (45) 3,268,562 Investor Principal & Interest accounts. See Exhibit J for additional information.

3 Colonial Investor T&I (45) 18,649,234 Investor Tax & Insurance accounts. See Exhibit J for additional information.

4 Colonial Western Union Clearing Account

885 See Exhibit E, Line 39 for additional information.

5 Colonial REO Proceeds Clearing Account

3,151,176 This account includes proceeds from REO sales that would have been transferred to the CFCA in the ordinary course of business had the Colonial account hold not occurred in August 2009.

6 Colonial Escrow Disbursement Clearing Account (“EDCA”)

2,940,892 As more fully described in the Borrower Protocol, $8,414,181 was on deposit in this account as of August 5, 2009. From this balance, $5,473,290 was transferred to investors in accordance with the Borrower Protocol. The balance – $2,940,892 as of April 30, 2010 – remains on deposit in this account. (See Exhibit J, p. 3 and Exhibit E)

7 Colonial Other Servicing Accounts (16)

674,814 As indicated in Exhibit C and Exhibit J, there are a number of “other” Colonial accounts related to the servicing function.

8 Total $242,304,744

77. Importantly, neither the calculation of Gross Affected Funds and Net Affected

Funds set forth in Table 1 above nor the balances in Table 2 reflect funds that were transferred

out of certain investor P&I and T&I accounts between August 6, 2009 and August 25, 2009.

During that period, Colonial and/or the FDIC-Receiver released $673,429,353 to Ginnie Mae,


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$180,189,139 to Freddie Mac, and $4,367,581 to Henley Holdings from their respective P&I and

T&I accounts. (See, Exhibits D and J.)

Summary of Regions Bank Funds on Deposit

78. In addition to the Debtor’s operating accounts, there are 32 Regions accounts that

have been used to wind-down TBW’s servicing operation and to allocate monies among

investors (though none of the Regions accounts are custodial accounts). As of April 30, 2010,

there was $228,529,585 on deposit in these 32 accounts.

79. Table 3 below is a summary of the balances in these Regions accounts as of April

30, 2010.

TABLE 3 Summary of Regions Bank Funds on Deposit at April 30, 2010 (Non-Operating Accounts)

Bank Account

Name 4/30/10 Bank

Balance

4/30/10 Affected

Funds Total Description

1 Regions Deposit and Clearing Accounts (3)

$13,031,760 $13,031,760 Accounts into which a majority of borrower payments were received by TBW after August 4, 2009 (and not otherwise transmitted to subsequent servicers) have been deposited. (See, Exhibit E.)

2 Regions P&I and T&I Accounts (25)

120,385,354 120,385,354 T&I and P&I accounts established to mirror Colonial account structure on simplified basis. These accounts receive a “push down” of T&I and P&I funds from amounts deposited into the Deposit and Clearing Accounts. As indicated in Table 1 and Exhibit E, all of these monies have been allocated.

3 Regions Service Fee Account

1,337,847 1,337,847 Deposits into these accounts represent the various fees transferred from the Regions Clearing account as part of the “push down” of borrower funds on deposit in Regions Deposit and Clearing accounts, including service fees, late returned check fees, etc. (See, Exhibit E.)

4 Regions REO Proceeds Account

90,434,696 10,619,784

[A]

Account holding proceeds from REO sales in the ordinary course of business and pursuant to § 363 of the Bankruptcy Code. The balance in the Regions REO Proceeds account has been allocated among affected investors. (See, Exhibit E.) Table 11 provides a summary of deposits into and disbursements from these REO proceeds accounts.

5 Regions REO Specialists (formerly RBC)

566,457 561,213 Similar to the REO Proceeds Account amount above except these proceeds were originally deposited in an RBC account and subsequently transferred to a Regions account. (See, Exhibit E and Table 11.)


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TABLE 3 Summary of Regions Bank Funds on Deposit at April 30, 2010 (Non-Operating Accounts)

Bank Account

Name 4/30/10 Bank

Balance

4/30/10 Affected

Funds Total Description

6 Regions Refunds Account

2,773,472 2,773,472 Account into which refunds totaling $11,291,175 from force placed insurance claims, tax refunds and private mortgage insurance premium refunds have been deposited. As these refunds have been allocated, $8,517,703 in T&I and/or corporate advances made by TBW have been reimbursed. (See, Exhibit R). These deposits have not been posted to the borrower’s record in TBW’s Servicing System. TBW will provide the information to each investor so that necessary adjustments can be made to each affected borrower’s escrow account. Exhibit L provides a summary of deposits and disbursements from the Refund Account, which includes repayment of advances repaid to TBW.

7 Total $228,529,585 $148,709,430

[A] The REO proceeds amount in the Affected Funds column only includes proceeds associated with investor owned REO properties. See Table 11 for additional information.

80. In sum, the Debtor has reviewed and analyzed $860,642,822 in Gross Affected

Funds trapped in the Debtor’s servicing complex and has reconciled and allocated all but

$234,167 to the appropriate investor. Attached as Exhibit K is a detailed schedule of all Regions

accounts used in the Affected Funds Reconciliation, indicating the account balances as of April

30, 2010.

B. Book-to-Bank Reconciliations

81. In order to determine whether any shortfalls existed in the various accounts

maintained by TBW for the benefit of investors, the Debtor undertook Book-to-Bank

Reconciliations which compared investors’ balances in TBW’s Servicing System with amounts

actually on deposit in the corresponding investor bank accounts maintained by TBW.

a. With respect to P&I accounts, the reconciliations included a comparison

of the Servicing System borrower payments, cumulative P&I advances

made by TBW, and other expense items pursuant to the servicing contracts

to related bank balances;


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b. With respect to T&I accounts, the reconciliations included a comparison

of the Servicing System borrower escrow balances to the related bank

balances; and

c. With respect to EDCA accounts, the reconciliations included a comparison

of outstanding EDCA checks to the related bank balances.

82. Because the administrative hold was placed on TBW’s Colonial accounts on

August 5, 2009, the last day that banking transactions were conducted in the ordinary course of

TBW’s business was August 4, 2009. Accordingly, the Book-to-Bank Reconciliations were

undertaken as of August 4, 2009. The EDCA Book-to-Bank Reconciliations were prepared

through April 30, 2010 to reflect disbursements made pursuant to the Borrower Protocol.

83. The Book-to-Bank Reconciliations identified total shortfalls for investor P&I,

T&I “escrow,” and EDCA bank accounts in the aggregate amount of $25,145,274. In effect, this

represents money collected by TBW that was not turned over to investors. The results of the

Book-to-Bank Reconciliations are summarized as follows:

• $5,626,200 shortfall in the P&I accounts of Freddie Mac, Ginnie Mae, and a

number of other investors. The P&I shortfall includes expense items owing to

Freddie Mac and Ginnie Mae pursuant to the terms of their respective servicing

agreements.

• $19,056,184 shortfall in investor T&I escrow accounts. Historically, escrow

amounts collected from borrowers at loan closings were used by TBW to reduce

the amount of funds TBW transferred to the title company closing the loan, and

TBW did not deposit the borrower’s escrow amounts into a segregated custodial

bank account. Typically, when loans were sold to an investor, the necessary


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amounts were then transferred to investors’ custodial accounts. Of the

$19,056,184 shortfall in escrow accounts, $18,681,936 is the amount that had not

been funded as of August 4, 2009 in accordance with this business practice.

• $462,890 shortfall in EDCA accounts. The shortfall represents the difference

between the balances in TBW’s EDCA accounts (including an account at

Seaside)11 and the total adjusted checks written on the Platinum EDCA account

that were not and will not be honored. Adjustments were made to account for the

following: outstanding checks that were funded as a result of the approval of the

Borrower Protocol and checks written by TBW on or after August 4, 2009 that

were not funded from investors’ T&I custodial accounts due to the administrative

hold. As a result, money associated with these checks is included in the balances

of the investors’ custodial accounts.

As indicated in the following Table, the Debtor has allocated these shortfalls among investors:

11 This amount assumes full recovery of $5 million on deposit in a custodial account at Seaside Bank, for which a turnover demand has been made. In the event that less than $5 million is recovered from Seaside, the amount of the EDCA shortfall will increase accordingly.


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TABLE 4Servicing Shortfalls

Line Investor P&I Shortfalls Escrow Shortfalls EDCA ShortfallsNet Shortfalls by

Investor

[A] [B] [C]1 American Servicing -$ 420$ -$ 420$ 2 Bank of America - 3,959,749 (891) 3,958,858 3 Bank of Internet - - - - 4 Bayrock Mortgage - - - - 5 Bayview Loan Servicing LLC - 14,896 1,299 16,195 6 BB&T - 292 (28) 264 7 Central Mortgage (CMC) - - 355 355 8 Century National Bank - - - - 9 CitiMortgage Inc - 61,315 127 61,442 10 Cole Taylor - 516,869 (978) 515,891 11 Colonial - FDIC - 5,751,541 2,721 5,754,262 12 Freddie Mac 2,954,582 1,825,585 257,919 5,038,086 13 First American Bank & Trust - - - - 14 First Charter - 1,638 - 1,638 15 First Western Bank - 457 - 457 16 GMAC - - - - 17 Ginnie Mae 2,515,497 2,940,097 178,515 5,634,109 18 Henley Holdings - - - - 19 Hyde Park Savings Bank - - - - 20 IndyMac - 116 - 116 21 Mercantile Bank - 1,018 - 1,018 22 MGC Mortgage - 115,700 287 115,987 23 MountainView 113,684 21,581 - 135,266


- 204,714 274 204,988

25 Ocwen - - 189 189 26 Platinum Community Bank - FDIC - 1,683,228 20 1,683,248 27 RBC Bank - - - - 28 Seaside - 796,713 (49) 796,664 29 Selene 42,436 30,307 61 72,804 30 TBW - Not Service Released - 186,835 6,675 193,509 31 TBW - Net Funded / FHLMC - 137,673 - 137,673 32 TBW - Net Funded / GNMA - 188,756 - 188,756 33 TBW - Net Funded / Wells Fargo - 685 (17) 668 34 TBW - Selene Interim Serviced - 511,927 835 512,762 35 UMS - Hudson City - - 138 138 36 Urban Trust Bank - 15,992 56 16,048 37 US AmeriBank - 105,731 (166) 105,565 38 US Bank - - 64 64 39 Wachovia - 639 - 639 40 Wells Fargo - 10,119 15,483 25,602 41 Unallocated - (28,409) - (28,409)

42 Total 5,626,200$ 19,056,184$ 462,890$ 25,145,274$ [A] P&I Book-to-Bank Reconciliations as of August 4, 2009 reflecting net shortfalls by investor. For additional information, see positive investor

balances in Column H of Exhibit M. [B] Escrow Book-to-Bank Reconciliations reflecting escrow shortfalls by Investor. See Exhibit O for additional information. [C] EDCA Book-to-Bank Reconciliations reflecting EDCA shortfalls by Investor. See Exhibit P for additional information. This shortfall reflects $5

million at Seaside which is included in the bank balance. The EDCA shortfall has been allocated to investors on a pro rata basis based upon each investor’s adjusted book balance over the total adjusted book balance.


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C. Servicing Advances Reconciliation

84. In connection with performing the Book-to-Bank Reconciliations, the Debtor also

analyzed and reconciled, pursuant to the Servicing Advances Reconciliation, Servicing Advances

and Corporate Advances made by TBW on behalf of investors for which it had not received

reimbursement and servicing fees for which TBW had not received payment. Unreimbursed

Servicing Advances and Corporate Advances total $237,988,341, and unpaid servicing fees total

$39,511,966. After accounting for advance reimbursements received by TBW of $13,506,507,

the total remaining unreimbursed and unpaid amount is $263,993,800, the components of which

are:

• $71,376,950 in Net P&I Advances representing principal and interest payments

advanced by TBW on behalf of investors.

• $116,479,538 in T&I Advances representing amounts disbursed by TBW for

payment of taxes and insurance premiums. TBW has made an adjustment to

those amounts for outstanding checks issued that did not clear the bank and were

not funded.

• $38,850,744 in Corporate Advances representing amounts paid by TBW related

to the foreclosure of defaulted loans (e.g., attorneys’ fees and expenses). TBW

has made an adjustment to those amounts for outstanding checks issued that did

not clear the bank and were not funded.

• $11,281,109 in Other Unreimbursed Items representing outstanding

unreimbursed amounts for Servicing Advances and Corporate Advances not

captured in other categories (including amounts outstanding related to loans that

were liquidated and/or modified).


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• $39,511,966 in Unpaid Servicing Fees representing fees earned on current and

delinquent loans up to the date such loan was released to a subsequent servicer.

• $13,506,507 in Advance Reimbursements representing reimbursements of

advances the Debtor has received during the pendency of this case. These are

reimbursements received by TBW which include reimbursement of $8,517,703

from the Regions Refund Account; $2,688,804 from the Regions REO Proceeds

Account; and $2,300,000 received from Wells Fargo and Bayview in accordance

with stipulations entered in connection with the Chapter 11 case.

§ Table 5 below provides the Debtor’s reconciliation and calculation

of results by investor of total unreimbursed advances and unpaid

service fees and the reimbursements of those amounts, if any, since

August 4, 2009.


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TABLE 5Unreimbursed Advances and Unpaid Service Fees

Line InvestorNet P&I

Advances T&I AdvancesCorporate Advances

Other Unreimbursed

Items

Total Unreimbursed

Advances [A]+[B]+[C]+[D]

Unpaid Service Fees

Advance Reimbursement

as of April 30 2010

Net Unreimbursed Advances and

Unpaid Service Fees

[A] [B] [C] [D] [E] [F] [G]1 American Servicing -$ -$ 107$ -$ 107$ -$ -$ 107$ 2 Bank of America - 13,374 2,328 - 15,702 - (2,332) 13,370 3 Bank of Internet - 6,224 - - 6,224 1,606 - 7,830 4 Bayrock Mortgage - - - - - - - - 5 Bayview Loan Servicing LLC 10,920,636 2,602,346 1,423,877 - 14,946,859 873,154 (1,176,149) 14,643,864 6 BB&T 0 79,413 26,901 - 106,315 58,747 - 165,062 7 Central Mortgage (CMC) - 14,291 1,243 - 15,534 - - 15,534 8 Century National Bank 945 3,325 1,090 - 5,360 2,275 - 7,635 9 CitiMortgage Inc - 12,023 840 - 12,863 - - 12,863 10 Cole Taylor - 524 - - 524 - - 524 11 Colonial - FDIC - 6,020,206 1,433,845 - 7,454,051 - (459,015) 6,995,036 12 Freddie Mac - 50,264,497 7,863,122 2,929,932 61,057,551 15,620,927 (5,064,749) 71,613,729 13 First American Bank & Trust - - - - - 24 - 24 14 First Charter - - - - - - - - 15 First Western Bank - - - - - - - - 16 GMAC - - 10 - 10 - - 10 17 Ginnie Mae - 30,732,276 13,443,982 7,957,927 52,134,184 17,495,659 (741,821) 68,888,021 18 Henley Holdings [H] - 3,231 7,220 - 10,450 13,329 - 23,780 19 Hyde Park Savings Bank 18,460 5,445 1,111 - 25,015 2,620 (1,787) 25,849 20 IndyMac - - 2,052 - 2,052 - - 2,052 21 Mercantile Bank - 4,983 530 - 5,513 - (2,655) 2,858 22 MGC Mortgage - - - - - - (2,608) (2,608) 23 MountainView - - - - - - (103) (103)


- 4,914 1,705 - 6,618 - - 6,618

25 Ocwen - - - - - - - 26 Platinum Community Bank - FDIC 69,738 54,368 645 - 124,751 2,556 - 127,307 27 RBC Bank - 2,692 - - 2,692 29 - 2,720 28 Seaside - 66 - - 66 - - 66 29 Selene - - - - - - - - 30 TBW - Not Service Released - - - 393,249 393,249 - (393,249) - 31 TBW - Net Funded / FHLMC - - - - - - - - 32 TBW - Net Funded / GNMA - - - - - - - - 33 TBW - Net Funded / Wells Fargo - - - - - - - - 34 TBW - Selene Interim Serviced - - - - - - - - 35 UMS - Hudson City - - 539 - 539 7,191 - 7,730 36 Urban Trust Bank - 9,038 937 - 9,975 191 - 10,165 37 US AmeriBank - 793 - - 793 - - 793 38 US Bank - - - - - - - - 39 Wachovia - - 14 - 14 - - 14 40 Wells Fargo 60,367,171 26,645,512 14,638,648 - 101,651,332 5,433,659 (5,662,039) 101,422,951

41 Total 71,376,950$ 116,479,538$ 38,850,744$ 11,281,109$ 237,988,341$ 39,511,966$ (13,506,507)$ 263,993,800$ [A] P&I Book-to-Bank Reconciliation as of August 4, 2009 reflecting net advances made by TBW. For additional information, see negative investor

balances in Column H of Exhibit M. [B] T&I advances on loans and REOs after adjustment for Platinum EDCA bounced checks. [C] Corporate Advances on loans and REOs after adjustment for Platinum EDCA bounced checks. [D] Other unreimbursed amounts to TBW. See Exhibit Q for additional information. [E] Total unreimbursed Advances which is the sum of [A]+[B]+[C]+[D]. [F] Unpaid service fees for loans and REOs calculated up to service release date for each investor. [G] Represents funds transferred from the Regions Refund Account, funds transferred from Regions REO Proceeds Account, and $1,300,000 and

$1,000,000 advances received from Wells Fargo and Bayview, respectively, to facilitate servicing transfer of their loans in 2009. See Exhibit R for more details.

[H] TBW serviced released approximately $125 million of loans to Henley Holdings. Pursuant to the terms of a mortgage loan purchase agreement entered into in 2007, TBW, through its wholly-owned subsidiary TBW Funding III LLC, has a residual interest in the loans after satisfaction of amounts owing to Henley Holdings. TBW has requested certain information from Henley Holdings with respect to that residual interest.

D. Borrower Protocol Update

85. Beginning on August 4, 2009 and continuing thereafter, all investors demanded

that the servicing of their respective mortgage assets be transferred to a different service


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provider. As summarized in the following schedule, the servicing of all mortgage assets was

transferred to subsequent servicers except for 751 Net Funded Loans described briefly below.

TABLE 6 TBW Loan Service Release Schedule by Investor

Investor Servicer Dates # of Loans Bank of America Bank of America 8/10/09 - 8/18/09 2,920 Bayview Loan Servicing LLC Bayview Loan Servicing LLC 9/1/09 2,021 Colonial-FDIC RoundPoint 9/4/09 - 12/14/09 7,709 Freddie Mac Cenlar 8/12/09 266,183 Freddie Mac Ocwen 8/12/09 24,305 Freddie Mac Saxon 8/12/09 4,991 Ginnie Mae Bank of America 8/10/09 - 8/21/09 180,205 Henley Holdings 21st Mortgage Corp 8/18/09 2,946 Ocala Funding – RoundPoint Interim Serviced RoundPoint 9/18/09 183 Platinum Community Bank-FDIC Dovenmuehle / RoundPoint 8/27/09 1,518 Seaside RoundPoint 9/4/09 538 TBW – Selene Interim Serviced Selene 11/6/09 - 5/12/10 1,060 Wells Fargo American Home Mortgage 10/19/09 15,996 Various Various Aug - Dec 09 711

Total 511,286

86. The abrupt nature of TBW’s collapse, coupled with the administrative hold placed

on the Colonial bank accounts, created numerous problems for borrowers and resulted in the

filing of numerous state regulatory actions. However, the combination of the Colonial

receivership and the transfer of servicing to new servicers prevented the Debtor from remedying

the borrower problems unilaterally.

87. As a result of the collaborative efforts of the Debtor and the FDIC-Receiver, on

January 21, 2010, the Debtor filed a Motion for Approval of Protocol to Resolve Borrower

Issues [Doc. No. 927] (“Borrower Protocol”). In sum, there were more than 16,000 borrowers

affected by one of the following issues:

a. Issue 1: Insurance Proceeds – monies received by TBW from property

insurance companies based on payment of individual borrower claims for

loss or damage to property, but not paid to the borrower as of the date of the

administrative hold.


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b. Issue 2: Tax and Insurance Escrow Proceeds – T&I monies owed, but not

paid, to borrowers who had paid off their mortgages as of the date of the

administrative hold.

c. Issue 3: Bounced Checks Written on Platinum EDCA – checks written by

TBW to borrowers that were not honored.

The total amount of cash required to resolve these three issues was $25,636,418 (i.e., the

cumulative amount owed to borrowers).

88. In addition, in the Borrower Protocol the Debtor identified a fourth issue

regarding 788 (751 serviced at TBW and 37 service-released) “Net Funded Loans” (Issue 4: Net

Funded Loans). As more fully described in the Borrower Protocol, TBW had implemented a

practice of refinancing certain mortgages but waiting until the new loan was sold before paying

off the old mortgage (rather than paying the old mortgage off at closing). As a result of the

events in August 2009, certain borrowers have two mortgages outstanding because the old loan

was not paid off. The Borrower Protocol proposed a resolution to this issue whereby the

appropriate investor will evaluate the old and the new loan and resolve the matter with each

borrower so that only one loan remains outstanding.

89. After a hearing on the Borrower Protocol held on February 19, 2010, the

Bankruptcy Court granted the motion and approved the recommended Borrower Protocol by an

Order entered on February 24, 2010 [Doc. No. 1079].

90. In accordance with the approved Borrower Protocol, most affected investors

opted to participate in the resolution of Issues 1, 2 and 3. As of the filing of this Report, the

FDIC-Receiver has transferred $7,861,287 and the Debtor has transferred $781,367 to various

investors to be used in the resolution of those issues. Four (4) investors (Wachovia, Central


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Mortgage, Five Mile Capital and Mercantile Bank) did not opt in to the Borrower Protocol. The

Debtor believes, but has not confirmed, that each investor that opted in has issued checks to their

affected borrowers.

91. As of the filing of this Report, all affected investors have opted to participate in

the resolution of Issue 4 regarding Net Funded Loans. However, in each instance TBW

continues to service the new loan and believes the loans need to be service-released to the

investors to properly resolve the issue.

92. In addition to the issues addressed in the Borrower Protocol, a number of other

borrower issues have been identified as a result of the Servicing Reconciliation. These are issues

that should be addressed by the subsequent servicers and, in certain circumstances, adjustments

to individual borrowers’ servicing records may be necessary.

93. These additional borrower issues can be summarized as follows:

a. Borrower Payments “Posted, Not Monetized” – As indicated above and

detailed in Exhibit C, $63,208,545 in ACH borrower payments and

$67,137 in Western Union borrower payments were posted in TBW’s

Servicing System as received, but no cash was actually received by TBW

due to the imposition of the administrative hold on the Colonial bank

accounts. As a result, the servicing records that were provided to

subsequent servicers by TBW indicate that a payment was made by the

borrower, however, no corresponding funds are on deposit at Colonial or

Regions. These “payments” are allocated among investors in Table 1, as

well as at Exhibit C. The Debtor will work with the subsequent servicers

to properly update borrower records to address this issue.


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b. Western Union Clearing Account Funds – As described in Exhibit C,

$17,294,686 in partial borrower payments were on deposit in the Western

Union Clearing Account at Colonial when the administrative account hold

was implemented. While these amounts are accounted for as Gross

Affected Funds in the Servicing Reconciliation, the FDIC-Receiver turned

these funds over to Western Union on November 20, 2009. (See, Exhibit

D.) Based on discussions with Western Union, the Debtor understands

that Western Union either: (i) sent the borrowers’ payments to the

subsequent servicer if there were enough funds for a full payment, or, (ii)

sent the borrower a check if the funds were not enough for a full mortgage

payment. If the affected borrowers have received their portion of these

funds from Western Union, then no action is required. However, to the

extent that any of these funds remain at Western Union, the investors for

the affected borrowers should work with Western Union to determine

whether the funds should be released to the borrower or paid to the

subsequent servicer with appropriate adjustments made in any affected

borrower’s servicing records.

c. Borrower Payments Posted, Then Forwarded – In the course of

transferring loans to subsequent servicers, there were instances of TBW

receiving borrower checks, posting them in the Servicing System, and then

forwarding the checks to the appropriate subsequent servicer (rather than

depositing the checks). These payments, totaling $7,946,899, are

identified in Exhibit C. Investors and their subsequent servicers should


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confirm that these checks are properly recorded in their servicing records

(i.e., confirm that the check was not entered as another payment by the

subsequent servicer upon receipt).

d. Payments on Deposit, But Not Posted – There is approximately $136

million in borrower-related payments deposited into the clearing accounts

at Colonial or Wachovia (and subsequently Regions), but the payments

were not recorded in TBW’s Servicing System for one of the following

reasons: (i) the requisite information was not sent to TBW by Colonial

(e.g., lockbox checks deposited on August 10, 2009); or, (ii) the

underlying loan had already been released to a subsequent servicer, but the

borrower payments were deposited into Colonial and Wachovia accounts.

Hence, the borrower made the payment and the payment was received,

and yet the payment was not recorded as received. The information

necessary to resolve this issue has been available to the applicable

investors since January 2010. While some investors and their subsequent

servicers resolved this issue promptly, others have not done so and have

actually reported the affected borrowers to credit reporting agencies as

being delinquent. This is an important issue that requires immediate

attention by the applicable investors and subsequent servicers.

e. Escrow Refunds – As indicated above and in Exhibit L, the Debtor has

received $11,291,175 in refunds associated with “escrows” such as force

placed insurance, mortgage insurance, and overpayment of taxes. Because

these refunds were received after servicing was released, they have not


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been recorded in the Servicing System. Subsequent servicers need to

update these borrowers’ servicing records to reflect these refunds.

f. Bounced EDCA Checks – As more fully described in the Borrower

Protocol, the cumulative amount of checks written on the Platinum EDCA

account that were not and will not be honored is $31,284,686. The checks

written to borrowers (totaling $9,866,332) were addressed in the Borrower

Protocol; however, the balance of the checks, which included payments of

taxes and insurance premiums, was not addressed. As explained above,

there are monies on deposit at Colonial and Seaside that are related to

these payments though there is a cumulative shortfall in the EDCA

accounts. (See, Exhibit P.) To the extent not already done, subsequent

servicers should make certain that the payments related to any remaining

bounced EDCA checks have been made. The affected borrowers’

servicing records should be adjusted accordingly.

g. Escrow Accounts – As with any large servicing enterprise, the Debtor has,

since the release of servicing, discovered errors in the recorded borrower

escrow balances of a limited number of borrowers. The Debtor has

provided and will continue to provide information regarding these errors

to the appropriate investors so that adjustments can be made in their

servicing records.

h. Erroneous Credit Reporting – As a result of some of these and, possibly,

other issues, some subsequent servicers have reported borrowers to credit

reporting agencies as delinquent, even though all mortgage payments have


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been timely made. To the extent not already done, investors and their

subsequent servicers should correct these reports.

i. Satisfaction of Paid-Off Mortgages – There are mortgages that were paid

in full, but as to which the appropriate recordings were not made at the

time of TBW’s collapse. The recording process is ongoing. The Debtor,

in addition to some investors, are working with Nationwide Title Clearing

Inc. (“NTC”) to make the appropriate filings. TBW and NTC will work

with each investor to resolve any open satisfaction requests from

borrowers.

94. Some of these issues have already been resolved by some of the investors and

their subsequent servicers. The Debtor, however, continues to receive communications from

borrowers indicating that further efforts will be required to achieve complete resolution. The

Debtor has previously provided certain investors with information required to address some of

these issues after the filing of the Second Report. The Debtor will make additional information

available and will work with investors and their subsequent servicers in a continuing effort to

resolve these issues properly.

95. Subsequent to the filing of this Report, the Debtor expects to make data available

to the FDIC-Receiver and investors that may have an interest in the Gross and Net Affected

Funds and expects to provide information with respect to each investor’s applicable loan

servicing and reconciliation records (subject to the execution of a confidentiality agreement

acceptable to the FDIC-Receiver and the Debtor). The detailed information supporting the

Debtor’s Servicing Reconciliation will be available on an investor-by-investor basis for review

via encrypted databases and spreadsheets.


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V. ASSET RECONCILIATION

96. From the earliest days of this case, there have been questions about the nature,

location and ownership of certain mortgage assets originated, sold and/or serviced by TBW. In

an effort to clarify these issues, the Asset Reconciliation began shortly after the Stipulation was

approved. Early on, it was clear that the parameters of the Asset Reconciliation would continue

to evolve as facts were developed.

97. As indicated in the First Report, the initial focus of the Asset Reconciliation was

7,883 specific loans that were the subject of litigation between Bank of America (as indenture

trustee for the OFCP) and Colonial. However, as the investigation and analysis of these assets

progressed, it became apparent that there were significant issues regarding other mortgage assets

that are relevant to this case. In addition, issues emerged regarding TBW’s use of certain

funding sources.

98. Ultimately, the Asset Reconciliation has included the investigation and analysis of

the following interrelated components:

a. The status, as of the filing of the Petition, of mortgage assets related to the

Ocala Funding commercial paper facility;

b. The status, as of the filing of the Petition, of mortgage assets related to the

Colonial COLB;

c. The status, as of the filing of the Petition, of mortgage assets related to the

Colonial AOT; and,

d. TBW’s use of cash related to the OFCP and AOT.

99. Due to the additional time and expense that would be involved, the Debtor has not

performed an extensive tracing of TBW’s receipt and disbursement of funds during the course of

its business operation. However, as facts continue to emerge, the Debtor, in consultation with


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significant stakeholders, may determine that it is necessary and appropriate to perform such an

analysis.

100. As indicated below, the time period most relevant to the Asset Reconciliation is

June 30, 2008 (i.e., the date of the restructuring of the OFCP) through August 24, 2009 (i.e., the

Petition Date). However, during the course of the Debtor’s investigation and reconciliation,

certain facts and circumstances were discovered regarding transactions and conduct prior to June

30, 2008. While this earlier conduct may be relevant to the resolution of specific issues, the

Debtor does not believe that these earlier transactions and conduct are central to the issues that

are the subject of the Asset Reconciliation.12

101. The results of the Asset Reconciliation are summarized below. However, it is

important to emphasize that this Report is not intended to provide a comprehensive recitation of

all facts that were developed during the course of the Debtor’s investigation into these issues.

Moreover, this Report is not intended to be a determination or adjudication of the legal issues

associated with these facts. Rather, the Asset Reconciliation has been developed in the hope and

expectation that the relevant factual record will be available to the Court and interested parties to

facilitate prompt resolution of various legal issues related to TBW’s Chapter 11 case.

102. As the Asset Reconciliation has progressed, the Debtor has been in

communication with interested parties regarding this process and its preliminary findings.

Records and information, including extensive mortgage and financial databases and the

electronic evidence database compiled during the course of the reconciliation process, have been

made available, as appropriate. This information will continue to be available to investors, 12 On June 16, 2010, an indictment filed against Lee Farkas, TBW’s former Chairman and principal shareholder, was unsealed in the Eastern District of Virginia. In sum, Mr. Farkas has been charged with bank fraud, wire fraud and securities fraud. It is apparent that some, but not all, of these charges arise from facts and circumstances that are the subject of the Asset Reconciliation. However, a number of the charges relate to earlier conduct. The Debtor is informed and believes that the criminal investigation is ongoing.


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creditors and other interested parties, subject to appropriate agreements regarding maintenance

and use of confidential information.

A. Ocala Funding

103. Ocala Funding is a limited liability company formed by TBW in 2005 as a

“bankruptcy remote” subsidiary. TBW was the managing member of Ocala Funding and, as a

practical matter, was fully responsible for all of its business activities.

104. In or about April 2005, Ocala Funding established a commercial paper facility –

i.e., the OFCP. The controlling documents are voluminous and complicated. In sum, the OFCP

was structured as follows:

a. Ocala Funding issued short-term promissory notes (“Secured Loan

Notes”) to participants in the OFCP, most, if not all, of which were large

financial institutions.

b. The proceeds of the note sales were used to fund mortgages originated by

TBW (i.e., wet funding) and to purchase mortgages from other lenders.

c. Even though Ocala Funding provided the funding, most, if not all,

mortgage loans were made (or acquired) in the name of TBW.

d. TBW sold the mortgages financed by Ocala Funding to “take-out

purchasers” such as Freddie Mac and large financial institutions engaged

in the issuance of mortgage-backed securities.

e. Ocala Funding’s principal bank was LaSalle Bank in Chicago (which

subsequently was acquired by Bank of America). As a result,

disbursements to fund mortgage loans and loan purchases, along with the

proceeds from the sale of Secured Loan Notes and mortgages, were

maintained in and administered through accounts at LaSalle Bank. While


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there were various accounts over time, the one that is most relevant to the

Asset Reconciliation is the “Ocala Funding Collateral Account,” which

was used throughout the life of the OFCP.

f. Under the terms of the controlling documents, the amounts owed by Ocala

Funding pursuant to the issued and outstanding Secured Loan Notes were

to be secured by collateral consisting of mortgages and cash owned by

Ocala Funding.

g. As Secured Loan Notes matured, they were either: (a) paid in full; or, (b)

“rolled,” with accrued interest paid on the maturity date and new notes

issued to the same investors.

105. LaSalle Global Trust Services (“LGTS”), an operating unit of LaSalle Bank, was

the trustee under the controlling indenture for the OFCP. In that capacity, it acted on behalf of

the purchasers of the Secured Loan Notes in dealing with Ocala Funding (and TBW). LGTS

also served as custodian and collateral agent for the facility. In those capacities, LGTS acted as

the custodian of mortgages for Ocala Funding and as the party who dealt with Ocala Funding

regarding the status of the collateral for the Secured Loan Notes – i.e., mortgages and cash.

106. Typically, Secured Loan Notes were issued as business activities dictated, and

they typically matured between one and thirty days after issuance. As a result, there were

multiple issuances of Secured Loan Notes each month. Every time new notes were issued,

including when maturing notes were “rolled” as described above, the underlying collateral was

reviewed by Ocala Funding and LGTS to determine whether there was sufficient collateral

available to support the new issue. This “collateral check” was to be performed in accordance

with the controlling agreements.


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107. From its inception, the OFCP was an important funding source for TBW, and the

amount of issued and outstanding notes increased as TBW’s business grew. In May 2005, there

was a total of $325 million in issued and outstanding Secured Loan Notes. By June 2007, the

outstanding balance of issued Secured Loan Notes had grown to more than $4.4 billion. In

addition, Ocala Funding owed $67.5 million in subordinated debt.

108. In August 2007, the asset-backed commercial paper market crashed. As a result,

Ocala Funding was unable to continue issuing new Secured Loan Notes as it had done in the

past, and many of the participants in the OFCP stopped purchasing Secured Loan Notes. As a

result, between August 2007 and October 2007, Ocala Funding redeemed almost $2.8 billion in

Secured Loan Notes.

109. The OFCP was restructured as of June 30, 2008. By this time, the amount of

issued and outstanding Secured Loan Notes had been reduced to $895 million, which meant that

the total indebtedness under the facility, including the subordinated debt amount, was $962.5

million. However, it now appears that the value of the underlying collateral – i.e., the value of

the mortgages plus the “eligible” cash – totaled only $250.4 million. Hence, there was a

collateral shortfall of more than $712 million at the time of the restructuring.13

110. The changes to the OFCP resulting from the restructuring included:

a. The maximum amount of Secured Loan Notes that could be issued and

outstanding was reduced to $1.75 billion.

13 Obviously, this shortfall is substantial and inconsistent with the terms of the controlling agreements. As of the filing of this Report, the Debtor has not identified transactions prior to August 2008 in which cash in Ocala Funding accounts was used to fund other aspects of TBW’s business or that otherwise was transferred to third-parties. Conversely, the Debtor has identified significant cash transactions on and after August 18 or 20, 2008 that are inconsistent with the controlling documents.


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b. The two remaining participants in the OFCP – Deutsche Bank (“DBK”)

and BNP Paribas (“BNP”) – were the only purchasers of Secured Loan

Notes.

c. Mortgages assigned as collateral for the OFCP were specifically allocated

among the two participants.

d. Wet funding was no longer permitted – i.e., cash proceeds could not be

used to fund mortgage originations. Cash could only be used to purchase

mortgages that had “dried.”

e. Ginnie Mae approved mortgages were not eligible collateral for the

facility.

f. Mortgages were eligible collateral for the facility for no more than 60 days

after purchase by Ocala Funding.

111. The net effect of the changes to the OFCP was that after June 2008, the primary

business activity of Ocala Funding was intended to be the purchase of mortgages from Colonial

and other lenders.

112. With the restructuring of the OFCP in June 2008, TBW’s principal source for wet

funding became the COLB at Colonial. At all relevant times, money paid to Colonial for the

purchase of mortgages funded on the COLB (or assigned to the AOT) was deposited into the

TBW (or Seaside) Investor Funding Accounts at Colonial. While these accounts were

maintained in TBW’s name, TBW did not have signature authority over them. Rather, it appears

that TBW provided Colonial with information, which, in effect, was direction to Colonial about

how deposits should be applied by Colonial with respect to mortgage purchases.


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113. Contemporaneously with the restructuring of the OFCP on June 30, 2008, new

Secured Loan Notes were issued, so that the cumulative amount of issued and outstanding

Secured Loan Notes was increased from $895 million to $1,682,485,000, with approximately

$1.2 billion of the notes owned by Deutsche Bank and the balance owned by BNP. From then

until the Petition Date, the amount issued and outstanding on the OFCP remained unchanged.

Hence, in the ensuing fourteen months, the Secured Loan Notes issued to DBK and BNP were

“rolled” each month.

114. As a result of the issuance of the new Secured Loan Notes at the time of the

restructuring, $783 million in purchase proceeds (from DBK and BNP) was deposited into Ocala

Funding accounts at Bank of America (formerly LaSalle) on June 30, 2008. On the same day,

more than $237 million was transferred from those accounts to the Investor Funding Account at

Colonial to purchase mortgages “off of the COLB”.

115. In the weeks following the restructuring, Ocala Funding continued to use the

remaining cash proceeds to purchase mortgages off of the COLB and, to a much lesser extent,

from others. By August 20, 2008, Ocala Funding had used virtually all of the new cash to

acquire mortgages, which increased the apparent value of its mortgage collateral by almost $735

million. However, during this same period of time, the disparity between the value of the

collateral and the amounts owed under the OFCP continued to increase. It now appears that on

August 20, 2008 the value of the collateral was $723 million less than the cumulative amount

Ocala Funding owed to DBK and BNP, which was an $11 million increase in the shortfall since

the restructuring on the OFCP in June 2008.

116. While there were changes to the OFCP as a result of the restructuring, many

practical aspects of the relationship between TBW, Ocala Funding, Colonial, and LGTS (and


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Bank of America) remained the same. The logistics regarding purchases “off of the COLB”

generally worked as follows immediately following the restructuring:

a. TBW originated and initially funded individual mortgage loans on the

“wet” sublimit of COLB.

b. The mortgage loan documents were shipped from the closing

agent/attorney’s office to TBW’s Central Document Facility in Ocala.

The documents were inspected by TBW and the loan information was

loaded into TBW’s Servicing System.

c. The mortgage loan documents were then sent to the Warehouse Lending

Group at Colonial, where they were also inspected. After Colonial

confirmed the mortgage was dry, it was reassigned to the “dry” sublimit of

COLB, thus freeing up funding space on the “wet” sublimit.

d. TBW arranged for mortgages to be sold off of the COLB to Ocala

Funding and shipped to LGTS. Simultaneously, TBW also arranged for

the ultimate sale of the mortgages from Ocala Funding to take-out

purchasers, primarily Freddie Mac.

e. Prior to June 30, 2008, TBW sent LGTS a “Gatekeeper” report – typically

each day – which identified all mortgages that had been funded using the

OFCP and that were being shipped to LGTS. After the restructuring,

TBW continued to use the Gatekeeper report to identify for LGTS the

mortgages that were being submitted for purchase by Ocala Funding that

had been previously shipped to LGTS. At the same time, TBW provided

wire-transfer instructions for the payment to purchase the mortgages.


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f. Upon LGTS’s approval of the Gatekeeper report, LGTS wired funds as

instructed. For mortgages being purchased off of the COLB, the purchase

money was wired to the TBW Investor Funding account at Colonial.

g. As mortgages were sold to Ocala Funding, the original loan documents

were shipped from Colonial to LGTS, as custodian for Ocala Funding.

These documents were transferred to LGTS subject to the terms of a

general bailee letter.14 An example of one of these letters is attached as

Exhibit V.

h. When loan documents were received by LGTS, they were reviewed and,

after being confirmed as suitable collateral for the OFCP, were entered

into LGTS’s collateral management system as being “on hand.” The

effect of this designation was that LGTS was in possession of loan

documents for a mortgage that qualified and was treated as collateral for

the OFCP.

i. As mortgages were sold from Ocala Funding to the ultimate take-out

purchasers, LGTS shipped the subject loan documents to the custodian for

the purchaser, subject to the terms of a bailee letter.15 An example of one

of these letters is attached as Exhibit W.

j. Because TBW typically arranged for sales to take-out purchasers

simultaneously with selling loans to Ocala Funding, LGTS typically did

not retain possession of saleable loan collateral for more than a few days.

14 The Debtor has not confirmed the existence of a bailee letter for every shipment of loans from Colonial to LGTS. 15 The Debtor has not confirmed the existence of a bailee letter for every loan shipment by LGTS.


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When loan documents were shipped by LGTS subject to a bailee letter,

their status in the LGTS collateral management system was changed to

“active release.” The effect of this designation was that LGTS did not

have physical possession of loan documents for the subject mortgage,

even though it continued to be counted as collateral for the OFCP.

k. As the custodians for take-out buyers received, reviewed and approved the

loans shipped by LGTS, the purchase proceeds paid to Ocala Funding

should have been wired by the take-out buyer to the “Ocala Funding

Collateral Account” at Bank of America.

l. Each morning, TBW received an automated report from LGTS identifying

all “on-hand” and “active release” loans – i.e., a complete listing of all

mortgages that LGTS counted as collateral for the OFCP.

m. Every day TBW prepared an internal Ocala Funding Pipeline report. In

general, this report tracked TBW’s accounting for the mortgages that were

collateral for the facility, as well as the loans purportedly purchased by

take-out purchasers that day.

n. Beginning in July 2008, TBW sent separate daily pipeline reports to DBK

and BNP identifying the mortgages assigned as collateral to each OFCP

investor. Beginning in the fall of 2008, LGTS sent separate daily

collateral reports to DBK and BNP.

o. The vast majority of mortgages shipped to LGTS were ultimately sold to

Freddie Mac with TBW retaining the servicing rights. For these loans

sold to Freddie Mac, Colonial served as the document custodian (through


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its Corporate Trust group), which meant that these loan documents were

shipped back from LGTS to Colonial.

p. As a part of the Freddie Mac purchase process, lien holders are required to

execute a Form 996. It appears that TBW prepared these forms and

submitted them to LGTS for execution. An example of one of these forms

is attached as Exhibit X.

q. When LGTS removed loans from the Ocala Funding collateral listing, the

status in the collateral management system was changed to “inactive.”

The purchase and sale process described above was directed by TBW. Moreover, TBW also

directed the disbursement of monies from the Ocala Funding Collateral Account.

117. Within months of the restructuring of the OFCP, the process described in the

preceding paragraph changed. By December 2008:

a. TBW continued to send Gatekeeper reports to LGTS identifying

mortgages that were “purchased” off of the COLB, however, in many

instances, there was no corresponding request to transfer funds to the

TBW Investor Funding Account at Colonial. In other words, mortgages

were being shipped to LGTS and/or “purchased” by Ocala Funding, but

the purchase payment was not being made to Colonial.

b. Consistent with past practices, upon receipt and review of the loan

documents, LGTS entered mortgages into its collateral management

system as being “on hand” and, then, when shipped out as being on

“active release” in accordance with its historical practice.


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c. As loans were shipped from LGTS in connection with sales to take-out

purchasers, the sales proceeds were paid to Ocala Funding (into the Ocala

Funding Collateral Account), however, the sales proceeds were not used to

pay Colonial for the loans being sold. Instead, it now appears TBW

directed Bank of America to wire money to Colonial from the Ocala

Funding Collateral Account to pay for mortgages that had been shipped to

LGTS earlier (an average of 25 days) and which had already been sold and

paid for in the intervening time. As a result, numerous mortgages

remained in “active release” status in the LGTS collateral system after

they were sold to take-out purchasers.

d. Because payment to Colonial was not being made in a manner that

actually corresponded to purchase and sale activity by Ocala Funding,

mortgages remained on the COLB (i.e., collateral/assets supporting the

total amount advanced on the COLB) and were simultaneously listed as

collateral for the OFCP.

The net effect of this course of conduct is that thousands of loans were sold to take out

purchasers but continued to be listed as collateral for the OFCP in the LGTS collateral

management system after the sale. Moreover, a substantial number of these loans also remained

“on the COLB” because Colonial was not paid at the time of “purchase” by Ocala Funding or at

the time of sale of the mortgages to take-out purchasers.16

16 Moreover, the available evidence indicates that 2,979 mortgages that appear to have been “sold” to Ocala Funding were actually paid for using proceeds from the BoA EPF described in Section V.C., below. Apparently, mortgages were shipped to LGTS, listed as collateral for the OFCP, then shipped back to Colonial as described above with no payment from Ocala Funding to Colonial. All of these mortgages were then sold by TBW to Freddie Mac in connection with the issuance of mortgage-backed securities, and were assigned to the BoA EPF pending settlement of the trade. Proceeds from that facility were then used to pay Colonial for the subject mortgages.


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118. During 2009, the balance owed for the loans shipped to Ocala Funding “off of

COLB,” but for which Colonial was not paid at the time of sale, steadily increased. According to

Colonial’s records, at the end of May 2009, the amount owed to Colonial for loans shipped to

LGTS, but not paid for, totaled nearly $600 million. By August 5, 2009, that amount had

increased to over $900 million.

119. When TBW collapsed in early August 2009, the process described above came to

an abrupt halt. At that time, the outstanding balance owed by Ocala Funding on the Secured

Loan Notes continued to be approximately $1.68 billion (approximately $1.2 billion being owed

to DBK and approximately $481 million being owed to BNP). However, the value of the

mortgages physically located at LGTS (693 mortgages with a UPB of $89.1 million), coupled

with the cash on deposit in the Ocala Funding bank accounts (approximately $75 million) was

far less than the amount owed.17

120. On or about August 12, 2009, Bank of America, in its capacity as indenture

trustee and collateral agent for the OFCP, filed suit seeking emergency injunctive relief against

Colonial alleging that Colonial was in possession of 7,883 loans or the proceeds of the sale of

those loans (“TRO Loans”) that constituted collateral for the OFCP. Hence, Bank of America

asserted that Colonial should return or pay for these loans. The FDIC was appointed receiver for

Colonial shortly thereafter. Bank of America made similar assertions regarding these loans early

in this case, which prompted this Asset Reconciliation.

121. As more fully explained below, it now appears that, as a result of the processes

described above, these TRO Loans were listed as OFCP collateral in “active release” status in the

LGTS collateral management system despite the fact that they had actually been sold by Ocala

17 Some of the 693 loans are old. The Debtor has been able to confirm that Ocala Funding purchased 290 of these loans, but the identity of the seller has not been ascertained in all instances.


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Funding (and/or TBW) and paid for by a take-out purchaser. Moreover, more than half of these

loans remained on the COLB because Colonial had not been paid for them.

122. The Debtor, with assistance from Bank of America, identified a total of 9,111

mortgage loans (which includes all of the TRO Loans) that, according to the LGTS collateral

management system, are collateral for the OFCP – i.e., either “on hand” or on “active release” as

of August 2009 – and available to secure repayment of the issued and outstanding Secured Loan

Notes. This list of loans was compiled from four different sources: (a) the August 5, 2009

LGTS collateral report; (b) the August 13, 2009 LGTS collateral report; (c) the list of TRO

Loans attached to Bank of America’s complaint filed against Colonial; and, (d) a physical count

conducted by LGTS after August 2009 of the mortgage loans “on-hand” – i.e., in the physical

possession of LGTS. These 9,111 mortgage loans are recorded in the LGTS collateral

management system as follows:

TABLE 7

OFCP InvestorPer LGTS

Total Loans Assigned to

Investor Per LGTS

Total Loans With "On-Hand"

Status Per LGTS

Total Loans With "Active Release" Status Per LGTS

BNP 2,214 182 2,032

DBK 6,121 302 5,819

Ocala Funding (Unassigned) 776 344 432

Total 9,111 828 8,283

Of these 9,111 loans, 8,256 were first included as collateral for the OFCP on or after April 9,

2009.


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123. In stark contrast to the LGTS records, other investors are identified as the owners

of all but 183 of these 9,111 mortgage loans in TBW’s Servicing System.18 This disparity was a

focal point of the Debtor’s Asset Reconciliation and related investigation.

124. The Debtor located 9,084 of the subject 9,111 mortgage loans in TBW’s

Servicing System (i.e., there is no record for 27 of the mortgages). Of the 9,084 loans for which

there are records, 110 had been paid off by the borrower; 49 had never been funded; 9 were

listed as real property owned by TBW; 60 were Net Funded Loans (as described in Section

IV.D., above); and 46 had been disposed of prior to 2007.

125. Accordingly, of the 9,111 mortgage loans on the LGTS collateral list for the

OFCP, there are 8,810 mortgage loans that were actually reviewed as part of the Asset

Reconciliation. Because all but 183 of these loans were assigned to other investors in TBW’s

Servicing System, the Debtor endeavored to determine whether the indicated investor paid for its

assigned mortgages. As more fully described in Exhibit B to this Report, multiple sources of

information were used to perform this analysis. Where necessary and appropriate, the Debtor

validated loan level data by reconciling it to actual cash deposits. In addition, pursuant to its

ongoing discovery under Rule 2004 of the Federal Rules of Bankruptcy Procedure, the Debtor

has recently obtained from Freddie Mac copies of Freddie Mac purchase advices and Form

996’s, which have been tested but not yet thoroughly analyzed. The testing done to date

indicates that these records are consistent with the Debtor’s findings regarding the subject loans.

126. In general, the Debtor verified that the investor indicated in the Lookup Database

did make payment to Ocala Funding or to TBW for the assigned loans in connection with a

purchase transaction. However, as a result of this analysis, the Debtor discovered a few

18 The servicing of these 183 loans was transferred to RoundPoint in September 2009. At that time, the UPB of these loans totaled $37.3 million.


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erroneous assignments of loans to investors in the Servicing System based on the purchase and

cash transactions. (See, “Comments” in Table 8, below.)

127. The following Table summarizes the Debtor’s analysis of the 8,810 loans:

Line Investor Total Loans Comments

1 American Portfolio 1

2 Bank of America 297 All of these mortgages were assigned to the BoA EPF.

3 Bank of Camden 15

4 Bayview 5

5 Beal Bank 1

6 CitiMortgage 138

7 Colonial 742Includes 33 mortgages that were paid for by Ocala Funding but are on the Overline with a $0 balance. Also includes 4 mortgages that appear to have been purchased by Freddie Mac.

8 Freddie Mac 7,165Does not include 4 mortgages assigned to Colonial and 23 mortgages assigned to Ocala Funding that appear to have been purchased by Freddie Mac.

9 GNMA 3

10 Marix Servicing 12

11 MGC Mortgage 2

12 MountainView 16

13 Ocala Funding 183

Does not include 33 and 6 mortgages assigned to Colonial and TBW/Selene, respectively, that were purchased by Ocala Funding. Includes 23 mortgages that appear to have been purchased by Freddie Mac.

14 Ocwen 1

15 Omni American 1

16 Platinum Community Bank 85

17 Seaside 10

18 Selene 8

19 TBW/Selene 6 All 6 of these mortgages were paid for by Ocala Funding. These mortgages do not appear to have been sold to another investor.

20 Urban Trust Bank 46

21 Wells Fargo 73

22 TOTALS 8,810

TABLE 8


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128. The 7,883 TRO Loans are included in the analysis summarized above. The

available information indicates that either Ocala Funding or TBW was paid by investors for the

vast majority of the TRO Loans.

129. In addition to the foregoing, the Debtor endeavored to ascertain how many of the

subject 8,810 loans had actually been paid for in connection with Ocala Funding’s apparent

purchases from Colonial or other lenders. All cash disbursements from the Ocala Funding bank

accounts at Bank of America from June 30, 2008 through August 4, 2009 have been thoroughly

analyzed. As part of this analysis, the Debtor has identified the disbursements that were used to

purchase loans on behalf of Ocala Funding during this period, as well as the loans related to each

such disbursement. In sum, of the 8,810 loans, it appears that:

a. Ocala Funding actually paid for 691.

b. Colonial was not paid for 4,928, which remained “on the COLB” as of

August 2009.

c. The remaining 3,191 were not paid for by Ocala Funding, but were paid

for using other funding sources unrelated to Ocala Funding or the OFCP.19

130. In sum, as of August 2009, Ocala Funding owed approximately $1.68 billion to

DBK and BNP pursuant to the terms of issued and outstanding Secured Loan Notes. Of the

9,111 loans listed as collateral to secure the repayment of those notes, Ocala Funding actually

purchased and paid for 691. The vast majority of these loans were sold to Freddie Mac and other

take-out purchasers, who made payment to Ocala Funding or to TBW for those purchases. The

servicing for most, if not all, of these loans was transferred to the subsequent servicers for the

take-out purchasers in accordance with TBW’s servicing records. Moreover, Colonial was not

19 It appears that the 2,979 of these loans were purchased off of COLB using the BoA EPF described below and were assigned as collateral for that facility.


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paid for 4,928 of these loans even though they were originally funded using the COLB and

shipped to LGTS as custodian and collateral agent for Ocala Funding.

B. Colonial COLB

131. As indicated above, the COLB was an important funding source for TBW. In

general, the COLB facility operated as follows:

a. Advances from the COLB were made to TBW on a daily basis and were

used to fund loan closings and, to a lesser extent, to purchase dry loans

from other lenders. The money advanced to TBW was deposited into the

Colonial Master Advance account.

b. Typically, Colonial created a participation certificate for the prior day’s

advance on the COLB. The certificate was provided to TBW, signed and

then returned to Colonial. Colonial executed the certificate after receiving

the executed version from TBW. This exchange was typically

accomplished electronically, using e-mail. Colonial retained a hard copy

of the participation certificate. The specific loan listings associated with

each day’s advance were not attached to the participation certificate but

were maintained in electronic form by Colonial.

c. TBW sent “funding tapes” to Colonial multiple times each day. The

funding tapes provided Colonial with directions regarding wiring funds

from the Master Advance Account to fund individual loan closings and

loan purchases.

d. Loans funded at closing using advances from the COLB were initially

assigned to the “wet” sublimit of COLB.


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e. After the closing and related activities were completed, loan documents

were shipped by the closing agent to TBW’s Central Document Facility in

Ocala. TBW inspected the documents, entered the loan into the Servicing

System, and then shipped them to Colonial’s Warehouse Lending Group

in Orlando, Florida.

f. When Colonial confirmed that the loan was “dry,” the loan was reassigned

to the “dry” sublimit of COLB.

g. TBW directed and managed the sale of the COLB loans to investors.

When loans assigned to the COLB were sold, Colonial shipped the loans

to the purchasing investor’s custodian for inspection. In the case of loans

sold to Freddie Mac, Colonial simply transferred the loan documents from

its Warehouse Lending Group to its Corporate Trust Department, which

served as custodian for Freddie Mac.

h. Every day, Colonial prepared a “pipeline” report, which identified, among

other things, the loans assigned to the COLB, including the mortgages

funded with advances and those that had been shipped to investors but not

yet paid for. In addition, the pipeline report identified loans paid down

(i.e., paid for) that day, which would be removed from the next day’s

pipeline report.

i. At the end of each day, Colonial created a “pay down” file, which

identified the specific deposits into the Investor Funding Account that

were being used to pay down the COLB, as well as the AOT and other

TBW warehouse lines. It appears that this report was used by TBW and


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Colonial to make decisions regarding the use of monies deposited into the

Investor Funding Account, including payments applied to the various

Colonial financing facilities and transfers to other TBW accounts at

Colonial.

132. TBW was the servicer of the mortgages on the COLB. Payments received from

borrowers on these mortgages were deposited into the CFCA and, from there, into TBW’s

operating account as they were received. Each month, TBW made interest payments to Colonial

based on the outstanding balance of the COLB.

133. As of the appointment of the FDIC-Receiver on August 14, 2009, Colonial’s

records indicated that there were 8,714 loans assigned to the COLB, with an associated advance

amount in excess of $1.7 billion for these loans. Comparing this listing to TBW’s Servicing

System, it appears that 29 of these loans were either paid off by the borrower or not maintained

in TBW’s Servicing System. As described in Exhibit B, the Debtor has analyzed the 8,685

COLB loans for which there are TBW servicing records.

134. Of the 8,685 COLB loans that were reviewed, the Debtor determined that 3,829

loans, with a UPB of approximately $825.9 million, had not been sold by Colonial.20 The other

4,856 were ultimately sold to and paid for by the following investors: Freddie Mac (4,802);

Wells Fargo (30); and, CitiMortgage (24). The Debtor has been able to trace cash payments

from Freddie Mac, Wells Fargo, and CitiMortgage for these loans.

135. As indicated in the Ocala Funding section, above, there are 4,928 loans assigned

to the COLB that are also on the LGTS collateral list for the OFCP that were not paid for by

Ocala Funding. The cumulative COLB balance associated with these 4,928 loans is $909.6

20 The servicing for the vast majority of these loans was released to RoundPoint Mortgage Company (“RoundPoint”), the subsequent servicer for the FDIC-Receiver.


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million. Of the 4,856 COLB loans sold to Freddie Mac, CitiMortgage, and Wells Fargo

described in the preceding paragraph, 4,252 of these loans (with an associated balance on the

COLB of $779.9 million) are also among the 4,928 loans on the LGTS collateral list.

136. In sum, of the 8,714 loans assigned to the COLB as of August 14, 2009, 29 were

not located. Colonial was in possession of and had not sold 3,829. The other 4,856 had been

sold by TBW or Ocala Funding and paid for by other investors, but Colonial had not been paid.

Of these loans sold to other investors, 4,252 had initially been “sold” to Ocala Funding and

shipped to LGTS before being shipped to the purchasing investor (or its custodian).

C. Colonial AOT Facilities and BoA EPF

137. In addition to the COLB facility, TBW had access to funding through the AOT

facilities. Like the COLB, the AOT was designed as a participation facility – i.e., Colonial was

granted a “participation” (i.e., ownership) interest in the mortgage pools assigned to the facility.

Unlike the COLB, wet funding was not available under the AOT. Rather, it was designed as an

interim funding source used to “warehouse” dried mortgage loans as pools were being finalized

for sale to investors who were issuers of mortgage-backed securities.

138. In general, the AOT (like other assignment of trade facilities) was designed to

operate as follows:

a. TBW entered into a “trade” with an issuer of mortgage-backed securities,

which means that the issuer agreed to purchase pools of mortgages that

would support the issuance of the securities.

b. Under the terms of the contract with the purchaser/issuer, TBW was not

paid until the “trade settled” – i.e., the securities were sold and the

proceeds received by the issuer.


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c. Between the contract date and the settlement date, the mortgage pools

were assigned to the AOT. At the time of the assignment of a pool to the

AOT, Colonial acquired a 99% interest in the mortgage pool and paid

corresponding cash to TBW.

d. TBW used the proceeds from the AOT to pay down the warehouse lines

that had been used initially to finance the loans in the pool.

e. When the trade settled, the purchase proceeds were to be wired to the

Investor Funding Account at Colonial and should have been used to pay

down the AOT.

139. Trades involving both agency approved securities (e.g., Freddie Mac) and private

label securities were allowed on the AOT.

140. TBW was the servicer of the mortgages in the pools assigned to the AOT. Each

month, TBW made an interest payment to Colonial based on the outstanding balance of the

AOT, and TBW retained monthly interest from borrowers.

141. From 2005 to 2008, the balance on the AOT increased from approximately $500

million to almost $2 billion. By early August 2009, the balance had decreased to just under $1.5

billion.

142. On March 31, 2009, TBW entered into a new financing arrangement that was

similar in structure to the AOT but allowed for only agency-approved securities. This new

interim funding source was the BoA EPF facility (wholly unrelated to Ocala Funding and

OFCP). Initially, the size of the BoA EPF was $500 million but it eventually grew to $1 billion.

In sum, the BoA EPF worked as follows:


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a. TBW aggregated mortgage loans into mortgage pools and submitted the

pools to Freddie Mac and Ginnie Mae for approval as eligible collateral

for mortgage-backed securities.

b. Once approved, these pools were sold into “trades” – i.e., securities issued

by Freddie Mac or securities insured by Ginnie Mae. The vast majority of

the trades, which were identified in the underlying document by the trade

number and pool numbers, were assigned to the BoA EPF.

c. At the time of the assignment to the BoA EPF, Bank of America

transferred 95% of the purchase proceeds to TBW’s Investor Funding

Account at Colonial. With very limited exceptions, these funds were then

used to pay down the COLB.

d. However, unlike the AOT, Bank of America (rather than TBW) received

and controlled the purchase proceeds when the trade settled.

e. Upon receipt of the settlement proceeds, Bank of America transferred the

remaining 5% of the purchase price to the Investor Funding Account at

Colonial.

143. In general, it appears that the BoA EPF operated as designed, although the

Committee of Unsecured Creditors filed an adversary proceeding against Bank of America

seeking to recover amounts owed to TBW under the terms of the BoA EPF.

144. During the course of its investigation and analysis of Ocala Funding, the Debtor

determined that there were substantial deposits into the Ocala Funding Collateral Account that

originated as draws by TBW on the AOT, but which seemed wholly inconsistent both with the


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purpose of Ocala Funding and the design of the AOT.21 Similarly, the Debtor also determined

that there were substantial disbursements from the Ocala Funding Collateral Account that were

used to pay down the balance owed on the AOT. These disbursements typically occurred on the

same day and in amounts similar to an advance from the AOT that was deposited with Ocala

Funding. Again, these disbursements were inconsistent with the structures of Ocala Funding and

the AOT. (See, Section D, below.)

145. In the course of investigating the AOT-related deposits into and disbursements

from the Ocala Funding Collateral Account, the Debtor determined that there was a correlation

between the trades assigned to the BoA EPF and the trades assigned to the AOT, which can be

summarized as follows:

a. Each trade TBW entered into was assigned a unique internally generated

ticket number. In addition, each mortgage-backed pool that was created

by TBW and approved by Freddie Mac or Ginnie Mae was assigned a

unique pool number.

b. When a trade was assigned to the BoA EPF, the pool number and the

ticket number were each included in the documents supporting the trade

assignment.

c. Within days of assigning a trade to the BoA EPF, TBW assigned to the

AOT the same ticket number and pool number that had been used for the

BoA EPF trade. The characteristics (e.g., the amount and settlement date)

of the pools assigned to the AOT were similar – but not identical – to

those of the pools previously assigned to the BoA EPF.

21 The only instances in which advances on the AOT might have been paid to Ocala Funding would have been for loans owned by Ocala Funding that were included in the trades assigned to the AOT.


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d. In addition, the actual mortgages purportedly included in the pool assigned

to the AOT were completely different from the corresponding mortgages

included in the pool assigned to the BoA EPF. While the loans in the

pools assigned to the BoA EPF were the actual loans approved by Freddie

Mac or Ginnie Mae, the loans included in the corresponding pools

assigned to the AOT were, in general, a collection of old loans, loans that

had been paid off or sold and that now appear to be fictitious – i.e., non-

existent – loans. Hence, the loans actually included in the pools assigned

to the AOT were of questionable value and validity.

e. Upon assignment of one of these pools to the AOT, monies were advanced

by Colonial and deposited into the Ocala Funding Collateral Account. At

the time of many of these advances, a disbursement was made from the

Ocala Funding Collateral Account and deposited into the Investor Funding

Account at Colonial and used to pay down the AOT, thereby removing a

prior trade from the collateral listing and replacing it with the new trade.

As more fully described in Section C, below, some of the deposits from

the AOT into the Ocala Funding Collateral Account were used for various

other purposes.

146. As of August 5, 2009, there were 124 trades assigned to the AOT. The

cumulative purchase price (i.e., outstanding balance) of these trades was $1,473,868,368. The

Debtor has determined that 112 of these trades correspond to actual trades that had been assigned

to the BoA EPF prior to being assigned to the AOT.22 Five of the assigned trades cannot be

22 Bank of America advanced funds to TBW for all 112 of these trades prior the advance being made on the AOT. The BoA EPF proceeds were used by TBW to pay down loans on COLB, Platinum and the Overline.


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found in TBW’s secondary trading system, and seven are primarily comprised of loans having

little value, if any at all. In other words, none of the 124 mortgage pools assigned to the AOT

was actually associated with a real, pending trade. Hence, the collateral value of these “trades”

is zero.

147. In addition to analyzing the 124 trades assigned to the AOT as of early August

2009, the Debtor has also analyzed the individual loans that were assigned to the AOT. The last

pipeline report in which Colonial provided TBW with a list of loans assigned to the AOT was

dated July 24, 2009. This listing included 7,867 loans. However, by the time of the FDIC’s

appointment as receiver, the list included 9,304 loans shown as having been assigned to the AOT

with an assigned “purchase price” totaling $1.26 billion. Given that the balance of the AOT as

of August 5, 2009 was approximately $1.47 billion, there is a shortfall of $211 million even if all

of the loans exist, are performing, and are owned by Colonial.

148. When the loans are actually analyzed, it is evident that the value of the loans that

might actually be collateral for the AOT is well below the $1.47 billion balance. Using TBW’s

servicing records and other available information, the Debtor has analyzed the 9,304 loans

purportedly assigned to the AOT as of early August 2009 and has determined that:

a. 231 loans either had never been serviced by TBW or had not been

serviced since 2006. The cumulative purchase price of these loans

according to the AOT loan listing exceeds $31 million.

b. 2,752 loans, with assigned purchase prices totaling $323,846,996, had

been previously sold to other investors, but had not been removed from

the AOT loan listing.


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c. 1,206 loans with assigned purchase prices totaling $136,028,808 had been

“charged off” or paid off by the borrower, but had remained on the AOT

loan listing.

d. 1,837 loans had been foreclosed, meaning that the underlying collateral is

actually REO (which is not permitted collateral under the terms of the

AOT).23 This includes some second liens (e.g., home equity lines of

credit) and properties that had been conveyed to HUD and the VA prior to

August 2009. The aggregate purchase prices assigned to this group of

loans total $295,831,301.

e. 3,278 loans were coded “001” in TBW’s Servicing System, which was the

code used for loans owned by TBW and/or assigned to one of the Colonial

facilities.24 The purchase prices for this group of loans according to the

AOT loan listing total $474,881,623.

The loan documents for much of the REO and many of the “001” loans were in the possession of

the Warehouse Lending Group at Colonial as of the appointment of the FDIC-Receiver.

D. Uses of Cash and Funding Sources

149. In light of the circumstances surrounding Ocala Funding and the AOT, the Debtor

analyzed the funding sources in place at the time that the Petition was filed – i.e., the COLB,

AOT, OFCP and BoA EPF – and how monies advanced on each were used by TBW.

150. Given the length of time that the COLB, AOT, and OFCP were in place, the

Debtor did not endeavor to review thoroughly every transaction on each of these facilities.

23 1,197 of these REO properties were part of the Section 363 bulk sale approved by the Bankruptcy Court and closed in December 2009. 24 Servicing of these loans was transferred to RoundPoint, as servicer for the FDIC-Receiver.


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Rather, overall activity on each funding source was analyzed in reverse chronological order. As

a result of this high level review (and in the context of other facts developed during the course of

the Debtor’s investigation), the Debtor ascertained the following:

a. The transactions associated with the BoA EPF appear to be consistent with

its purpose and structure.

b. The wet funding of loan originations and related transactions associated

with the COLB appear to be consistent with its purpose and structure.

However, as explained above, payments to Colonial for loans sold “off of

the COLB” were not made in accordance with the terms of the controlling

agreements.25

c. The Debtor has conducted a general review of cash activity in the Ocala

Funding Collateral account for the year 2007 and a detailed review of the

activity in that account for 2008 and 2009. Based upon this review, the

Debtor has not identified any activity in the Ocala Funding Collateral

Account prior to June 30, 2008 that is clearly inconsistent with the

purpose and structure of the OFCP. Conversely, the Debtor has identified

numerous deposits into and disbursements from that account since June

30, 2008 that appear to be inconsistent with the purpose and structure of

the OFCP.

d. The Debtor has identified numerous transactions related to the AOT going

back to 2004 that appear to be inconsistent with the purpose and structure

of the AOT. While the Debtor will continue to review and analyze a 25 In the recently filed indictment of Lee Farkas, the government contends that the COLB was misused prior to 2008. The Debtor’s investigation of the COLB has not included that period of time. As of the filing of this Report, the Debtor can neither confirm nor dispute these contentions.


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number of these transactions, it appears that the transactions that most

affect this Asset Reconciliation occurred after June 30, 2008 and involved

deposits into and disbursements from the Ocala Funding Collateral

Account.

Hence, the Debtor’s analysis of the uses of cash has centered on transactions involving the Ocala

Funding Collateral Account since June 30, 2008.

Deposits into the Ocala Funding Collateral Account

151. Between June 30, 2008 and August 4, 2009, more than $19.9 billion was

deposited into the Ocala Funding Collateral Account. Deposits from financial institutions that

purchased loans (e.g., Freddie Mac, Citibank, CSFB, and Wells Fargo) appear to have been

consistent with the purpose and structure of Ocala Funding and the OFCP. However, other

deposits into the Ocala Funding Collateral Account are not consistent with the design of Ocala

Funding and the OFCP.

152. In sum, it appears that more than $8 billion deposited into the Ocala Funding

Collateral Account between June 30, 2008 and August 4, 2009 was not related to the operation of

Ocala Funding or the OFCP. Among other things, these deposits appear to be:

• Advances on the AOT used to pay off worthless trades previously assigned to

the AOT (see, Section B, above);

• Advances on the AOT used to fund payments to mortgage investors or other

aspects of TBW’s operations; and,

• Short term transfers that correspond to collateral confirmations performed in

connection with the operation of the OFCP.


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153. The following table summarizes the deposits into the Ocala Funding Collateral

Account at Bank of America from June 30, 2008 through August 4, 2009:

Deposits Into The Ocala Funding Collateral Account For the Period June 30, 2008 Through August 4, 2009

Line Source of DepositTotal Deposits / (Transactions) Comments

1 Freddie Mac 9,892,876,473$ / (423) Consistent with structure and purpose of Ocala Funding.

2 Colonial AOT 6,986,392,581 / (83) Inconsistent with the structure and purpose of Ocala Funding and the AOT.

3 TBW Investor Funding Account (Colonial)

751,205,386 / (133)

Approximately $450 to $500 million in deposits appear to be proceeds of sales of Ocala Funding loans initially deposited into the Investor Funding Account and then transferred to the Ocala Funding Collateral Account. These transactions appear to be consistent with the purpose and structure of Ocala Funding. However, more than $250 million in deposits from the Investor Funding Account were not consistent with the structure of the OFCP.

4 Citibank 625,808,957 / (314) Consistent with structure and purpose of Ocala Funding.

5 CSFB AOT 550,953,658 / (21) Consistent with structure and purpose of Ocala Funding.

6 Master Advance Account (Colonial)

450,100,000 / (25)

Inconsistent with the structure and purpose of Ocala Funding, though some of these deposits appear to have been applied to pay down loans on the Ocala Funding collateral list that had already been sold to Investors. The Master Advance Account was used in connection with funding loan closings with individual borrowers and other purposes such as loan repurchases from Investors. Deposits in excess of $265 million correspond to a single “collateral check” done pursuant to the OFCP, which were returned to Colonial the next day, via a $265 million wire into the Investor Funding Account.

7 Wells Fargo 269,585,700 / (236) Consistent with structure and purpose of Ocala Funding.

8 RBC Operating 94,993,785 / (13)

Inconsistent with the structure and purpose of Ocala Funding. TBW maintained an operating account that was used to fund TBW’s payroll and other aspects of TBW’s operations. It is possible that some of these deposits were in payment of interest and fees associated with the OFCP or in "repayment" of servicing advances that were funded from the Ocala Funding Collateral account. However, three of these transfers - totaling $29 million - correspond to “collateral checks” done pursuant to the OFCP.

9 TBW P&I Custodial Others (Colonial)

84,000,000 / (2)

Inconsistent with the structure and purpose of Ocala Funding. This deposit corresponds with a single "collateral check" pursuant to the OFCP. The day after receiving the $84 million, the funds were returned to the custodial accounts at Colonial from which the deposits originated.

10 Franklin American 75,687,302 / (29) Consistent with structure and purpose of Ocala Funding.

11 Fees 53,741,334 / (49)

Under the terms of the OFCP agreements, fees were paid by TBW/Ocala Funding to DBK/BNP. It appears that some or all of these fees were then “returned” to TBW/Ocala Funding by DBK/BNP. The Debtor has lumped all of these types of transactions under the category of “Fees.” The Debtor has not determined whether these transactions are consistent with the terms of the controlling agreements.

12Custodial Funds Clearing Account (Colonial)

41,500,000 / (5) Inconsistent with the structure and purpose of Ocala Funding.

13 DBK Collateral (BOA) 26,334,461 / (11) Consistent with structure and purpose of Ocala Funding.

14 Return Wire 8,758,059 / (36) Inconsistent with the structure and purpose of Ocala Funding.

15 Urban Trust Bank 8,305,209 / (11) Consistent with structure and purpose of Ocala Funding.

16 BNP Collateral (BOA) 2,962,895 / (11) Inconsistent with the structure and purpose of Ocala Funding.

17 MCM Management 2,944,844 / (5) Consistent with structure and purpose of Ocala Funding.

18 Dresdner Bank 2,283,919 / (2) Consistent with the structure and purpose of Ocala Funding.

19 Other Sources 5,074,006 / (28)

20 TOTAL DEPOSITS [A] 19,933,508,568$ / (1,437)

[A] Excludes a deposit from a Freddie Mac P&I account on 12/05/08 that was a reversal of a previous transfer to the same P&I account.

TABLE 9


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Disbursements from the Ocala Funding Collateral Account

154. Between June 30, 2008 and August 4, 2009, more than $19.9 billion was

disbursed from the Ocala Funding Collateral Account. Certain disbursements are consistent with

the purpose and structure of Ocala Funding and the OFCP; however, others are not. In general, it

appears that these “inconsistent” disbursements were used to:

• Pay down expiring “trades” assigned to the AOT (see, Section B, above);

• Fund P&I servicing advances to investors;

• Finance TBW’s operations; and,

• Repay very short-term deposits – i.e., one or two days – into the Ocala Funding

Collateral Account (apparently in conjunction with collateral confirmations

performed in connection with the operation of the OFCP.

155. The following table summarizes the disbursements from the Ocala Funding

Collateral Account at Bank of America from June 30, 2008 through August 4, 2009:


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Disbursements From The Ocala Funding Collateral Account For The Period June 30, 2008 Through August 4, 2009

LineRecipient of

DisbursementTotal Disbursements /

(Transactions) Comments

1 TBW Investor Funding Account (Colonial)

10,177,897,949$ / (290)

A significant portion of these disbursements were payment for loans purchased “off of the COLB” by Ocala Funding and, therefore, are consistent with the structure and purpose of Ocala Funding. However, approximately $5 billion of this amount was used to pay off expiring “trades” on the AOT as described in Section C, above, which would have been funded by deposits from the AOT. As indicated in the prior table, $265 million appears to be the return of money that transferred from the Colonial Master Advance Account that corresponds to a collateral check.

2 DBK Collateral (BOA) 4,981,106,143 / (406) Consistent with the structure and purpose of Ocala Funding.

3 BNP Collateral (BOA) 2,052,994,482 / (369) Consistent with the structure and purpose of Ocala Funding.

4FHLMC P&I Acct. No. ******1506 (Colonial) 706,830,816 / (23)

Inconsistent with the structure and purpose of Ocala Funding. With the exception of $34.2 million, these disbursements were used to fund P&I Servicing Advances paid to Freddie Mac. It appears that TBW was “repaid” these advances, but the “repayments” were not made to Ocala Funding. Prior to mid-December 2008, “repayments” were made to the Colonial Master Advance Account and, thereafter, to the RBC Operating Account.

5Custodial Funds Clearing Account (Colonial) 674,349,711 / (20)

Inconsistent with the structure and purpose of Ocala Funding. Approximately $330 million of these disbursements were used to fund Servicing Advances to Investors. The advances to Freddie Mac and Ginnie Mae were "repaid," though not to Ocala Funding. However, only a portion of the Servicing Advances to the private Investors were "repaid" to TBW. The remaining disbursements were used for a variety of purposes unrelated to the operation of Ocala Funding.

6 CSFB 570,150,835 / (10) Consistent with the structure and purpose of Ocala Funding.

7Master Advance Account (Colonial) 451,087,135 / (51)

Inconsistent with the structure and purpose of Ocala Funding. In general, these disbursements correspond to payments made by TBW in connection with fees, margin calls and payments on working capital lines, as well as when transfers to the TBW Operating account occurred.

8FHLMC P&I Acct. No. ******5410 (Colonial) 129,728,959 / (12)

Inconsistent with the structure and purpose of Ocala Funding. These disbursements were used to fund P&I Servicing Advances paid to Freddie Mac. It appears that TBW was “repaid” these advances, but the “repayments” were not made to Ocala Funding. Prior to mid-December 2008, “repayments” were made to the Colonial Master Advance Account and, thereafter, to the RBC Operating Account.

9 TBW Operating Account (Colonial)

58,500,000 / (9)

Inconsistent with the structure and purpose of Ocala Funding. It appears that these disbursements to TBW's Operating Account were used primarily to fund borrower tax and insurance "escrows" as loans were sold to Investors. While TBW received "escrows" from borrowers at closing, the T&I accounts were not funded until the loan was actually sold.

10GNMA P&I Acct. No. ******5287 (Colonial) 57,832,567 / (2)

Inconsistent with the structure and purpose of Ocala Funding. It appears that these disbursements were used to fund Servicing Advances paid in connection with the August and November 2008 scheduled P&I payments to investors in securities guaranteed by Ginnie Mae. As with the Freddie Mac advances, it appears that these were repaid, but the repayments were made to the Colonial Master Advance Account, not to Ocala Funding.

11 Platinum Bank 62,239,697 / (3)

Inconsistent with the structure and purpose of Ocala Funding. $50,000,000 was used to fund the purchase money escrow account at Platinum established in connection with TBW’s (and others’) potential $300 million investment in Colonial, which was not consummated. The remaining $12.2 million was used to purchase loans from Platinum that were not used as collateral for the OFCP.

12 Sovereign Bank 22,461,005 / (1) Inconsistent with the structure and purpose of Ocala Funding. It appears that this disbursement was a payment on TBW's working capital line with Sovereign.

13 Fees 7,913,976 / (93) Consistent with the structure and purpose of Ocala Funding.

14 US Ameribank 5,000,000 / (1) Inconsistent with the structure and purpose of Ocala Funding.

15 Loan Purchase 3,669,649 / (10) Consistent with the structure and purpose of Ocala Funding.

16 Henley Holdings P&I Acct. No. ******4822 (Colonial)

2,500,000 / (1) Inconsistent with the structure and purpose of Ocala Funding.

17 RBC Operating 350,000 / (2)

18 Return Wire 499,272 / (2)

19 Citibank 134,830 / (1)

20 Seaside 69,235 / (1)

21 TOTAL DISBURSEMENTS [A] 19,965,316,261$ / (1,307)

[A] Excludes a transfer from a Freddie Mac P&I account on 12/05/08 that was returned to the Ocala Funding Collateral account on the same day.

TABLE 10

156. In sum, it appears that more than $2 billion in funds disbursed from the Ocala

Funding Collateral Account between June 30, 2008 and August 4, 2009 was not related to the


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operation of Ocala Funding or the OFCP. Despite the extensive commingling of funds in the

Ocala Funding Collateral Account, it is apparent that TBW used monies obtained from Colonial

(principally from the AOT) and from Ocala Funding to fund these Inconsistent Disbursements.

E. REO

157. As previously discussed, TBW’s REO portfolio included properties that were

owned outright by TBW and properties that had been financed as loans on one of the Colonial

facilities or securitized in a private label securitization. As of August 4, 2009, there were a total

of 4,481 REO properties being managed by TBW. By April 30, 2010, only 499 of these

properties remained.

158. The following table summarizes activity related to the REO properties since

August 4, 2009:

TABLE 11Summary of REO Transactions - August 2009 through April 2010

Line Investor

Beg. Inventory REO Properties

as of 8/4/09 REO SalesProceeds Received

Transferred to TBW Operating

Account

Remaining Proceeds Received

as of 4/30/10

End Inventory REO Properties

as of 4/30/10

REO Sales Proceeds [A] [E]

1 TBW Owned 772 - (597) $40,570,371 ($40,283,236) $287,135 175 2 Colonial 1 - (1) 83,030 (2,453) 80,577 - 3 Mercantile 1 - (1) 300,117 (5,513) 294,604 - 4 Wells Fargo 2,038 (1,971) (67) 12,900,576 (2,688,804) 10,211,772 - 5 Bayview 176 (176) - - - - - 6 BB&T 5 (5) - - - - - 7 "On AOT/Overline" [B] 1,488 - (1,164) 102,347,501 (25,142,430) 77,205,070 324

8 Subtotal 4,481 (2,152) (1,830) $156,201,594 ($68,122,436) $88,079,159 499

Property Preservation and T&I Refunds [C]

9 REO Related Refunds 2,375,371 (1,292,614) 1,082,758

MI Claims [D]

10 TBW MI Claims on REO 2,080,397 - 2,080,397

11 Total 4,481 (2,152) (1,830) $160,657,363 ($69,415,049) $91,242,314 499

[A][B][C]

[D][E] Includes deposits in the Regions REO Proceeds account and the Regions REO Specialists account (which are REO sales proceeds originally deposited in

Wachovia and RBC prior to TBW’s bankruptcy).

Receipt of mortgage insurance claims for TBW Owned REO.

Post-Petition Service

Released REO

Sale Results

Proceeds from REO sales in the ordinary course and the § 363 sale.Advances associated with these properties are reimbursed to the Debtor, with the net sale proceeds maintained in the Regions REO Proceeds account.Refunds sent back to the Debtor for property taxes, insurance and property preservation advances on REO homes that had been sold prior to the necessary required service release.


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159. The reduction in REO properties since August 4, 2009 is due to two factors: (a)

the turnover of 2,152 properties to Wells Fargo, Bayview and BB&T in connection with

servicing transfers; and, (b) the sale of 1,830 properties, a majority of which were either owned

by TBW (594 properties) or assigned to the AOT (947 properties).26 The remaining 499

properties are divided between TBW-owned properties (175 properties) and properties assigned

to the AOT (250 properties) and the Overline (74 properties).

160. As indicated in Table 11, above, the Debtor has realized proceeds totaling $156.2

million from the sale of REO properties. The Debtor has also recovered $4.5 million in funds

related to the management of the REO.27 The $160.7 million in REO-related funds was

deposited into the Wachovia operating account (subsequently transferred to the Regions REO

Proceeds account), the RBC REO Specialists bank account (subsequently transferred to the

Regions REO Specialists account) and directly into the Regions REO Proceeds account. The

Debtor has transferred $69.4 million from the sale of REO owned by the Debtor from the REO

Proceeds account to the Debtor’s operating account, which is also at Regions. After this transfer,

the remaining REO related proceeds totaled $91.2 million as of April 30, 2010.28

VI. NEXT STEPS

161. The Debtor will provide an overview of this Report for the Court and stakeholders

during the status conference to be held on July 7, 2010. In all likelihood, mortgage investors and

26 These REO properties were sold either in the ordinary course or in the bulk sale via the Court-approved Section 363 auction process. 27 The $4.5 million includes the collection of mortgage insurance refunds and the recovery of advances made by the Debtor to preserve the value of the REO. These advances were made to cover property taxes, insurance premiums and maintenance costs. 28 The $91,242,314 consists of the remaining REO related proceeds, however, the combination of the Regions REO Proceeds account and the Regions REO Specialists account total $91,001,153, which is $241,161 less than the remaining REO related proceeds as a result of REO preservation costs paid out of the RBC REO Specialists account prior to the establishment of the Regions account structure.


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other affected creditors will require additional time to review and analyze the allocations and

other findings set forth herein.

162. Data supporting both the Servicing Reconciliation and the Asset Reconciliation

have been and will continue to be made available to applicable investors subject to execution of

appropriate agreements regarding maintenance and use of confidential information.

163. The Debtor will continue to work with the FDIC-Receiver to: (a) ascertain how

and when distributions should be made from the servicing-related accounts at Colonial and

Regions; (b) define and resolve issues related to and arising from the relationship between TBW

and Colonial; and (c) develop appropriate methods of assuring investors’ implementation of the

Borrower Protocol, including the additional issues identified in this Report.

164. The completion of the Servicing Reconciliation and the Asset Reconciliation is

fundamental to the formulation and proposal of a plan of liquidation for the Debtors (the

“Plan”), the preparation of an accompanying disclosure statement that meets the requirements of

Section 1125 of the Bankruptcy Code (the “Disclosure Statement”), and the confirmation of the

Plan under Section 1129 in this case. In conjunction with the completion of this Report, the

Debtor, in collaboration with the Committee, has been working to formulate the Plan and to

compile information for the Disclosure Statement. The Debtor has invited the Committee to join

the Debtor as a co-proponent of the Plan, and the Committee has indicated that it will join the

Debtor in formulating and proposing the Plan. The Debtor and the Committee expect to be able

to file the Plan and Disclosure Statement by September 21, 2010, or earlier.

165. The Debtor and the Committee have begun discussions with several stakeholders

in an effort to define key issues and, to the extent possible, resolve differences regarding claims

and recoveries. The completion of the reconciliation processes and the filing of this Report


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should facilitate those discussions. The Debtor expects to engage all significant stakeholders in

similar discussions as this case moves forward. To the extent that resolution cannot be achieved

by agreement, then the process should aid in narrowing and clarifying disputes and quantifying

claims and recoveries.

166. As indicated above, it may be necessary and appropriate at some point in the

future for the Debtor to analyze TBW’s sources and uses of funds for certain periods of time.

167. The Debtor anticipates that it will continue to receive and respond to formal

discovery and informal information requests regarding the findings set forth herein, as well as

the underlying analysis and investigation.


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DATED this 1st day of July, 2010.

Respectfully submitted, /s/ J. David Dantzler, Jr._______________ Jeffrey W. Kelley (Ga. Bar No. 412296) [email protected] Ezra H. Cohen (Ga. Bar No. 173800) [email protected] J. David Dantzler, Jr. (Ga. Bar No. 205125) [email protected] TROUTMAN SANDERS LLP 600 Peachtree Street, Suite 5200 Atlanta, Georgia 30308 Telephone: (404) 885-3000 Facsimile: (404) 885-3900 SPECIAL COUNSEL TO DEBTOR TAYLOR, BEAN & WHITAKER MORTGAGE CORP. Russell M. Blain (FBN 236314) [email protected] Edward J. Peterson, III (FBN 014612) [email protected] Amy Denton Harris (FBN 0634506) [email protected] STICHTER, RIEDEL, BLAIN & PROSSER, P.A. 110 East Madison Street, Suite 200 Tampa, Florida 33602 Telephone: (813) 229-0144 Facsimile: (813) 229-1811 ATTORNEYS FOR DEBTOR TAYLOR, BEAN & WHITAKER MORTGAGE CORP.








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CERTIFICATE OF SERVICE

I HEREBY CERTIFY that a true and correct copy of the Final Reconciliation Report of

Debtor Taylor, Bean & Whitaker Mortgage Corp., together will all exhibits thereto, has been

furnished by electronic mail and/or by the Court’s CM/ECF system on this 1st day of July, 2010

to the parties listed on the Service List attached hereto.

/s/ Russell M. Blain RUSSELL M. BLAIN


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SERVICE LIST

Kenneth C. Meeker, Esquire, Assistant United States Trustee, and Elena L. Escamilla, Esquire, Office of the United States Trustee, 135 West Central Boulevard, Suite 620, Orlando, Florida 32801-2476 Paul Steven Singerman, Esquire, and James D. Gassenheimer, Esquire, Berger Singerman, P.A., 1000 Wachovia Center, 200 South Biscayne Boulevard, Miami, Florida 33131 James Berger, Esquire, Esquire, Berger Singerman, P.A., 350 East Las Olas Boulevard, 10th Floor, Fort Lauderdale, Florida 33301 Arthur Spector, Esquire, Berger Singerman, P.A., 2650 North Military Trail, Suite 240, Boca Raton, Florida 33431-7391 Donald A. Workman, Esquire, Baker Hostetler, 1100 Washington Square, 1050 Connecticut Avenue Northwest, Washington, D.C. 20036-5304 Thomas R. Califano, Esquire, Richard F. Hans, Esquire, and Christopher R. Thomson, Esquire, DLA Piper LLP (US), 1251 Avenue of the Americas, New York, New York 10020-1104 Jeffrey E. Schmitt, Esquire, Legal Division, Federal Deposit Insurance Corporation, 3501 Fairfax Drive, Arlington, Virginia 22226 Roy S. Kobert, Esquire, and Nicolette Vilmos, Esquire Broad and Cassel, 390 North Orange Avenue, 14th Floor, Orlando, Florida 32801 Robert A. Soriano, Esquire, Greenberg Traurig, LLP, 625 East Twiggs Street, Suite 100, Tampa, Florida 33602-3925 Jason W. Johnson, Esquire, and David E. Peterson, Esquire, Lowndes, Drosdick, Doster, Kantor & Reed, 215 North Eola Drive, Orlando, Florida 32801 George A. Kielman, Esquire, Kenton W. Hambrick, Esquire, and Soha Mody, Esquire, Federal Home Loan Mortgage Corporation, 8200 Jones Branch Drive – MS 202, McLean, Virginia 22102 Hugh Ray, Esquire, McKool Smith P.C., 600 Travis Street, Suite 7000, Houston, Texas 77002 Lisa Gonsior Laukitis, Esquire, Jones Day, 222 East 41st Street, New York, New York 10017-6702 Betsy C. Cox, Esquire, Rogers Towers, P.A., 1301 Riverplace Boulevard, Suite 1500, Jacksonville, Florida 32207 Thomas E Lauria, Esquire, and Matthew C. Brown, Esquire, White & Case LLP, 4900 Wachovia Financial Center, 200 South Biscayne Boulevard, Miami, Florida 33131-2352 Frank E. Emory, Jr., Esquire, and Joseph B. Buonanno, Esquire, Hunton & Williams LLP, 3500 Bank of America Plaza, 101 South Tryon Street, Charlotte, North Carolina 28280 Andrew D. Zaron, Esquire, Hunton & Williams, LLP, 1111 Brickell Avenue, Suite 2500, Miami, Florida 33131-3126 Michael A. Tessitore, Esquire, The Tessitore Law Firm, P.A., 612 East Colonial Drive, Suite 150, Orlando, Florida 32803


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Robert M. Dombroff, Esquire, Todd B. Marcus, Esquire, and Erin Kate Mautner, Esquire, Bingham McCutchen LLP, 399 Park Avenue, New York, New York 10022 Alan D. Weiss, Esquire, Holland & Knight LLP, 3900 Bank of America Building, 50 North Laura Street, Jacksonville, Florida 32202-3622 Stephen P. Sorensen, Esquire, Williams & Connolly LLP, 725 Twelfth Street, Northwest, Washington, D.C. 20005 Nina M. LaFleur, Esquire, Post Office Box 861128, St. Augustine, Florida 32086-1128 John C. Weitnauer, Esquire, Alston & Bird LLP, One Atlantic Center, 1201 West Peachtree Street, Atlanta, Georgia 30309-3424 James H. Post, Esquire, Smith Hulsey & Busey, 1800 Wachovia Center, 225 Water Street, Jacksonville, Florida 32202 James W. Carpenter, Esquire, Angelo & Banta, P.A., 515 East Las Olas Boulevard, Suite 850, Fort Lauderdale, Florida 33301 Jeffrey N. Rich, Esquire, K&L Gates, 599 Lexington Avenue, New York, New York 10022-6030 Jason B. Burnett, Esquire, and Kenneth B. Jacobs, Esquire, Gray Robinson, P.A. 1100 Bank of America Building, 50 North Laura Street, Jacksonville, Florida 32202 Glenn Gillett, Esquire, United States Department of Justice, Civil Division, Post Office Box 875, Ben Franklin Station, Washington, D.C. 20044 Jack A. Raisner, and René S. Roupinian, Esquire, Outten & Golden LLP, 3 Park Avenue, 29th Floor, New York, New York 10016 Scott K. Rutsky, Esquire, Proskauer Rose LLP, 1585 Broadway, New York, NY 10036-8299 Scott Tavolieri, Esquire, State of Florida Office of Financial Regulation, 921 North Davis Street, Building B, Suite 225, Jacksonville, Florida 32209


Exhibit A

Overview of Servicing Reconciliation Procedures

Case 3:09-bk-07047-JAF Doc 1644-1 Filed 07/01/10 Page 1 of 23

EXHIBIT A

OVERVIEW OF SERVICING RECONCILIATION PROCEDURES

Page 1

Following are general summary discussions of the procedures performed in the Servicing Reconciliation. Such procedures are included for each of the following three components of the Servicing Reconciliation:1

1. The Affected Funds Reconciliation under which the Debtor performed a reconciliation and allocation of all monies that were affected by the Colonial Bank account hold beginning on August 5, 2009, Colonial’s subsequent failure and TBW’s bankruptcy.

2. The Book-to-Bank Reconciliations pursuant to which the Debtor determined the amount of any shortfalls in investor’s custodial accounts.

3. The Servicing Advances Reconciliation pursuant to which the Debtor reconciled and accounted for unreimbursed advances (including P&I, T&I, and Corporate Advances) and service fees not paid to the Debtor.

I. Affected Funds Reconciliation

A. Understanding of TBW Cash Accounts

In order to develop Table 1 of the Report and the related exhibits, the Debtor first gained an understanding of cash accounts, balances, the sources of funds deposited in TBW’s bank accounts, and the purpose of each bank account. This understanding was obtained through (1) numerous discussions with TBW personnel in the Accounting, Investor Services, and Cashiering departments, among others, (2) discussions with FDIC-Receiver personnel, and (3) a review of thousands of contemporaneous TBW documents including, but not limited to, bank statements, TBW trial balances, bank reconciliations, accounting documentation, cashiering documentation, and correspondence with the FDIC-Receiver, as well as large volumes of electronic data. The following sections set forth a high level summary of the procedures performed in order to compile the data used to develop the Affected Funds Reconciliation:

1. The Debtor obtained Colonial, Wachovia, Regions, RBC Bank, Platinum bank account statements and other account information for over 100 accounts on a monthly basis from July 2009 through April 2010.

2. The Debtor identified the cash balances for the accounts used in the servicing operation as of the following dates: July 31, 2009; August 4, 2009 (i.e., the balance prior to the bank account hold2); August 24, 2009 (the Petition Date); September 30, 2009, October 31, 2009, November 30, 2009, and April 30, 2010. See Exhibits J and K for a detailed summary of these accounts.

1 All Capitalized terms not otherwise defined herein shall have the meaning set forth in the Final Reconciliation Report. 2 Colonial placed an administrative hold on TBW’s accounts at Colonial beginning on August 5, 2009, making it

impossible for TBW to access funds from more than 100 bank accounts or use those accounts in the operation of its business.


EXHIBIT A


Page 2

3. The Debtor identified the following servicing related accounts at Colonial:

a. Custodial Funds Clearing Account (“CFCA”)

b. Investor specific Principal & Interest accounts (45 accounts)

c. Investor specific Tax & Insurance accounts (45 accounts)

d. CA and IL Impound Escrow accounts (2 accounts)

e. REO Proceeds Clearing

f. Escrow Distribution Clearing Account

g. Western Union Clearing Account

h. Other Accounts

i. EDCA - CS

ii. CS Deposits Clearing Account

iii. Investors Clearing Account

iv. GPS Custodial Clearing

v. TBW Escrow Servicing Account

4. The Debtor established numerous accounts at Regions, which on a much simplified basis mirrors the account structure at Colonial. These accounts include servicing related, REO proceeds and escrow refund accounts, as follows:

a. Deposit (2 accounts)

b. Clearing 3

c. P&I and T&I (25 accounts)

d. Service Fee

e. REO Proceeds

f. Refunds

3 As described in the Report, funds that were initially deposited in Wachovia were subsequently transferred to

various Regions accounts, primarily the Clearing account.


EXHIBIT A


Page 3

5. TBW maintained an account with RBC Bank which was referred to as the REO Specialists, LLC account and generally served as an operating account for REO preservation activities. Certain REO proceeds were deposited in this account after the administrative hold.

6. The Debtor identified and analyzed the following two accounts at Platinum:

a. TBW maintained $210 million at Platinum, which consisted of T&I escrow funds on deposit in a series of custodial accounts. The Debtor did not assess the loan level detail for these Platinum accounts. However, the Debtor performed a detailed analysis to identify the sources of the $210 million and the accounts where there funds were deposited.

b. TBW maintained an Escrow Distribution Clearing Account (“EDCA”) which was used to distribute payments of real estate taxes and insurance premiums (as well as other “escrow” related payments). TBW typically distributed thousands of checks monthly from this account.

B. Identifying the Loan Level Detail Associated with Gross Affected Funds

The Debtor next gained an understanding of the relationship between cash activity and the TBW servicing system, as well as how TBW processed borrower payments, executed transfers to investor accounts, and processed returns (e.g., NSF, ACH returns, etc.). This understanding assisted with the extensive process of identifying the loan level detail associated with Gross Affected Funds (See Exhibit C for a detailed allocation).

1. Based on discussions with TBW personnel and review of the TBW’s electronic records, the Debtor determined that the loan level detail associated with borrower payments on deposit could not be extracted from the Servicing System, as the Servicing System did not contain the necessary fields of data to reconcile to the daily deposits. In addition, TBW did not maintain the data in a usable, electronic format on a daily basis. Therefore, the Debtor undertook an extensive process to identify the loan level data. The following sections set forth a summary of this process.

2. The Debtor determined that the TBW Cashiering Department (“Cashiering”) was primarily responsible for identifying, processing (updating the Servicing System records), and depositing borrower funds. Therefore, the Debtor conducted extensive interviews, reviewed thousands of Cashiering work papers, and reviewed large volumes of electronic data in order to identify the necessary documentation to perform the Affected Funds Reconciliation. The Debtor identified the following roles of Cashiering:

a. Cashiering processed thousands of borrower payments on a daily basis, which came in the following forms:

i. Physical checks received at TBW (generally numbered in the thousands per day);


EXHIBIT A


Page 4

ii. Direct deposit information received from Colonial bank in the form of wire transfers or lockbox checks; and

iii. Direct deposit information received from third parties that transferred funds to TBW accounts.

b. Cashiering personnel identified the data received and reconciled the information to bank transactions. Next, Cashiering personnel applied the borrower payments to the corresponding loans by manually entering or downloading the information into the TBW Servicing System. TBW Cashiering generally processed payments and/or payment data the same day that it was received. In certain instances, TBW Cashiering did not identify the nature of certain deposits immediately or did not receive the relevant data and would have to delay the posting process in the Servicing System.

c. TBW Cashiering prepared a “Daily Log” report, which summarized each day’s posting of borrower payments on TBW’s Servicing System. The activity was segregated into various categories, including cash receipts by cash source (e.g., lockbox checks, wire transfers, Western Union, etc.; see Exhibit F), returns, and non-cash entries. The Daily Log was an integral part of the cash reconciliation process as it provided a means of reconciling the cash activity in the various bank accounts to the payments posted on the TBW Servicing System. The Daily Log support packages generally included the following:

i. Summary schedule of Servicing System postings and bank deposits.

ii. Loan level detail schedules - each support package contained large volumes of data detailing TBW Servicing System postings. In certain instances, the package included data associated with borrower payments that were not posted to the TBW Servicing System because the loan was previously service released.

iii. Notes and correspondence supporting TBW Cashiering research on borrower payments.

3. After identifying the requisite data, the Debtor’s next step was to collect the necessary data in order to identify and relate the loan level detail to the bank activity and funds on deposit. This identification process included weeks of interviews/inquiries of TBW personnel, an extensive review/analysis of Cashiering documentation and electronic data, subsequent research, and finally, the reconciliation of loan level data to cash on deposit. These processes were different for each bank account and are described in greater detail below.


EXHIBIT A


Page 5

a. The Colonial Bank CFCA - This process of identifying the cash and the associated loan level detail for this account was complex as this account is where borrower funds are initially deposited and typically included thousands of transactions per month. The Debtor’s procedures for identifying the loan level detail varied depending on the time period. The following sections describe the procedures for identifying loan level detail for two distinct periods, activity through August 4, 2009, and activity from August 5, 2009 going forward.

i. Activity up through August 4, 2009 - the ending CFCA balance on August 4, 2009 consisted primarily of funds that had been deposited prior to August 4, 2009, but had not been transferred to investor specific custodial P&I and T&I accounts. Generally, funds remain in the CFCA for two reasons: (a) the item has not been posted to the TBW Servicing System and allocated to an investor, or (b) the item has been posted to the Servicing System but could not be transferred due to the Colonial administrative hold. In this case, deposits that were posted on or prior to August 3, 2009 were transferred to the custodial investor P&I and T&I accounts. If a deposit was posted on or after August 4, 2009, the funds were trapped in the CFCA due to the administrative hold. The Debtor performed a series of extensive analyses to identify the loan level detail associated with the August 5, 2009 opening balance. This process included the following:

(a) Reconciliation of the CFCA account at July 31, 2009 on a detailed transaction and loan level basis; this process included “un-batching” hundreds of bulk/bundled deposit and return items, which entailed significant research involving numerous Debtor personnel working with several banks, TBW personnel, FDIC-Receiver personnel , and third parties that sourced the funds. As indicated previously, there were typically thousands of transactions per month in the CFCA, with certain transactions containing thousands of borrower payments. For example, the July 2009 CFCA included over $2 billion in credits, $2 billion in debits, and approximately 5,500 transactions.

(b) Identification of the TBW Servicing System postings after August 3, 2009 with deposit dates of August 3, 2009 or prior. For example, the Debtor reviewed the Cashiering Daily Logs and determined that over $5 million of July 2009 REO related deposits were not posted to the TBW Servicing System until after the Petition Date. Although


EXHIBIT A


Page 6

the REO deposits were posted in October, the amounts could not be transferred from the CFCA to the appropriate custodial investor account because of the administrative hold. Therefore, these deposits were part of the opening CFCA balance on August 5, 2009 and have remained in the account since being deposited in July 2009.

(c) Identification of items that were deposited prior to August 4, 2009 but never posted to the TBW Servicing System. This process entailed comparing the deposit loan level detail to TBW’s Servicing System postings. The Debtor, with the assistance of TBW personnel, queried the loan level detail associated with the thousands of July 2009 transactions against the Servicing System and identified deposits that were not posted to the Servicing System prior to August 4, 2009. Certain transactions in the CFCA balance were not posted to the TBW Servicing System because they were either previously service released or were never identified by TBW.

ii. Activity from August 5, 2009 forward – all borrower deposits in the CFCA from August 5, 2009 forward were trapped in the CFCA due to the administrative hold. Therefore, the process of identifying the deposits from August 5, 2009 was more straightforward than the opening balance above. However, the process of identifying the loan level detail was as complex due to the higher volume of activity. The Debtor performed the following procedures in order to identify the loan level detail associated with cash deposits and withdrawals from 8/5/09 forward:

(a) The Debtor analyzed TBW bank statements and classified the thousands of deposits and withdrawals into unique categories. Most of the bank activity was distinct and could be categorized readily. However, the Debtor faced a substantial challenge in performing the classification of CFCA activity as the bank data was in PDF format that could not be utilized in spreadsheets or databases. Therefore, the Debtor digitized, or converted hundreds of pages of bank activity from a PDF format into a format that could be imported and manipulated in a database. This process was extensive and was utilized throughout the procedures described in this exhibit.


EXHIBIT A


Page 7

(b) In order to identify the loan level detail associated with each category of cash, the Debtor utilized the Daily Logs. Although the Daily Logs contained the necessary summary level detail, the supporting data was fragmented and required a significant degree of review and reconciling in order to get an accurate understanding of the daily postings to the TBW Servicing System and the underlying loan level detail. The Debtor utilized appropriate TBW Cashiering personnel, PDF files and native files (e.g., Microsoft Excel) as part of this process which took numerous Debtor personnel weeks to complete due to significant volume of activity. The Cashiering daily log support packages consisted of hundreds of pages in most instances. One example of the complexity of this process is the reconciliation of the August 5, 2009 “Phone Check/TMP/eStatements” postings, which represented incoming borrower payments via ACH transactions totaling $3.28 million. The documentation supporting the August 5, 2009 posting of these payments consisted of 13 different reports containing hundreds of line items each, which had to be identified and reconciled to the summary page. Once the amounts were reconciled to the summary page, the Debtor had to locate and obtain the full detail for each of the 13 reports. The hundreds of pages of detail were in PDF format and had to be digitized, as described previously. This process was repeated for each category of cash for each day that was analyzed, which amounted to thousands of pages of loan level data. For additional information and summaries of these categories of cash in the CFCA, refer to Exhibits F and G to the Report. In addition, the Debtor worked with cashiering to identify loan level detail associated with transactions totaling over $63 million that were posted to the Servicing System but were not monetized.

(c) Once the Debtor reconciled the Daily Log’s summary data to the supporting data for each business day from July 30, 2009 forward, the Debtor was able to begin the process of identifying the loan level detail associated with the bank activity. This process was done by reconciling the bank activity to the Daily Log summary page. For example, the August 5, 2009 Daily Log indicated that TBW processed $4,879,373.40 in borrower payments that were deposited at the Colonial Lockbox. The Debtor reconciled this deposit


EXHIBIT A


Page 8

amount to the corresponding amount on the August 2009 CFCA bank statement. This step was performed for each day from July 30, 2009 for each category in order to gain a thorough understanding of the funds in the CFCA.

(d) The Debtor’s next step in determining the loan level detail associated with the bank activity was to digitize or convert the data containing the large volumes of loan level detail from PDF format to a database friendly format. This process involved thousands of PDF pages that had to be carefully converted page by page. The converted data was loaded into the master database and reconciled to the bank activity and Daily Logs again in order to ensure completeness. This process involved over 300,000 individual loan records and millions of data points that were collected in the Debtor’s master database.

(e) The above process did not capture all of the bank activity. A significant number of transactions required research because TBW had not previously processed certain payments and withdrawals. Each of these items was unique and required a high level of research/investigation since each item was at the individual transaction level. On many occasions, the research required correspondence, telephone calls or other follow up activities with third parties to assist with the research process.

iii. In most instances, cash collections were posted to the TBW Servicing System after the funds were received, and after TBW personnel identified the loan level detail. However, there are certain types of transactions where a payment was posted to a borrower’s account prior to cash receipt. An example of these types of transactions are TBW payment center ACH’s, where TBW posts a payment to the TBW Servicing System, initiates an ACH draw from the borrower’s bank account, and collects the cash three business days later.

b. Colonial investor P&I and T&I – the Debtor identified numerous Colonial custodial investor P&I and T&I accounts. In general, these accounts were investor specific and the Debtor simply allocated the entire balance to the corresponding investor. Certain accounts were not investor specific and required additional research. The Debtor conducted numerous interviews to gain an understanding of the nature of these non-investor specific accounts. In most instances, TBW personnel provided the loan level detail


EXHIBIT A


Page 9

supporting the bank balances, which was based on ordinary course bank reconciliations. However, certain instances required additional research involving third parties that originally sourced the funds.

c. Colonial Western Union Clearing - Western Union administers a program pursuant to which bi-weekly payments are collected from borrowers which are maintained in a Colonial account referred to as the “Western Union Clearing Account”. Western Union determined when the payments would be transferred to TBW's CFCA, at which time the borrower payment would be reflected in the TBW Servicing System. The Debtor contacted Western Union personnel to obtain the loan level detail associated with this account, processed the information, and allocated the funds by investor as reflected in Exhibit C to the Report. Exhibit D reflected the FDIC-Receiver’s return of all amounts in the Western Union Clearing Account to Western Union on November 20, 2009, with the exception of $885 remaining in the account at April 30, 2010. Western Union subsequently informed the Debtor that Western Union (1) sent the borrowers' payments to the subsequent servicer if there were enough funds for a full payment, or (2) sent the borrower a check if the funds were not enough for a full mortgage payment.

d. Colonial REO Proceeds Clearing Account and Other Accounts – the Debtor identified the loan level detail associated with the $3.15 million in the REO Proceeds Clearing Account and certain other accounts with the assistance of TBW personnel and the information explicitly presented on the bank statements (i.e., loan numbers and borrower names).

e. Colonial Escrow Distribution Clearing Account (“EDCA”) - the Colonial EDCA account contains borrower funds transferred from custodial T&I accounts at Colonial to fund borrower tax and insurance disbursements, as well as other escrow disbursements. Initially, TBW made the disbursements directly from this account. However, in early 2009, TBW began to transfer these funds to TBW's Platinum EDCA account where the disbursements were ultimately made. The Debtor worked directly with TBW personnel to identify the loan level detail associated with activity in this account from August 2009 forward and to develop the list of outstanding EDCA checks in the Colonial account.

f. Wachovia – subsequent to the administrative hold and prior to the Petition Date, TBW’s prior management made the decision to deposit approximately 4,000 borrower payment checks into an operating account maintained at Wachovia, totaling over $53 million. These deposits were made prior to the Petition Date of August 24, 2009. The Debtor worked directly with TBW personnel to obtain the loan level detail associated with


EXHIBIT A


Page 10

these deposits. The Debtor analyzed the detail that TBW provided and identified several hundred deposits without a corresponding loan number. Therefore, the Debtor performed extensive analysis to identify the corresponding borrower and loan number for these items, by directing/supervising numerous TBW personnel to find and analyze the supporting documentation, which entailed a review of the images for the 4,000 checks. This process was not completed for several weeks. The funds in the Wachovia account were subsequently transferred to the Regions Clearing Account, which is described in greater detail below.

g. Regions Accounts – as indicated earlier in this exhibit, the Debtor established a series of bank accounts at Regions in September 2009, which on a much simplified basis mirrors the account structure at Colonial. The accounts are described in greater detail below along with the procedures the Debtor performed to identify the associated loan level detail.

i. Deposit and Clearing Accounts – these accounts are the equivalent of the Colonial Bank CFCA, whereby a majority of borrower payments received by TBW since August 4, 2009 were deposited. Generally, the borrower payments were deposited into the two Deposit accounts (one for checks and the other for ACH transactions), and subsequently transferred to the Clearing Account. The Debtor was responsible for the Regions deposits, the first of which occurred on September 16, 2009. Therefore, the Debtor maintained the loan level detail associated with the deposits into Regions accounts. See Table 3 of the Report and Exhibits C through E for additional information.

ii. Refunds Account - account into which refunds totaling $11,291,175 from force placed insurance claims, tax refunds and private mortgage insurance premium refunds were deposited. Similar to the Deposit and Clearing Accounts above, the Debtor was responsible for establishing this account and maintained the loan level detail associated with the deposits. See Table 3 of the Report and Exhibit L for additional information.

iii. REO Account - account holding proceeds from REO sales in the ordinary course of business and pursuant to § 363 of the Bankruptcy Code totaling over $160 million. Similar to the Deposit and Clearing Accounts above, the Debtor was responsible for establishing this account and maintained the loan level detail associated with the deposits. Table 11 provides a summary of deposits into and disbursements from this REO Account.


EXHIBIT A


Page 11

iv. Investor P&I and T&I Accounts - T&I and P&I accounts were established to mirror Colonial account structure on simplified basis. These accounts receive a push down of T&I and P&I funds from amounts deposited into the Deposit and Clearing Accounts. Similar to the Deposit and Clearing Accounts above, the Debtor was responsible for establishing these accounts and maintained the loan level detail associated with the deposits.

v. Service Fee Account - deposits into this account represent the various fees transferred from the Regions Clearing account as part of the “push down” (i.e., allocation) of borrower funds on deposit in Regions Deposit and Clearing accounts, including service fees, late returned check fees, etc. Similar to the Deposit and Clearing Accounts above, the Debtor was responsible for establishing this account and maintained the loan level detail associated with the deposits.

h. Posted, Not Monetized – The Debtor also identified borrower payments that were posted in TBW’s Servicing System, but no cash was actually received by TBW due to the imposition of the administrative hold on the Colonial bank accounts. The following is a description of these items and the procedures performed to identify the associated loan level detail.

i. TBW ACH - amounts represent TBW initiated ACH payments held in suspense and never drawn from borrowers accounts and therefore not monetized. However, TBW posted the payments in the Servicing System. As a result, the servicing records that TBW provided to subsequent servicers indicate that a payment was made by the borrower, however, no corresponding funds are on deposit at Colonial or Regions. Similar to the CFCA procedures described above, the Debtor worked directly with TBW personnel to reconcile these amounts to the Daily Logs, identified the relevant documents containing the loan level detail, and then digitized the data into a usable format.

ii. Checks forwarded - amounts represent certain borrower payments that were (1) collected after the implementation of the Colonial account hold, and (2) were processed and recorded in the Servicing System. The borrower checks were not deposited into TBW accounts and were forwarded to investors and their subsequent servicers in September 2009. The Debtor was responsible for documenting these checks and maintained the loan level detail associated with the deposits.


EXHIBIT A


Page 12

iii. Western Union - amounts represent Western Union related postings to the Servicing System that were not supported by cash deposits. Based on the Debtor’s research, TBW appeared to have posted these items erroneously as they are duplicative of postings made one or two business days prior. The Debtor discovered these items during the process of reconciling the TBW postings to the bank deposit data.

i. FDIC-Lockbox – the FDIC-Receiver collected, maintained, and forwarded over 75,000 borrower payments received in the Colonial lockbox after August 12, 2009. These lockbox checks were not monetized/not deposited in TBW bank accounts and not posted in the Servicing System. The FDIC-Receiver and the Debtor worked jointly to identify the loan numbers for each check in order to forward the checks to the appropriate investor and their related subsequent servicer. The FDIC-Receiver distributed all but $1 million of the $94.7 million of lockbox checks to investors or their subsequent servicers. The Debtor has already documented the procedures for this process in great detail in the First Report’s Servicing Reconciliation Methodology as detailed below:

i. The FDIC collected and arranged the lockbox checks into over 60 boxes which generally consisted of approximately nine (9) batches/box and approximately 200 checks/batch. The FDIC-Receiver created control sheets for each and every batch, detailing the contents of the batch.

ii. The FDIC-Receiver retained custody of the checks at TBW and provided them to the TBW Cashiering personnel to be processed.

iii. The Debtor maintained a schedule to log assignment of boxes.

iv. The TBW Cashiering personnel created new summary spreadsheets for each tray and batch by entering check amount, check number and loan number. Upon completion of each tray, TBW Cashiering personnel provided the electronic data to the Debtor and the FDIC-Receiver. TBW Cashiering personnel concurrently reviewed the batched FDIC-Receiver control sheets by box to identify any blank or unpopulated data (i.e., loan account numbers). The information was researched and populated, with the corrected data written on the FDIC-Receiver control sheet and in an exception column on the appropriate row in the electronic spreadsheet.


EXHIBIT A


Page 13

v. The Debtor independently verified the accuracy of the Cashiering schedule against the original control schedule and the check. The Debtor forwarded the analyses to FDIC-Receiver personnel.

vi. The Debtor investigated all changes and exceptions and forwarded the results to the FDIC-Receiver before the box could be finalized and prepared for sorting.

vii. The Debtor prepared revised control sheets for each batch and box. The data was sorted by investor and their successor servicer while maintaining the original FDIC-Receiver order within each successor servicer batch.

viii. The FDIC-Receiver reconciled the updated control totals to the original FDIC-Receiver box totals.

ix. The Debtor, the FDIC-Receiver and TBW Cashiering personnel jointly sorted checks by successor servicer on a box by box level. The sorting was based on the revised batch control sheets supplied by the Debtor.

x. The FDIC-Receiver has released approximately $93.7 million of lockbox checks to investors and their successor servicers.

4. The Debtor performed analyses to determine the posting status for all funds identified on a loan level basis, which amounted to over 400,000 transactions. These analyses consisted of comparing the population of cash activity identified in the Affected Funds Reconciliation to the TBW Servicing System. These analyses were performed on a loan level basis in order to achieve a high level of granularity. The process entailed a significant level of research/investigation due to variances between the amounts collected and actual TBW Servicing System postings. For example, a borrower remitted a payment for $500, of which $490 was the scheduled payment amount and the remaining $10 was a curtailment (additional principal payment). The TBW Servicing System split the payment into two separate line items while the loan level detail shows only the $500 payment. Therefore, the Debtor performed an analysis to reconcile this payment to the TBW Servicing System in order to assign the posting status. The results of the posting status analysis are reflected in the Access Database containing unique, identifying information for each transaction (“Affected Funds Database”). The Affected Funds Database contained loan level detail for each transaction, the specifics of the transactions (e.g., date, amount, bank, etc.), and other related information collected by the Debtor.

C. Identifying the Loan Level Detail Associated with Distributions of Gross Affected Funds

1. As detailed in Exhibit D to the Report, the Debtor collected data associated with Gross Affected Funds that were distributed to various parties. As indicated in the Report, these


EXHIBIT A


Page 14

amounts included (i) any Gross Affected Funds that have been distributed by the FDIC-Receiver since August 5, 2009, (ii) any Gross Affected Funds that have been distributed by the Debtor since August 5, 2009, and (iii) any Gross Affected Funds that were never monetized (i.e., electronic payments trapped in suspense, checks forwarded, etc.). The procedures performed varied by distribution type. The following sections provide greater detail of the procedures that the Debtor performed in identifying the loan level detail of the distributions.

a. FDIC-Receiver CFCA Third Party ACH distributions – the FDIC-Receiver transferred approximately $34.5 million in funds to investors and their subsequent servicers. The Debtor worked directly with the FDIC-Receiver to identify the loan level data and the investors associated with the amounts transferred. This data was captured in a Final Allocation Database (the “Final Allocation Database”), with the allocation reflected in Exhibit D. Both the Debtor and FDIC-Receiver understand that a small portion of the initial allocation and subsequent distributions may have been made to incorrect parties. The Debtor and FDIC-Receiver will work jointly to reconcile the differences and work with investors to re-allocate the funds, as needed.

b. Colonial Western Union Clearing Account - the FDIC-Receiver returned all amounts in the Western Union Clearing Account to Western Union on November 20, 2009, with the exception of $885 remaining in the account at April 30, 2010. Therefore, the Debtor performed limited procedures relating to this distribution as virtually all the funds were returned. The Debtor engaged Western Union in discussions to determine how the funds were handled after they were returned by the FDIC-Receiver. Western Union informed the Debtor that Western Union either (1) sent the borrowers' payments to the subsequent servicer if there were enough funds for a full payment, or (2) sent the borrower a check if the funds were not enough for a full mortgage payment.

c. FDIC-Receiver Lockbox check distributions – the FDIC-Receiver forwarded approximately $93.7 million in checks to investors and their subsequent servicers. The Debtor worked directly with the FDIC-Receiver to identify the loan level data and investors associated with the forwarded checks. This data was captured in the Final Allocation Database, with the allocation reflected in Exhibit D to the Report. Both the Debtor and FDIC-Receiver understand that a small number of checks may have been initially allocated and distributed to incorrect parties. The Debtor and FDIC-Receiver will work jointly to reconcile the differences and work with investors to re-allocate the funds, as needed.

d. Borrower Protocol - the Bankruptcy Court approved the Motion for Approval of Protocol to Resolve Borrower Issues by an Order entered on


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February 24, 2010 [Doc. No. 1079] (“Borrower Protocol”). Accordingly, the FDIC-Receiver transferred $7,861,287 from various Colonial Bank accounts and the Debtor transferred $781,367 from the Regions Clearing Account to various investors to be used in the resolution of borrower issues. The Debtor was instrumental in identifying the loan level detail and funds to be distributed in satisfaction of the Borrower Protocol. The Debtor incorporated this information into the Final Allocation Database with the allocation reflected in Exhibit D to the Report.

e. Transfers to Ginnie Mae - on August 7, 2009, Colonial Bank transferred funds from the CFCA to the Colonial custodial Ginnie Mae P&I and T&I accounts. These transfers were associated with various 8/3 and 8/4 borrower payments TBW received that would have been transferred to the Ginnie Mae P&I and T&I accounts the following business day but-for the Colonial account hold. This transfer represents the actual "push down" of funds from the Custodial Funds Clearing Account. The Debtor performed limited procedures associated with this transfer, as the entire balance related to one investor and two bank transactions. The Debtor reconciled the amounts to the CFCA bank statement, obtained the loan level from TBW personnel, and confirmed that the associated loans were related to Ginnie Mae.

f. Platinum - the FDIC distributed $210 million to Freddie Mac in the August or September of 2009. The Debtor performed limited procedures relating to this distribution as all of the funds were returned to Freddie Mac. The Debtor received verbal confirmation from FDIC-Receiver representatives that all of the funds were transferred to Freddie Mac.

g. Posted Checks Forwarded – amount represents certain borrower payments that were (1) collected after the implementation of the Colonial account hold, (2) processed and posted to the Servicing System, and (3) forwarded to investors and their subsequent servicers in September 2009 rather than being deposited into the Regions accounts. As indicated above, all of the checks included in the Check Forwarded population were under the control of the Debtor in the September 2009 timeframe and were forwarded to investors and their subsequent servicers. Therefore, the Debtor’s procedures were limited to identifying the loan level detail of checks and allocating the amounts by investor, as reflected in Exhibit D.

h. Regions - the Debtor directed a series of transfers from various Regions accounts. The following sections set for the nature of the transfers and the procedures performed to identify the associated loan level detail.


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Page 16

i. Borrower Protocol Transfers – the purpose of these transfers and the Debtor’s procedures are consistent with the Borrower Protocol description above, with the funds being distributed from the Regions Clearing Account rather than the Colonial accounts.

ii. Transfers to Selene – amount represents transfers of funds from the Regions Clearing Account to Selene as interim servicer for TBW's service-released loans. Since the Debtor maintained control of these funds, limited procedures were performed, which included confirming that the amounts transferred were allocated to TBW/Selene.

iii. Transfers to Operating – amounts relate to transfers to the Regions Operating Account from the Regions REO Proceeds, Regions Refunds, Regions Clearing, and RBC accounts for reimbursement of force placed insurance, T&I advances, and REO proceeds deposits, among others. The Debtor identified the relevant funds, performed the calculations (if necessary), and maintained/managed the transfers of funds. Therefore the Debtor’s procedures were limited to identifying the loan level detail associated with the transfers. The transfers to Regions Operating are reflected in Exhibit D.

D. Reconciliation of Cash Amounts to Bank Statements

1. The Debtor reconciled the Gross Affected Funds to bank statements on two different levels, which are described below.

a. Inherent in the CFCA loan level identification process was a reconciliation of the cash, by category, to the CFCA bank statements. The Debtor compared the summary cash data from the Daily Logs to the bank statements to confirm the accuracy of the loan level detail.

b. The Debtor obtained the cash balances that are reflected in the Exhibits to this Report from the Colonial statements for certain accounts, including custodial investor P&I and T&I accounts, REO Proceeds Clearing Account, EDCA, and the “Other Accounts” reflected in Exhibit E to the Report.

c. Finally, the Debtor reconciled all of the balances reflected in Exhibit E of the Report to the corresponding April 30, 2010 bank balances, without exception.


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2. In summary, the above reconciliation procedures indicates that the relevant Gross Affected Funds cash has been identified and reconciled to corresponding bank statements as of April 30, 2010.

E. Investor Allocation Process

1. Once the Debtor identified the loan level detail in the Affected Funds Database, the next step was to identify the corresponding investor and subsequent servicer, if any. The process of identifying the investor and subsequent servicer involved utilizing the TBW Servicing System, specifically Access database which included all the loans in the TBW Servicing System by Investor Code (“the Lookup Database”; (see Section [III] of the Report). The Debtor compared the Lookup Database to the Affected Funds Database, which produced the Final Allocation Database. The Final Allocation Database combined the investor and subsequent servicer information with each cash transaction identified.

2. The Debtor utilized formulas in the process of applying the Lookup Database to the Affected Funds Database. The formulas were applied to data in order to identify loans in which (i) the payment did not relate to a typical monthly borrower payment, and (ii) payments were received after a paid in full (“PIF”), short sale, charge off, or service release date. The results of the formula were captured in the “Final Investor” field of the Final Allocation Database, and were as follows:

a. The appropriate investor;

b. Blank or “Still Under Review” – this population was followed-up by a manual review process to assess ownership of the funds. In general, blank items relate to transactions in which the loan number does not have a match on the Lookup Database. The “Still Under Review” classification at this stage of the analysis was preliminary. The procedures described below detail how the final “Still Under Review” population was finalized as reflected in Table 1 of the Report and Exhibits C through E and I.

3. The manual review process was necessary for over 1,000 deposited items where the ownership of the funds was not clear. The items are flagged in the Debtor’s database as “Still Under Review” or blank. The Debtor performed the following in connection with the manual review:

a. The Debtor developed a database that documented a majority of the allocations of ownership completed during the extensive manual review process (the “Manual Review Database”). The data from the Manual Review Database was added to the results of the overall analysis to reflect the appropriate investor allocation.

b. The Debtor added the final ownership field in the Final Allocation Database to reflect the appropriate investor allocation. If the final


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allocation was not consistent with the investor from the “Lookup Database”, the Debtor documented the manual allocation with a flag in a field entitled “manual adjustment.”

II. Book-to-Bank Reconciliations and Servicing Advances Reconciliation

A. Overview

1. A significant effort was necessary to prepare the Book-to-Bank Reconciliations and the Servicing Advances Reconciliation. This was due to a number of factors, including, among others:

a. Former TBW senior managers were not available.

b. TBW’s Servicing System did not have systematic reconciliation reports.

c. It was necessary to develop/populate multiple Access databases due to the volume of loans (over 512,000) and transactions (millions) involved in the reconciliations.

d. Separate manual calculations of losses incurred on short sales for each loan by investor were necessary to calculate unreimbursed advances and proceeds due to the investor.

e. Certain data from the Servicing System was not in usable format requiring manual efforts to combine loan data in Excel spreadsheets and Access databases.

f. Thousands of individual PDF reports from the Servicing System were utilized and/or included in the Excel spreadsheets and Access databases.

g. All borrower payments from July 1 to August 3, 2009 (July 16 to August 3, 2009 for Freddie Mac) in the Servicing System were reconciled to respective investor custodial P&I bank accounts which included hundreds of thousands of transactions.

h. All information reported to Freddie Mac (on Freddie Mac’s MIDANET reporting application) by TBW from June 15 to August 4, 2009 was imported to an Access database.

i. The Debtor had to determine how remittance programs historically operated for each individual investor at TBW. This was necessary in order to prepare reconciliations for each investor.


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j. Freddie Mac expense items included in the P&I book-to-bank reconciliation that were historically provided to TBW had to be independently calculated.

B. Servicing Shortfalls (Table 4 and related Exhibits)

1. P&I Shortfalls - See Section C.1. below for Net P&I Advances which resulted in a P&I Shortfall.

2. Escrow Shortfalls - Escrow Shortfalls were calculated per the Escrow Book-to-Bank Reconciliation included in Exhibit O. The steps in this reconciliation were as follows:

a. August 3, 2009 Book Balance - Obtained loan level Escrow balances (including borrower T&I, loss drafts and unapplied balances) for each loan from the Servicing System. The Debtor designed and developed an Access database to store the Escrow balances. The Debtor developed queries to extract the loan level data from the servicing system, organized the data, reconciled the data for completeness and loaded the data into the Debtor’s Access database.

b. August 4, 2009 Escrow Funds - Obtained investor custodial T&I bank statements to validate the August 4, 2009 balances. The Debtor obtained loan detail for the bank balances of the California and Illinois Impound Accounts and allocated to investors accordingly. These bank balances were used to compare to the August 3, 2009 book balance.

3. EDCA Shortfalls - EDCA Shortfalls were calculated per the EDCA Book-to-Bank Reconciliation detailed in Exhibit P. The steps in this reconciliation were as follows:

a. Created a list of checks issued and still outstanding for the Platinum bank account.

b. Researched Platinum information provided to the Debtor to adjust the outstanding check list for checks that cleared in bulk bank transactions.

c. Adjusted the outstanding check list for checks issued pursuant to the Borrower Protocol and for checks issued on and subsequent to August 4, 2009.

d. The Debtor compared the remaining outstanding checks to related Colonial, Platinum and Seaside balances to determine the EDCA shortfall.


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C. Unreimbursed Advances and Unpaid Service Fees (Table 5 and related Exhibits)

1. The P&I Book-to-Bank Reconciliation detailed in Exhibit M shows net P&I Advances for which TBW was not reimbursed. Such advances include each of the following items along with the steps described below for how each item was determined:

a. P&I Advances - Obtained loan level reports from the Servicing System that provided the total P&I advances on each loan. The Debtor developed queries to extract the loan level data from the Servicing System, organized the data, reconciled the data for completeness and loaded the data into the Debtor’s spreadsheets and Access databases. The debtor validated the results from the Servicing System by recalculating for each loan an expected P&I advance amount based on delinquency status of each loan.

b. July Scheduled Remittances - Obtained the wire remittance amounts between July 1, 2009 and August 3, 2009 for each Investor and the related supporting remittance reports. The form of the data required the Debtor to manually extract and reconcile the loan level data to be used in the Debtor’s spreadsheets and Access databases.

c. Borrower Collections - Obtained borrower payments received by TBW and posted in the Servicing System between July 1, 2009 and August 3, 2009. The debtor validated and reconciled the daily borrower payments received to the investor custodial P&I accounts.

d. Prepaid Borrower Payments - Obtained loan level reports from the Servicing System that provided the prepaid borrower payments on each loan. The form of the data required the Debtor to manually extract and reconcile the loan level data to be used in the Debtor’s spreadsheets and Access databases.

e. Other P&I Items Detailed in Exhibit N

i. Unapplied balances - Obtained the unapplied balances for each affected Ginnie Mae loan from the Servicing System.

ii. Seller Servicer Remittance Analysis Balance - Obtained the Freddie Mac issued Seller/Servicer Remittance Analysis report as of August 4, 2009 which provides this balance. The Debtor reviewed/analyzed historical remittance activity between TBW and Freddie Mac from May 2008 through August 4, 2009 to confirm the business activity and support the balance.

iii. Private Investor Funds - Obtained reports and historical remittance amounts on the related MBS to calculate the amount.


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iv. July ARC Curtailments - Obtained loan level reports from the Servicing System that provided the July ARC Curtailments on each loan. The form of the data required the Debtor to manually extract and reconcile the loan level data to be used in the Debtor’s spreadsheets and Access databases.

v. Guaranty Fee - Obtained Ginnie Mae pool level information from the Servicing System that provided the guaranty fee. The Debtor confirmed that the July guaranty fee was not paid by August 4, 2009.

vi. Foreclosure claims - The Debtor identified the foreclosed loan population from the Servicing System and spreadsheets historically maintained by TBW. The Debtor calculated incremental claim amounts over and above claims previously filed with and paid by Freddie Mac, and claim amounts where claims were either filed or not yet filed with Freddie Mac which remain unpaid.

vii. Repurchases - The Debtor identified a number of repurchased loans where the amount for the repurchases remains unpaid. This is included as an amount owing to Freddie Mac.

viii. Compensating Interest - The Debtor identified the affected loans paid in full and independently calculated the interest amount under the terms of the compensating interest criteria of the Freddie Mac Seller/Servicer Guide.

ix. Same Month Pooling - The Debtor identified the affected loans and independently calculated the interest amount under the terms of the Same Month Pooling criteria of the Freddie Mac Seller/Servicer Guide.

x. Reserve Holdback - Obtained the amount included in the custodial P&I account relating to the Reserve Holdback provisions of the securitization contract.

2. T&I Advances- In order to calculate these amounts, the Debtor started by obtaining loan level T&I balances for each loan service released to each investor. The Debtor designed and developed an Access database to store the T&I balances. The Debtor developed queries to extract the loan level data from the Servicing System, organized the data, reconciled the data for completeness, and loaded the data into the Debtor’s Access database. The Debtor reconciled the loan population and loan balances to each trial balance provided to each investor’s successive servicer(s).


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3. Corporate Advances – In order to calculate these amounts the Debtor started by obtaining loan level Corporate Advance balances for each loan service released to each investor. The Debtor designed and developed an Access database to store the Corporate Advance balances. The Debtor developed queries to extract the loan level data from the Servicing System, organized the data, reconciled the data for completeness, and loaded the data into the Debtor’s Access database. The Debtor reconciled the loan population and loan balances to each trial balance provided to each investor’s successive servicer(s).

4. Other Unreimbursed Items detailed in Exhibit Q were calculated as follows:

a. HUD Claims - The Debtor identified short sales and foreclosed loan population based on the Servicing System and spreadsheets historically maintained by TBW. The Debtor calculated the claim (for both filed and unfiled claims as of August 4, 2009) amounts which remain unpaid.

b. Modifications - The Debtor identified loan modifications based on the Servicing System and spreadsheets historically maintained by TBW. The Debtor calculated the claim (for both filed and unfiled claims as of August 4, 2009) amounts which remain unpaid. The claim amount also includes incentive fees which remain unpaid.

c. Excess UPB - The Debtor identified loans with principal balance differences. The Debtor calculated the differences to identify the amounts which remain unpaid.

d. Short Sale Claims - The Debtor identified short sales based on the Servicing System and spreadsheets historically maintained by TBW. The Debtor calculated the incentive claim amounts which remain unpaid.

5. Unpaid Service Fees - The Debtor developed queries to extract the loan level data from the Servicing System, organized the data, reconciled the data for completeness and loaded the data into the Debtor’s spreadsheets and Access databases. The Debtor calculated the service fee due on each loan up through each loan’s service release date.


Exhibit B

Overview of Asset Reconciliation Procedures


EXHIBIT B

OVERVIEW OF ASSET RECONCILIATION PROCEDURES

Page 1

As more fully described in the Debtor’s Final Reconciliation Report, the Asset Reconciliation has included the investigation and analysis of certain mortgage assets and funding sources relevant to issues in this bankruptcy case.1 In connection with this process, the Debtor has:

a. interviewed and met with numerous TBW personnel;

b. reviewed certain electronic data stored on TBW’s servers for key operational areas;

c. built numerous databases that include loan level and cash activity details;

d. identified loans sold to investors and traced cash payments from investors to loans; and

e. traced cash disbursements from Ocala Funding to specific loans purchased by Ocala Funding.

Each of these tasks is discussed in more detail below.

I. Interviews of TBW Personnel

In connection with the Asset Reconciliation, the Debtor, through Navigant support staff and attorneys at Troutman Sanders, has conducted multiple interviews and meetings with TBW personnel in an attempt to understand how TBW operated and the types of information generated and relied upon in its day-to-day operations. The functional area and the title of individuals the Debtor met with are identified below:

FUNCTIONAL AREA TITLE

Accounting Controller Accounting Director, Financial Planning Accounting Director, Accounting Operations Accounting Senior Financial Analyst Accounting Cash Department Treasury VP, Asset Acquisition MBS Delivery Specialist Investor Services Director, Reporting & Operations Analysis Investor Services Director, Investor Services

1 All Capitalized terms not otherwise defined herein shall have the meaning set forth in the Final

Reconciliation Report.


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Page 2

FUNCTIONAL AREA TITLE Loan Administration Executive Director

By the time the Asset Reconciliation began in early October 2009, no one from the

Capital Markets group remained with the Debtor.2 In addition, only one member of the Treasury group still remained with the Debtor. This individual, however, left the Debtor shortly after the Asset Reconciliation started. The Debtor has also not interviewed anyone from Colonial who was involved with TBW or from LaSalle or its successor Bank of America in connection with its involvement with Ocala Funding.

II. Analysis of the Debtor Network Drives, Shared Folders and Email

In conjunction with interviewing the available Debtor personnel, the Debtor, through Navigant support staff and attorneys at Troutman Sanders, also conducted an in-depth forensic analysis of the following Debtor network drives and shared folders:

• Accounting • Secondary • Treasury • Investor Services

1. These network drives and shared folders contained hundreds of gigabytes of data and tens of thousands of individual files. The purpose of the Debtor’s analysis was to determine what types of information were stored electronically and to identify the information that could be potentially relevant to the Asset Reconciliation. The following is a general overview of the types of information that the Debtor believes is relevant to the Asset Reconciliation:

DOCUMENT TYPE SUMMARY OF DOCUMENT TYPE

Bank of America Early Purchase Facility “Advance Tape”

These reports contain the loan level detail underlying the agency pool that was advanced on the BoA EPF.

Bank of America Early Purchase Facility “Funding Worksheets”

These reports identify the pools that were advanced on the BoA EPF. These reports also contain information regarding the purchase price, the initial payment and the holdback payment for pools assigned to the BoA EPF.

2 This group was also commonly referred to as Secondary Markets.


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Page 3


Bank of America/LaSalle Daily Ocala Funding bank statements

TBW downloaded bank statements every day from LaSalle. These bank statements showed all activity within the account that day. TBW personnel would mark up the daily bank statements in an effort to identify the source of deposits and the purpose for the disbursements.

COLB Paydown Reports This is a report prepared daily by Colonial. This report tracks all investor deposits into the Investor Funding account and shows how these deposits were used. In general, the deposits in this account were applied to pay down TBW’s warehouse lines including COLB and the AOT.

Colonial Advances Report This is a schedule included in the daily COLB, Seaside and Platinum Pipeline reports. The schedule included in the report identifies the pools advanced on the AOT and the Overline on that day and the advance amount.

Colonial Bank Statements TBW had over one hundred different bank accounts with Colonial. The key Colonial operating accounts with respect to the Asset Reconciliation are the Investor Funding and Colonial Master Advance accounts. The Investor Funding accounts were the accounts where proceeds from loan sales were deposited. The Master Advance account is the account where loans on COLB were funded, certain loans were repurchased and other Colonial related fees and expenses were paid. The key Colonial custodial accounts include the CFCA and the Freddie Mac and Ginnie Mae P&I accounts.

Colonial Payment Reports This is a schedule included in the daily Colonial Pipeline reports for COLB, Seaside, Platinum and the Overline. These schedules identify the loans that were paid-off the facility that day.


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Colonial Pipeline Reports Report prepared daily by Colonial. These reports included several different schedules including a “pipeline” report showing all loans outstanding on (1) COLB, (2) Overline, (3) Seaside and (4) Platinum. The COLB pipeline reports go back to well before 2007. The Seaside pipeline reports start in December 2008, while the Platinum reports begin in June 2009. The Overline pipeline report is included with the COLB pipeline report.

Colonial Purchase Reports This is a schedule included in the daily Colonial Pipeline reports for COLB. This schedule shows the loans that were purchased by COLB that day.

Daily Cash Proofs These reports were prepared everyday by Investor Services. These reports identified where money in the CFCA account was transferred.

DBK and BNP Pipelines These were daily reports prepared by TBW that identified the Ocala Funding loans that were assigned to DBK and BNP. These reports were sent to BNP and DBK directly by TBW starting in July 2008.

Freddie Mac Form 996E This is a Freddie Mac form titled “Warehouse Lender Release of Security Interest.” It was prepared by TBW and sent to LGTS or Colonial for execution. Once the form was signed by LGTS or Colonial, TBW would forward it to Freddie Mac. It is the Debtor’s understanding that Freddie Mac would not release funds without an approved 996E.

Freddie Mac Funding Detail Reports

These reports were downloaded directly from Freddie Mac on a daily basis by Investor Services. These reports identified the loans that were purchased that day by Freddie Mac. Investor Services used these reports to change a loan’s Investor Code in the Servicing System to Freddie Mac’s code.

Funding Management System This is the system used by TBW to manage the funding of loans. This system identifies, among other things, the warehouse line used to fund the loan, the date the loan was funded and the account where the wire was sent to.


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Ginnie Mae Form 11705 and 11706 Form 11705 contains pool level data while Form 11706 identifies the specific loans included in the Ginnie Mae pool.

Ginnie Mae Text Files These are files that were downloaded directly from Ginnie Mae by Investor Services. These files identified which loans were assigned to which Ginnie Mae pool and when it was assigned. Investor Services used these files to make sure that the investor loan number for all Ginnie Mae loans was correctly identified in the Servicing System.

LGTS Daily Collateral Reports LGTS would send TBW collateral lists each morning identifying all “on-hand” and “active release” Ocala Funding loans. Beginning in the fall of 2008, LGTS would also send a separate collateral list to BNP and DBK that identified the loans assigned to each investor.

Ocala Funding Collateral Account Monthly Schedules

These are Excel files maintained by TBW. These files summarize all of the daily cash activity for, among others, the Ocala Funding, DBK and BNP collateral accounts. This file also includes a summary description of what the transaction related to. In general, this description was similar to the handwritten notes included on the daily Ocala Funding bank statements.

Ocala Funding Gatekeeper Reports These reports were prepared by TBW’s Capital Markets (a/k/a Secondary) group and then forwarded to Treasury before being sent on to LaSalle. These reports identified the loans that were being submitted for approval (by LGTS) for purchase that day.

Ocala Funding Pipeline Reports Report prepared daily by TBW. It does not appear this was distributed externally on a regular basis. This report includes a pipeline report that identified the loans allegedly outstanding at Ocala Funding. This report also identified the loans advanced and paid down each day. The Ocala Funding Pipeline Reports appear to have begun in July 2005.

Purchase Advices In general, TBW retained PDF versions of third party (e.g., Freddie Mac, Wells Fargo) purchase advices. The purchase advices are one source that can be used to trace sale proceeds to specific loans.


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QRM QRM was TBW’s secondary markets trading system.

Rules System This system provides historical loan level information. This dataset identifies, among other things, the loan type, last warehouse bank, broker, underwriter, MERS, sold date and investor.

TBW Master Pipeline Report Report prepared each day by TBW. This spreadsheet aggregates all of the loans outstanding on TBW’s various funding sources each day. These reports start in August 2007. The name of this report was changed to the Funding Report in July 2009.

Wire Breakdowns TBW prepared daily wire breakdowns by investor to track loan sale proceeds deposited into, among others, the Investor Funding and the Ocala Funding Collateral accounts. These wire breakdown reports allowed TBW to trace specific deposits to specific loans.

2. In addition to the data contained on the Debtor’s servers, the Debtor created a

database containing over 2 million email records and attachments for key TBW custodians. This discovery database includes records dating back to as early as 2002. The email discovery database was used extensively by the Debtor to research specific loans and cash movements as well as to respond to specific requests from outside parties.

III. Databases Created by the Debtor

Based upon the Debtor’s review of TBW’s records, it became apparent that TBW did not have a centralized system that allowed a user to trace the history of a loan from origination all the way through to purchase by an investor. In fact, it appears TBW relied upon Excel spreadsheets to manage its day-to-day operations and track the movement and sale of loans. In order to perform the Asset Reconciliation, the Debtor concluded that it would be necessary to create numerous databases that would allow it to track loans from their inception through sale. A list of the databases created, the source files used to create them, the time period covered and the number of records in each one is contained in Exhibit S.

IV. Identification of Loans to Analyze for the Asset Reconciliation

The Debtor has worked with the FDIC and Bank of America to identify the mortgage loans that are the subject of the Asset Reconciliation. The sources relied upon for the OFCP, COLB and AOT mortgage loans that were analyzed by the Debtor are discussed below.

3. Ocala Funding Mortgage Loans - The Debtor, with assistance from Bank of America, identified a total of 9,111 (which includes all of the TRO Loans) mortgage loans that, according to the LGTS collateral management system, are collateral for the OFCP – i.e., either


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“on hand” or on “active release” as of August 2009. This list of loans was compiled from four different sources: (1) the August 5, 2009 LGTS collateral report; (2) the August 13, 2009 LGTS collateral report; (3) the list of TRO Loans attached to Bank of America’s complaint filed against Colonial; and, (4) a physical count conducted by LGTS after August 2009 of the mortgage loans “on-hand” – i.e., in the physical possession of LGTS.

4. COLB Mortgage Loans – The FDIC provided the Debtor with a list of 8,714 COLB mortgages that were still outstanding when Colonial was seized on August 14, 2009. It is the Debtor’s understanding that this list was generated from Colonial’s internal mortgage loan accounting system. The Debtor reconciled this list to the August 5, 2009 Colonial Pipeline report, which was the last one TBW received from Colonial. There are 142 mortgages on the August 5, 2009 pipeline report that are not on the collateral list provided by the FDIC. The Debtor has been able to account for all 142 mortgage loans and has identified the reason why they are not on the FDIC list.

5. AOT Mortgage Loans – Colonial typically emailed to TBW on a daily basis two spreadsheets related to the AOT. One of the spreadsheets identified the trades that were outstanding on the AOT. The second spreadsheet identified the mortgage loans “on the AOT” and the trades the loans were assigned to. The last date these two spreadsheets were provided to TBW by Colonial was July 24, 2009. According to the loan level spreadsheet, there were 7,867 loans assigned to the AOT as of this date.

6. The FDIC provided the Debtor with a list of loans “on the AOT” from a source that had been brought to the FDIC’s attention.3 This list, however, included 9,304 loans that were supposedly “on the AOT.” While all 7,867 loans on the July 24, 2009 list are included in the 9,304, there are 1,437 that are not. Based on TBW’s Master Pipeline reports, nearly all of the 1,437 additional AOT loans were on the AOT at different points in time prior to August 5, 2009.4 Nonetheless, for purposes of the Asset Reconciliation, the Debtor has relied upon the list of 9,304 AOT mortgage loans.

7. The Debtor also prepared an aging analysis of the Ocala Funding and COLB mortgages. The purpose of this analysis was to identify a reasonable date range that could be used to determine how far back in time the information captured in the databases built by the Debtor should go in order to reasonably account for activity involving the subject loans. The following table summarizes the aging analysis for the Ocala Funding mortgages.

3 This list has not been validated by the FDIC. 4 As of the August 5, 2009 Master Pipeline Report, which was the last one prepared by TBW, 64 of the 1,437

were listed as being “on the AOT” and 4 were on the Overline.


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TABLE 1Aging Analysis of Ocala Funding Loans

Loan StatusPer LGTS

Prior to2008 2008

January 1, 2009 March 31, 2009

April 1, 2009 - June 30, 2009

July 1, 2009 - August 14, 2009

Not Found in Reports Total

"Active Release" [A] 0 1 195 4,222 3,853 12 8,283

"On-Hand" [B] 201 40 0 46 437 104 828

9,111

[A] Based on the date the loan w as shipped by LGTS to an Investor. There are 12 loans listed as Active Release that have no Release Date. These loans w ere identif ied by BoA through its physical inventory count.[B] Based on the Advance Date of the loan per the daily TBW Ocala Funding Pipeline Reports.

8. Over 96% or 8,753 of the Ocala Funding mortgages were either shipped by LGTS to investors or added as collateral to the OFCP in 2009. The next table summarizes the aging analysis for the COLB mortgages.

TABLE 2Aging Analysis of Loans Outstanding on COLB Based on the "Inception Date"

Loans on Construction

Sublim itPrior to

2009 [A]

January 1, 2009 March 31, 2009

April 1, 2009 - June 30, 2009

July 1, 2009 - August 14, 2009

No Inception

Date [B]Total

Loans

16 6 18 3,678 4,991 5 8,714

[A] The earliest Colonial Pipeline Report w e have loaded into a database is 09/02/08. [B] These loans w ere on COLB on the Wet Sublimit as of 08/06/09.

9. Over 99% or 8,687 of the COLB mortgages were assigned to the COLB in 2009.

10. Based upon the above aging analysis, the Debtor believes its databases should at least capture data for the period January 2009 through August 5, 2009. However, in order to account for as many of the subject loans as possible, the Debtor has also captured data for periods prior to 2009. The exact periods covered by each database are identified in Exhibit S to the Report.

V. Tracing Mortgage Loans to Specific Investors

The next step in the Asset Reconciliation was to determine whether there was any indication that the subject loans were purchased by third party investors, such as Freddie Mac or Wells Fargo. This step involved: (1) identifying the investor that the subject loans are currently assigned to, and (2) tracing cash payments from investors to the subject mortgage loans. The Debtor relied upon the following data sources in connection with this analysis:


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• QRM • Lookup Database • Freddie Mac Funding Detail Reports • TBW Prepared Investor Wire Breakdowns and Investor Purchase Advices • Ginnie Mae Text Files • BoA EPF

11. QRM was TBW’s secondary marketing trading system. TBW used QRM to

manage its hedging activities and loan sales to third party mortgage investors. As such, QRM is essentially the starting point for understanding why a loan is assigned to a specific investor. For example, if Wells Fargo is identified in QRM as the investor for a loan, one would expect the loan to be:

a. coded to Wells Fargo in the Servicing System;

b. in a TBW prepared wire breakdown for Wells Fargo that ties to a deposit from Wells Fargo;

c. and in a purchase advice from Wells Fargo.

12. As discussed in more detail in the Report, the Lookup Database is based upon the Servicing System. Each loan in the Servicing System was coded to a specific investor. When loans were initially funded or purchased by TBW, they would be assigned to the Investor Code for the warehouse lender that provided the funds. Once a loan was sold, the Investor Code would be changed in the Servicing System to the purchaser’s Investor Code. This change was made by Investor Services, not TBW’s Treasury or Secondary Markets groups. The Investor Code assigned to a loan would determine which investor P&I and escrow account the borrower payments would be transferred to. As such, loans needed to be properly coded to investors in order for TBW’s servicing operations to function reliably.

13. While QRM and the Lookup Database are reliable indicators of who the investor is for each loan, they do not contain information that allows one to tie a cash payment from the investor directly to the loan.

14. In contrast, the Freddie Mac Funding Detail Reports, the TBW Investor Wire Breakdowns, the Investor Purchase Advices, the Ginnie Mae Text Files and the BoA EPF all can be used to trace cash payments to specific loans. Each one of these sources is discussed in more detail below.

A. Freddie Mac Funding Detail Reports

15. As previously mentioned, on a daily basis TBW’s Investor Services group would download the Funding Detail Reports from Freddie Mac. These reports include information regarding the date a loan was purchased and the amount of principal purchased. These reports, however, do not tie exactly to the cash payment made by Freddie Mac for the loan because,


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among other things, they do not identify the premium or discount paid for the loan.5 Nonetheless, the principal purchased should be reasonably close to the total cash paid for the loan. For purposes of the Asset Reconciliation, the Debtor has loaded into a database all of the daily Freddie Mac Funding Detail Reports stored on the Investor Services network drive for the period November 3, 2008 through August 4, 2009.

16. The Debtor endeavored to validate the database and its source information by comparing TBW’s and Ocala Funding’s daily Freddie Mac related cash receipts6 to the total daily loan principal purchased per the Funding Detail Reports. In other words, the Debtor attempted to reconcile actual cash receipts from Freddie Mac to the principal balance of the loans purchased by Freddie Mac.

17. Freddie Mac deposits into the following bank accounts were captured in this analysis: (1) TBW Investor Funding, (2) Seaside Investor Funding and (3) Ocala Funding Collateral. The Debtor’s analysis covered Freddie Mac cash receipts and principal purchased during the period December 1, 2008 through August 4, 2009. The results of this reconciliation are summarized below:

TABLE 3Total Freddie Mac Related Deposits into the TBW and Seaside Investor Funding and Ocala Funding

Collateral Accounts Compared to the Total Principal Purchased per the Funding Detail Reports for the

Period December 1, 2008 Through August 4, 2009

Freddie Mac Cash Window

Deposits

Freddie Mac MBS Settlement Proceeds

TotalFreddie Mac

Related Deposits

Principal Purchased Per Funding Detail

Reports Difference

$ 8,380,335,177 685,497,692$ 9,065,832,869$ 8,977,184,129$ [A] 88,648,739$

[A] This number is calculated by taking the total principal purchased from the Funding Detail Reports excluding the principal purchased for pools assigned to the EPF.

18. As the above table highlights, between December 1, 2008 and August 4, 2009, total Freddie Mac related cash receipts exceeded the total principal purchased by Freddie Mac by

5 The Freddie Mac “Loan Purchase Statement” (a/k/a purchase advice) is a Freddie Mac document that

identifies the exact amount of cash paid by Freddie Mac for each loan. It was TBW’s practice to retain PDF copies of all Freddie Mac purchase advices for each Freddie Mac cash window related deposit. While TBW continued this practice for deposits into the Investor Funding accounts, beginning in or about January 2009, TBW stopped retaining copies of Freddie Mac purchase advices for Freddie Mac deposits into the Ocala Funding Collateral account.

6 There are two forms of Freddie Mac related cash receipts: (1) deposits directly from Freddie Mac for cash window loan sales and (2) deposits from Bank of New York covering proceeds from the settlement of Freddie Mac securities.


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$88.6 million or approximately 1 percent. This difference is consistent with the fact that Freddie Mac’s actual cash payment included accrued interest and premiums or discounts and, as such, would necessarily vary from the principal purchased. With respect to the period December 1, 2008 through August 3, 2009, it is the Debtor’s view that the Funding Detail Reports in the Debtor’s possession are complete and can be relied upon to trace cash receipts from Freddie Mac to specific loans.7

19. On August 4, 2009, the receipts from Freddie Mac exceeded the principal purchased per the available Funding Detail Reports by $7.7 million or by over 32 percent. As such, the Funding Detail Reports for August 4, 2009 are not complete. The Debtor, however, has located four TBW wire breakdowns dated August 4, 2009 that identify the source as Freddie Mac. These wire breakdowns tie exactly to the individual deposits from Freddie Mac on August 4, 2009. In addition, there are Freddie Mac purchase advices that agree to the information in the TBW prepared wire breakdown.

20. In conclusion, the Debtor believes that between the Funding Detail Reports and the August 4, 2009 Freddie Mac wire breakdowns, it has the necessary data to trace cash payments from Freddie Mac to specific loans for the period December 1, 2008 through August 4, 2009.

B. TBW Prepared Wire Breakdown and Investor Purchase Advices

21. It was TBW’s practice to prepare what it referred to as a wire breakdown for each deposit from an investor. The wire breakdown identified the date of the wire, the amount of the wire, the source of the wire (e.g., Wells Fargo), the individual loans purchased and the cash payment for each loan that made up the total deposit. There were separate wire breakdowns prepared for Ocala Funding and the TBW and Seaside Investor Funding accounts.8 It appears that at least the Investor Funding wire breakdowns were shared with Colonial.

22. These wire breakdowns were retained in the Secondary Markets shared folder and organized by year and month. TBW has copies of wire breakdowns going back to well before 2007. The purchase advices were also retained in the Secondary Markets shared folder. They are organized by year, month and investor.

23. Based on internal TBW procedure memorandums, it appears that for major investors, such as CitiMortgage, Wells Fargo and Freddie Mac, TBW would create the wire breakdown by downloading or copying the loan purchase details directly from the investor’s website. In addition to downloading the loan details, TBW would also download a copy of the actual purchase advice from these investors.

7 While there are minor differences between QRM and the Freddie Mac Funding Detail Reports, there are

49,429 loans in 2,607 pools where both the pool number and the loan number match exactly between the two data sources.

8 Wire breakdowns related to the TBW Investor Funding account would include the phrase “C-Wire” in the file name, while Ocala Funding related wire breakdowns would include the phrase “Ocala Funding.”


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24. While TBW also prepared wire breakdowns for smaller investors, the process used to create them is not clear. TBW did, however, retain copies of the loan level purchase advices for sales to smaller investors. The Debtor has not attempted to reconcile all of the wire breakdowns for the smaller investors to purchase advices. The limited number of purchase advices the Debtor has reviewed, however, have been consistent with the wire breakdown and other information.

25. The purchase advices for the settlement of securities were sent to TBW by Bank of New York via email. Unlike the other investor purchase advices, the purchase advices from Bank of New York did not include loan level detail. More specifically, they only identified the pools (e.g., Freddie Mac, Ginnie Mae) that settled that day.

26. In general, the Bank of New York wire breakdowns prepared by TBW were loan level specific. There were, however, some wire breakdowns that only identified the pool or were a combination of loan level and pool level detail. While the Debtor has not compared all of the Bank of New York wire breakdowns to the purchase advices, the Debtor is aware of instances where the pools identified in the wire breakdown are not the same as the pools identified in the Bank of New York purchase advice for the same day. In fact, according to QRM the pools identified in the wire breakdowns had settlement dates prior to the date of the wire breakdown.9

27. There are also numerous instances where a so-called “funding adjustment” was made to the Bank of New York settlement proceeds deposited into the TBW Investor Funding account. The effect of this adjustment was that it reduced the amount available to pay down the appropriate warehouse lines.10 While the Debtor has not analyzed each “funding adjustment,” it appears that the “funding adjustment” would at least initially be transferred to other TBW accounts.

C. Wire Breakdown Database and Reconciliation to Investor Deposits

28. The Debtor has loaded into a database all of the TBW prepared wire breakdowns for the period June 1, 2008 through August 5, 2009. In order to test the completeness of the wire breakdowns, the Debtor has tied deposits from certain investors to the wire breakdown attributed by TBW to that deposit and that investor.

29. In terms of Ocala Funding, the Debtor divided Ocala Funding Collateral account investor deposits between non-Freddie Mac and Freddie Mac investors. The following table summarizes the results of the Debtor’s reconciliation of non-Freddie Mac deposits to “matching” wire breakdowns for the period June 1, 2008 through August 4, 2009.11

9 In general, the pools in the Bank of New York wire breakdowns can be found in Bank of New York

purchase advice corresponding to the settlement date indicated in QRM. 10 Some of these funding adjustments were in the tens of millions of dollars. 11 For purposes of this analysis, in order for a wire breakdown to be considered “matching,” both the amount

and the source of the wire breakdown must correspond to the source of deposits.


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Total Non-Freddie Mac Investor Deposits into the Ocala Funding Collateral Account and Total

Matching TBW Wire Breakdowns for the Period June 1, 2008 to August 4, 2009

LineSource of Funds

Per TBWTotal

Deposits

TotalMatching Wire Breakdowns Difference

1 Bank of America (BoA) 46,025,987$ 14,764,260$ 31,261,727$ [A]

2 Bank of New York (BONY) 269,476,622 207,614,937 61,861,686 [A]

3 CitMortgage 630,009,777 625,862,143 4,147,634 [B]

4 CSFB AOT 715,422,323 704,582,902 10,839,421 [C]

5 Franklin American 75,747,302 75,687,302 60,000

6 Wells Fargo 270,158,420 267,880,873 2,277,547 [D]

7 Others 68,591,493 68,388,034 203,458

8 Total 2,075,431,924$ 1,964,780,451$ 110,651,473$

9 Total Exlcuding BoA and BONY 1,759,929,315$ 1,742,401,254$ 17,528,061$

[A] The missing wire breakdowns all include transfers from the Investor Funding account.[B] We have not been able to locate a wire breakdown for deposits on 12/30/08 and 12/31/08.[C] We have not been able to locate a wire breakdown for one deposit on 12/30/08.[D] We have not been able to locate wire breakdowns for deposits that were made between 12/26/08 and 12/31/08.

TABLE 4

30. Excluding Bank of America and Bank of New York, the Debtor was able to

match wire breakdowns to all but $17.5 million of deposits from non-Freddie Mac sources (See Table 4, Line 9). In order to further test the reliability of the Ocala Funding related wire breakdowns, the Debtor compared a small sample of CitiMortgage and Wells Fargo purchase advices to the corresponding wire breakdown (See Table 4, Lines 3 and 6).

31. None of the deposits in the above table attributed by TBW to Bank of America or Bank of New York actually involved transfers from those two entities (See Table 4, Lines 1 and 2). All of the Bank of America and the vast majority of the Bank of New York transfers came directly from the Investor Funding account. The Bank of America difference is due to a missing wire breakdown for a transfer on May 12, 2009 to Ocala Funding. The Bank of New York difference can be traced almost entirely to two missing wire breakdowns on April 20th and April 21, 2009.

32. With respect to Freddie Mac, the Debtor was able to tie the vast majority of deposits from Freddie Mac between June 1, 2008 and December 31, 2008 to Freddie Mac related wire breakdowns that had been saved in the Secondary Markets shared folder. In 2009, however, TBW’s Secondary Markets shared folder contained almost no Ocala Funding wire breakdowns or purchase advices for Freddie Mac deposits. This is despite the fact Freddie Mac deposited over $5.6 billion into the Ocala Funding Collateral account in 2009.


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33. The Debtor undertook an extensive review of TBW’s internal communications in an effort to track down the missing wire breakdowns and purchase advices. Based upon this review, the Debtor was able to locate copies of Ocala Funding Freddie Mac wire breakdowns that tied to $1.43 billion of the $1.45 billion in proceeds received from Freddie Mac during the period May 15, 2009 through August 4, 2009.12

34. The Debtor, however, was only able to locate wire breakdowns corresponding to $488.8 million of the nearly $4.2 billion deposited in the Ocala Funding Collateral account by Freddie Mac during the period January 1, 2009 through May 14, 2009. As such, the primary source available to identify Ocala Funding mortgages sold to Freddie Mac during this period is the Freddie Mac Funding Detail Reports.

35. The Debtor tested the reliability of the wire breakdowns it was able to locate by comparing the wire breakdown details to the Freddie Mac Funding Detail Reports. The Debtor did not identify any material issues that would indicate the wire breakdowns were not reliable. Based upon this additional testing, the Debtor believes that the Freddie Mac wire breakdowns that were located can be relied upon to trace sales proceeds from Freddie Mac to specific loans.

36. Given the problems with the Bank of New York wire breakdowns discussed in paragraphs 26 and 27, the Debtor has elected to place little, if any, reliance upon them as a source for the Asset Reconciliation. The Debtor does, however, believe that wire breakdowns for the other Non-Freddie Mac Investors identified in Table 4 can be relied upon to trace sales proceeds deposited into the Ocala Funding Collateral account to specific loans purchased by those Investors.

37. In addition to analyzing the Ocala Funding Collateral account investor deposits, the Debtor performed the same analysis regarding proceeds from key third party investors that were deposited into the TBW and Seaside Investor Funding accounts. This analysis covered sales proceeds deposited during the period January 1, 2009 through August 5, 2009 and by the following investors: (1) CitiMortgage, (2) Wells Fargo and (3) Freddie Mac (cash window sales).

38. The Debtor focused the reconciliation of deposits to wire breakdowns on these three investors because they are the only third party investors identified as potential third party investors in the 8,714 COLB loans. (See Section VIII below) The results of the Debtor’s analysis with respect to these three investors are summarized below:

12 The Debtor was not able to locate corresponding purchase advices for all of these wire breakdowns.


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TABLE 5Deposits From Key Investors Into the TBW and Seaside Investor Funding Accounts and

Total Matching TBW Wire Breakdowns for the Period January 1, 2009 to August 5, 2009

InvestorTotal

Deposits

TotalMatching Wire Breakdowns Difference

CitiMortgage 38,418,092$ 38,373,759$ 44,333$ [A]

Freddie Mac (Cash Window) 2,171,681,811 2,171,681,811 - Wells Fargo 100,957,418 100,406,182 551,237 [B]

Total 2,311,057,322$ 2,310,461,752$ 595,569$

[A] The difference is due to a 05/20/09 transfer from Ocala Funding to Investor Funding. On the same day of the transfer there was a deposit from CitiMortgage into the Ocala Funding Collateral account. The loan associated with the transfer to Investor Funding is in the 05/20/09 Ocala Funding CitiMortgage wire breakdown.[B] There was a deposit on 08/05/09 from Wells Fargo without a wire breakdown. We have located purchase advices from Wells Fargo supporting this deposit.

39. The loan associated with the one missing deposit attributed to CitiMortgage can be found in an Ocala Funding wire breakdown. In addition, the loans purchased by Wells Fargo for which there is no wire breakdown are identified in a Wells Fargo purchase advice. The Debtor also compared a small sample of CitiMortgage and Wells Fargo wire breakdowns to their corresponding purchase advices and noted no issues.

40. The Debtor also tested the reliability of the Freddie Mac wire breakdowns by comparing them to the Freddie Mac Funding Detail Reports. There were no issues identified that would call into question the reliability of the TBW prepared Freddie Mac related wire breakdowns. As such, the Debtor believes the CitiMortgage, Wells Fargo and Freddie Mac Investor Funding related wire breakdowns can be relied upon to trace sales proceeds from these investors to specific loans sold by Ocala Funding and TBW for at least the period January 1, 2009 through August 5, 2009.

D. Ginnie Mae Text Files

41. As previously mentioned, the Ginnie Mae Text Files were downloaded by the Investor Services group.13 These files identified the issuer id, issuer’s loan number (i.e., TBW), the pool number, the Ginnie Mae loan number, the original principal balance and the “Record Date,” which is equivalent to the month the pool was created.

42. The Debtor has loaded the available Ginnie Mae Text Files into a database for the period December 2008 through August 2009. The Debtor has attempted to verify the reliability of the Ginnie Mae database and, thus, the underlying source documents by performing the following steps: 13 Investor Services downloaded monthly and pool specific files from Ginnie Mae.


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a. Confirm the Ginnie Mae pools that settled;

b. Reconcile settlement proceeds received from Bank of New York for Ginnie Mae securities to the original principal balance of the pools in the Ginnie Mae database that settled that day;14

c. Reconcile the QRM trading data to the Ginnie Mae database.

43. There were 64 pools included in the Ginnie Mae Text Files that were created prior to August 5, 2009 that were scheduled to settle after August 5, 2009. None of these pools settled with TBW.15 The Debtor has carved out these 64 “busted” pools and the loans associated with them into a separate Ginnie Mae database.16 Furthermore, the Debtor only considered loans assigned to settled Ginnie Mae pools in the Asset Reconciliation Analysis.

44. Similar to the Freddie Mac Funding Detail Reports, the Ginnie Mae Text Files do not identify the actual cash paid for each loan or for the entire pool. However, similar to the Freddie Mac Funding Detail Reports, the actual cash settlement proceeds should be reasonably close to the original principal balance of the pool. The following table compares the total settlement proceeds received by TBW for Ginnie Mae related securities for the period December 1, 2008 through August 5, 2009, to the total original principal balance of the Ginnie Mae pools - per the Ginnie Mae Text Files - that settled during that same time frame.

TABLE 6Total Settlement Proceeds Received by TBW on Ginnie Mae

Related Securities Compared to the Original Principal Balance

of the Pools

Settlement Proceeds

Ginnie Mae MBS

Original Principal Balance PerGinnie MaeText Files Difference

$ 6,100,734,594 5,941,831,906$ [A] 158,902,688$

[A] This number is calculated by taking the original principal balance from the Ginnie Mae Text Files excluding the pools assigned to the EPF.

14 QRM is the source for the actual settlement date for the pools in the Ginnie Mae database. 15 The BoA EPF was assigned 42 of the 64 pools. The loans assigned to these 42 pools that did not settle

were service released to Bank of America. 16 None of the loans assigned to these 64 pools were service released to Ginnie Mae’s subsequent servicer.


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45. As the above table illustrates, the Ginnie Mae related settlement proceeds

exceeded the original principal balance of the loans assigned to the pools by approximately $158.9 million or by 2.7 percent. While this variance is greater than the one observed with respect to the Freddie Mac Funding Detail Reports, in the Debtor’s view it does not rise to a level that would suggest the Ginnie Mae Text Files are materially incomplete or unreliable.

46. Since QRM was used to manage all of TBW’s trading activity, the pools in the Ginnie Mae database should also be in QRM. In addition, the loans assigned to the pools in the Ginnie Mae database should be very similar to the loans assigned to the pools in QRM. The Debtor identified all Ginnie Mae pools in QRM that had a settlement date between December 1, 2008 and August 5, 2009 and compared the details of the QRM pools to the details contained in the Ginnie Mae database. The results of this analysis are summarized in the table below

Comparison of Ginnie Mae Pools and Loans in QRM to the Ginne Mae Text Files

Line Source

TotalGinnie Mae

Pools

TotalGinnie Mae

Loans in Pools

TotalGinnie Mae Original Principal Balance

1 QRM 1,219 65,482 11,022,722,949$

2 Ginnie Mae Text Files 1,219 65,485 11,024,454,505

TABLE 7

47. There were a total of 1,219 Ginnie Mae pools in QRM and the Ginnie Mae Text Files that settled between December 2008 and August 5, 2009. The pool numbers are exactly the same in both data sources. Furthermore, the total loans in the 1,219 pools and the aggregate principal balance of the loans in those pools are almost identical between the two sources.

E. BoA EPF

48. The BoA EPF was entered into on March 31, 2009. The BoA EPF allowed TBW to receive upfront cash for agency eligible mortgage pools that had not yet settled with the take-out purchaser. The Debtor has created a database that includes all of the pools and the loans assigned by TBW to the BoA EPF since its inception.

49. The pool information was created from the so-called “funding worksheets” prepared by TBW. These schedules identified, among other things, the pools assigned to the


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BoA EPF that day, the total purchase price, the 95% initial payment and the 5% holdback payment.17

50. The loan level detail captured in the database was developed from the “advance tapes” that were prepared by TBW for the pools assigned to the BoA EPF. These “advance tapes” identified, among other things, all the loans included in the pool and borrower specific information.

51. In an effort to validate the information loaded into the database and, thus, the underlying source data, the Debtor performed the following tasks:

a. Traced the 95% initial payment and the 5% holdback payment per the “funding worksheets” to actual cash receipts from Bank of America;

b. Determined whether the loans assigned to pools in the BoA EPF are in the same pools in the Funding Detail Reports and the Ginnie Mae Text Files.

52. The following table summarizes the results of the Debtor’s cash tracing:

Total Initial Payment and Holdback Payment Due to TBW Per the EPF Database

Compared to Actual Cash Receipts f rom Bank of America

Line Payment Type BoA EPF

Cash Receipts from Bank of

America Difference

1 95% Initial Payment 6,318,224,106$ 6,319,914,945$ (1,690,839)$

2 5% Holdback Payment 332,757,523 293,783,732 38,973,791

TABLE 8

53. As the above table highlights, except for minor differences, TBW received the initial payment from Bank of America for all the pools assigned to the BoA EPF (See Table 8, Line 1). Therefore, the cash receipts from Bank of America are consistent with the “funding worksheets” and, thus, the pool level details included in the BoA EPF database constructed by the Debtor.

54. The nearly $39 million difference between the 5% holdback due TBW and the cash received from Bank of America for the holdback (See Table 8, Line 2) is because TBW was not paid the holdback on pools assigned to the BoA EPF that were scheduled to settle on or after

17 Bank of America paid TBW 95% of the purchase price (i.e., the initial payment) when the pool was

initially assigned to the BoA EPF. The 5% holdback was paid by Bank of America when the pool settled and Bank of America received the proceeds from Bank of New York.


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August 4, 2009. Bank of America did, however, pay TBW the holdback for all pools that settled prior to August 4, 2009.

55. In order to verify that the loans identified in the TBW “advance tapes” were the actual loans assigned to the Freddie Mac and Ginnie Mae pools advanced on the BoA EPF, the Debtor compared the loan level BoA EPF data to the Freddie Mac Funding Detail Reports and the Ginnie Mae Text Files previously discussed. The following table summarizes the results of that comparison.

TABLE 9Comparison of Pools and Loans Assigned to the EPF to the Freddie Mac Funding Detail

Reports and the Ginnie Mae Text Files

Freddie Mac Ginnie MaeSource EPF Pools EPF Loans EPF Pools EPF Loans

Total - Settled 44 4,094 316 27,650

Match with Agency Databases 43 [A] 4,062 316 27,609

[A] The one pool missing from the Freddie Mac Funding Detail Reports Database is Pool 70873013. It settled on August 4, 2009. We have not been able to locate all of the Funding Detail Reports for this date. It was included in the recent documents received from Freddie Mac.

56. The pools and the loans assigned to the pools included in the Debtor’s BoA EPF database are consistent with the pool and loan level data downloaded by TBW from Freddie Mac and Ginnie Mae. In other words, the BoA EPF database and, thus, the underlying documents supporting it are complete and reliable.

F. Conclusion

57. The Debtor believes that through a combination of (1) the Funding Detail Reports, (2) the Wire Breakdowns, (3) the Ginnie Mae Text Files, (4) the BoA EPF database, (5) the purchase advices, (6) the Lookup Database, and (7) QRM, it has a comprehensive and reliable data set that can be used to identify loans that have been sold to and paid for by investors for at least the period December 2008 through August 2009.

VI. Ocala Funding Mortgage Loan Purchases

58. In addition to verifying that the investor actually paid TBW or Ocala Funding for a mortgage, the Debtor also endeavored to trace cash disbursements from Ocala Funding to purchase mortgages.


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59. In general, the recordkeeping process related to the loans “purchased” by Ocala Funding worked as follows:

a. On a daily basis TBW would send a Gatekeeper report to LGTS that identified the loans to be “purchased” by Ocala Funding.18

b. After LGTS reviewed the Gatekeeper report and approved it, LGTS would wire the funds to the accounts that TBW identified.

c. TBW would create an “Advance” report that was included in the daily Ocala Funding Pipeline report. The “Advance” report was created from the Gatekeeper report and identified all loans Ocala Funding “purchased” that day.

d. The “Advance” report also identified the line (i.e., BNP or DBK) the mortgage loans were assigned to, the advance amount and the funded amount.

i. The advance amount represented the “original purchase price” of the mortgage loan and essentially reflected the loan’s market value.

ii. The funded amount represented the cash that was disbursed by Ocala Funding to purchase the mortgage loan.

60. The following is a summary of how the cash moved, after June 30, 2008, from Ocala Funding to purchase mortgage loans identified in the Gatekeeper reports.

a. Transfer of funds from the Ocala Funding, BNP or DBK Collateral accounts to the Ocala Funding Disbursement account. The funds would then be wired by LGTS from the Disbursement account to the institution selling the dry loan.

i. The loans purchased through these types of transfers would also appear in that day’s Gatekeeper report.

ii. Loans purchased by Ocala Funding through the Disbursement account appeared on the “Advance” report on the same day as the transfer from the Disbursement account and with a funded amount equal to the actual wire sent out of the account.

iii. TBW would not prepare a wire breakdown for these types of loan purchases.

18 There were separate Gatekeeper reports for BNP and DBK.


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iv. Funds disbursed in this manner did not involve loan purchases from COLB.

b. Transfer of funds from the BNP or DBK Collateral accounts to the Investor Funding account.

i. TBW typically prepared wire breakdowns for these types of transfers. These wire breakdowns contained the phrases “C-Wire” and “Ocala Funding” in the file name.

ii. In general, the loans identified in the wire breakdown would also appear in that day’s Gatekeeper report with corresponding instructions provided by TBW to wire funds to the Investor Funding account.

iii. Loans purchased by Ocala Funding through these types of transfers appeared on the “Advance” report the same day as the wire transfer and with a funded amount equal to the actual wire amount in the wire breakdown.

iv. These transfers involved purchases by Ocala Funding loans “off of COLB.”

c. Transfer of funds from the Ocala Funding Collateral account to the Investor Funding account.

i. TBW typically prepared wire breakdowns for these types of transfers. These wire breakdowns, however, contained the phrases “C-Wire” and “Paydown” in the file name, not “Ocala Funding.”

ii. The loans identified in the wire breakdown also would not appear in that day’s Gatekeeper report. Instead, these loans would have been included in earlier Gatekeeper reports.

iii. Loans purchased by Ocala Funding through these types of transfers did not appear on the “Advance” report on the same day as the wire transfer. Instead, these loans appeared in earlier “Advance” reports but with a funded amount equal to $0.

iv. In general, these transfers involved a payment to COLB for loans that had been shipped to Ocala Funding (typically weeks earlier), but not yet paid for.

v. This process appears to have started in December 2008.


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61. The following table summarizes the amount of money transferred through each one of the above processes between June 30, 2008 and August 4, 2009.

Transfers From the Ocala Funding, DBK and BNP Collateral Accounts to the Ocala Funding Disbursement

or the TBW Investor Funding Accounts For the Period June 30, 2008 to August 4, 2009

LineFunds

Transferred FromFunds

Transferred ToJune 30, 2008 -

December 31, 2008January 1, 2009 -

August 4, 2009 Total

1 OF/DBK/BNP Collateral Disbursement 1,624,186,684$ 135,859,715$ 1,760,046,399$

2 DBK/BNP Collateral Investor Funding 5,226,679,185 775,772,665 6,002,451,850

3 OF Collateral Investor Funding 638,128,797 9,528,485,334 10,166,614,131

4 Total 7,488,994,665$ 10,440,117,714$ 17,929,112,379$

TABLE 10

62. During the last six months of 2008, the vast majority of the loan purchases were funded by transfers to either the Disbursement account (See Table 10, Line 1) or by transfers from the DBK/BNP Collateral accounts to the Investor Funding account (See Table 10, Line 2). As a result, loan purchases by Ocala Funding occurred the same day the loans were on both the Gatekeeper report and the “Advance” report and also had a funded amount greater than $0 (i.e., cash was disbursed).

63. In 2009, the process for funding loan purchases changed dramatically. More specifically, the vast majority of loan purchases in 2009 were paid for by a transfer from the Ocala Funding Collateral account to the Investor Funding account (See Table 10, Line 3). As a result, the vast majority of loans purchased by Ocala Funding were being shipped to Ocala Funding, included in a Gatekeeper report, and counted as collateral for the OFCP prior to Ocala Funding ever paying COLB for the loans.

64. In addition, of the $9.5 billion in transfers to the Investor Funding account from the Ocala Funding Collateral account in 2009, $5 billion had nothing to do with loan purchases. Instead, the $5 billion was part of a “round-trip” movement of money that involved an advance on the AOT to Ocala Funding that was returned the same day to Colonial and used to pay down expiring (or expired) AOT trades.

65. Based on the process employed by TBW to track the Ocala Funding loan purchases discussed above, the Debtor has identified the following data sources that can be used to trace cash payments from Ocala Funding to specific loans:

a. Loans that are on the “Advance” report with a funded amount greater than $0 can be used to identify loan purchases for:

i. transfers to the Disbursement Account (See Table 10, Line 1)and


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ii. transfers from the BNP and DBK Collateral accounts to the Investor Funding account (See Table 10, Line 2).

(a) In addition, wire breakdowns that include the references “C-Wire” and “Ocala Funding” can also be used to account for transfers from the BNP/DBK Collateral accounts to the Investor Funding account.

b. Wire breakdowns that contain the references “C-Wire” and “Paydown” can be used to identify loan purchases for:

i. transfers from the Ocala Funding Collateral account to the Investor Funding account (See Table 10, Line 3).

66. After identifying the data sources available to trace loan purchases to cash disbursements, the Debtor prepared the following analyses to test the completeness of the source data.

a. Reconciled daily transfers to the Disbursements accounts and from the DBK/BNP Collateral accounts to the Investor Funding account to the daily funded amount per the “Advance” report (See Table 10, Lines 1 and 2).

b. Reconciled the daily transfers from the Ocala Funding Collateral account to the Investor Funding account to matching wire breakdowns (See Table 10, Line 3).

67. The following table summarizes the results of the first test.

TABLE 11Transfers to the Ocala Funding Disbursement Account and from the DBK/BNP Collateral Accounts

to the TBW Investor Funding Account Compared to the "Funded Amount" from the Ocala Funding

Pipeline "Advance" Report for the Period June 30, 2008 to August 4, 2009

Transfers from OF/DBK/BNP to Disbursement

Account

Transfers from DBK/BNP to

Investor Funding Total

OF PipelineAdvance Report

"Funded Amount" Difference

1,760,046,399$ 6,002,451,850$ 7,762,498,248$ 7,729,351,718$ 33,146,530$

68. According to the above table, $7.73 billion in loan purchases can be traced to loans that have a funded amount greater than $0 in the “Advance” report.19 As such, the 19 The totals for the first three columns in Table 11 are the same in Lines 1 and 2 from Table 10.


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“Advance” report accounts for all but $33.1 million, or less than 0.5 percent, of the $7.77 billion in funds transferred to the Disbursement account or transferred from the DBK or BNP Collateral accounts to Investor Funding. Furthermore, the loans that make up the $33.1 million difference can be accounted for in wire breakdowns with the references “C-Wire” and “Ocala Funding.” In other words, the Debtor will be able to trace nearly all of these types of cash disbursements to specific loan purchases for the period June 30, 2008 through August 4, 2009.

69. The following table summarizes the Debtor’s tracing of transfers from the Ocala Funding Collateral Account to the TBW Investor Funding Account to matching wire breakdowns.

Transfers from the Ocala Funding Collateral Account to the TBW Investor Funding Account and

Total Matching Wire Breakdowns for the Period June 30, 2008 to August 4, 2009

Line Description Amount

1 Transfers from Ocala Funding Collateral to Investor Funding (See Table 10, Line 3) 10,166,614,131$

2 Matching Wire Breakdowns with "C-Wire" and "Paydown" Reference 9,930,668,940

3 Matching Wire Breakdowns without "C-Wire" and "Paydown" Reference 75,897,924

4 Difference 160,047,266$ [A]

[A] A $90 million transfer on September 30, 2008 and a $62.5 million transfer on December 31, 2008 account for nearly all of the missing wire breakdowns. Both of these transfers were used to pay down the AOT.

TABLE 12

70. Nearly 98% of the above cash transfers to the Investor Funding account can be tied to matching wire breakdowns that contain a “C-Wire” and “Paydown” reference (See Table 12, Line 2 Compared to Line 1). There are an additional nearly $76 million in wire breakdowns that have the same date and amount as the wire transfer from Ocala Funding (See Table 12, Line 3). These wire breakdowns, however, reference other investors and do not include both the “C-Wire” and “Paydown” references. Finally, nearly all of the missing wire breakdowns involved cash transfers that were not used to purchase loans, but instead went to pay down pools on the AOT (See Table 12, Line 4 and Note A). As such, the Debtor will be able to trace nearly all of these types of cash disbursements to specific loan purchases for the period June 30, 2008 through August 4, 2009.

A. Conclusion

71. The Debtor believes that through a combination of the “Advance” report, and the wire breakdowns with references to “C-Wire” and “Paydown” or “Ocala Funding,” it has a comprehensive and reliable data set that can be used to trace cash disbursements from Ocala


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Funding to fund the purchase of specific loans for at least the period June 30, 2008 through August 4, 2009.20

VII. Ocala Funding Analysis

72. As previously mentioned, the Debtor, with assistance from Bank of America, identified a total of 9,111 (which includes all of the TRO Loans) mortgage loans that, according to the LGTS collateral management system, are collateral for the OFCP – i.e., either “on hand” or on “active release” as of August 2009 – and available to secure repayment of the issued and outstanding Secured Loan Notes.

73. When TBW and Colonial collapsed in August 2009, thousands of the subject Ocala Funding loans were listed as collateral securing other TBW related warehouse lines such as COLB and the AOT. In other words, these Ocala Funding loans were assigned as collateral to multiple TBW lines. The following table summarizes how many of the 9,111 Ocala Funding mortgages were assigned to other TBW lines.

Ocala Funding Loans That Are Also Identified as Collateral on other TBW and Colonial Lines

Unique Ocala Funding Loans That Also Appear on Other TBW or Colonial LinesOcala

FundingLoans COLB AOT Overline Seaside Platinum BOA EPF Total

9,111 4,928 [A] 93 [A] 112 [A] 10 [B] 85 [B] 2,979 [C] 8,207

[A] Based on August 14, 2009 loan lists provided by the FDIC for each facility.[B] Based on the August 5, 2009 pipeline reports for Seaside and Platinum.[C] Based on the BoA EPF database created by the Debtor, which includes all loans assigned to the BoA EPF.

TABLE 13

74. Hence, of the 9,111 Ocala Funding mortgages supposedly securing the repayment of the Secured Loan Notes held by Deutsche Bank and BNP, 8,207 of them were are also assigned as collateral for other facilities. Furthermore, as discussed in more detail below, Ocala Funding or TBW was paid by third party investors, such as Freddie Mac, for the vast majority of these mortgages. Thus, there are a substantial number of Ocala Funding loans that are claimed by three different owners.

75. The Debtor located 9,084 of the subject 9,111 mortgage loans in the Lookup Database (i.e., there is no record for 27 of the mortgages). The 27 mortgages not in the Lookup Database were all included in the “Ocala” pool in the LGTS collateral management system.21 20 In addition, the Debtor has loaded into a database all of the available “Advance” reports dating back to July

2005. The Debtor has relied upon this database to identify loans purchased by Ocala Funding prior to June 2008.

21 In other words, none of the 27 loans were specifically assigned as collateral to the BNP or DBK lines.


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These loans were shipped to LGTS in October 2008 and December 2008. According to the LGTS collateral management system, six of these loans are coded as “on-hand” and 21 are coded as “active release” with release dates between February 2009 and May 2009. The Debtor was not able to confirm that Ocala Funding paid for these 27 loans. In addition, it does not appear that these mortgages ever closed.

76. With respect to the 9,084 mortgage loans that are in the Lookup Database, 274 can be grouped as follows:

TABLE 14274 Ocala Funding Loans by Status Group

Status Group [A] Total Loans

Paid In Full [B] 110

Net Funded [C] 60

Loan Deletes 49

TBW REO Sold [D] 8

TBW Active REO [E] 1

Disposed of Prior to 2007 46

TOTAL 274

[A] Based on the Status Detail code in the Lookup Database.[B] Excludes one loan that was Net Funded.[C] Includes one loan that was Paid In Full.[D] Includes 1 REO asset that is also "on the AOT."[E] This REO property is also "on the AOT."

a. Paid In Full – These are loans that have been paid off by the borrower. The Debtor has been able confirm that funds were, in fact, received for at least 106 of these 110 loans. In addition, the Servicing System records indicate that 82 of these loans were paid off prior to 2009.

b. REO – There are 9 mortgage loans on the Ocala Funding loan list that are actually REO. Eight of those assets were sold by the Debtor between December 2009 and February 2010. The remaining REO asset is under contract but the closing has been held up due to issues with the deed.

c. Net Funded – As more fully described in the Borrower Protocol motion, TBW implemented a practice of refinancing certain mortgages but waiting until the new loan was sold before paying off the old mortgage (rather than paying the old mortgage off at closing). As a result of the events in August 2009, certain borrowers have two mortgages outstanding as the old loan was not paid off. The Borrower Protocol proposed a resolution to this issue whereby the impacted investor would evaluate the old and the


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new loan with the intent to resolve the matter with each borrower such that only one loan remains outstanding.

d. Loan Deletes – This “Status Detail” typically indicates that while information regarding these 49 loans was loaded into the Servicing System, the loans did not close. Most of these loans were funded initially on Ocala Funding. The Debtor has been able to verify that funds initially sent for 47 of the loans were returned to either Ocala Funding or the original sender.22

e. Disposed of Prior to 2007 – These loans were not in the Lookup Database, but were in TBW’s Servicing System. As such, these mortgages were either paid off or sold or became inactive prior to 2007. Nonetheless, they continued to remain listed as collateral for the OFCP.

77. Accordingly, of the 9,111 on the LGTS collateral list for the OFCP, 8,810 (9,084 – 274) mortgage loans were reviewed to determine whether: (1) Ocala Funding purchased the mortgage and (2) the investor indicated in the Lookup Database purchased and paid for its assigned mortgages. The sources of information discussed in Section V above were used to perform both of these analyses.

78. In order to verify whether Ocala Funding paid for these 8,810 mortgages, the Debtor compared all of these mortgages to all of the available “Advance” reports and to wire breakdowns that contained the references “C-Wire” and “Paydown” or “Ocala Funding.”23 The results of this analysis are summarized below.

Summary of Analysis of Whether Ocala Funding Purchased Loans

Total Loans

Loans not on OF

Advance Report

Loans on OF Advance Report w ith $0 "Fund"

Amount

Loans on OF Advance Report

w ith "Fund" Am ount Greater

than Zero

Loans in OF Related Wire Breakdown

Distinct Loans Paid

for by OF

Cannot Confirm Payment

8,810 242 8,024 544 540 691 8,119

TABLE 15

79. As indicated in the second to last column of the above table, the Debtor was only able to confirm that Ocala Funding paid for 691 of the 8,810 mortgages. 22 The Debtor has confirmed that the Alabama Housing Finance Authority paid TBW for one of these two

loans in February 2008 and that TBW transferred the funds for this loan to Ocala Funding within a couple of days of receipt.

23 Every available Advances report going back to July 2005 was loaded into a database by the Debtor.


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80. In order to verify whether the currently indicated investor paid for the mortgage, the Debtor divided the 8,810 mortgages into the following investor groups: (1) Freddie Mac, (2) Other Third Party Investors, (3) TBW Related Parties and (4) Ocala Funding.24 The number of mortgages included in each investor group is summarized in the table below.

TABLE 16Remaining 8,810 Ocala Funding Loans

Investor Group Total Loans

Freddie Mac 7,165

Other Third Party Investors 619

TBW Related Parties 843

Ocala Funding 183

TOTALS 8,810

81. The specific analysis done by the Debtor with respect to each one of these groups is discussed in more detail below.25

A. Freddie Mac

82. The Debtor compared all 8,810 mortgages to the following data sources to determine if any of these sources identified Freddie Mac as the investor: (1) Lookup Database, (2) Freddie Mac Funding Detail Reports and (3) QRM. The following table summarizes the results of this analysis.

Ocala Funding Loans that Have Freddie Mac

Identif ied As the Investor In the Follow ing Sources

Lookup Database

Funding Detail Reports QRM

7,165 7,122 7,082

TABLE 17

24 These groupings are based upon the investor the mortgage is currently assigned to in the Lookup Database. 25 None of the 9,111 Ocala Funding loans were included in the Ginnie Mae Text Files database. This is

consistent with the notion that Ginnie Mae loans were not eligible collateral for the OFCP after June 2008.


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83. When you combine the individual loan numbers from the three different data

sources into one master list, there are a total of 7,196 unique loan numbers, of which 7,031 appear in all three sources. In other words, there are 165 (7,196 – 7,031) unique loan numbers where Freddie Mac is identified as the investor in only one or two sources, but not all three.

84. The Debtor reviewed each one of these 165 mortgages in more detail to determine whether there is evidence indicating Freddie Mac purchased any of these 165 mortgages and whether the investor is correctly assigned in the Lookup Database. A summary of that analysis is contained in Exhibit T to the Report. Based upon this additional review, the Debtor did discover 27 mortgages where it appears Freddie Mac paid cash for the mortgage, but the mortgages are currently assigned in the Lookup Database to either Ocala Funding or Colonial. These instances are discussed in more detail below.

a. There are 23 mortgages currently assigned to Ocala Funding that were in Freddie Mac pool “30873013.” This pool was advanced on the BoA EPF on July 23, 2009. All of these mortgages are in a wire breakdown that ties to a deposit from Bank of America into the Investor Funding account on July 23, 2009. This pool settled on August 4, 2009. The Debtor does not have the Funding Detail Reports for this pool. However, the settlement details and the Form 996 for this pool were recently produced by Freddie Mac. All 23 of these loans are included in these documents.

b. There is one mortgage currently assigned to Colonial that was in Freddie Mac pool “30862471.” This loan was in the Freddie Mac Funding Detail Report for this pool and it is in the Form 996 for this pool that the Debtor recently received from Freddie Mac. This loan is also included in a Freddie Mac TBW wire breakdown that can be tied to a deposit into the Investor Funding account on July 13, 2009. Freddie Mac is also identified as the investor in QRM for this loan. The Debtor was not able to find any information in the email discovery database indicating that TBW repurchased the mortgage after it was sold to Freddie Mac.

c. There are three additional loans that are currently assigned to Colonial that were included in Freddie Mac pools that settled on August 4, 2009. The Debtor does not have all of the Freddie Mac Funding Detail Reports for this day. However, all three of these loans can be found in a TBW prepared wire breakdown that ties to a Freddie Mac deposit on August 4, 2009. In addition, all three of these loans are included in purchase advices for these pools that were recently produced by Freddie Mac.

85. In summary, the Debtor has verified that Freddie Mac made payment to Ocala Funding or TBW for 7,192 of the 8,810 Ocala Funding mortgages.


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B. Other Third Party Investors

86. The Debtor compared the 619 mortgages currently assigned to the “Other Third Party Investors” group to the following data sources to determine if these sources identified the same investor for the mortgage as the Lookup Database: (1) QRM, (2) Wire Breakdowns and (3) Purchase Advices.

TABLE 18Ocala Funding Loans that Are Assigned to "Other Third Party Investors"

InvestorLookup

Database In QRMIn Wire

BreakdownsPurchase

Advice

American Portfolio 1 1 1 1

Bank of America 297 0 297 0 [A]

Bank of Camden 15 15 15 15

Bayview 5 5 5 5

Beal Bank 1 1 1 1

CitiMortgage 138 138 138 137

GNMA 3 2 3 3

Marix Servicing 12 12 12 12

MGC Mortgage 2 2 2 2 [B]

MountainView 16 16 16 16

Ocw en 1 1 1 1 [C]

Omni American 1 1 1 1

Selene 8 8 8 8

Urban Trust Bank 46 41 46 37

Wells Fargo 73 69 72 72 [D]

Total 619 312 618 311

[A] These loans w ere in pools advanced on the EPF betw een July 24 and July 30. All pools w ere scheduled to settle on or af ter August 5, 2009. They are not in QRM because the pools w ere unw ound in QRM. There is no Purchase Advice from BONY because the pool did not settle.[B] The Investor for these loans per QRM is Beal Bank. The Wire Breakdow ns and Purchase Advices are also for Beal Bank.[C] The Investor for this loan per QRM is MCM Mortgage. The Wire Breakdow n and Purchase Advice are also for MCM Mortgage.[D] Includes three loans that w ere in private label securitizations in either June 2006 or May 2007 w here Wells Fargo is the Master Servicer.


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87. With the exception of one mortgage currently assigned to Wells Fargo, the Debtor has verified that either Ocala Funding or TBW was paid for at least 618 of the mortgages assigned to the investors identified in the above table.

88. The one Wells Fargo loan at issue was service released to Wells Fargo’s subsequent servicer in October 2009. This loan was purchased by Ocala Funding in May 2007. According to internal TBW communications, this loan was scheduled to be included in a TBW private label security that was issued in May 2007. This loan was included in the purchase advice issued with the security and the purchase price for this loan was included in the total proceeds received by TBW when the security was issued. This loan, however, was not included in the wire breakdown prepared by TBW related to this security.26 In August 2007, a transfer was made from the Ocala Funding Collection account to the Ocala Funding Collateral account to pay down the loan on Ocala Funding. Nonetheless, it appears that the investor in the security paid TBW for this loan.

C. TBW Related Parties

89. The Debtor has defined the TBW Related Parties to include: (1) Colonial, (2) Platinum, (3) Seaside and (4) TBW. There are 843 Ocala Funding related mortgages currently assigned to these four investors. The Debtor has endeavored to determine whether Ocala Funding paid for any of these mortgages. The results of this analysis are summarized below.

Summary of Analysis of Whether Ocala Funding Paid for Loans Currently Assigned to TBW Related Parties

Line InvestorTotal

Loans

Loans not on OF

Advance Report

Loans on OF Advance Report with $0 "Fund"

Amount


w ith "Fund" Amount Greater

than Zero

Loans in OF Related

Wire Breakdow n

Distinct Loans

Paid for by OF


1 Colonial 742 67 639 36 18 40 702

2 Platinum Community Bank 85 0 85 0 0 0 85

3 Seaside 10 0 10 0 0 0 10

4 TBW/Selene 6 0 0 6 6 6 0

5 Total 843 67 734 42 24 46 797

TABLE 19

90. The Debtor has been able to verify that Ocala Funding paid for 46 of the 843 mortgages assigned to the investors in this group (See Table 19, Line 5). Furthermore, there is

26 It appears that the loan was excluded from the wire breakdown because it was inadvertently coded as paid

in full.


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no indication that these 46 loans were ever sold to outside investors.27 These 46 mortgages are discussed in more detail below.

a. Of the 40 Colonial mortgages that Ocala Funding paid for, 36 are assigned to the Overline and 4 to the AOT (See Table 19, Line 1). While Colonial made advances on all 4 of the mortgages assigned to the AOT, no advances were made on 33 of the 36 mortgages assigned to the Overline.

b. The 6 TBW mortgages were purchased by Ocala Funding between May 18, 2009 and June 2, 2009 (See Table 19, Line 4). Correspondingly, all 6 of these loans were paid down on COLB during the same period. All 6 of these mortgages have a status of “active release” according to LGTS’s collateral management system. However, they were all included in the collateral list prepared by LGTS that was based upon the physical inventory count it undertook after August 2009. As such, the mortgage documents for this loan appear to be on-hand at LGTS.

D. Ocala Funding

91. There are only 183 mortgages currently assigned to Ocala Funding in the Lookup Database that were released to a subsequent servicer. As discussed earlier, it appears that 23 of these mortgages were sold to the BoA EPF on July 23, 2009 and then purchased by Freddie Mac on August 4, 2009. Similar to the analysis the Debtor undertook with respect to the mortgages assigned to the TBW Related Parties, the Debtor has endeavored to determine how many of the 183 mortgages assigned to Ocala Funding were paid for by Ocala Funding. The results of that analysis are summarized below.

Summary of Analysis of Whether Ocala Funding Paid for the 183 Loans Currently Assigned to It

Total Loans

Loans not on OF

Advance Report


Am ount


w ith "Fund" Am ount Greater

than Zero

Loans in OF Related Wire Breakdow n

Distinct Loans Paid for by OF

Cannot Confirm Paym ent

183 10 37 136 144 153 30

TABLE 20

92. As indicated in the second to last column of the above table, the Debtor was able to verify that Ocala Funding paid for 153 of the 183 mortgages. The 30 mortgages the Debtor

27 In fact, these loans are all identified as “Do Not Sell” loans in TBW’s Rules system.


EXHIBIT B


Page 33

was not able to confirm Ocala Funding paid for include the 23 mortgages that Freddie Mac paid for but are currently assigned to Ocala Funding.

VIII. COLB Loan Analysis

93. As discussed in Section IV, when Colonial was seized on August 14, 2009 there were 8,714 loans listed as still outstanding on the COLB. Of this total, 29 can be grouped as follows:

TABLE 21COLB Loans by Status Group or COLB Sublimit

Status Group or COLB Sublimit Total Loans

Loan Deletes [A] 3

Paid in Full [B] 3

Old Virginia & United Funding Management [C] 23

TOTAL 29

[A] Based on the Status Detail code in the Lookup Database.[B] Based on the Status Detail code in the Lookup Database and includes 2 loans that w ere sold to Freddie Mac[C] These loans are not in the Lookup Database. Old Virginia and United Funding are "sublimits" of COLB. Old Virginia and United Funding apparently used these sublimits to fund their ow n loans.

94. Loan Deletes – As previously mentioned, loans with a “Status Detail” of Loan Delete in the Servicing System indicate that while the loan was initially loaded into the Servicing System it ultimately did not close. If a wire was sent to close the loan and the loan is coded as Loan Delete, then there should be a wire returning the funds. The Debtor has not been able to locate a return wire or returned funds for any of these loans. In addition, these three loans were shipped to three different investors in June and July 2009. The Debtor has located purchase advices from investors for two of the loans and confirmed that the sales proceeds were received by either TBW or Ocala Funding.

95. Paid In Full - The Debtor has also confirmed that payoffs were received in August 2009 for all three COLB loans coded as Paid In Full. Furthermore, Freddie Mac was


EXHIBIT B


Page 34

identified as the investor for two of the three loans.28 The Debtor has confirmed that Freddie Mac paid Ocala Funding in June 2009 for both of these loans.

96. Old Virginia and United Funding Mortgage – None of these loans are in the Lookup Database. There is, however, an Old Virginia and a United Funding Mortgage sublimit on COLB. The Debtor understands that these two entities were “warehouse customers” of TBW who used COLB to fund the origination of their own loans, not TBW loans. The advances on COLB for these two sublimits did not go through TBW’s Master Advance account. In addition, sales proceeds for loans assigned to these sublimits were not deposited into TBW’s Investor Funding account.

97. Accordingly, of the 8,714 mortgages on the COLB collateral list, 8,685 (8,714 – 29) were reviewed to determine whether the investor indicated in the Lookup Database purchased and paid for its assigned mortgages. The sources of information discussed in Section V above were used to perform this analysis. The allocation of the 8,685 COLB mortgages by investor is summarized below.

TABLE 22Remaining 8,865 COLB Loans by Investor

Investor Total Loans

Freddie Mac 4,798

CitiMortgage 24

Wells Fargo 30

Colonial 3,831

Platinum Community Bank 1

TBW/Selene 1

TOTALS 8,685

98. The specific analysis done by the Debtor with respect to each one of these investors is discussed in more detail below.29

28 The other loan was a construction loan. 29 There was one COLB loan that appeared in the Ginnie Mae database. The wire to close the loan was

returned subsequent to the loan being assigned to the Ginnie Mae pool. As a result, TBW had to repurchase the loan out of the pool once it settled. TBW eventually resubmitted the loan for funding on COLB and the loan closed on the second attempt. This loan is currently assigned to Colonial in the Lookup Database.


EXHIBIT B


Page 35

A. Freddie Mac

99. The Debtor compared all 8,685 COLB mortgages to the following data sources to determine if any of them identified Freddie Mac as the investor: (1) Lookup Database, (2) Freddie Mac Funding Detail Reports, (3) QRM and (4) Freddie Mac Related Wire Breakdowns. The following table summarizes the results of this analysis.

Remaining 8,685 COLB Loans that Have Freddie Mac

Identified As the Investor In the Follow ing Sources

Lookup Database

Funding Detail

Reports QRM

Freddie Mac Related Wire Breakdowns

4,798 4,800 4,804 4,700

TABLE 23

100. When you combine the loan numbers from the four different data sources into one file, there are a total of 4,806 distinct loan numbers, of which 4,693 appear in all three sources. In other words, there are 113 (4,806 – 4,693) distinct loan numbers where Freddie Mac is identified as the investor in one or more of the sources, but not all four.

101. The Debtor reviewed each one of these 113 mortgages in more detail to determine whether there is evidence indicating Freddie Mac purchased any of these 113 mortgages and whether the investor has been correctly assigned. A summary of that analysis is contained in Exhibit U of the Report. Based upon this additional review, the Debtor did discover 4 mortgages where it appears Freddie Mac paid for the mortgage, but the mortgages are currently assigned to Colonial.

102. These same four loans are included in the 8,810 Ocala Funding mortgages and were previously discussed in paragraph 84(b) and 84(c).

103. In summary, the Debtor has verified that Freddie Mac made payment to Ocala Funding or TBW for 4,802 of the 8,865 COLB mortgages.30

30 This total does not include the two mortgages that Freddie Mac purchased that were paid in full in early

August 2009.


EXHIBIT B


Page 36

B. CitiMortgage and Wells Fargo

104. The Debtor compared the 54 mortgages currently assigned to CitiMortgage and Wells Fargo to the following data sources to determine if these sources identified the same investor for the mortgage as the Lookup Database: (1) QRM, (2) Wire Breakdowns and (3) Purchase Advices.

Remaining 8,685 COLB Loans that Are Assigned to CitiMortgage and Wells Fargo

InvestorLookup

Database In QRMIn Wire

BreakdownsPurchase

Advice

CitiMortgage 24 24 24 24

Wells Fargo 30 30 30 30

Total 54 54 54 54

TABLE 24

105. Hence, the Debtor has verified that TBW or Ocala Funding was paid for all 54 of these mortgages.

C. Colonial

106. Of the 3,831 mortgages assigned to Colonial, 3,826 appear on a “COLB Purchase” report.31 While the Debtor has not verified every transaction, when a loan appears in the COLB Purchase report, a corresponding wire out of the Colonial Master Advance account can be found. The 5 mortgages that are not in a purchase report all have an advance balance of $0 per the COLB loan list provided by the FDIC. According to TBW’s Funding Management System, all 5 of these wires were “processed” in early August 2009. Furthermore, these 5 loans are not included on the Ocala Funding loan list.

107. The FDIC also provided the Debtor with access to the participation certificates related to these mortgages. The Debtor reviewed all the certificates and was able to reconcile the total purchase amount identified in the certificate to the loan level detail for the loans purchased by Colonial that day. In summary, with the exception of a few loans the Debtor has been able to verify that Colonial purchased the mortgages assigned to it.

D. Platinum and TBW

108. The one Platinum loan appears on a July 29, 2009 “COLB Purchase” report. The Debtor reviewed the Colonial Master Advance account bank statement and confirmed that a wire in the exact amount indicated in the “COLB Purchase” report for this loan was sent out on July

31 These reports are part of daily Colonial Pipeline reports sent by Colonial to TBW.


EXHIBIT B


Page 37

29, 2009.32 Furthermore, according to TBW’s Funding Management System the wire for this loan was scheduled to be sent by Colonial from the Master Advance account, not from Platinum’s account. It appears that this loan is currently not assigned to the correct investor.

109. According to TBW’s Funding Management System, the one TBW loan was scheduled to be funded on COLB on May 26, 2009. This loan appears in the May 26, 2009 “COLB Purchase” report. The loan was paid off COLB on June 1, 2009 because the wire was returned to Colonial. This loan was subsequently resubmitted for funding and was funded on COLB on July 6, 2009. The Debtor has verified that a wire transfer was sent from the Colonial Master Advance account on the same day for the loan. In addition, the loan also appears on the July 6, 2009 “COLB Purchase” report. The Debtor has not found any evidence indicating that this loan was sold to an investor after July 6, 2009. It appears that this loan is also currently assigned to the wrong investor.

E. COLB Compared to Ocala Funding

110. As previously mentioned, when TBW collapsed in early August 2009, there were thousands of the same loans that were listed as collateral for both Ocala Funding and COLB. In addition to the double assigning of loans between Ocala Funding and COLB, thousands of those same loans had already been sold to and paid for by investors. The following table summarizes by investor the number of COLB loans that are duplicated on the 9,111 Ocala Funding collateral list.

32 The wire description contained on the bank statement referenced Platinum Community Bank.


EXHIBIT B


Page 38

COLB Loans That Are Also on the List of 9,111 Ocala Funding Loans

Line COLB Loan GroupingTotal Loans

on COLB

Total COLB Loans Also on Ocala Funding

Loan List

Outstanding COLB Balance on Loans

Also on Ocala Funding Loan List

1 Freddie Mac 4,798 4,200 770,621,265$

2 CitiMortgage 24 22 4,313,124

3 Wells Fargo 30 30 4,976,887

4 Colonial 3,831 674 129,342,527

5 Platinum Community Bank 1

6 TBW/Selene 1

7 Loan Deletes 3

8 Paid in Full 3 2 [A] 343,800

9 Old Virginia & United Funding Management

23

10 TOTALS 8,714 4,928 909,597,603$

[A] Prior to being paid off , these tw o loans had been sold to Freddie Mac.

TABLE 25

111. Hence, there are 4,252 (4,928 – 674 -2) mortgages that have an outstanding balance on the COLB totaling nearly $780 million that are pledged as collateral to COLB, Ocala Funding and a third party mortgage investor (See Table 25, Line 4 and Line 10).33

112. The Debtor further analyzed these 4,928 mortgages to determine if Ocala Funding had paid for them. The results of that analysis are summarized below.

33 The 4,252 does not take into account the four loans, discussed in paragraphs 101 and 102, currently

assigned to Colonial that appear to have been purchased by Freddie Mac.


EXHIBIT B


Page 39

TABLE 26Ocala Funding Loans That Are Also on COLB and Whether Ocala Funding Paid for the Loans

Total Loans

Loans not on OF

Advance Report


Amount


w ith "Fund" Amount Greater

than Zero

Loans in OF Related Wire Breakdown

Distinct Loans Paid

for by OF


4,928 65 4,863 0 0 0 4,928

113. As reflected in the second to last column in Table 26, the Debtor was not able to confirm that Ocala Funding paid for any of these mortgages.

IX. AOT Trades and Loan Analysis

114. As of August 5, 2009, there were 124 trades assigned to the AOT. The cumulative purchase price (i.e., outstanding balance) of these trades was $1.5 billion. The following table breaks down the 124 trades between settled and “busted” agency (i.e., Freddie Mac and Ginnie Mae) trades and non-agency (i.e., Private Label) trades.

Summary of Trades Outstanding on the AOT As of August 5, 2009

Line Trade Type Total Trades Purchase Price

1 "Settled" Agency Pools/Trades Outstanding on AOT 102 1,146,800,877$

2 "Busted" Agency Pools/Trades Outstanding on AOT 10 95,341,976

3 Non-Agency Trades Outstanding on AOT 12 231,725,514

4 TOTAL 124 1,473,868,368$

TABLE 27

115. There were a total of 112 agency related pools listed as outstanding on the AOT as of August 5, 2009 (See Table 27, Lines 1 and 2). All 112 of these pools were assigned to the BoA EPF prior to being advanced on the AOT. As of August 5, 2009, 102 of the 112 agency-related pools had settled and Bank of America, since they were all assigned to the BoA EPF, had received the settlement proceeds from Bank of New York (See Table 27, Line 1).

116. The 10 “busted” agency pools all had scheduled settlement dates after August 5, 2009 (See Table 27, Line 2). Again, all of these pools were assigned to the BoA EPF prior to being advanced on the AOT. In addition, none of the underlying AOT loans assigned to the 10 AOT pools were the same loans assigned to the 10 BoA EPF pools. Finally, all of the loans assigned to the 10 “busted” BoA EPF pools were service released to Bank of America.


EXHIBIT B


Page 40

117. In terms of the 12 non-agency trades on the AOT (See Table 27, Line 3), there is no record for five of them in QRM, TBW’s secondary markets trading system. The remaining seven private label trades had settlement dates ranging from June 2, 2009 to July 2, 2009. In other words, all seven of these trades had expired as of August 5, 2009.

118. In addition to analyzing the trades outstanding on the AOT, the Debtor has also analyzed the loans that were assigned to the AOT. As discussed in Section IV, per information provided by the FDIC there were a total of 9,304 loans identified as being “on the AOT” when TBW collapsed in August 2009. The following table groups the 9,304 AOT loans into different high level categories based upon the “Status Detail” of the loans in the Lookup Database.

Summary of Loans "on the AOT" by Status Group

Line Status Group Total Loans

TotalPurchase Price Per AOT Loan Level Detail

1 Transferred to RoundPoint for Servicing 3,278 474,881,623$

2 Transferred to Other Investors 2,752 323,846,996

3 REO 1,837 [A] 268,823,349

4 Non-Service Released 1,206 136,028,808

5 Not in Lookup Database 137 15,788,736

6 Not in Servicing System 94 15,532,968

7 TOTAL LOANS 9,304 1,234,902,481$

[A] This total includes not only the 1,197 REO properties that w ere part of the §363 REO sale approved by the Bankruptcy count, but also second liens and REO that w as conveyed to HUD or the VA prior to August 2009. These assets w ere not included in the 363 sale.

TABLE 28

119. Line 1: The largest category of AOT loans are the 3,278 that have been service released to RoundPoint. This group includes loans that had an Investor Code of 001 in the Servicing System. This was the code used for loans owned by TBW and/or assigned to one of the Colonial facilities. Colonial is identified as the investor for all 3,278 loans. The purchase price of this group of loans, according to the AOT loan listing, is $474,881,623.

120. Line 2: The second largest category of AOT loans are those that have been service released to investors other than Colonial. This includes loans that were service released prior to and after August 5, 2009. The Debtor has been able to trace the vast majority of these loans to wire breakdowns or other data sources that support the allocation of the loans to the investors.


EXHIBIT B


Page 41

121. Line 3: There are 1,837 loans “on the AOT” that have a status detail that indicates the underlying collateral is actually REO. This total includes the 1,197 REO properties that were part of the §363 sale approved by the Bankruptcy Court. The 1,837, however, also includes second liens (e.g., home equity lines) and properties that were conveyed to HUD and the VA prior to August 2009. None of these types of properties were included in the §363 sale.

122. Line 4: In addition to the AOT loans that have been service released, there are 1,206 loans that fall into what the Debtor has defined as the “Non-Service Released” category. For purposes of the Debtors analysis, this group includes loans with a “Status Detail” that indicates the loan is no longer active (e.g., “Paid In Full”). Loans with a “Status Detail” of either “Paid In Full” or “Charge Off” account for 1,162 of the loans and $129 million of the purchase price of the loans in this group.34

123. There are 137 AOT loans not in the Lookup Database, which means these loans were paid-off, sold or were otherwise disposed of prior to 2007 (See Table 28, Line 5). Furthermore, there are another 94 loans that have never been loaded into TBW’s Servicing System and, therefore, have never been serviced by TBW (See Table 28, Line 6).

X. Ocala Funding Cash Activity Analysis

124. TBW downloaded Ocala Funding bank statements on a daily basis from LGTS. Copies of the daily statements were retained by TBW on the Accounting network shared drive. The daily statements also contain hand written notes from TBW employees. In general, these notes described the source and use of funds.

125. TBW also used Excel spreadsheets to track the daily cash activity for all the Ocala Funding accounts. These spreadsheets included the comments that were written on the daily bank statements. The Debtor has created a database from these daily spreadsheets for the following accounts and for the following periods:

a. Ocala Funding Collateral Account – January 1, 2007 through August 4, 2009

b. DBK Collateral Account – June 30, 2008 through August 4, 2009

c. BNP Collateral Account - June 30, 2008 through August 4, 2009

126. While the database includes all of TBW’s original comments, the Debtor needed to standardize them in order to analyze the Ocala Funding cash activity. For transactions after 2007, the Debtor also validated each entry in the database by comparing the data fields to the daily bank statements. 34 The Debtor has not endeavored to validate the accuracy of the Status Detail with respect to the AOT loans

included in this category. In addition, loans with a Status Detail of “Charge off” could include REO that was sold with the loan balance charged off after the sale. However, the loan was coded in the Servicing System as a “Charge off” instead of REO.


EXHIBIT B


Page 42 2185862v3

127. The Debtor also tested the database to ensure that all cash activity for these accounts from 2007 forward was captured. More specifically, the Debtor used the daily deposits and disbursements to calculate a daily beginning and ending balance for each account. The July 31, 2009 ending balance, based on this daily calculation, ties to the month end balance report downloaded by TBW from LGTS.


Exhibit C

“Gross” Affected Funds as of April 30, 2010


TAYLOR, BEAN & WHITAKER EXHIBIT C

Line Investor

Custodial Funds

ClearingPrincipal &

InterestTaxes &

Insurance

Western Union

Clearing

REO Proceeds Clearing EDCA

Other Accounts

Total Colonial Accounts

Clearing/ Deposit P&I and T&I Service Fee REO Proceeds

REO Specialists (from RBC) Refunds

Total Regions Accounts

[C] [D] [E] [F] [G] [H] [H] [I]1 Freddie Mac 173,757,808$ -$ 215,767$ 9,986,571$ -$ -$ 115,142$ 184,075,288$ 959,644$ 51,160,312$ -$ 7,895$ -$ 6,653,647$ 58,781,498$ 2 Ginnie Mae 70,546,011 - 215,882 3,833,189 - - 119,595 74,714,678 1,087,340 477,077 - 64,460 - 1,409,766 3,038,644 3 Wells Fargo 10,368,387 335,636 16,326,707 415,178 914,412 - 86 28,360,406 6,944,233 58,131,530 - 12,808,616 581,833 1,981,051 80,447,264 4 TBW - Not Service

Released5,799,922 289,504 17,299 - 1,555,504 - 235,000 7,897,229 1,063,938 1,003,806 1,337,847 - - 302,486 3,708,077

5 TBW - Net Funded / FHLMC 6,383 - 53,597 2,500 - - - 62,479 1,292,084 2,615,461 - 5,605 - 72 3,913,221 6 TBW - Net Funded / GNMA 1,869 - 49,196 - - - - 51,064 665,221 1,574,929 - 1,707 - 1,470 2,243,327 7 TBW - Net Funded / Wells - - - - - - - - 4,278 6,568 - - - - 10,846 8 Colonial-FDIC 399,973 - 1,092,897 9,767 338,195 - 941 1,841,773 1,904,847 1,190,611 - 95,588 108 507,914 3,699,068 9 BB&T 1,852,324 35,292 94,562 - - - - 1,982,179 86,318 1,708,869 - - - - 1,795,186

10 Bayview Loan Servicing LLC 137,086 - 1,138,864 26,795 343,065 - - 1,645,810 226,291 278,353 - 216 7,294 215,361 727,515 11 Bank of America 252,839 - 566,449 1,871 - - - 821,159 4,541 25,369 - 4,128 - 57,332 91,370 12 UMS - Hudson City 19,898 483,183 57,517 8,258 - - - 568,856 15,458 863,434 - - - - 878,892

13 TBW - Selene Interim Serviced 192,094 - 46,559 1,317 - - - 239,969 131,575 745,148 - 193,207 - 92,754 1,162,684

14 Urban Trust Bank 17,943 897,802 82,137 1,106 - - - 998,987 - - - - - 280 280 15 Bank of Internet 35,912 881,944 14,448 5,858 - - - 938,162 - - - - - - -

16 Platinum Community Bank-FDIC 183,470 169,179 259,792 - - - - 612,442 72,106 59,117 - 1,456 - 3,275 135,953

17 Henley Holdings 343,881 - - 12,202 - - - 356,084 2,818 59,592 - - - 1,915 64,324 18 Seaside 45,435 - 110,940 - - - - 156,374 137,992 51,033 - - - 17,444 206,470 19 Mercantile Bank - - - - - - - - 374,842 - - 302,897 - 2,805 680,544


38,878 50,159 21,602 - - - - 110,639 16,141 198,663 - - - 9,573 224,377

21 Cole Taylor 38,686 - 123,106 - - - - 161,792 - 159,074 - 31 - 1,691 160,796 22 IndyMac - - - - - - - - - - - - - - - 23 Five Mile Capital - 1,175 - - - - - 1,175 283 - - - - - 283 24 US AmeriBank 22,806 - 24,692 - - - - 47,498 - - - - - 1,192 1,192 25 MGC Mortgage 38,948 - - 6,512 - - - 45,461 - 930 - - - 13,649 14,579 26 Century National Bank 1,362 13,749 3,942 - - - - 19,053 1,494 20,724 - - - - 22,218 27 Hyde Park Savings Bank 1,341 - 13,665 - - - - 15,006 - 30,813 - - - 1,787 32,600 28 CitiMortgage Inc 13,079 - - - - - - 13,079 4,698 18,267 - - - 3,324 26,289 29 First American Bank & Trust 615 4,147 5,975 - - - - 10,736 4,500 4,492 - - - - 8,992 30 MountainView 2,906 67,584 - - - - - 70,490 - - - - - 4,817 4,817 31 Citi Home Equity - - - - - - - - - - - - - - - 32 RBC Bank - 1,309 1,047 - - - - 2,355 - 1,181 - - - - 1,181 33 Selene 1,400 - - - - - - 1,400 - - - - - - - 34 Bayrock Mortgage 1,469 - - - - - 20,036 21,505 - - - - - - - 35 Central Mortgage (CMC) (2,000) - 1,691 - - - - (309) 1,604 - - - - 47 1,651 36 Marix Servicing - 31,211 - - - - - 31,211 - - - - - 7,525 7,525

37 First Alternative Mortgage Corp - - - - - - 142,410 142,410 - - - - - - -

38 Borrower 337,636 - - - - - 5,208 342,843 16,690 - - - - - 16,690 39 Returned to Western Union - - - 2,983,562 - - - 2,983,562 - - - - - - - 40 EDCA [A] - - - - - 8,414,181 - 8,414,181 - - - - - - - 41 Seaside - - - - - - - - - - - - - - - 42 Still Under Review [B] (195,023) 6,687 13,246 - - - 36,396 (138,694) (33,781) - - 4,699 81 - (29,000) 43 Total 264,263,337$ 3,268,562$ 20,551,579$ 17,294,686$ 3,151,176$ 8,414,181$ 674,814$ 317,618,334$ 14,985,157$ 120,385,354$ 1,337,847$ 13,490,505$ 589,316$ 11,291,175$ 162,079,354$

"Gross" Affected Fundsas of April 30, 2010

Colonial Accounts Regions Accounts

Page 1 of 3


TAYLOR, BEAN & WHITAKER

Line Investor

1 Freddie Mac2 Ginnie Mae3 Wells Fargo4 TBW - Not Service

Released5 TBW - Net Funded / FHLMC6 TBW - Net Funded / GNMA7 TBW - Net Funded / Wells 8 Colonial-FDIC9 BB&T

10 Bayview Loan Servicing LLC11 Bank of America12 UMS - Hudson City

13 TBW - Selene Interim Serviced

14 Urban Trust Bank15 Bank of Internet

16 Platinum Community Bank-FDIC

17 Henley Holdings18 Seaside19 Mercantile Bank


21 Cole Taylor22 IndyMac23 Five Mile Capital24 US AmeriBank25 MGC Mortgage26 Century National Bank27 Hyde Park Savings Bank28 CitiMortgage Inc29 First American Bank & Trust30 MountainView31 Citi Home Equity32 RBC Bank33 Selene34 Bayrock Mortgage35 Central Mortgage (CMC)36 Marix Servicing

37 First Alternative Mortgage Corp

38 Borrower39 Returned to Western Union40 EDCA [A]41 Seaside42 Still Under Review [B]43 Total

"Gross" Affected Fundsas of April 30, 2010

EXHIBIT C

SeasideChecks

Forwarded

TBW Payment

Center ACHWestern Union

Total Posted, Not

MonetizedTotal "Gross"

Affected Funds

[J] [K] [L] [M] [N] [O]-$ 58,175,907$ 210,000,000$ 3,636,317$ 47,337,787$ 49,256$ 51,023,360$ 562,056,053$ - 25,642,030 - 4,058,756 13,307,411 - 17,366,167 120,761,519 - 6,697,111 - - 1,765,810 12,173 1,777,984 117,282,764 - 5,392 - - 14,139 - 14,139 11,624,837 - 183,264 - - 2,390 - 2,390 4,161,355 - 110,180 - - 3,017 - 3,017 2,407,588 - 535 - - - - - 11,381 - 1,435,804 - - 281,991 2,100 284,091 7,260,737 - 75,403 - 54,564 7,061 - 61,625 3,914,393 - 188,390 - - 83,719 1,134 84,853 2,646,568 - 564,714 - - 100,963 - 100,963 1,578,206 - 11,739 - - 9,894 - 9,894 1,469,380

- 111,259 - - 29,347 2,475 31,822 1,545,733

- 25,156 - - 12,329 - 12,329 1,036,752 - 11,531 - 18,178 3,254 - 21,433 971,126

- 417,297 - - 60,738 - 60,738 1,226,431

- 118,227 - 177,974 109,661 - 287,635 826,270 - 176,673 - - 7,146 - 7,146 546,663 - - - - - - - 680,544

- 120,780 - - 19,610 - 19,610 475,406

- 168,583 - - 19,851 - 19,851 511,022 - 175 - - - - - 175 - - - - - - - 1,458 - 50,312 - - 14,673 - 14,673 113,675 - 13,209 - 1,109 14,934 - 16,044 89,293 - 2,563 - - 837 - 837 44,672 - 1,468 - - - - - 49,075 - 1,350 - - 1,982 - 1,982 42,700 - - - - - - - 19,728 - 3,337 - - - - - 78,644 - 3,141 - - - - - 3,141 - - - - - - - 3,537 - 1,691 - - - - - 3,091 - - - - - - - 21,505 - - - - - - - 1,342 - 2,470 - - - - - 41,206

- - - - - - - 142,410

- 1,000 - - - - - 360,533 - - - - - - - 2,983,562 - - - - - - - 8,414,181

5,000,000 - - - - - - 5,000,000 - 401,861 - - - - - 234,167

5,000,000$ 94,722,552$ 210,000,000$ 7,946,899$ 63,208,545$ 67,137$ 71,222,582$ 860,642,822$

FDIC Lockbox Platinum

Posted, Not Monetized

Page 2 of 3


TAYLOR, BEAN & WHITAKER NOTES TO EXHIBIT C"Gross" Affected Funds as of April 30, 2010

[A]

[B]

[C]

[D]

[E][F]

[G]

[H]

[I]

[J][K]

[L][M]

[N]

[O]

FDIC Lockbox checks represent lockbox checks received at Colonial after August 12, 2009. As indicated in Exhibit D, the FDIC-Receiver has released and transferred virtually all of the lockbox checks to investors and their subsequent servicers.

Amounts represent postings to the Servicing System that were not supported by cash deposits. These amounts were previously classified in the Second Report as Western Union borrower payments under the Colonial Custodial Funds Clearing category. See Section IV.D. of the Report for additional information.

Amounts transferred from Freddie Mac T&I escrow accounts at Colonial and Sovereign to Platinum in July 2009.Amount represents certain borrower payments that were (1) collected after the implementation of the Colonial account hold, and (2) were processed and recorded in the Servicing System. The borrower checks were not deposited into TBW accounts and were forwarded to investors and their subsequent servicers in September 2009. See Section IV.D. of the Report for additional information.Amounts represent TBW initiated ACH payments held in suspense and never drawn from borrowers accounts, and therefore not monetized. However, TBW posted the payments in the Servicing System. As a result, the servicing records that TBW provided to subsequent servicers indicate that a payment was made by the borrower, however, no corresponding funds are on deposit at Colonial or Regions. See Section IV.D. of the Report for additional information.

General Note: Certain affected funds amounts reflect the full borrower payment which includes unpaid service fees to TBW. In addition, for a small population of loans the affected funds include insurance premium payments made by borrowers for non-mortgage related insurance policies. Historically, TBW transferred these insurance premium payments to the insurance carriers. The Debtor will potentially adjust the affected funds amounts for both the service fee and the insurance premium amounts, as appropriate, subsequent to the issuance of this Report. In addition, the amounts in Exhibit C do not reflect funds that were transferred out of certain Investor P&I and T&I accounts between August 6, 2009 and August 25, 2009 as follows: (1) $673,429,353 was released to Ginnie Mae between August 11, 2009 and August 25, 2009; $180,189,139 was released to Freddie Mac on August 6, 2009; and, $4,367,581 was released to Henley Holdings on August 12, 2009 from their respective P&I and T&I accounts.

The Colonial REO Proceeds Clearing Account represents funds collected from REO sales. In the ordinary course of business, REO proceeds would be transferred from this account to the Colonial Custodial Funds Clearing account for processing and subsequent transfer to investor custodial accounts.Amounts in "Other Accounts" represent funds in Colonial that were accumulated prior to the implementation of the Colonial account hold. See Exhibit J for additional details.

The $5 million balance consists of custodial T&I funds that TBW transferred to Seaside in December 2008.

The Regions Refunds Account represents funds collected after the implementation of the Colonial account hold that are associated with various tax and insurance refunds. Refer to Exhibit L for additional allocation of funds.

Similar to funds described under [F], the amounts in the Regions P&I and T&I accounts represent borrower payments received by TBW after implementation of the Colonial account hold. However, these funds represent borrower payments that were initially deposited into the Regions Deposit and Wachovia accounts and then subsequently transferred to investor P&I and T&I accounts established at Regions. The transfers are based on borrower payments that were recorded and processed in the Servicing System.

The Colonial Escrow Distribution Clearing Account ("EDCA") represents borrower funds transferred from T&I custodial accounts at Colonial to fund borrower tax and insurance disbursements for TBW's Platinum EDCA account.These amounts have not been reconciled on a loan level basis due to a lack of necessary supporting information. The Debtor will continue to review in an effort to allocate these amounts. The completion of this review could affect other allocated amounts set forth in this table. See Exhibit I for an explanation of certain reconciling items.Western Union administered a program pursuant to which bi-weekly payments were collected from borrowers. Western Union maintains the collected borrower partial payments in a separate Colonial account (referred to as the “Western Union Clearing Account”). Western Union determined when the payments should be transferred to TBW (Custodial Funds Clearing Account). The

$17.29 million amount represents the balance of funds that have not been transferred to the Custodial Funds Clearing Account. The FDIC-Receiver returned all amounts in the Western Union Clearing Account to Western Union on November 20, 2009, with the exception of $885 remaining in the account at April 30, 2010. The return of funds is reflected in Exhibit D.

Amounts in the Regions Clearing and Deposit Accounts represent borrower payments that TBW received after the implementation of the Colonial account hold and prior to the service release of loans to subsequent servicers. Such amounts were deposited in the Wachovia and Regions Deposit and Clearing accounts and do not include any REO proceeds, force placed insurance refunds, mortgage insurance refunds, or TBW operating funds at Regions. The borrower funds are net of returned items such as NSF and stop payments.

The amounts in the Regions REO Proceeds and Regions REO Specialists (formerly RBC) accounts represent funds collected after the implementation of the Colonial account hold that are associated with investor owned REO properties. REO proceeds associated with TBW owned properties have been excluded for purposes of this analysis. See Table 11 of the Report for information relating to the entire population of REO proceeds. In addition, non-REO proceeds of $796,098 were deposited in the Regions REO Proceeds Account.

Page 3 of 3


Exhibit D

Reductions to the “Gross” Affected Funds

as of April 30, 2010


TAYLOR, BEAN & WHITAKER EXHIBIT D

Line InvestorCFCA 3rd Party ACH

Western Union

ClearingFDIC Lockbox

Checks

CFCA Borrower Protocol

EDCA Borrower Protocol

T&I Borrower Protocol Platinum Bank

Posted Checks

Forwarded

[A] [B] [C] [D] [D] [D] [E] [F] [G]1 Freddie Mac 562,056,053$ (23,571,960)$ (9,986,571)$ (58,021,069)$ (254,311)$ -$ (4,671)$ -$ (210,000,000)$ (3,636,317)$ 2 Ginnie Mae 120,761,519 (9,296,860) (3,833,189) (25,637,471) (50,506) - - (15,720,259) - (4,058,756) 3 Wells Fargo 117,282,764 (1,185,218) (415,178) (6,551,757) - - (984,719) - - - 4 TBW - Not Service Released 11,624,837 - - - (142,400) - (33,635) - - - 5 TBW - Net Funded / FHLMC 4,161,355 - (2,500) (90,663) - - - - - - 6 TBW - Net Funded / GNMA 2,407,588 - - (40,679) - - - - - - 7 TBW - Net Funded / Wells Fargo 11,381 - - (535) - - - - - - 8 Colonial-FDIC 7,260,737 (167,855) (9,767) (1,431,577) [J] - - (483,518) - - - 9 BB&T 3,914,393 - - (21,684) - - (13,985) - - (54,564)

10 Bayview Loan Servicing LLC 2,646,568 (46,206) (26,795) (170,726) - - (313,405) - - - 11 Bank of America 1,578,206 (55,001) (1,871) (560,579) - - - - - - 12 UMS - Hudson City 1,469,380 - (8,258) - - - - - - - 13 TBW - Selene Interim Serviced 1,545,733 - (1,317) (102,494) - - (34,660) - - - 14 Urban Trust Bank 1,036,752 (5,592) (1,106) (25,156) - - (19,280) - - - 15 Bank of Internet 971,126 (1,655) (5,858) (8,503) - - - - - (18,178) 16 Platinum Community Bank-FDIC 1,226,431 (34,986) - (414,113) - - - - - - 17 Henley Holdings 826,270 (79,317) (12,202) (113,723) - - - - - (177,974) 18 Seaside 546,663 (1,319) - (176,673) - - (9,150) - - - 19 Mercantile Bank 680,544 - - - - - - - - -

20 Ocala Funding - RoundPoint Interim Serviced 475,406 (10,536) - (119,331) - - (1,282) - - -

21 Cole Taylor 511,022 (10,795) - (161,862) - - (2,875) - - - 22 IndyMac 175 - - - - - - - - - 23 Five Mile Capital 1,458 - - - - - - - - - 24 US AmeriBank 113,675 (5,939) - (48,525) - - (1,165) - - - 25 MGC Mortgage 89,293 - (6,512) - - - - - - (1,109) 26 Century National Bank 44,672 - - - - - - - - - 27 Hyde Park Savings Bank 49,075 - - - - - - - - - 28 CitiMortgage Inc 42,700 - - - - - - - - - 29 First American Bank & Trust 19,728 - - - - - - - - - 30 MountainView 78,644 (571) - (2,215) - - - - - - 31 Citi Home Equity 3,141 - - - - - - - - - 32 RBC Bank 3,537 - - - - - - - - - 33 Selene 3,091 (1,400) - (1,691) - - - - - - 34 Bayrock Mortgage 21,505 (1,469) - - - - - - - - 35 Central Mortgage (CMC) 1,342 - - - - - - - - - 36 Marix Servicing 41,206 - - - - - - - - - 37 First Alternative Mortgage Corp 142,410 - - - - - - - - - 38 Borrower 360,533 - - - - - - - - - 39 Unresolved Returned to Western Union 2,983,562 - (2,982,677) - - - - - - - 40 EDCA 8,414,181 - - - - (5,473,290) - - - - 41 Seaside 5,000,000 - - - - - - - - - - 42 Still Under Review 234,167 - - - - - - - - - 43 Total 860,642,822$ (34,476,679)$ (17,293,801)$ (93,701,023)$ (447,217)$ (5,473,290)$ (1,902,345)$ (15,720,259)$ (210,000,000)$ (7,946,899)$

FDIC-Receiver Distributions

Reductions to the "Gross" Affected Funds as of April 30, 2010

"Gross" Affected Funds Total (Exhibit C)

CFCA Transfer to

GNMA P&I/T&I

Page 1 of 3


TAYLOR, BEAN & WHITAKER

Line Investor

1 Freddie Mac2 Ginnie Mae3 Wells Fargo4 TBW - Not Service Released5 TBW - Net Funded / FHLMC6 TBW - Net Funded / GNMA7 TBW - Net Funded / Wells Fargo8 Colonial-FDIC9 BB&T

10 Bayview Loan Servicing LLC11 Bank of America12 UMS - Hudson City13 TBW - Selene Interim Serviced14 Urban Trust Bank15 Bank of Internet16 Platinum Community Bank-FDIC17 Henley Holdings18 Seaside19 Mercantile Bank


21 Cole Taylor22 IndyMac23 Five Mile Capital24 US AmeriBank25 MGC Mortgage26 Century National Bank27 Hyde Park Savings Bank28 CitiMortgage Inc29 First American Bank & Trust30 MountainView31 Citi Home Equity32 RBC Bank33 Selene34 Bayrock Mortgage35 Central Mortgage (CMC)36 Marix Servicing37 First Alternative Mortgage Corp38 Borrower39 Unresolved Returned to Western Union40 EDCA41 Seaside42 Still Under Review43 Total

Reductions to the "Gross" Affected Funds as of April 30, 2010

EXHIBIT D

Regions Transfers to Selene Regions REO

REO Specialists (from RBC)

Regions Refund

Regions Clearing

Total Transfers to Operating

Total Deductions

[D] [H] [I] [I] [I] [I] [I] [K](675,312)$ -$ (100)$ -$ (5,064,749)$ -$ (5,064,849)$ (311,215,060)$ 250,840,993$

- - (1,629) - (741,821) - (743,451) (59,340,492) 61,421,026 (66,272) - (2,845,043) (28,103) (1,673,235) - (4,546,381) (13,749,525) 103,533,240

- (178,922) - - (303,562) (117,669) (421,231) (776,187) 10,848,650 - - - - - - - (93,162) 4,068,193 - - - - - - - (40,679) 2,366,910 - - - - - - - (535) 10,846

(28,366) - (2,453) - (459,015) - (461,467) (2,582,550) 4,678,187 - - - - - - - (90,234) 3,824,159 - - (108) - (176,149) - (176,257) (733,389) 1,913,180 - - - - (2,332) - (2,332) (619,783) 958,423 - - - - - - - (8,258) 1,461,122 - (875,439) (15,875) - (89,688) - (105,563) (1,119,473) 426,260 - - - - - - - (51,134) 985,618 - - - - - - - (34,194) 936,932

(2,349) - - - - - - (451,448) 774,982 - - - - - - - (383,215) 443,054

(9,068) - - - - - - (196,210) 350,453 - - (5,513) - (2,655) - (8,168) (8,168) 672,376

- - - - - - - (131,149) 344,257

- - - - - - - (175,532) 335,490 - - - - - - - - 175 - - - - - - - - 1,458 - - - - - - - (55,629) 58,047 - - - - (2,608) - (2,608) (10,230) 79,063 - - - - - - - - 44,672 - - - - (1,787) - (1,787) (1,787) 47,288 - - - - - - - - 42,700 - - - - - - - - 19,728 - - - - (103) - (103) (2,889) 75,755 - - - - - - - - 3,141 - - - - - - - - 3,537 - - - - - - - (3,091) 0 - - - - - - - (1,469) 20,036 - - - - - - - - 1,342 - - - - - - - - 41,206 - - - - - - - - 142,410 - - - - - - - - 360,533 - - - - - - - (2,982,677) 885 - - - - - - - (5,473,290) 2,940,892 - - - - - - - - 5,000,000 - - - - - - - - 234,167

(781,367)$ (1,054,360)$ (2,870,721)$ (28,103)$ (8,517,703)$ (117,669)$ (11,534,197)$ (400,331,437)$ 460,311,385$

Transfers to Regions Operating

Total Net Affected Funds

Regions

Page 2 of 3


TAYLOR, BEAN & WHITAKER NOTES TO EXHIBIT DReductions to the "Gross" Affected Funds as of April 30, 2010

[A]

[B]

[C]

[D]

[E]

[F]

[G]

[H]

[I]

[J]

[K]

Transfer of funds from the Regions Clearing Account to Selene, as interim servicer for TBW's service released loans. Amount includes $178,922 transferred to Selene pursuant to the Borrower Protocol.

Transfers to the Regions Operating Account from the Regions REO Proceeds, Regions Refunds, Regions Clearing, and Regions REO Specialists (formerly RBC) accounts for reimbursement of force placed insurance, T&I advances, and REO proceeds deposits, among others.

Refer to Exhibit E for the calculation of Net Affected Funds on deposit.

Amount represents Third Party ACH deposits that were held in the CFCA and which have been distributed by the FDIC-Receiver through April 30, 2010. The difference between the balance from Exhibit C and the distributed funds represents funds that are still on deposit at Colonial that total $229,114.

Western Union administers a program pursuant to which bi-weekly payments are collected from borrowers which are maintained in a Colonial account referred to as the “Western Union Clearing

Account”. Western Union determined when the payments would be transferred to TBW's Custodial Funds Clearing Account, at which time the borrower payment would be reflected in the

Servicing System. The FDIC-Receiver returned all amounts in the Western Union Clearing Account to Western Union on November 20, 2009, with the exception of $885 remaining in the account at April 30, 2010. Western Union informed the Debtor that Western Union (1) sent the borrowers' payments to the subsequent servicer if there were enough funds for a full payment, or (2) sent the borrower a check if the funds were not enough for a full mortgage payment.

The FDIC-Receiver has released and transferred virtually all of the lockbox checks with approximately $1.0 million out of a total $94.7 million remaining with the FDIC-Receiver as of April 30, 2010. Certain small amounts were distributed to the incorrect investor and related subsequent servicer. The Debtor will work jointly with the FDIC-Receiver to address and resolve these issues with individual investors.

Distributions made in March 2010 and April 2010 pursuant to the Borrower Protocol. The sources of the funds are included the Colonial Custodial Funds Clearing, Colonial EDCA, various Colonial investor T&I accounts, and the Regions Clearing account. These amounts do not include a May 2010 distribution of $1,456. In addition, the Debtor received certain distributions from the Colonial accounts that were subsequently distributed on behalf of other investors, which are reflected in this allocation.

On August 7, 2009, Colonial transferred funds from the Custodial Funds Clearing Account to the Colonial Ginnie Mae P&I and T&I accounts. These transfers were associated with various August 3 and August 4 borrower payments TBW received that would have been transferred to the Ginnie Mae P&I and T&I accounts the following business day but-for the Colonial hold. This transfer represents the actual "push down" of funds from the Custodial Funds Clearing Account.

The FDIC distributed $210 million to Freddie Mac in the August/September 2009 timeframe.

The Colonial-FDIC figure includes ($3,987) of lockbox checks that were distributed to RoundPoint.

Amount represents certain borrower payments that were (1) collected after the implementation of the Colonial account hold, (2) processed and posted to the Servicing System, and (3) forwarded to investors and their subsequent servicers in September 2009 rather than being deposited into the Regions accounts. As indicated in Exhibit C, these borrower payments were not deposited in TBW accounts. The subsequent servicers' records already reflect these payments and should not have been posted to the borrower's accounts.

Page 3 of 3


Exhibit E

“Net” Affected Funds as of April 30, 2010


TAYLOR, BEAN & WHITAKER EXHIBIT E"Net" Affected Funds as of April 30, 2010

Line Investor

Custodial Funds

ClearingPrincipal &

InterestTaxes &

Insurance

Western Union

Clearing

REO Proceeds Clearing EDCA

Other Accounts

Total Colonial Accounts

Clearing/ Deposit P&I and T&I Service Fee REO Proceeds

REO Specialists (from RBC) Refunds

Total Regions Accounts

[A] [B] [C] [D] [E] [F] [G] [H]1 Freddie Mac 149,931,537$ -$ 211,097$ -$ -$ -$ 115,142$ 150,257,776$ 284,333$ 51,160,312$ -$ 7,795$ -$ 1,588,897$ 53,041,337$ 2 Ginnie Mae 45,478,386 - 215,882 - - - 119,595 45,813,864 1,087,340 477,077 - 62,831 - 667,945 2,295,193 3 Wells Fargo 9,183,169 335,636 15,341,988 - 914,412 - 86 25,775,292 6,877,962 58,131,530 - 9,963,574 553,729 307,815 75,834,611 4 TBW - Not Service Released 5,657,522 289,504 (16,336) - 1,555,504 - 235,000 7,721,194 767,347 1,003,806 1,337,847 - - (1,076) 3,107,925 5 TBW - Net Funded / FHLMC 6,383 - 53,597 - - - - 59,980 1,292,084 2,615,461 - 5,605 - 72 3,913,221 6 TBW - Net Funded / GNMA 1,869 - 49,196 - - - - 51,064 665,221 1,574,929 - 1,707 - 1,470 2,243,327 7 TBW - Net Funded / Wells Fargo - - - - - - - - 4,278 6,568 - - - - 10,846 8 Colonial-FDIC 232,118 - 609,379 - 338,195 - 941 1,180,633 1,876,481 1,190,611 - 93,136 108 48,899 3,209,235 9 BB&T 1,852,324 35,292 80,577 - - - - 1,968,193 86,318 1,708,869 - - - - 1,795,186

10 Bayview Loan Servicing LLC 90,880 - 825,459 - 343,065 - - 1,259,404 226,291 278,353 - 107 7,294 39,212 551,258 11 Bank of America 197,838 - 566,449 - - - - 764,287 4,541 25,369 - 4,128 - 55,000 89,038 12 UMS - Hudson City 19,898 483,183 57,517 - - - - 560,598 15,458 863,434 - - - - 878,892 13 TBW - Selene Interim Serviced 192,094 - 11,899 - - - - 203,992 (743,864) 745,148 - 177,331 - 3,066 181,681 14 Urban Trust Bank 12,350 897,802 62,857 - - - - 973,009 - - - - - 280 280 15 Bank of Internet 34,257 881,944 14,448 - - - - 930,650 - - - - - - - 16 Platinum Community Bank-FDIC 148,484 169,179 259,792 - - - - 577,456 69,756 59,117 - 1,456 - 3,275 133,604 17 Henley Holdings 264,564 - - - - - - 264,564 2,818 59,592 - - - 1,915 64,324 18 Seaside 44,116 - 101,790 - - - - 145,905 128,924 51,033 - - - 17,444 197,402 19 Mercantile Bank - - - - - - - - 374,842 - - 297,384 - 150 672,376

20 Ocala Funding - RoundPoint Interim Serviced 28,342 50,159 20,319 - - - - 98,820 16,141 198,663 - - - 9,573 224,377

21 Cole Taylor 27,891 - 120,232 - - - - 148,122 - 159,074 - 31 - 1,691 160,796 22 IndyMac - - - - - - - - - - - - - - - 23 Five Mile Capital - 1,175 - - - - - 1,175 283 - - - - - 283 24 US AmeriBank 16,867 - 23,527 - - - - 40,394 - - - - - 1,192 1,192 25 MGC Mortgage 38,948 - - - - - - 38,948 - 930 - - - 11,041 11,971 26 Century National Bank 1,362 13,749 3,942 - - - - 19,053 1,494 20,724 - - - - 22,218 27 Hyde Park Savings Bank 1,341 - 13,665 - - - - 15,006 - 30,813 - - - - 30,813 28 CitiMortgage Inc 13,079 - - - - - - 13,079 4,698 18,267 - - - 3,324 26,289 29 First American Bank & Trust 615 4,147 5,975 - - - - 10,736 4,500 4,492 - - - - 8,992 30 MountainView 2,335 67,584 - - - - - 69,919 - - - - - 4,714 4,714 31 Citi Home Equity - - - - - - - - - - - - - - - 32 RBC Bank - 1,309 1,047 - - - - 2,355 - 1,181 - - - - 1,181 33 Selene - - - - - - - - - - - - - - - 34 Bayrock Mortgage - - - - - - 20,036 20,036 - - - - - - - 35 Central Mortgage (CMC) (2,000) - 1,691 - - - - (309) 1,604 - - - - 47 1,651 36 Marix Servicing - 31,211 - - - - - 31,211 - - - - - 7,525 7,525 37 First Alternative Mortgage Corp - - - - - - 142,410 142,410 - - - - - - - 38 Borrower 337,636 - - - - - 5,208 342,843 16,690 - - - - - 16,690

39 Unresolved Returned to Western Union - - - 885 - - - 885 - - - - - - -

40 EDCA - - - - - 2,940,892 - 2,940,892 - - - - - - - 41 Seaside - - - - - - - - - - - - - - - 42 Still Under Review (195,023) 6,687 13,246 - - - 36,396 (138,694) (33,781) - - 4,699 81 - (29,000) 43 Total 213,619,182$ 3,268,562$ 18,649,234$ 885$ 3,151,176$ 2,940,892$ 674,814$ 242,304,744$ 13,031,760$ 120,385,354$ 1,337,847$ 10,619,784$ 561,213$ 2,773,472$ 148,709,430$

Colonial Accounts Regions Accounts

Page 1 of 3


TAYLOR, BEAN & WHITAKER"Net" Affected Funds as of April 30, 2010

Line Investor

1 Freddie Mac2 Ginnie Mae3 Wells Fargo4 TBW - Not Service Released5 TBW - Net Funded / FHLMC6 TBW - Net Funded / GNMA7 TBW - Net Funded / Wells Fargo8 Colonial-FDIC9 BB&T

10 Bayview Loan Servicing LLC11 Bank of America12 UMS - Hudson City13 TBW - Selene Interim Serviced14 Urban Trust Bank15 Bank of Internet16 Platinum Community Bank-FDIC17 Henley Holdings18 Seaside19 Mercantile Bank


21 Cole Taylor22 IndyMac23 Five Mile Capital24 US AmeriBank25 MGC Mortgage26 Century National Bank27 Hyde Park Savings Bank28 CitiMortgage Inc29 First American Bank & Trust30 MountainView31 Citi Home Equity32 RBC Bank33 Selene34 Bayrock Mortgage35 Central Mortgage (CMC)36 Marix Servicing37 First Alternative Mortgage Corp38 Borrower

39 Unresolved Returned to Western Union

40 EDCA41 Seaside42 Still Under Review43 Total

EXHIBIT E

SeasideChecks

Forwarded

TBWPayment

Center ACH Western Union

Subtotal Posted, Not Monetized

Subtotal Funds Not Monetized

Total Net Affected Funds

-$ -$ 203,299,113$ -$ 47,337,787$ 49,256$ 47,387,043$ 154,838$ 47,541,881$ 250,840,993$ - - 48,109,057 - 13,307,411 - 13,307,411 4,558 13,311,969 61,421,026 - - 101,609,902 - 1,765,810 12,173 1,777,984 145,354 1,923,338 103,533,240 - - 10,829,119 - 14,139 - 14,139 5,392 19,531 10,848,650 - - 3,973,201 - 2,390 - 2,390 92,601 94,992 4,068,193 - - 2,294,392 - 3,017 - 3,017 69,501 72,518 2,366,910 - - 10,846 - - - - - - 10,846 - - 4,389,868 - 281,991 2,100 284,091 4,227 288,319 4,678,187 - - 3,763,380 - 7,061 - 7,061 53,718 60,779 3,824,159 - - 1,810,662 - 83,719 1,134 84,853 17,665 102,518 1,913,180 - - 853,325 - 100,963 - 100,963 4,134 105,097 958,423 - - 1,439,489 - 9,894 - 9,894 11,739 21,633 1,461,122 - - 385,674 - 29,347 2,475 31,822 8,765 40,586 426,260 - - 973,289 - 12,329 - 12,329 - 12,329 985,618 - - 930,650 - 3,254 - 3,254 3,028 6,282 936,932 - - 711,060 - 60,738 - 60,738 3,185 63,923 774,982 - - 328,889 - 109,661 - 109,661 4,505 114,166 443,054 - - 343,307 - 7,146 - 7,146 - 7,146 350,453 - - 672,376 - - - - - - 672,376

- - 323,197 - 19,610 - 19,610 1,450 21,060 344,257

- - 308,919 - 19,851 - 19,851 6,721 26,572 335,490 - - - - - - - 175 175 175 - - 1,458 - - - - - - 1,458 - - 41,586 - 14,673 - 14,673 1,788 16,461 58,047 - - 50,920 - 14,934 - 14,934 13,209 28,143 79,063 - - 41,271 - 837 - 837 2,563 3,400 44,672 - - 45,819 - - - - 1,468 1,468 47,288 - - 39,368 - 1,982 - 1,982 1,350 3,332 42,700 - - 19,728 - - - - - - 19,728 - - 74,633 - - - - 1,122 1,122 75,755 - - - - - - - 3,141 3,141 3,141 - - 3,537 - - - - - - 3,537 - - - - - - - - - - - - 20,036 - - - - - - 20,036 - - 1,342 - - - - - - 1,342 - - 38,736 - - - - 2,470 2,470 41,206 - - 142,410 - - - - - - 142,410 - - 359,533 - - - - 1,000 1,000 360,533 [I]

- - 885 - - - - - - 885

- - 2,940,892 - - - - - - 2,940,892 5,000,000 - 5,000,000 - - - - - - 5,000,000

- - (167,694) - - - - 401,861 401,861 234,167 5,000,000$ -$ 396,014,173$ -$ 63,208,545$ 67,137$ 63,275,683$ 1,021,529$ 64,297,212$ 460,311,385$

FDIC Lockbox Not

Distributed

Posted, Not Monetized FundsTotal Net

Affected Funds on DepositPlatinum

Page 2 of 3


TAYLOR, BEAN & WHITAKER NOTES TO EXHIBIT E"Net" Affected Funds as of April 30, 2010

[A]

[B]

[C]

[D]

[E]

[F]

[G]

[H]

[I] Amount represents certain funds that are to be returned to borrowers for various reasons including payments received after loan payoff and escrow returns, among others. The Debtor will work jointly with the FDIC-Receiver to distribute these funds.

General Note: Certain affected funds amounts reflect the full borrower payment which includes unpaid service fees to TBW. In addition, for a small population of loans the affected funds include insurance premium payments made by borrowers for non-mortgage related insurance policies. Historically, TBW transferred these insurance premium payments to the insurance carriers. The Debtor will potentially adjust the affected funds amounts for both the service fee and the insurance premium amounts, as appropriate, subsequent to the issuance of this Report. In addition, the amounts in Exhibit E do not reflect funds that were transferred out of certain Investor P&I and T&I accounts between August 6, 2009 and August 25, 2009 as follows: (1) $673,429,353 was released to Ginnie Mae between August 11, 2009 and August 25, 2009; $180,189,139 was released to Freddie Mac on August 6, 2009; and, $4,367,581 was released to Henley Holdings on August 12, 2009 from their respective P&I and T&I accounts.

Account in which borrower funds were initially deposited prior to the Colonial account hold on August 5, 2009. See Exhibit F for a description of the sources of the deposits into the Custodial Funds Clearing Account, as well a description of the changes since the Second Report. Exhibit F is an updated version of a table contained in the First and Second Reports. See Exhibit G for the investor allocation of these funds by investor. Finally, see Exhibit H for a high level summary of the monthly activity in the Custodial Funds Clearing Account since August 1, 2009. A portion of these funds represent unpaid service fees to TBW.Investor Principal & Interest accounts. There have been no deposits into any of the investor P&I accounts since August 4, 2009.

This amount does not include $5,244 in non-REO proceeds amounts that are included in the account balance at April, 30 2010 of $566,457 as reflected in Exhibit K. Therefore, the amounts reflected in this exhibit and Table 3 of the Report reflect an amount of $561,213.

Investor Tax & Insurance accounts. There have been no deposits into any of the investor T&I accounts since August 4, 2009.

This account was used in connection with a program administered by Western Union. Borrowers made payments into this account every two weeks, and Western Union determined when those funds should be transferred to the Custodial Funds Clearing Account in payment of these borrowers’ mortgages. TBW recorded and posted these borrowers’ payment only when the funds were

deposited into the Custodial Funds Clearing Account. As of September 30, 2009, $17.3 million in this account had not been transferred to the Custodial Funds Clearing Account. The FDIC-Receiver turned a large majority of these funds over to Western Union in November 2009. Western Union informed the Debtor that Western Union (1) sent the borrowers' payments to the subsequent servicer if there were enough funds for a full payment, or (2) sent the borrower a check if the funds were not enough for a full mortgage payment.

This account includes proceeds from REO sales that would have been transferred to the Custodial Funds Clearing Account in the ordinary course of business had the Colonial account hold not

As more fully described in the Borrower Protocol, $8,414,181 was on deposit in this account as of August 5, 2009. From this balance, $5,473,290 was transferred to investors pursuant to the Borrower Protocol. The balance of $2,940,892 as of April 30, 2010, remains on deposit in this account.

As described more fully in Exhibit J, there are a number of “other” Colonial accounts related to the servicing function.

Page 3 of 3


Exhibit F

Summary of Funds Identified in the

Colonial Bank Custodial Funds Clearing Account (“CFCA”)


TAYLOR, BEAN & WHITAKER Exhibit FSummary of Funds Identified in the Colonial Custodial Funds Clearing Account ("CFCA")

Line Item

Reported Amount at 11/30/09

Reported Amount at

4/30/10 Change Description

[A]1 Third Party ACH 34,705,792$ 34,705,792$ -$ Automated Clearinghouse ("ACH") transactions initiated by third party entities, Checkfree and Metavante, which

were deposited into the Clearing Account between 8/4/09 and 8/18/09.

2 Less: Transferred to Investors (34,430,473) (34,476,679) (46,206) [B] Funds transferred to investors by the FDIC-Receiver.3 Net Third Party ACH 275,319 229,114 (46,206) Third Party ACH funds that FDIC-Receiver has not transferred to investors as of 4/30/10.

4 Western Union 21,376,058 21,389,002 12,943 [C] Western Union wire transfers received in the Custodial Funds Clearing Account ("CFCA") between 8/3/09 and 8/11/09. These are borrower payments associated with a bi-weekly mortgage payment program that is administered by Western Union.

5 Military Allotment 379,593 615,687 236,094 [D] Borrower payments wired into the CFCA account from 8/3/09 through 4/30/10. Various branches of the U.S. armed forces make payments on behalf of active duty military personnel.

6 Wire Transfers 107,606,477 110,731,743 3,125,266 [E] Wire transfers received in the CFCA account through 4/30/10. The wire transfers relate to loan payoffs, REO proceeds, and borrower payments, among others.

7 Colonial Borrower Payment Checks:

8 8/4/09-8/7/09 34,561,968 34,561,968 - Borrower checks deposited into the CFCA lockbox from 8/4/09 through 8/7/09.

9 8/10/09 21,903,315 21,903,315 - Borrower checks deposited into the CFCA lockbox on 8/10/09. TBW did not post the payments from the 8/10/09 deposit due to insufficient borrower payment detail.

10 Net Funded HARP Funds 2,645,332 1,336,494 (1,308,838) [F] Amount relates to the net funded loans associated with the Freddie Mac Home Affordable Refinance Program ("HARP") that assists mortgagors refinance into a more affordable mortgage. The net amount relates to payoff funds transferred from the TBW Master Advance Account, less payoff funds that were transferred to the Freddie Mac investor P&I account.

11 REO Proceeds 1,578,832 7,039,167 5,460,335 [E] REO proceeds on deposit in the CFCA and transferred from the TBW REO Proceeds Clearing Account.

12 Checks Received at TBW 25,389,560 25,317,260 (72,300) [G] Borrower payments mailed to TBW and deposited into the CFCA account on 8/5/09.

13 ACH - TBW Payment Center 8,323,832 8,323,832 - Deposits related to TBW initiated ACH transactions from 8/5/09 through 8/11/09.

14 Credit Memos 115,455 115,455 - Amount relates to settlement proceeds for a net-funded Freddie Mac “Relief Refi Mortgage” loan made under the

Making Home Affordable program.15 Payroll Deductions 5,046 5,046 - Employee payroll deductions from September to November 2009 associated with a paid in full loan.

16 Wells Fargo Wire Transfers - 30,765 30,765 [H] Borrower related payments deposited into the CFCA via wire transfer in August 2009 and April 2010.

17 Unallocated Colonial Deposits (f/k/a "Cashiering Access")

721,221 2,104,292 1,383,070 [I] Checks deposited in the CFCA account (1) without a corresponding loan number or investor in TBW’s servicing

system, referred to as "Not in System" or "NIS", and (2) funds ultimately due to TBW. The Debtor and FDIC-Receiver will work jointly to distribute the items identified as borrower funds subsequent to this Report.

18 Less: Bank Debits (2,318,645) (3,728,139) (1,409,494) [J] Borrower payments that were returned by the bank for various reasons including insufficient funds, stop payments, account number errors, as well as bank corrections.

19 Less: GNMA Transfer (15,720,259) (15,720,259) - On 8/7/09, prior to the appointment of the FDIC-Receiver, Colonial transferred funds from the CFCA to Ginnie Mae P&I and T&I accounts. These transfers were associated with various 8/3/09 and 8/4/09 borrower payments received by TBW that would have been transferred to the Ginnie Mae P&I and T&I accounts the following business day but-for the Colonial account hold. These transfers represent the actual push down of funds from the CFCA. In addition, the funds associated with this transfer are contained in the other categories in this table, such as Third Party ACH or Lockbox checks.

20 Less: Borrower Motion Transfers - (447,217) (447,217) [K] Distributions made in March and April 2010 in accordance with Borrower Protocol.

21 Total Identified 206,843,105 213,807,525 6,964,420 Funds identified and to be allocated by investor.

22 Ending Bank Balance 214,065,638 213,619,182 (446,456) [L]

23 Difference 7,222,533$ (188,343)$ (7,410,876)$ [M] Amount represents an unreconciled difference from the bank balance at 4/30/10.

Page 1 of 2


TAYLOR, BEAN & WHITAKER Exhibit FSummary of Funds Identified in the Colonial Custodial Funds Clearing Account ("CFCA")

NOTES:

[A]

[B][C]

[D]

[E]

[F]

[G]

[H][I]

[J]

[K]

[L]

[M]

The change represents additional FDIC-Receiver distributions to investors in January 2010 after the Second Report.

The decrease between the November 30, 2009 and April 30, 2010 figure represents a reclassification of certain checks from "Checks Received at TBW" to "Unallocated Colonial Deposits" at April 30, 2010.

The Debtor identified and clarified certain incoming wire transfers in the Custodial Funds Clearing Account subsequent to the Second Report.The Debtor identified and clarified additional unallocated funds in the Custodial Funds Clearing Account subsequent to the Second Report.

The increase between the November 30, 2009 and April 30, 2010 figures represents additional returns and bank debits that were identified and clarified subsequent to the Second Report.

Amount represents March and April 2010 transfers from the Custodial Funds Clearing Account in accordance with the Court approved Borrower Protocol.

The difference reflects the work performed by the Debtor subsequent to the Second Report to identify loan level detail associated with unidentified difference of $7.2 million. See Exhibit A for a description of the procedures performed.

The decrease in the balance from November 30, 2009 through April 30, 2010 was driven primarily by the FDIC-Receiver's transfers of 3rd Party ACH and Borrower Protocol funds to investors. As noted in Exhibits C and I, ($195,023) of the April 30, 2010 balance represent items that are Still Under Review and have not been allocated to a specific investor.

The change represents the identification of a $1.3 million transfer from the CFCA to the Freddie Mac P&I account, but no funds had been deposited into the CFCA relating to those specific loans.

The amounts represent figures from Table 2 of the Second Report (p. 9).

General Note: Certain affected funds amounts reflect the full borrower payment which includes unpaid service fees to TBW. In addition, for a small population of loans the affected funds include insurance premium payments made by borrowers for non-mortgage related insurance policies. Historically, TBW transferred these insurance premium payments to the insurance carriers. The Debtor will potentially adjust the affected funds amounts for both the service fee and the insurance premium amounts, as appropriate, subsequent to the issuance of this Report.

The increase between the November 30, 2009 and April 30, 2010 figures represents a clarification of the loan level detail based on a reconciliation between TBW and Western Union records. Certain payments identified as Western Union in the Second Interim Report were reclassified to Western Union Posted, Not Monetized.

The increase between the November 30, 2009 and April 30, 2010 figures represents additional borrower funds deposited into the Custodial Funds Clearing Account.

The increase between the November 30, 2009 and April 30, 2010 figures represents the identification of wires that were previously contained in the Custodial Funds Clearing Account balance at November 30, 2009, and were identified based on further research subsequent to the Second Report.

Page 2 of 2


Exhibit G

Custodial Funds Clearing Account as of April 30, 2010


Exhibit G

Line Description

Total All Investors at

4/30/10 Freddie Mac Wells Fargo Ginnie MaeBank of America

Bank of Internet

Bayrock Mortgage

Bayview Loan Servicing LLC BB&T

1 Third Party ACH (Metavante/Checkfree) 34,705,792$ 23,638,663$ 1,205,671$ 9,365,945$ 55,001$ 1,655$ 1,469$ 46,206$ 5,655$ 2 Western Union 21,389,002 14,911,440 624,428 5,727,878 - 8,379 - 31,567 - 3 Military Allotment 615,687 43,632 2,919 545,942 3,380 - - - - 4 Wire Transfers 110,731,743 70,915,520 2,848,905 34,723,517 - - - 132,603 1,501,649 5 Colonial Borrower Payment Checks via Lockbox:6 Received at Colonial through 8/7/09 34,561,968 23,996,681 1,057,384 8,964,105 85,711 19,552 - 46,966 4,738 7 Received at Colonial on 8/10/2009 21,903,315 15,242,324 800,924 5,578,173 42,560 - - 35,268 2,732 8 Net Funded HARP Funds 1,336,494 1,989,767 - (146,515) - - - (165,786) - 9 REO Proceeds 7,039,167 - 3,291,946 - - - - - 342,051 10 Checks Received at TBW 25,317,260 19,385,013 378,888 4,861,858 24,928 6,326 - 10,068 - 11 TBW Payment Center:12 TBW Payment Center - ACH 4,977,876 2,806,474 127,572 1,969,264 16,608 - - 5,692 - 13 TBW Payment Center - Phone Check, BMC,

eStatement, TMP 2,979,781 1,610,091 79,753 1,247,104 15,435 - - 1,556 - 14 TBW Payment Center - BMC 8/6 Deposit 366,175 132,445 6,590 218,946 1,579 - - - -

15 Subtotal TBW Payment Center 8,323,832 4,549,010 213,915 3,435,314 33,622 - - 7,249 - 16 Credit Memos 115,455 - - - - - - - - 17 Payroll Deductions 5,046 - - - - - - - - 18 Wells Fargo Wire Transfers 30,765 13,603 565 15,052 - - - - -

19 Unallocated Colonial Deposits (f/k/a "Cashiering Access") 2,104,292 35,361 - 23,464 10,622 - - - -

20 Returns (3,728,139) (963,207) (57,158) (2,548,724) (2,984) - - (7,054) (4,500) 21 Unallocated Funds/(Shortfall) (188,343) - - - - - - - -

22 Subtotal - "Gross" Custodial Funds Clearing Account

264,263,337$ 173,757,808$ 10,368,387$ 70,546,011$ 252,839$ 35,912$ 1,469$ 137,086$ 1,852,324$

23 Less: 3rd Party ACH Distributions by FDIC-Receiver (34,476,679) (23,571,960) (1,185,218) (9,296,860) (55,001) (1,655) (1,469) (46,206) - Less: GNMA - 8/7/09 Debit Memos:

24 P&I transfer (15,017,545) - - (15,017,545) - - - - - 25 T&I transfer (702,714) - - (702,714) - - - - - 26 Borrower Protocol Distributions (447,217) (254,311) - (50,506) - - - - - 27 Net Custodial Funds Clearing Account 213,619,182$ 149,931,537$ 9,183,169$ 45,478,386$ 197,838$ 34,257$ -$ 90,880$ 1,852,324$

See Exhibit F for a description of the Custodial Funds Clearing Account categories.

TAYLOR, BEAN & WHITAKERCustodial Funds Clearing Account as of April 30, 2010

Page 1 of 4


Line Description

1 Third Party ACH (Metavante/Checkfree)2 Western Union3 Military Allotment4 Wire Transfers5 Colonial Borrower Payment Checks via Lockbox:6 Received at Colonial through 8/7/097 Received at Colonial on 8/10/20098 Net Funded HARP Funds9 REO Proceeds10 Checks Received at TBW11 TBW Payment Center:12 TBW Payment Center - ACH13 TBW Payment Center - Phone Check, BMC,

eStatement, TMP14 TBW Payment Center - BMC 8/6 Deposit

15 Subtotal TBW Payment Center16 Credit Memos17 Payroll Deductions18 Wells Fargo Wire Transfers


20 Returns21 Unallocated Funds/(Shortfall)


23 Less: 3rd Party ACH Distributions by FDIC-ReceiverLess: GNMA - 8/7/09 Debit Memos:

24 P&I transfer25 T&I transfer26 Borrower Protocol Distributions27 Net Custodial Funds Clearing Account



Exhibit G

Borrower

Central Mortgage

(CMC)Century

National BankCiti Home

EquityCitiMortgage

Inc Cole Taylor Colonial-FDICFirst American Bank & Trust

Five Mile Capital

Henley Holdings

27,887$ -$ 495$ -$ 4,075$ 10,795$ 169,108$ -$ -$ 79,317$ 30,051 - - - 527 - 15,681 - - 18,725 2,300 - - - - - 15,000 - - - 4,135 - - - - - - - - 106,722

- - - - 3,786 13,738 157,172 - - 102,782 - - 867 - 2,207 5,278 100,528 615 - 28,000 - - - - - - (340,972) - - - - - - - - - - - - - 224 - - - - 7,816 257,140 - - 2,433

- - - - 2,485 1,059 26,243 - - 6,670

- - - - - - 15,929 - - 861 - - - - - - 2,838 - - 514

- - - - 2,485 1,059 45,009 - - 8,045 - - - - - - - - - - - - - - - - 5,046 - - - - - - - - - - - - 752

298,145 - - - - - 2,492 - - -

(25,107) (2,000) - - - - (26,231) - - (2,895) - - - - - - - - - -

337,636$ (2,000)$ 1,362$ -$ 13,079$ 38,686$ 399,973$ 615$ -$ 343,881$

- - - - - (10,795) (167,855) - - (79,317)

- - - - - - - - - - - - - - - - - - - - - - - - - - - - - -

337,636$ (2,000)$ 1,362$ -$ 13,079$ 27,891$ 232,118$ 615$ -$ 264,564$

Page 2 of 4


Line Description











Exhibit G

Hyde Park Savings Bank IndyMac

Mercantile Bank

MGC Mortgage MountainView

Ocala Funding - RoundPoint

Interim Serviced

Platinum Community Bank-FDIC RBC Bank Seaside Selene

-$ -$ -$ 7,586$ 2,861$ 10,536$ 34,986$ -$ 1,319$ 1,400$ - - - 9,315 - - - - - - - - - - - - 1,497 - 1,017 - - - - - - - - - - -

- - - 9,555 - 14,151 38,807 - 7,147 - - - - 3,801 - 6,131 27,531 - 1,151 - - - - - - - - - - - - - - - - - - - - -

1,341 - - 3,800 45 7,724 48,760 - 33,639 -

- - - - - 1,461 11,810 - 1,161 -

- - - 5,799 - - 1,166 - - - - - - - - - 3,265 - - -

- - - 5,799 - 1,461 16,240 - 1,161 - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - -

- - - - - 619 19,383 - - -

- - - (907) - (1,743) (3,734) - - - - - - - - - - - - -

1,341$ -$ -$ 38,948$ 2,906$ 38,878$ 183,470$ -$ 45,435$ 1,400$

- - - - (571) (10,536) (34,986) - (1,319) (1,400)

- - - - - - - - - - - - - - - - - - - - - - - - - - - - - -

1,341$ -$ -$ 38,948$ 2,335$ 28,342$ 148,484$ -$ 44,116$ -$

Page 3 of 4


Line Description











Exhibit G

TBW - Not Service

Released

TBW - Net Funded / FHLMC

TBW - Net Funded / GNMA

TBW - Net Funded / Wells

Fargo

TBW - Selene Interim

ServicedUMS - Hudson

CityUrban Trust

Bank US AmeriBankStill Under

Review

246$ 1,600$ -$ -$ 21,784$ -$ 5,592$ 5,939$ -$ - - - - 1,646 8,258 1,106 - - - - - - - - - - -

497,816 - - - 875 - - - -

- 3,633 - - 8,576 8,179 4,756 14,550 - - 1,150 1,838 - 9,994 3,461 6,488 2,297 - - - - - - - - - -

3,402,837 - - - - - - - 2,334 129,659 - 31 - 149,692 - - 2,185 5,689

- - - - 1,379 - - - -

- - - - 2,086 - - - - - - - - - - - - -

- - - - 3,465 - - - - 115,455 - - - - - - - -

- - - - - - - - - 793 - - - - - - - -

1,714,205 - - - - - - - -

(61,088) - - - (3,937) - - (2,165) (14,703) - - - - - - - - (188,343)

5,799,922$ 6,383$ 1,869$ -$ 192,094$ 19,898$ 17,943$ 22,806$ (195,023)$

- - - - - - (5,592) (5,939) -

- - - - - - - - - - - - - - - - - -

(142,400) - - - - - - - - 5,657,522$ 6,383$ 1,869$ -$ 192,094$ 19,898$ 12,350$ 16,867$ (195,023)$

Page 4 of 4


Exhibit H

Colonial Bank Custodial Funds Clearing Account Roll Forward from August 1, 2009 through April 30, 2010


TAYLOR, BEAN & WHITAKER Exhibit HColonial Custodial Funds Clearing Account Roll Forward from August 1, 2009 through April 30, 2010

Line Description8/1-8/4

Transactions8/5-9/30

Transactions10/09

Transactions11/09

Transactions12/09

Transactions01/10

Transactions02/10

Transactions03/10

Transactions04/10

Transactions

Total by Transaction

Type

123,654,549$ 56,233,871$ 248,109,056$ 215,641,684$ 214,065,639$ 214,089,087$ 214,042,882$ 214,050,442$ 213,609,627$ 1 Third Party ACH

Checkfree 9,251,180 22,392,289 - - - - - - - 31,643,469 Metavante 2,275,497 8,099,501 - - - - - - - 10,374,998 BiSaver 828,483 - - - - - - - - 828,483

2 Western Union 10,169,026 12,068,736 - - - - - - - 22,237,762 3 ACH - TB&W Payment Center (ACH, eStatement,

Phone Checks, Bill Matrix)ACH Webbiz 55,132,178 6,953,136 - - - - - - - 62,085,314 BMC Client Funds 4,054,072 779,408 - - - - - - - 4,833,480 Debits Webbiz 21,902,764 581,364 - - - - - - - 22,484,128 TBW & WH 87,367 9,924 - - - - - - - 97,291 ACH - Other - 88,850 - - - - - - - 88,850

4 Taylor Made Payments ("TMP") - - - - - - - - - - 5 Third Party Military Allotment 48,137 229,549 100,207 1,700 23,448 - 7,560 6,402 8,764 425,767 6 Wire Transfers

Wires in Custodial 33,341,549 5,214,971 - - - - - - - 38,556,520 Wires - Service Released 13,747 76,335,701 281,785 - - - - - - 76,631,233 HUD Transactions 1,488,880 2,810,628 - - - - - - - 4,299,508

7 Lockbox Checks8/4/09-8/7/09 34,803,509 27,039,793 - - - - - - - 61,843,302 8/10/2009 - 21,903,315 - - - - - - - 21,903,315

8 Other DepositsTransfer from Freddie P&I [B] 7,000,000 - - - - - - - - 7,000,000 Credit Memo 307,779 - - - - - - - - 307,779 Payroll deduction for mortgage payment - 1,682 1,682 1,682 - - - - - 5,046 Net Funded deposits [C] 2,645,332 - - - - - - - 2,645,332 Wells Fargo Home Equity 29,973 - - - - - - - 793 30,765 Incoming wire returned/reversed on 8/5 123,261 - - - - - - - - 123,261

9 REO Proceeds 1,578,832 - - - - - - - - 1,578,832 10 Check Deposits (received at TBW) 64,446,201 25,339,757 - - - - - - - 89,785,958 11 Deductions

Bill Matrix borrower payment reversal (6,572) (17,761) - - - - - - - (24,333) Checkfree borrower payment reversal (24,292) (53,416) - - - - - - - (77,708) Bank correction - (8,304) - - - - - - - (8,304) Returns of borrower payments (e.g., NSF, stop payment, etc.)

[D] (306,698) (2,050,418) - - - - - - - (2,357,116)

Transfers to GNMA P&I and T&I via debit memo on 8/7:

GNMA P&I - (15,017,545) - - - - - - - (15,017,545) GNMA T&I - (702,714) - - - - - - - (702,714)

Other debits and transfers (6,564) - - - - - - - - (6,564) 8/3/09 pushdown to investor accounts (148,207,460) - - - - - - - - (148,207,460) 8/4/09 pushdown to investor accounts (168,396,859) - - - - - - - - (168,396,859) 8/3 Incoming Wire Returned - (123,261) - - - - - - - (123,261)

Beginning Balance [A]

Page 1 of 2


TAYLOR, BEAN & WHITAKER Exhibit HColonial Custodial Funds Clearing Account Roll Forward from August 1, 2009 through April 30, 2010

Line Description8/1-8/4

Transactions8/5-9/30

Transactions10/09

Transactions11/09

Transactions12/09

Transactions01/10

Transactions02/10

Transactions03/10

Transactions04/10

Transactions

Total by Transaction

Type

12 FDIC-Receiver Funds Transfers - Third Party ACH

[E]

10/16/09 Outgoing Wire - - (23,499,186) - - - - - - (23,499,186) 10/30/09 Outgoing Wire - - (9,351,861) - - - - - - (9,351,861) 11/03/09 Outgoing Wire - - - (6,136) - - - - - (6,136) 11/05/09 Outgoing Wire - - - (79,317) - - - - - (79,317) 11/10/09 Outgoing Wire - - - (1,388,246) - - - - - (1,388,246) 11/16/09 Outgoing Wire - - - (105,728) - - - - - (105,728) 01/25/10 Outgoing Wire - (46,206) - - - (46,206)

13 FDIC - Borrower Protocol Distributions on 3/25/10 - - - - - - - (447,217) - (447,217) 14 Ending Balance 56,233,871$ 248,109,056$ 215,641,684$ 214,065,639$ 214,089,087$ 214,042,882$ 214,050,442$ 213,609,627$ 213,619,183$

NOTES:

[A]

[B][C][D][E] See Exhibit D for a more detailed description of the FDIC-Receiver Fund Transfers.

The beginning balance figure represents the opening balance on August 1, 2009. The amount consists of various items including, but not limited to deposits in transit, borrower payments that have not been transferred to investor custodial accounts, loan payoffs that have not been transferred to investor custodial accounts, REO proceeds, etc.Amount represents the return of funds that were initially transferred from the Custodial Funds Clearing Account to the FHLMC P&I account in July 2009.Funds associated with the Home Affordable Refinance Program ("HARP") that assists mortgagors to refinance into a more affordable mortgage.Returns represent borrower payments that were returned by the bank for various reasons including insufficient funds, stop payments, account number errors, etc.

Page 2 of 2


Exhibit I

Summary of Funds “Still Under Review”

and Proposed Final Steps


TAYLOR, BEAN & WHITAKER Exhibit ISummary of Funds "Still Under Review" and Proposed Final Steps

Line Item Amount Reference Next Steps

1 Custodial Funds Clearing Accounta REO Proceeds 2,334$ Exhibit G, Page 4 Amount consists of certain incoming wire transfers with missing

or incorrect loan numbers.b Checks Received at TBW 5,689 Exhibit G, Page 4 Amount consists of certain borrower payments that were

deposited in the Colonial Custodial Funds Clearing Account in which the loan number cannot be identified.

c Bank Debits (14,703) Exhibit G, Page 4 Amount relates to the following: (1) unidentified bank corrections totaling $5,720, and (2) an unidentified return of ACH funds totaling $8,983.

d Unreconciled Funds (188,343) Exhibit F, Line 23 Amount relates to unreconciled funds in the Custodial Funds Clearing Account. See Exhibit F for additional information.

e Total Custodial Funds Clearing Acct. (195,023) Exhibit C, Line 42

2 Colonial Principal & Interest AccountsInvestor Remittance Clearing Account 6,687 Exhibit C, Line 42 Amount relates to unidentified account balance.

3 Colonial Tax & Insurance AccountsWarehouse 13,246 Exhibit C, Line 42 Amount relates to account balance not associated with specific

loans. See Exhibit O for additional information.

4 Colonial Other Accountsa CS Custodial Funds Clearing Acct 5,210 Amount relates to unidentified account balance.b Investors Clearing Acct 10,425 Amount relates to unidentified account balance.c TBW Escrow Servicing Acct 20,761 Amount relates to unidentified account balance.d Total Colonial Other Accounts 36,396 Exhibit C, Line 42

5 Regions Clearing Accounta Deposits 75,439 Amount consists of payments where the borrower omitted or

provided an incorrect loan number.b Regions Reconciling Items (109,418) Classification consists of reconciling items originated by Regions

(e.g., corrections, deposit adjustments, etc.).c Due to Town of Thunderbolt 198 Classification consists of a payment inadvertently sent to TBW by

the Town of Thunderbolt.d Total Regions Clearing Account (33,781) Exhibit C, Line 42

6 Regions REO Account 4,699 Exhibit C, Line 42 Amount consists of certain incoming wire transfers with missing or incorrect loan numbers.

7 Regions REO Specialists (formerly RBC) 81 Exhibit C, Line 42 Amount consists of certain incoming wire transfers with missing or incorrect loan numbers.

8 FDIC Lockbox Checks Collected by the FDIC-Receiver

401,861 Exhibit C, Line 42 Amount consists of numerous classifications of "Still Under Review". The first classification consists of certain borrower payments that were received after the respective loan's paid in full, charge off, or short sale dates. TBW will research the nature of each payment to identify the allocation of funds. The second classification consists of payments that are not identifiable loans in the Servicing System ("Not in System" or "NIS"). This may be the result of a missing or an incorrect loan number. TBW will continue to work with the FDIC-Receiver to identify the appropriate loan number in order to properly allocate the funds.

9 Total $ 234,167

Page 1 of 1


Exhibit J

Colonial Bank Account Balances


TAYLOR, BEAN & WHITAKER Exhibit JColonial Bank Account Balances

8/4/2009 8/24/2009 11/30/2009 4/30/2010Acct ID

#Type

Count Bank Account # Account Type Bank Account Name Account PurposeBank Statement

BalanceBank Statement





Balance

CLEARING ACCOUNTS1 1 Colonial 8036907759 Clearing TBW / WESTERN UNION PYMT

SVCSClearing account that captures funds received from Western Union collections. Western Union directs the funds to be transferred to the TB&W Collection Clearing account (#8037152645).

16,765,592$ 7,630,255$ 22,379,812$ 29,618,630$ 46,566$ 885$

2 2 Colonial 8037152645 Clearing Custodial Funds Clearing Collection clearing account; borrower payments are pooled in this account before being pushed down to the custodial P&I/T&I accounts

123,654,549 56,233,871 240,500,560 248,109,056 214,065,638 213,619,182

Clearing Accounts Subtotal 140,420,142$ 63,864,126$ 262,880,373$ 277,727,686$ 214,112,204$ 213,620,067$

PRINCIPAL & INTEREST ACCOUNTS3 1 Colonial 8027625287 P&I GNMA Investor custodial principal and interest acct. 344,620,645 467,930,636 - - - - 4 2 Colonial 8027625410 P&I FHLMC Investor custodial principal and interest acct. 3,705,172 43,758,199 - - - - [C]5 3 Colonial 8027625477 P&I AFT TTEE/Bailee for GSB Investor custodial principal and interest acct. 916 1,309 1,309 1,309 1,309 1,309 6 4 Colonial 8027625493 P&I FABT Investor custodial principal and interest acct. 4,147 4,147 4,147 4,147 4,147 4,147 7 5 Colonial 8027625964 P&I CSFB/DLJ 2007-1 (Jumbo) Investor custodial principal and interest acct. - - - - - - 8 6 Colonial 8027626277 P&I PNC Investor custodial principal and interest acct. - - - - - - 9 7 Colonial 8032548284 P&I Florida Bank, NA Investor custodial principal and interest acct. 115,093 115,093 115,093 115,093 115,093 115,093 10 8 Colonial 8032548573 P&I Nomura Credit & Capital Investor custodial principal and interest acct. - - - - - - 11 9 Colonial 8036906470 P&I Bayview Securities Investor custodial principal and interest acct. - - - - - - 12 10 Colonial 8036907536 P&I Ocala Funding Investor custodial principal and interest acct. 10,092 50,159 50,159 50,159 50,159 50,159 13 11 Colonial 8037151506 P&I FHLMC P&I SS# 142080 Investor custodial principal and interest acct. 8,217 51,042,517 - - - - [C]14 12 Colonial 8037152033 P&I Wells Fargo TBW 2006-01 Investor custodial principal and interest acct. - - - - - - 15 13 Colonial 8037152074 P&I Investor Remittance Clearing Acct Investor custodial principal and interest acct. 209,422 211,652 211,652 211,652 211,652 211,652 16 14 Colonial 8037152157 P&I Wells Fargo TBW 2006-02 Investor custodial principal and interest acct. - - - - - - 17 15 Colonial 8037152173 P&I Wells Fargo TBW 2006-03 Investor custodial principal and interest acct. - - - - - - 18 16 Colonial 8037152272 P&I Wells Fargo TBW 2006-04 Investor custodial principal and interest acct. - - - - - - 19 17 Colonial 8037152397 P&I Wells Fargo TBW 2006-05 Investor custodial principal and interest acct. - - - - - - 20 18 Colonial 8037152462 P&I Wells Fargo TBW 2007-02 Investor custodial principal and interest acct. - - - - - - 21 19 Colonial 8037152488 P&I BB&T Investor custodial principal and interest acct. - 35,292 35,292 35,292 35,292 35,292 22 20 Colonial 8037152553 P&I Wells Fargo TBW 2006-06 Investor custodial principal and interest acct. - - - - - - 23 21 Colonial 8037152686 P&I Wells Fargo TBW 2007-01 Investor custodial principal and interest acct. - - - - - - 24 22 Colonial 8037152843 P&I Dresdner Bank AG, NY Investor custodial principal and interest acct. - - - - - - [A]25 23 Colonial 8037152876 P&I Bayview 2007-13 F Investor custodial principal and interest acct. - - - - - -

26 24 Colonial 8037152934 P&I Bayview 2007-13 A Investor custodial principal and interest acct. - - - - - - 27 25 Colonial 8037244442 P&I Bayview 2007-13 B Investor custodial principal and interest acct. - - - - - - 28 26 Colonial 8037244459 P&I Bayview 2007-13 C Investor custodial principal and interest acct. - - - - - - 29 27 Colonial 8037244467 P&I Bayview 2007-13 D Investor custodial principal and interest acct. - - - - - - 30 28 Colonial 8037244483 P&I Bayview 2007-13 E Investor custodial principal and interest acct. - - - - - - 31 29 Colonial 8037244541 P&I Trust for DB Structured Products, Inc. Investor custodial principal and interest acct. - - - - - - 32 30 Colonial 8037244707 P&I CSMC 2007-4 Investor custodial principal and interest acct. - - - - - - 33 31 Colonial 8037244723 P&I CSFB 2007-1 Investor custodial principal and interest acct. - - - - - - 34 32 Colonial 8037244749 P&I Hudson City Investor custodial principal and interest acct. 467,868 483,183 483,183 483,183 483,183 483,183 35 33 Colonial 8037244822 P&I 21st Mortgage Corp (Henley

Holdings)Investor custodial principal and interest acct. 4,087,453 4,313,632 - - - -

36 34 Colonial 8037244871 P&I Hyde Park Investor custodial principal and interest acct. - - - - - - 37 35 Colonial 8037244897 P&I Platinum Community Bank Investor custodial principal and interest acct. 206,303 239,650 239,650 239,650 239,650 239,650 38 36 Colonial 8037245092 P&I CSMC 2007-6 Investor custodial principal and interest acct. - - - - - - 39 37 Colonial 8037245514 P&I CSMC 2007-7 Investor custodial principal and interest acct. 323,525 335,636 335,636 335,636 335,636 335,636 40 38 Colonial 8037245852 P&I Bear Stearns Mort. Capital Corp

CollectionInvestor custodial principal and interest acct. - - - - - -

41 39 Colonial 8037350967 P&I Vanguard M&T Inc Investor custodial principal and interest acct. - - - - - -

7/31/2009 9/30/2009

Page 1 of 4



8/4/2009 8/24/2009 11/30/2009 4/30/2010Acct ID

#Type







Balance

7/31/2009 9/30/2009

42 40 Colonial 8037351296 P&I Freddie Mac P&I Custodial Investor custodial principal and interest acct. - - - - - - 43 41 Colonial 8037351338 P&I Century National Bank Investor custodial principal and interest acct. 11,141 13,749 13,749 13,749 13,749 13,749 44 42 Colonial 8037351353 P&I Urban Trust Bank Investor custodial principal and interest acct. 855,588 896,747 896,747 896,747 896,747 896,747 45 43 Colonial 8037351379 P&I Bank of Internet Investor custodial principal and interest acct. 877,822 881,944 881,944 881,944 881,944 881,944 46 44 Colonial 8037351429 P&I TTEE of Colonial Bank P&I

CustodialInvestor custodial principal and interest acct. - - - - - - [B]

47 45 Colonial 8037245712 P&I As TTEE of Bayrock Mtg Corp P&I Custodial Act Var. Mtgrs

Investor custodial principal and interest acct. - - - - - - [B]

P&I Subtotal 355,503,403$ 570,313,545$ 3,268,562$ 3,268,562$ 3,268,562$ 3,268,562$

TAX & INSURANCE ACCOUNTS48 1 Colonial 8027625295 T&I GNMA Investor custodial tax and insurance escrow acct. 184,399,041 189,514,259 100,000,000 - - - 49 2 Colonial 8027625428 T&I FHLMC Investor custodial tax and insurance escrow acct. 26,731,352 30,298,485 - - - - [C]50 3 Colonial 8027625485 T&I AFT TTEE/Bailee for GSB Investor custodial tax and insurance escrow acct. 948 1,047 1,047 1,047 1,047 1,047 51 4 Colonial 8027625501 T&I FABT Investor custodial tax and insurance escrow acct. 5,975 5,975 5,975 5,975 5,975 5,975 52 5 Colonial 8027625972 T&I CSFB/DLJ 2007-1 (Jumbo) Investor custodial tax and insurance escrow acct. - - - - - - 53 6 Colonial 8027626335 T&I WAMU/PNC Investor custodial tax and insurance escrow acct. - - - - - - 54 7 Colonial 8036906488 T&I Bayview Securities Investor custodial tax and insurance escrow acct. 75,677 76,789 76,789 76,789 76,789 76,789 55 8 Colonial 8036907544 T&I Ocala Funding, LLC Escrow Investor custodial tax and insurance escrow acct. - - - - - - [A]56 9 Colonial 8037151514 T&I FHLMC T&I SS# 142080 Investor custodial tax and insurance escrow acct. 48,079,758 55,047,058 - - - - [C]57 10 Colonial 8037152025 T&I Wells Fargo TBW 2006-01 Investor custodial tax and insurance escrow acct. 1,037,283 1,059,869 1,059,869 1,059,869 1,059,869 1,013,774 58 11 Colonial 8037152082 T&I Fixed & Adj. Rate Mtg Loans-

EscrowInvestor custodial tax and insurance escrow acct. - - - - - - [A]

59 12 Colonial 8037152165 T&I Wells Fargo TBW 2006-02 Investor custodial tax and insurance escrow acct. 2,346,757 2,251,135 2,251,135 2,251,135 2,251,135 2,051,292 60 13 Colonial 8037152181 T&I Wells Fargo TBW 2006-03 Investor custodial tax and insurance escrow acct. 2,629,510 2,310,188 2,310,188 2,310,188 2,310,188 2,222,066 61 14 Colonial 8037152280 T&I Wells Fargo TBW 2006-04 Investor custodial tax and insurance escrow acct. 1,401,278 962,036 962,036 962,036 962,036 940,548 62 15 Colonial 8037152405 T&I Wells Fargo TBW 2006-05 Investor custodial tax and insurance escrow acct. 2,393,303 2,128,730 2,128,730 2,128,730 2,128,730 1,883,166 63 16 Colonial 8037152470 T&I Wells Fargo TBW 2007-02 Investor custodial tax and insurance escrow acct. 2,924,523 2,564,573 2,564,573 2,564,573 2,564,573 2,470,043 64 17 Colonial 8037152496 T&I BB&T Escrow Investor custodial tax and insurance escrow acct. 91,872 94,562 94,562 94,562 94,562 80,577 65 18 Colonial 8037152546 T&I Wells Fargo TBW 2006-06 Investor custodial tax and insurance escrow acct. 2,032,651 1,933,416 1,933,416 1,933,416 1,933,416 1,903,573 66 19 Colonial 8037152603 T&I State of CA Escrow Impound Investor custodial tax and insurance escrow account; The

States of Illinois and California require the company to segregate Illinois and California T&I amounts for loans in Investor Code 001, which include loans on warehouse funding lines.

1,182,652 1,283,368 1,283,368 1,283,368 1,283,368 776,689

67 20 Colonial 8037152694 T&I Wells Fargo TBW 2007-1 Investor custodial tax and insurance escrow acct. 2,855,954 2,896,215 2,896,215 2,896,215 2,896,215 2,645,367 68 21 Colonial 8037152884 T&I Bayview 2007-13 F Investor custodial tax and insurance escrow acct. 29,755 31,328 31,328 31,328 31,328 31,294

69 22 Colonial 8037244475 T&I Bayview 2007-13 A Investor custodial tax and insurance escrow acct. 525,636 285,188 285,188 285,188 285,188 281,046 70 23 Colonial 8037244509 T&I Bayview 2007-13 B Investor custodial tax and insurance escrow acct. 136,559 135,129 135,129 135,129 135,129 128,484 71 24 Colonial 8037244517 T&I Bayview 2007-13 C Investor custodial tax and insurance escrow acct. 102,072 102,369 102,369 102,369 102,369 101,227 72 25 Colonial 8037244525 T&I Bayview 2007-13 D Investor custodial tax and insurance escrow acct. 14,257 13,646 13,646 13,646 13,646 12,034 73 26 Colonial 8037244533 T&I Bayview 2007-13 E Investor custodial tax and insurance escrow acct. 495,188 494,415 494,415 494,415 494,415 194,586 74 27 Colonial 8037244558 T&I ITF DB Structured Products, Inc Investor custodial tax and insurance escrow acct. - - - - - - 75 28 Colonial 8037244715 T&I CSMC 2007-4 Investor custodial tax and insurance escrow acct. 41,405 44,265 44,265 44,265 44,265 44,093 76 29 Colonial 8037244731 T&I ITF Hldrs of CSFB Mtg Sec Corp

CSMC Mtg-Bckd PassInvestor custodial tax and insurance escrow acct. 12,680 12,680 12,680 12,680 12,680 12,680

77 30 Colonial 8037244756 T&I Hudson City Investor custodial tax and insurance escrow acct. 57,520 57,517 57,517 57,517 57,517 57,517 78 31 Colonial 8037244830 T&I 21st Mortgage Corp (Henley

Holdings)Investor custodial tax and insurance escrow acct. 53,330 53,949 - - - -

79 32 Colonial 8037244889 T&I Hyde Park Investor custodial tax and insurance escrow acct. 13,312 13,665 13,665 13,665 13,665 13,665 80 33 Colonial 8037244905 T&I IndyMac Bank (Platinum

Community Bank)Investor custodial tax and insurance escrow acct. 146,318 155,160 155,160 155,160 155,160 155,160

Page 2 of 4



8/4/2009 8/24/2009 11/30/2009 4/30/2010Acct ID

#Type







Balance

7/31/2009 9/30/2009

81 34 Colonial 8037245084 T&I State of IL Escrow Impound A Investor custodial tax and insurance escrow account; The States of Illinois and California require the company to segregate Illinois and California T&I amounts for loans in Investor Code 001, which include loans on warehouse funding lines.

1,261,555 1,360,962 1,360,962 1,360,962 1,360,962 1,277,407

82 35 Colonial 8037245100 T&I CSMC 2007-6 Investor custodial tax and insurance escrow acct. 106,092 117,638 117,638 117,638 117,638 113,387 83 36 Colonial 8037245522 T&I CSMC 2007-7 Investor custodial tax and insurance escrow acct. 48,033 45,963 45,963 45,963 45,963 42,001 84 37 Colonial 8037350975 T&I Vanguard M&T Investor custodial tax and insurance escrow acct. - - - - - - 85 38 Colonial 8037351254 T&I AGT/TTEE/Bailee for Nomura

Credit & Capital IncInvestor custodial tax and insurance escrow acct. - - - - - -

86 39 Colonial 8037351346 T&I Century National Bank Investor custodial tax and insurance escrow acct. 3,942 3,942 3,942 3,942 3,942 3,942 87 40 Colonial 8037351361 T&I Urban Trust Bank Investor custodial tax and insurance escrow acct. 80,742 82,115 82,115 82,115 82,115 82,115 88 41 Colonial 8037351387 T&I Bank of Internet Investor custodial tax and insurance escrow acct. 14,448 14,448 14,448 14,448 14,448 14,448 89 42 Colonial 8032548292 T&I Custodial-Mercantile Bank T&I Investor custodial tax and insurance escrow acct. - - - - - - [B]90 43 Colonial 8032548581 T&I Nomura Credit T&I Investor custodial tax and insurance escrow acct. - - - - - - [B]91 44 Colonial 8037245704 T&I TTEE of Bayrock Mtg Corp Escrow

Custodial Act Var. MtgrsInvestor custodial tax and insurance escrow acct. - - - - - - [B]

92 45 Colonial 8027625535 T&I TBW Warehouse T&I account for warehouse loans (Investor Code 001) serviced by TBW

37,414 13,246 13,246 13,246 13,246 13,246

T&I Subtotal 281,368,791$ 295,465,330$ 120,551,579$ 20,551,579$ 20,551,579$ 18,649,234$

EDCA ACCOUNT93 1 Colonial 8027625568 EDCA Escrow Disb Clearing Account Escrow disbursement clearing account; T&I funds are

transferred from custodial accounts to this account and then amounts are transferred to Platinum Bank EDCA within one to two business days of the checks being issued

6,520,829 8,414,563 8,414,181 8,414,181 8,414,181 2,940,892

EDCA Subtotal 6,520,829$ 8,414,563$ 8,414,181$ 8,414,181$ 8,414,181$ 2,940,892$

REO PROCEEDS ACCOUNT94 1 Colonial 8037245423 REO Proceeds REO Proceeds Clearing Account Collection of REO proceeds, which are then transferred to

the CFCA796,401 481,631 1,871,555 3,002,730 3,151,176 3,151,176

REO Proceeds Subtotal 796,401$ 481,631$ 1,871,555$ 3,002,730$ 3,151,176$ 3,151,176$

OTHER SERVICING ACCOUNTS95 1 Colonial 8027625303 Buydown GNMA Buydowns Buy down acct. reflects excess servicing owned by investor 267,487 264,199 - - - - 96 2 Colonial 8027625436 Buydown FHLMC Buydowns Buy down acct. reflects excess servicing owned by investor 153 - - - - - [C]97 3 Colonial 8037151522 Buydown FHLMC Buydown SS# 14208 Buy down acct. reflects excess servicing owned by investor 46,564 42,881 - - - - [C]98 4 Colonial 8037351312 Buydown Freddie Mac Buydown Custodial Buy down acct. reflects excess servicing owned by investor - - - - - - 99 5 Colonial 8037152306 CS - EDCA EDCA - CS Account for the construction and home equity line of credit

loans5,408 5,408 5,408 5,408 5,408 5,408

100 6 Colonial 8037152298 CS - Escrow/ Clearing

CS Deposits Clearing Account Account for the construction and home equity line of credit loans

80,000 80,000 295,653 295,653 85,265 85,265

101 7 Colonial 8037152314 CS - Escrow/ Clearing

Disb. Clearing Account Account for the construction and home equity line of credit loans

- - - - - -

102 8 Colonial 8037152751 Escrow/ Clearing Investors Clearing Account The account captures amounts related to third party purchase of loans from TBW. Sellers also forward borrower payments to this account when TBW has repurchased the loans.

387,474 387,474 387,474 387,474 387,474 387,474

103 9 Colonial 8037244780 Escrow/ Clearing Custodial for CSFB Mtg Capital LLC-Coll Acct

Warehouse Account that is no longer active - - - - - -

104 10 Colonial 8037351155 Escrow/ Clearing GPS Custodial Clearing The account collects funds that are forwarded to sub servicers that service the loans under the TBW’s name

20,000 23,735 40,036 40,036 40,036 40,036

Page 3 of 4



8/4/2009 8/24/2009 11/30/2009 4/30/2010Acct ID

#Type







Balance

7/31/2009 9/30/2009

105 11 Colonial 8037351304 Escrow/ Clearing Freddie Mac Escrow Custodial The account was originally setup for a third seller servicer number for Freddie Mac. The setup was not complete, and the account is therefore inactive.

- - - - - -

106 12 Colonial 8037351411 Escrow/ Clearing TTEE of Colonial Bank Escrow This is an escrow account for Bay Rock. The account is inactive.

- - - - - -

107 13 Colonial 8037351585 Escrow/Clearing Platinum Servicing This is an inactive account for Platinum. - - - - - - 108 14 Colonial 8026461098 Clearing Central Depository Clearing

AccountCollection clearing account where borrower payments are pooled prior to being pushed down to the custodial P&I/T&I accounts; account was succeeded by the current clearing account 8037152645

- - - - - - [B]

109 15 Colonial 8032547948 Construction C to P Construction Disbursement Acct

Funded draws on construction loans - - - - - - [A]

110 16 Colonial 8037152421 Escrow/Clearing TBW Escrow Servicing Account Escrow account associated with construction loans 156,631 156,631 156,631 156,631 156,631 156,631 Other Servicing Subtotal 963,717$ 960,328$ 885,202$ 885,202$ 674,814$ 674,814$

Total Servicing Related Accounts 785,573,283$ 939,499,522$ 397,871,452$ 313,849,940$ 250,172,515$ 242,304,744$

OTHER NON-SERVICING ACCOUNTS111 1 Colonial 8037244491 Non-Servicing TBW Funding Co II LLC Account is for remittances received on securities owned

by TBW13,778,676 13,778,676 13,778,676 13,778,676 13,778,676 13,804,097

112 2 Colonial 8037152801 Non-Servicing Benefit of the Family (name excluded for confidentiality purposes)

This account was set up for the family of a former TBW employee who passed away. The only transactions in this account were employee contributions and checks cut for the maintenance and repair of the family's home.

1,626 1,626 1,626 1,626 1,626 1,626

113 3 Colonial 8026069362 Non-Servicing Master Advance Account This account funds loans via wires to the party closing the loan (settlement agent).

4,971,636 12,183,472 4,902,451 4,902,451 4,904,409 4,904,409

114 4 Colonial 8026069354 Non-Servicing TBW Investor Funding Account This account is a Colonial Bank operated account where investors send funds for purchases of loans

3,910,470 2,378,313 8,930,623 8,930,623 8,930,623 8,930,623

115 5 Colonial 8030377314 Non-Servicing TBW Operating Account Account utilized for TBW corporate operating activity 72 72 72 72 72 72 116 6 Colonial 8037152637 Non-Servicing TBW Operating Cash

Accumulation AccountAccount utilized for TBW corporate operating activity 4,502 4,502 4,502 4,502 4,502 4,502

Non-Servicing Account Subtotal 22,666,982$ 28,346,662$ 27,617,951$ 27,617,951$ 27,619,909$ 27,645,330$

Grand Total 808,240,265$ 967,846,185$ 425,489,403$ 341,467,891$ 277,792,424$ 269,950,075$

[A] Account closed prior to July 2009[B] Inactive account[C] Bank statement was not received for November 2009, however the balance was assumed to be $0 as there was no activity since August 2009 and in subsequent months, which also had a $0 balance.

Page 4 of 4


Exhibit K

Regions Bank Account Balances


TAYLOR, BEAN & WHITAKER Exhibit KRegions Account Balances

Bank Stmt

Bank Account # Account Type Bank Account NameBalance

As of 4/30/10

REGIONS DEPOSIT AND CLEARING ACCOUNTS1 Regions xxxxxxx624 Clearing TBW Mortgage Corp. Master Clearing 12,629,394$ 2 Regions xxxxxxx772 Deposit Deposit Account 402,365 3 Regions xxxxxxx764 Deposit ACH Deposit Acct - Subject to 90 Day Hold -

Total Deposit and Clearing Accounts 13,031,760

INVESTOR ACCOUNTS

Principal & Interest Accounts4 Regions xxxxxxx535 P&I Wells Fargo - P&I 5,422,902 5 Regions xxxxxxx543 P&I Bayview - P&I 245,461 6 Regions xxxxxxx551 P&I TBW Mortgage Corp. - P&I 5,637,050 7 Regions xxxxxxx055 P&I Freddie Mac - P&I 48,186,612 8 Regions xxxxxxx942 P&I Wells Fargo TBW 2006-01 P&I 8,049,723 9 Regions xxxxxxx950 P&I Wells Fargo TBW 2006-02 P&I 6,632,448

10 Regions xxxxxxx969 P&I Wells Fargo TBW 2006-03 P&I 6,397,601 11 Regions xxxxxxx977 P&I Wells Fargo TBW 2006-04 P&I 2,564,631 12 Regions xxxxxxx985 P&I Wells Fargo TBW 2006-05 P&I 5,065,582 13 Regions xxxxxxx108 P&I Wells Fargo TBW 2006-06 P&I 5,922,956 14 Regions xxxxxxx078 P&I Wells Fargo TBW 2007-01 P&I 6,634,347 15 Regions xxxxxxx043 P&I Wells Fargo TBW 2007-02 P&I 6,675,599

P&I Subtotal 107,434,912 Tax & Insurance Accounts

16 Regions xxxxxxx578 T&I Wells Fargo - T&I 109,826 17 Regions xxxxxxx586 T&I Bayview - T&I 32,891 18 Regions xxxxxxx594 T&I TBW Mortgage Corp. - T&I 1,239,361 19 Regions xxxxxxx993 T&I Wells Fargo TBW 2006-01 T&I 388,462 20 Regions xxxxxxx000 T&I Wells Fargo TBW 2006-02 T&I 600,211 21 Regions xxxxxxx019 T&I Wells Fargo TBW 2006-03 T&I 610,570 22 Regions xxxxxxx027 T&I Wells Fargo TBW 2006-04 T&I 369,105 23 Regions xxxxxxx035 T&I Wells Fargo TBW 2006-05 T&I 542,575 24 Regions xxxxxxx094 T&I Wells Fargo TBW 2006-06 T&I 577,808 25 Regions xxxxxxx086 T&I Wells Fargo TBW 2007-01 T&I 715,642 26 Regions xxxxxxx051 T&I Wells Fargo TBW 2007-02 T&I 851,542 27 Regions xxxxxxx063 T&I Freddie Mac - T&I 2,931,471

T&I Subtotal 8,969,465 28 Regions xxxxxxx608 P&I/T&I Various Investors - P&I and T&I 3,980,977 Total Investor Accounts 120,385,354

OTHER REGIONS ACCOUNTS29 Regions xxxxxxx616 Service Fee TBW Mortgage Corp. Service Fee Account 1,337,847 30 Regions xxxxxxx705 REO REO Proceeds Account 90,434,696 31 Regions xxxxxxx187 REO REO Specialists (formerly RBC) Account 566,457 [A]32 Regions xxxxxxx853 Refunds Refunds Account 2,773,472 Total Other Accounts 95,112,472

Grand Total 228,529,585$

AcctID #

[A] The Regions REO Specialists (formerly RBC) account balance at April 30, 2010 includes $5,244 of activity that is associated with TBW operations transactions and not REO proceeds. Therefore, the net REO proceeds balance at April 30, 2010 is $561,213 as reflected on Exhibit E and Table 3 of the Report.

Page 1 of 1


Exhibit L

Summary of the Regions Refunds Account Allocation

as of April 30, 2010


TAYLOR, BEAN & WHITAKER EXHIBIT LSummary of the Regions Refunds Account Allocation as of April 30, 2010

Line Investor DepositsTransfers to

TBW OperatingBank Balance

at 4/30/10 Due to TBW Due to InvestorsDue to

Borrowers Total Allocation

[A] [B] [C] [D] [E]1 Bank of America 57,332$ (2,332)$ 55,000$ 2,332$ 55,000$ -$ 57,332$

2 Bayview 215,361 (176,149) 39,212 176,149 39,212 - 215,361

3 Central Mortgage (CMC) 47 - 47 - 47 - 47

4 CitiMortgage 3,324 - 3,324 - 3,324 - 3,324

5 Cole Taylor 1,691 - 1,691 - 1,691 - 1,691

6 Colonial 507,914 (459,015) 48,899 459,015 48,899 - 507,914

7 CSMC (Wells Fargo) 15,671 (13,780) 1,891 14,080 653 938 15,671

8 FHLMC 6,653,647 (5,064,749) 1,588,897 5,064,749 1,514,281 74,616 6,653,647

9 GNMA 1,409,766 (741,821) 667,945 741,821 590,458 77,487 1,409,766

10 Henley Holdings 1,915 - 1,915 - 1,915 - 1,915

11 Hyde Park Savings Bank 1,787 (1,787) - 1,787 - - 1,787

12 Marix Servicing 7,525 - 7,525 - 7,525 - 7,525

13 Mercantile Bank 2,805 (2,655) 150 2,655 150 - 2,805

14 MGC Mortgage 13,649 (2,608) 11,041 2,608 11,041 - 13,649

15 Mountainview 4,817 (103) 4,714 103 4,714 - 4,817

16 Ocala Funding 9,573 - 9,573 - 9,573 - 9,573

17 Platinum Community Bank 3,275 - 3,275 - 3,275 - 3,275

18 Seaside 17,444 - 17,444 - 17,444 - 17,444

19 TBW 302,486 (303,562) (1,076) 302,486 - - 302,486

20 TBW - Net Funded / FHLMC 72 - 72 - 72 - 72

21 TBW - Net Funded / GNMA 1,470 - 1,470 - 1,470 - 1,470

22 TBW (Selene) 92,754 (89,688) 3,066 89,271 3,483 - 92,754

23 Urban Trust Bank 280 - 280 - 280 - 280

24 US AmeriBank 1,192 - 1,192 - 1,192 - 1,192

25 Wells Fargo 1,965,380 (1,659,456) 305,924 1,659,156 297,217 9,007 1,965,380

26 Total 11,291,175$ (8,517,703)$ 2,773,472$ 8,516,211$ 2,612,917$ 162,047$ 11,291,175$ [F] [F]

[A]

[B][C][D][E][F]

Bank Reconciliation Allocation of Regions Refunds

There is $1,492 difference between the amount transferred as of April 30, 2010 ($8,517,703) and the final allocation of "Due to TBW" ($8,516,211), which is attributable to revisions to the investor allocations made after April 30, 2010.

Deposits of force placed insurance refunds, tax refunds and MI premium refunds into the Regions Refunds Account through April 30, 2010. See the Borrower Motion section in the Report for additional information (Section IV.D.)Amount of refunds used to reimburse TBW T&I and/or Corporate Advances and transferred to TBW’s Regions operating account (see Exhibit R).

Regions Refunds Account deposits that are reimbursable to TBW based on T&I and/or Corporate Advances paid by TBW.Remaining Regions Refunds amounts allocated to the Investor (on behalf of the borrower) after allocation for TBW reimbursements in note [C] above.Refunds allocated to borrowers for Paid in Full loans. The Debtor will work on returning refunds to affected borrowers.

Page 1 of 1


Exhibit M

P&I Book to Bank Reconciliation by Investor


TAYLOR, BEAN & WHITAKER EXHIBIT MP&I Book-to-Bank Reconciliation by Investor

Line Investor Net P&I AdvancesJuly Scheduled

RemittanceBorrower

Collections

Prepaid Borrower Payments Other P&I Items

Book Balance [A]+[B]+[C]+[D]+[E]

P&I Account Balance

Net P&I Shortfall/(Net P&I

Advances)

[A] [B] [C] [D] [E] [F] [G] [H]1 American Servicing -$ -$ -$ -$ -$ -$ -$ -$ 2 Bank of America - - - - - - - - 3 Bank of Internet - - 881,944 - - 881,944 881,944 - 4 Bayrock Mortgage - - 20,036 - - 20,036 20,036 - 5 Bayview Loan Servicing LLC (11,357,904) (1,343,548) 1,707,786 73,030 - (10,920,636) - (10,920,636) 6 BB&T (541,029) (211,567) 765,993 21,895 - 35,292 35,292 - 7 Central Mortgage (CMC) - - - - - - - - 8 Century National Bank - - 12,804 - - 12,804 13,749 (945) 9 CitiMortgage Inc - - - - - - - -

10 Cole Taylor - - - - - - - - 11 Colonial - FDIC - - - - - - - - 12 Freddie Mac (169,516,627) - 308,563,863 10,236,322 (51,528,260) 97,755,298 94,800,716 2,954,582 13 First American Bank & Trust - - 4,147 - - 4,147 4,147 - 14 First Charter - - - - - - - - 15 First Western Bank - - - - - - - - 16 GMAC - - - - - - - - 17 Ginnie Mae (127,211,501) (148,915,380) 718,914,543 19,451,120 8,207,352 470,446,133 467,930,636 2,515,497 18 Henley Holdings - - 1,411,737 - 2,901,895 4,313,632 4,313,632 - 19 Hyde Park Savings Bank (21,892) (11,967) 13,688 1,713 - (18,460) - (18,460) 20 IndyMac - - - - - - - - 21 Mercantile Bank - - - - - - - - 22 MGC Mortgage - - - - - - - - 23 MountainView [I] - - 113,684 - - 113,684 - 113,684 24 Ocala Funding - RoundPoint Interim Serviced - - - - - - - - 25 Platinum Community Bank - FDIC - - 169,912 - - 169,912 239,650 (69,738) 26 RBC Bank - - 1,309 - - 1,309 1,309 - 27 Seaside - - - - - - - - 28 Selene [I] - - 42,436 - - 42,436 - 42,436 29 TBW - Net Funded / FHLMC - - - - - - - - 30 TBW - Net Funded / GNMA - - - - - - - - 31 TBW - Net Funded / Wells Fargo - - - - - - - - 32 UMS - Hudson City (24,943) (76,509) 574,476 10,158 - 483,183 483,183 - 33 Urban Trust Bank - - 896,747 - - 896,747 896,747 - 34 US AmeriBank - - - - - - - - 35 Wachovia - - - - - - - - 36 Wells Fargo (86,693,989) (21,570,521) 46,274,528 1,958,447 - (60,031,536) 335,636 (60,367,171)

37 Total (395,367,885)$ (172,129,492)$ 1,080,369,633$ 31,752,684$ (40,419,014)$ 504,205,926$ 569,956,676$ (65,750,750)$

[A][B]

[C]

[D]

[E][F][G][H][I] These investors historically purchased loans from TBW and the loans were service released to those investors prior to August 3, 2009. As the loans were service released there was no Investor Custodial Accounts.

The amounts represent borrower payments received and not previously remitted to the Investor.

P&I book balance as of August 3, 2009, which is the sum of [A]+[B]+[C]+[D]+[E].P&I bank account balances as of August 4, 2009.P&I reconciliation balance reflecting a net P&I shortfall or net P&I advances made by TBW.

Cumulative gross P&I advances made by TBW on delinquent loans as of July 15, 2009 for Freddie Mac and as of June 30, 2009 for all other investors.Last remittance made by TBW to investors in July 2009 which includes all July scheduled borrower payments irrespective of whether the borrower made the payment. No amount is included for Freddie Mac as the accounting cycle commences on July 16 and the July remittance was for the June 16 to July 15 accounting cycle. This is shown as a negative amount which will result in ultimately reflecting TBW P&I advances to extent borrower collections in Column C were not received.Borrower payments received by TBW from July 16 to August 4, 2009 for Freddie Mac and from July 1 to August 4, 2009 for all other investors. These funds are payable to the investor as all borrower collections either have been remitted already in Column B as part of the July remittance cycle or are due to the Investor relating to the unprocessed August remittance cycle.Borrower payments received by TBW prior to July 16, 2009 for Freddie Mac and prior to June 30, 2009 for all other investors - represents payments by borrowers for the August 1, 2009 and subsequent mortgage payments. These funds are payable to the investor.See Exhibit N which provides details of these amounts.

Page 1 of 1


Exhibit N

P&I Book to Bank Reconciliation – Other P&I Items


TAYLOR, BEAN & WHITAKER EXHIBIT NP&I Book-to-Bank Reconciliation - Other P&I Items

Line InvestorUnapplied Balances

Seller Servicer Remittance

Analysis BalancePrivate

Investor FundsJuly ARC

Curtailments Guaranty FeeForeclosure

Claims RepurchasesCompensat-ing Interest

Same Month Pooling

Reserve Holdback Other P&I Items

[A] [B] [C] [D] [E] [F] [G] [H] [I] [J]

1 Freddie Mac -$ (61,562,265)$ -$ 10,499,484$ -$ (4,306,559)$ 1,493,172$ 1,404,205$ 943,703$ -$ (51,528,260)$ 2 Ginnie Mae 6,863,385 - 23,456 - 1,320,511 - - - - - 8,207,352 3 Henley Holdings - - - - - - - - - 2,901,895 2,901,895

4 Total 6,863,385$ (61,562,265)$ 23,456$ 10,499,484$ 1,320,511$ (4,306,559)$ 1,493,172$ 1,404,205$ 943,703$ 2,901,895$ (40,419,014)$

[A][B]

[C][D]

[E] Ginnie Mae guaranty fee for the month of July.[F] Foreclosure claims primarily represent principal previously advanced on loans under the Freddie Mac ARC program that was not previously filed as a claim by TBW.[G][H] Compensating interest payable to Freddie Mac for payoffs on ARC program loans between July 16 and August 3, 2009.[I][J] Reserve holdback amount in the Investor Custodial P&I account as of August 4, 2009 as required by the mortgage loan purchase agreement.

Curtailment payments by borrowers on Freddie Mac ARC program collected between June 16 and July 15, 2009 that would have been remitted in August (curtailments on the Freddie Mac Gold program were remitted on July 20th).

Ginnie Mae unapplied balances as of August 3, 2009. Ginnie Mae required these borrower escrow funds to be deposited in their Investor P&I account.The balance as of August 4, 2009 is sourced from Freddie Mac's Seller Services Remittance Analysis provided to TBW. This amount primarily represents excess amounts historically remitted to Freddie Mac where TBW remitted more than what was contractually due to Freddie Mac. It also includes amounts where TBW did not historically reimburse itself for claims that Freddie Mac had authorized and approved.Funds due to private investors on certain Ginnie Mae securities from April through July.

Interest payable to Freddie Mac which is due for loans sold in the same month of origination.

Loans repurchased by TBW and the payment is due to Freddie Mac.

Page 1 of 1


Exhibit O

Escrow Fund Book to Bank Reconciliation by Investor


TAYLOR, BEAN & WHITAKER EXHIBIT OEscrow Fund Book-to-Bank Reconciliation by Investor

Line Investor 8/3 Book Balance 8/4 Escrow FundsEscrow Fund

Shortfall 8/3 Book Balance 8/4 Escrow FundsEscrow Fund

ShortfallCombined Escrow

Fund Shortfall

[C] [D] [E] [F] [G] [H] [I]1 American Servicing -$ -$ -$ 420$ -$ (420)$ (420)$ 2 Bank of America - - - 4,526,198 566,449 (3,959,749) (3,959,749) 3 Bank of Camden - - - - - - - 4 Bank of Internet 14,448 14,448 - - - - - 5 Bayview Loan Servicing LLC 1,153,751 1,138,864 (14,887) 9 - (9) (14,896) 6 BB&T 94,562 94,562 - 292 - (292) (292) 7 Central Mortgage (CMC) - - - 1,691 1,691 - - 8 Century National Bank 3,942 3,942 - - - - - 9 CitiMortgage Inc - - - 61,315 - (61,315) (61,315) [J]

10 Cole Taylor - - - 639,975 123,106 (516,869) (516,869) 11 Colonial - FDIC - - - 6,844,438 1,092,897 (5,751,541) (5,751,541) 12 Freddie Mac 295,222,040 295,388,424 166,383 2,207,736 215,767 (1,991,969) (1,825,585) 13 First American Bank & Trust 5,975 5,975 - - - - - 14 First Charter - - - 1,638 - (1,638) (1,638) 15 First Western Bank - - - 457 - (457) (457) 16 Ginnie Mae 190,199,671 189,778,458 (421,214) 2,734,765 215,882 (2,518,883) (2,940,097) 17 Henley Holdings 53,949 53,949 - - - - - 18 Hyde Park Savings Bank 13,665 13,665 - - - - - 19 IndyMac - - - 116 - (116) (116) 20 Mercantile Bank - - - 1,018 - (1,018) (1,018) 21 MGC Mortgage - - - 115,700 - (115,700) (115,700) 22 MountainView [K] - - - 21,581 - (21,581) (21,581) [J]23 Ocala Funding - RoundPoint Interim Serviced - - - 226,316 21,602 (204,714) (204,714) 24 Platinum Community Bank - FDIC 270,852 155,160 (115,692) 1,672,169 104,632 (1,567,537) (1,683,228) 25 RBC Bank 1,047 1,047 - - - - - 26 Seaside - - - 907,653 110,940 (796,713) (796,713) 27 Selene [K] - - - 30,307 - (30,307) (30,307) 28 TBW - Not Service Released - - - 188,970 2,136 (186,835) (186,835) 29 TBW - Net Funded / FHLMC - - - 191,270 53,597 (137,673) (137,673) 30 TBW - Net Funded / GNMA - - - 237,951 49,196 (188,756) (188,756) 31 TBW - Net Funded / Wells Fargo - - - 685 - (685) (685) 32 TBW - Selene Interim Serviced - - - 558,486 46,559 (511,927) (511,927) 33 UMS - Hudson City 57,517 57,517 - - - - - 34 Urban Trust Bank 82,115 82,115 - 16,014 22 (15,992) (15,992) 35 US AmeriBank - - - 130,423 24,692 (105,731) (105,731) 36 Wachovia - - - 639 - (639) (639) [J]37 Wells Fargo 16,315,546 16,326,707 11,161 21,280 - (21,280) (10,119) 38 Unallocated - - - - 28,409 28,409 28,409

39 Total 503,489,081$ 503,114,833$ (374,248)$ 21,339,512$ 2,657,576$ (18,681,936)$ (19,056,184)$

[A]

[B]

[C][D][E][F][G]

[H][I][J]

[K]

Discrete/Generally Funded Custodial [A] Commingled/Generally Unfunded Custodial [B]

Where loans were designated as owned by an investor on the servicing system on August 3, 2009 and discrete escrow bank accounts for the investors existed. These accounts were generally fully funded and book balances were reconciled to bank balances on a monthly basis.Where loans were in TBW's loan warehouse and in the process of being sold. The TBW warehouse escrow custodial account was not reconciled and had a balance of $13,246. Two Escrow Custodial Impound accounts, one for California loans and one for Illinois loans had a total of $2,644,331 on August 4, 2009.TBW servicing system escrow book balance on August 3, 2009 including T&I, loss draft, unapplied and subsidy balances.

The combined escrow fund shortfall on discrete and commingled custodial accounts.While loans were segregated within a discrete investor pool, an associated escrow bank account has not been identified for all (CitiMortgage and MountainView) or a portion (Wells Fargo) of these loans, resulting in shortfalls described in [H].These investors historically purchased loans from TBW and the loans were service released to those investors prior to August 3, 2009. As the loans were service released there was no Investor Custodial Accounts. The amounts represent borrower payments received and not previously remitted to the Investor.

Escrow custodial bank balances on August 4, 2009.Escrow fund shortfall within the segregated custodial accounts represents Book-to-Bank Reconciliation items that had not cleared as of August 4, 2009.TBW Servicing System escrow book balance with adjustments on Net Funded Loans on August 3, 2009 including T&I, loss draft, unapplied and subsidy balances.Escrow custodial book balances on August 4, 2009. Funded balances primarily represent $2,644,331 within impound accounts established for the States of CA and IL for TBW warehouse and investor-owned loans without other discrete custodial escrow accounts. In addition, the TBW warehouse escrow custodial account had a bank balance of $13,246.Escrow fund shortfall within the commingled custodial accounts.

Page 1 of 1


Exhibit P

EDCA Reconciliation by Investor as of April 30, 2010


TAYLOR, BEAN & WHITAKER EXHIBIT PEDCA Reconciliation by Investor as of April 30, 2010

Line

EDCA Outstanding

Checks

Less: Checks Issued Under the Borrower Motion

Less: O/S Checks Issued On and

Subsequent to 8/4, Net of Borrower Motion Checks

Subtotal: Checks Issued On and Prior

to 8/3, Net of Borrower Motion

Checks

Less: Cleared Checks Written

8/4 and Subsequent

Adjusted Book Balance

As a % of Total Adjusted Book

Balance Bank Balance EDCA Shortfall

[A] [B] [C] [A]-[B]-[C] [D] [E] [F]1 Bank of America 48,045$ -$ (35,689)$ 12,356$ (28,524)$ (16,168)$ -0.2% (15,277)$ 891$ 2 Bank of Camden 941 (941) - - - - 0.0% - - 3 Bank of Internet 403 (403) - - - - 0.0% - - 4 Bayview 99,006 (8,087) (62,825) 28,095 (4,507) 23,588 0.3% 22,289 (1,299) 5 BB&T 8,923 (5,723) - 3,200 (3,705) (505) 0.0% (477) 28 6 Central Mortgage (CMC) 8,053 (1,604) - 6,450 - 6,450 0.1% 6,094 (355) 7 Century National Bank 225 - (225) - - - 0.0% - - 8 CitiMortgage 2,305 - - 2,305 - 2,305 0.0% 2,178 (127) 9 Cole Taylor 3,680 (1,646) (2,034) - (17,751) (17,751) -0.2% (16,774) 978 10 Colonial 186,309 (53,579) (55,172) 77,559 (28,153) 49,406 0.6% 46,684 (2,721) 11 FHLMC 20,495,618 (6,641,532) (7,023,444) 6,830,642 (2,148,111) 4,682,531 55.7% 4,424,612 (257,919) 12 Five Mile Capital 283 (283) - - - - 0.0% - - 13 GNMA 8,319,219 (2,923,478) (1,158,791) 4,236,950 (996,004) 3,240,946 38.6% 3,062,431 (178,515) 14 GPS 1,470 - (1,470) - - - 0.0% - - 15 Henley Holdings 7,617 (881) (6,736) 0 - 0 0.0% 0 (0) 16 MGC Mortgage 11,222 (2,064) (2,390) 6,768 (1,552) 5,216 0.1% 4,929 (287) 17 MountainView 2,186 (2,186) - - - - 0.0% - - 18 Ocala Funding 13,818 (1,453) (6,434) 5,931 (958) 4,973 0.1% 4,699 (274) 19 Ocwen 3,425 - - 3,425 - 3,425 0.0% 3,237 (189) 20 Platinum Community Bank 84,422 - (82,259) 2,162 (1,799) 363 0.0% 343 (20) 21 Seaside 515 - (388) 126 (1,016) (890) 0.0% (841) 49 22 Selene 1,107 - - 1,107 - 1,107 0.0% 1,046 (61) 23 TBW 201,637 (12,330) (42,547) 146,760 (25,577) 121,182 1.4% 114,508 (6,675) 24 TBW - Net Funded / GNMA - - - - (304) (304) 0.0% (288) 17 25 TBW (Selene) 37,809 (3,500) (13,931) 20,379 (5,220) 15,159 0.2% 14,324 (835) 26 UMS 5,893 (3,394) - 2,499 - 2,499 0.0% 2,361 (138) 27 Urban Trust Bank 4,969 (1,282) (405) 3,281 (2,268) 1,013 0.0% 958 (56) 28 US AmeriBank 6,319 (1,165) (5,154) - (3,015) (3,015) 0.0% (2,849) 166 29 US Bank 1,162 - - 1,162 - 1,162 0.0% 1,098 (64) 30 Wells Fargo 1,728,100 (200,800) (1,154,925) 372,376 (91,287) 281,089 3.3% 265,606 (15,483) 31 Total EDCA 31,284,686$ (9,866,332)$ (9,654,819)$ 11,763,535$ (3,359,753)$ 8,403,782$ 100.0% 7,940,892$ (462,890)$

Bank Balance32 Seaside Bank 5,000,000$ 33 Colonial Bank 2,940,89234 Platinum Community Bank 035 Bank Balance at 4/30/10 7,940,892$

[A][B]

[C]

[D]

[E]

[F]

The bank balance includes $5,000,000 at Seaside and $2,940,892 in the Colonial EDCA as of April 30, 2010. The $5,000,000 at Seaside was transferred from the Colonial EDCA to Seaside on December 28, 2008. The total bank balance was allocated to each investor pro rata based on each investor's adjusted book balance.A shortfall of $462,890 exists and is allocated across investors as the difference between the book balance and the bank balance.

Investor

Checks issued and outstanding from the Platinum EDCA account. Checks were issued up to August 19, 2009.These outstanding checks were addressed in the Borrower Protocol and have been or are in the process of being replaced with reissued checks to borrowers. Therefore they are being removed from the total population of outstanding checks.Checks issued on and subsequent to August 4, 2009 are excluded as the funds did not transfer from the Investor T&I accounts to the Colonial EDCA/Platinum EDCA due to the administrative hold placed on the Colonial accounts on August 5, 2009. Therefore, the funds related to these checks are in the Investor T&I accounts and should not be considered in comparing the EDCA bank balances.These are checks issued on and subsequent to August 4, 2009, but the recipients presented the checks for payment and the checks cleared. However the funds associated with these checks remained in the Investor T&I accounts and therefore there are excess funds in the Investor T&I accounts for these cleared checks. Funds that were used to clear these checks are related to funds for checks issued on or prior to August 3, 2009.

Page 1 of 1


Exhibit Q

Other Unreimbursed Items


TAYLOR, BEAN & WHITAKER EXHIBIT QOther Unreimbursed Items

Line Investor HUD Claims Modifications Excess UPB Short Sale Claims

Other Unreimbursed

Items

[A] [B] [C] [D]1 Freddie Mac -$ 1,336,356$ 1,171,176$ 422,400$ 2,929,932$ 2 Ginnie Mae 7,391,707 257,090 309,131 - 7,957,927 3 TBW - Not Service Released - - - - 393,249 4 Total 11,281,109$

[A]

[B]

[C]

[D]

HUD claims represent insurance claims for short sales and claims for REO property conveyances for amounts owing to TBW.

Short sale incentive fee claims not received from Freddie Mac for short sales processed.

Excess UPB represents a net amount owing to TBW where borrower loan balances are in excess of the balances in the underlying MBS securities. Therefore, Freddie Mac and Ginnie Mae purchased loan amounts were less than the actual loan balances or the MBS security balances are less than the aggregate of those security loan balances.

Represents amounts owing to TBW for servicing advances capitalized to the borrower loan balance relating to loan modifications. The Freddie Mac amount also includes incentive fees for executing the modification with the borrower.

Page 1 of 1


Exhibit R

Advance Reimbursement as of April 30, 2010


TAYLOR, BEAN & WHITAKER EXHIBIT RAdvance Reimbursement as of April 30, 2010

Line Investor

Reimbursement from Regions

Refund Account

Reimbursement from REO Proceeds

Advances Received After

Service Release Total

[A] [B]

1 American Servicing -$ -$ -$ -$ 2 Bank of America 2,332 - - 2,332 3 Bank of Internet - - - - 4 Bayrock Mortgage - - - - 5 Bayview Loan Servicing LLC 176,149 - 1,000,000 1,176,149 6 BB&T - - - - 7 Central Mortgage (CMC) - - - - 8 Century National Bank - - - - 9 CitiMortgage Inc - - - -

10 Cole Taylor - - - - 11 Colonial - FDIC 459,015 - - 459,015 12 Freddie Mac 5,064,749 - - 5,064,749 13 First American Bank & Trust - - - - 14 First Charter - - - - 15 First Western Bank - - - - 16 GMAC - - - - 17 Ginnie Mae 741,821 - - 741,821 18 Henley Holdings - - - - 19 Hyde Park Savings Bank 1,787 - - 1,787 20 IndyMac - - - - 21 Mercantile Bank 2,655 - - 2,655 22 MGC Mortgage 2,608 - - 2,608 23 MountainView 103 - - 103 24 Ocala Funding - RoundPoint Interim Serviced - - - - 25 Ocwen - - - 26 Platinum Community Bank - FDIC - - - - 27 RBC Bank - - - - 28 Seaside - - - - 29 Selene - - - - 30 TBW - Not Service Released 393,249 - - 393,249 31 TBW - Net Funded / FHLMC - - - - 32 TBW - Net Funded / GNMA - - - - 33 TBW - Net Funded / Wells Fargo - - - - 34 TBW - Selene Interim Serviced - - - - 35 UMS - Hudson City - - - - 36 Urban Trust Bank - - - - 37 US AmeriBank - - - - 38 US Bank - - - - 39 Wachovia - - - - 40 Wells Fargo 1,673,235 2,688,804 1,300,000 5,662,039

41 Total 8,517,703$ 2,688,804$ 2,300,000$ 13,506,507$

[A] See Exhibit L.[B] See Table 11 in the Report.

Page 1 of 1


Exhibit S

Databases Created for the Asset Reconciliation


TAYLOR, BEAN & WHITAKER EXHIBIT SDatabases Created For the Asset Reconciliation

Line Database Tables Source Files Period Covered Total Records

1 Advance Advance Colonial Daily Pipeline Report - "Advance" Worksheet 04/01/08 - 08/06/09 12,908

2 BNP Pipelines BNP PipelinesDaily TBW BNP Pipeline Report maintained in the Accounting shared drive plus reports pulled from the email discovery database

07/10/08 - 08/04/09 555,062

BoA EPF Funding Worksheet Daily TBW "BOA Funding Worksheets" maintained in Secondary shared folder 03/31/09 - 07/31/09 407

BoA EPF Loans Daily TBW "BOA Advance Tapes" maintained in Secondary shared folder 03/31/09 - 07/31/09 34,628

4 COLB Purchase COLB Purchase Colonial Daily Pipeline Report - "COLB Purchase" Worksheet maintained in Secondary shared folder 12/01/08 - 08/06/09 115,850

5 Collateral Accounts Collateral Account Transactions

Monthly "Ocala Funding Collateral Account" TBW Excel files and Daily BoA bank statements for all three collateral accounts maintained in Accounting shared drive.

01/02/07 - 08/04/09 11,128

6 Colonial Pipeline Borrowers BorrowersCertain Borrower and Note related fields from the Platinum, Seaside and Colonial Daily Pipeline Report - "Pipeline" Worksheet

12/01/08 - 08/06/09 127,045

Certain fields from Colonial Daily Pipeline Report - "Pipeline" Worksheet 09/02/08 - 08/06/09 2,139,818

Certain fields from the Platinum Daily Pipeline Report - "Pipeline" Worksheet 06/05/09 - 08/06/09 29,359

Certain fields from the Seaside Daily Pipeline Report - "Pipeline" Worksheet 12/12/08 - 08/06/09 40,864

Summary Colonial Daily Pipeline Report - "Summary" Worksheet 12/01/08 - 08/06/09 5,762

8 DBK Pipelines DBK PipelinesDaily TBW DBK Pipeline Report maintained in the Accounting shared drive plus reports pulled from the email discovery database

07/14/08 - 08/04/09 1,404,831

COLB Spreadsheet provided by the FDIC called FDIC Retained - - "COLB_DETAIL" Worksheet 08/14/09 - 08/14/09 8,714

AOT Trades Spreadsheet provided by the FDIC called FDIC Retained - - "AOT_DETAIL_BIS" Worksheet 08/14/09 - 08/14/09 124

AOT Loan LevelSpreadsheet provided by the FDIC called FDIC Retained - - "AOT-unvalidated_ACCESS detail" Worksheet

08/14/09 - 08/14/09 9,304

Overline Spreadsheet provided by the FDIC called FDIC Retained - - "WH_DETAIL" Worksheet 08/14/09 - 08/14/09 1,735

10 Funding Management System Data TBW Funding System which was used to manage the funding process for new loans. 2003 - 08/06/09 897,769

11 Freddie Mac Funding Details Daily Funding Detail Report downloaded by Investor Services from Freddie Mac 11/03/08 - 08/04/09 51,763

3 BoA EPF

7 Colonial PipelineColonial Pipeline

9 FDIC Retained

Page 1 of 2


TAYLOR, BEAN & WHITAKER EXHIBIT SDatabases Created For the Asset Reconciliation

Line Database Tables Source Files Period Covered Total Records

Busted Pools TBW Excel file called "MBS-August" maintained on Secondary shared folder 64

Ginnie Mae Pools Pool level text files downloaded by Investor Services from Ginnie Mae 12/01/08 - 08/05/09 68,824

13 Master Pipelines Master Pipeline

Certain fields from the month end Master Pipeline report for August 2007 - March 2009 and daily reports for the remainder of 2009. Master Pipeline report renamed by TBW to the Funding Report starting with the July 8, 2009 report.

08/01/07 - 08/05/09 3,069,956

14 OF Pipelines OF Advances Daily TBW OF Pipeline - - "Advances" worksheet maintained on Accounting shared drive. 07/21/05 - 08/04/09 332,181

Colonial Daily Pipeline Report - "Payment" Worksheet 09/02/08 - 08/06/09 115,297

Platinum Daily Pipeline Report - "Payment" Worksheet 07/02/09 - 08/04/09 2,011

Seaside Daily Pipeline Report - "Payment" Worksheet 12/15/08 - 08/06/09 3,560

QRM Loan Level Pool DataExtracted from QRM data maintained on TBW Server TBWQRMSQL01 (Date Range based on Settlement Date)

01/01/07 - 08/27/09 390,083

QRM Pool DataExtracted from QRM data maintained on TBW Server TBWQRMSQL01 (Date Range based on Settlement Date)

01/01/07 - 08/27/09 20,260

17 Relativity Database Electronic Evidence Discovery Database

Extracted from multiple email source files for nine different TBW custodians. 1997 - 2009 2,132,394

18 Rules Rules Data Extracted from data contained in TBW's Rules and QRM systems. 2003 - 08/04/09 826,412

Colonial Daily Pipeline Report - "Shipped Not Paid" Worksheet 12/01/08 - 08/06/09 878,635

Platinum Daily Pipeline Report - "Shipped Not Paid" Worksheet 07/15/09 - 08/06/09 4,542

Seaside Daily Pipeline Report - "Shipped Not Paid" Worksheet 12/17/08 - 08/06/09 17,281

20 TBW Loan Lookup DB v4 043010 Profile 1 / CS Loan Lookup TBW Active Servicing System. This database is referred to as the Lookup Database. 2007 - 2009 708,071

Wire Details

TBW Daily Wire Breakdown Spreadsheets maintained in Secondary shared folder plus breakdowns retrieved from the email discovery database

06/02/08 - 08/05/09 328,397

Wires Extracted from File Name of Wire Breakdowns 06/02/08 - 08/05/09 3,780

19 Shipped Not Paid Shipped Not Paid

21 Wire Breakdowns

12 Ginnie Mae Pools

16 QRM

15 Payment Payment

Page 2 of 2


Exhibit T

Discrepancies Between Data Sources that identify

Freddie Mac as the Investor for Ocala Funding Loans


TAYLOR, BEAN & WHITAKER EXHIBIT TDiscrepancies Between Data Sources that Identify Freddie Mac as the Investor for Ocala Funding Loans

Line Loans

Freddie Mac Funding

Detail Report

QRM with Freddie Mac as Investor

Lookup Database with Freddie Mac as Investor

Investor per

Lookup Database Explanation

Potential Investor Loans

1 7,031 Yes Yes Yes Freddie Mac Found in all 3 Sources Freddie Mac 7,031

2 90 Yes No Yes Freddie Mac

88 of these loans are in Pool '30868020' that was advanced on the BoA EPF on July 17, 2009. It settled on July 29, 2009. The loans are found in a wire breakdown from Bank of America on July 17, 2009. There is a Purchase Advice from Bank of New York on the settlement date for this Pool. According to the Lookup Database these loans were service released to Cenlar.The other 2 loans are in Pool '30853452', an Enterprise Cash contract that expired on July 17, 2009. There is a Funding Detail Report, Purchase Advice and Form 996 for this pool. According to the Lookup Database these loans were service released to Cenlar.

Freddie Mac 90

3 1 Yes Yes No Colonial

Loan 3396988 is in Pool 30862471 that expired on July 13, 2009. It is in QRM and the Funding Detail Reports as a Freddie Mac loan. The loan can be found in a Funding Detail Report for this Pool. The Form 996 retained by TBW is incomplete and was not provided in the Freddie Mac production. There is no evidence in the email discovery database that suggests TBW repurchased the loan.

Freddie Mac 1

4 6 No Yes No Colonial

3 of these loans are in Pools that settled on August 4, 2009. We have not been able to locate all of the Funding Detail Reports for Pools that settled this day. The loans can be found in a Freddie Mac related wire breakdown that ties to a deposit from Freddie Mac on the settlement date. In addition they can be located in a Purchase Advice that was received as part of the Freddie Mac production. [FHLMC T 0003742-3752]Loans 7000078 and 7005854 were initially sold to Freddie Mac in 2007. Both were repurchased by TBW.Loan 712797 is in Pool 30833862 that settled on 06/24/09. According to the Form 996 for the Pool, this loan was removed from the Pool. It cannot be found in the related Funding Detail Report either. It does not appear this adjustment was made in QRM.

Freddie Mac

Colonial

3

3

5 24 No Yes No Ocala Funding

23 of these loans are in Pool '30873013' that was advanced on the BoA EPF on July 23, 2009. The Pool settled August 4, 2009. We have not been able to locate all of the Funding Detail Reports for Pools that settled this day. These loans are all found in a wire breakdown that can be tied to a deposit from Bank of America on July 23, 2009, the date on which they were advanced on the BoA EPF. In addition it is included in the files recently received from Freddie Mac. [FHLMC T 0002067-2073]Loan 2272467 is in Pool 30849495 per QRM. According to the Form 996 for the Pool, this loan was removed from the Pool. It cannot be found in the related Funding Detail Report either. It does not appear this adjustment was made in QRM.

Freddie Mac

Ocala Funding

23

1

6 20 No Yes Yes Freddie Mac These loans are in Pools that settled prior to December 2008. The earliest we have Funding Detail Reports uploaded is December 2008. Freddie Mac 20

7 24 No No Yes Freddie Mac

These loans were all sold to Freddie Mac according to the RULES Database. Most of the loans funded in early 2007 and before. The earliest we have Funding Detail Reports uploaded in December 2008. The earliest QRM data we have is from January 2007. According to the Lookup Database, 17 of these loans were service released to Cenlar, one was service released to Ocwen and 6 were Service Released prior to August 5, 2009.

Freddie Mac 24

8 7,196 Total 7,196

Page 1 of 1


Exhibit U

Discrepancies Between Data Sources that identify

Freddie Mac as the Investor for COLB Loans


TAYLOR, BEAN & WHITAKER EXHIBIT UDiscrepancies Between Data Sources that Identify Freddie Mac as the Investor For COLB Loans

Line Loans

Freddie Mac Funding

Detail Report

QRM with Freddie Mac as Investor

Lookup Database with Freddie Mac as Investor

TBW Wire Breakdown for

Freddie Mac

Investor per Lookup Database Explanation

Potential Investor Loans

1 4,693 Yes Yes Yes Yes Freddie Mac Found in all 4 Sources Freddie Mac 4,693

2 103 Yes Yes Yes No Freddie Mac

We were unable to locate a wire breakdown for a deposit from Freddie Mac into the OF Collateral account on July 8, 2009, which is the settlement date for these loans. They are all found in the same contracts per QRM and the Funding Detail Reports. They were all service released to Cenlar with Freddie Mac as the Investor.

Freddie Mac 103

3 2 Yes Yes No Yes Colonial

One loan is in Pool 30862471. It is listed on the Funding Detail Report for the Pool as well as the Form 996 received from the Freddie Mac Production. It is also listed on a Freddie Mac related wire breakdown that can be tied to a deposit into the Investor Funding account on the settlement date (July 13, 2009). There is no evidence in the email discovery database to suggest it was repurchased.The other loan is in Pool 30804764. It is listed on the Funding Detail Report and Form 996 for the Pool. It also is found on a Freddie Mac related wire breakdown that can be tied to a deposit from Freddie Mac on the settlement date (June 2, 2009). However, the loan failed to fund before it was put into the Freddie Contract. As a result TBW repurchased the loan from Freddie Mac.

Freddie Mac

Colonial

1

1

4 2 Yes No Yes Yes Freddie Mac

These loans are in Pool 30853452, an Enterprise Cash contract that expired on July 17, 2009. There is a Funding Detail Report, Purchase Advice and Form 996 for this Pool. They are listed on a wire breakdown from Freddie Mac that can be tied to a deposit into the Ocala Funding Collateral account on the settlement date (July 9, 2009).

Freddie Mac 2

5 3 No Yes No Yes Colonial

These loans are in Pools that settled on August 4, 2009. We have not been able to locate all of the Funding Detail Reports for loans that settled this day. However, there is a wire breakdown that ties to a deposit received from Freddie Mac on this day. They also can be found in Purchase Advices and Form 996s contained in the Freddie Mac Production.

Freddie Mac 3

6 3 No Yes No No Colonial

All of these loans list Colonial as the Investor and were service released to RoundPoint per the Lookup Database. One loan is in Pool 30833862 per QRM. It was deleted from the Pool per the Form 996 but it does not appear this update was made in QRM. One loan is in Pool 30849411. A Funding Detail Report and a Form 996 could not be located for this Pool nor could the loan be tied to a Freddie Mac related wire breakdown. One loan is in Pool 70847688. It is not listed on the Funding Detail Report but it is listed on the Form 996 for the Pool. It could not be tied to a Freddie Mac related wire breakdown.

Colonial 3

7 4,806 Total 4,806

Page 1 of 1


Exhibit V

Example of bailee letter for

shipment of loans from Colonial to LGTS


Exhibit W

Example of bailee letter for

shipment of loans from LGTS


Exhibit X

Form 996


[Loan listing omitted]


TBW Final Reconciliation

Documents

Transcript of TBW Final Reconciliation