2. Table of Contents
Company overview
Principles
Opportunity
Services
Technology
Staffing
Reporting
Pricing
3. Company Overview
Mela Capital Group, founded April 2005
Principles have over 40 years of underwriting, loss mitigation and
quality control management
Forensic fraud and financial auditing
Credit risk auditing
Servicing pool pre-purchase decisioning
Third party underwriting reviews
Securities fraud QC underwriting audits
Bulk investor credit risk and loss mitigation audits
Mortgage fraud forensic investigations
Expert witness testimony
Law enforcement training
Training, expert public speaker
4. Principles
Cindi Dixon, CEO
23 years executive leadership in mortgage underwriting and risk
management
20 years of Agency & Wall Street mortgage backed securities
firms
Underwritten/audited over $8 billion in mortgage loans
20 years underwriting management, policy development
Published author, expert speaker, law enforcement trainer
Nationally renown mortgage fraud expert
5. Principles
Scott Ramshaw, Mgt IT Security
Karl Dixon, IT Operations Manger
20+ years experience in web based applications development and
creating automated cost saving custom solutions.
Security Specialist responsible for supplying security updates for
confidential products and internal corporate security.
Developed SQL based Intranet/CRM, Linux product development and
product line consolidation.
Created a bandwidth monitoring system to monitor over 5000 secure
servers and manage team of System Administrators.
Manage all aspects of the WAN/LAN, including security, network
performance, software installation, service/server hardening,
server/workstation deployment, firewalls and phone systems.
Maintain system backups, network administration, tool development,
user support, File, Print, and Terminal servers.
Build new systems and design to customer specifications and
implement new network setups.
Work with clients to implement and design changes to improve
efficiently and profitability of operation.
6. Opportunity
FNMA Loan Quality Initiative
The Case for Quality Control effective July 1, 2010
A tenet for business
An element of sustainable homeownership
Key to eliminating loan defects and improving loan quality
A gauge for competency and effectiveness
Reduction of repurchase risk
7. Opportunity
Key Dates
Announcement SEL-2010-03 released March 29, 2010
Policy effective July 1, 2010
Expectations of FNMA Lender Partners
Ownership of loan quality
Establishment of goals, metrics, and targets
Lender standards vs. Fannie Mae minimums
8. Third Party Originator Requirements
Part A, Doing Business with Fannie Mae Subpart A3, Getting Started
with Fannie Mae
Requirements are now more specific and detailed
Lender must satisfy itself that a third-party originator can
produce quality mortgages
Lenders written QC procedures must include copies of the TPOs QC
procedures for compliance with lender standards
9. Third Party Originator Requirements
10. Third Party Originator Requirements
Part D, Ensuring Quality Control (QC) Subpart D1, Lender QC
ProcessExcerpt from D1-1-02
11. Services
The Case for Quality Control
Prefunding QC Review Process
Prefunding QC is now detailed in its own Selling Guide
section
It is a mandatory requirement
Lender has flexibility in applying prefunding QC
Excerpt from D1-2-01
12. Services
Discretionary Mortgage Selections
Now mandatory
Above random requirements but no specific minimums
Criteria outlined, but not limited to the list provided
Excerpt from D1-3-02
13. Services
Reverification of Social Security Number (SSN)
SSN validation mandated in Announcement SEL-2010-01
Lender must include SSN reverification in QC plan
Excerpt from D1-3-03
Use of IRS Form 4506-T in the Lenders QC Plan
4506-T requirements updated in Ann. 09-19
Lender must include 4506-T provisions in QC plan
See Note - Lender may use same docs in post-closing QC
process
Excerpt from D1-3-03
14. Services
Verification of Owner-Occupancy
This is a new requirement
The methodology is up to the lenderExcerpt from D1-3-03
Reverification of Borrowers Traditional Credit History
It now includes both loans underwritten manually and through
Desktop Underwriter (DU) or other automated underwriting
systemsExcerpt from D1-3-03
Reverification of Borrower Income, Employment, and Asset
Information
Allows verbal reverification of employment and income with written
documentation of conversation
Recognizes limitations of asset verifications but outlines
requirement for documentation of attemptExcerpt from D1-3-03
15. Services
QC Review of Red Flag and Alert Messages
This is a new requirement
The lenders QC process must include a review of any red flag
messagesExcerpt from D1-3-04
Verification of Data Integrity for DU
16. Services
Review of DU Underwriting Recommendations
For Approve/Elig. and Expanded Approval/Elig.: qualifying income
must be reverified
recognized challenges with reverifying assets
RWC IV portion is a new addition (previously omitted)
Reflects new policy from Ann. SEL-2010-01
Excerpts from D1-3-06
Home Valuation Code of Conduct (HVCC)
HVCC requirements detailed in Announcement 09-01
Lender must include HVCC provisions in QC plan
Excerpt from D1-3-05
17. Services
Audit Review of the QC Process
Lender must audit the QC function
Like QC findings, audit findings are to be provided to Senior
Management
Senior Management is accountable for timely resolution of audit
findings
Excerpt from D1-3-08
18. Mela Capital Group
We offer a full service platform meet all of your needs:
Quality Control Auditing,
Third Party Origination oversight,
Internal and Agency reporting,
Quality Control planning,
Issue resolution, and
Staff training
19. Technology
State of the art integrated server platform
Multi level stand-alone building
Backup UPS (N+1) and diesel generator (N+1) power systems
Highly secure, redundant IT infrastructure of our data centers
protect your servers and web presence, and ensures you are running
online, all of the time
NOC monitored network 24x7x365
SAS 70 Type I security certified for Managed Hosting
Independent and in-depth audit of control objectives and control
activities, including controls over information technology and
related processes. Microsoft Gold Certified Partner, Red Hat
Advanced Hosting Partner, SafeHarbor certified, and a proud member
of the Green Grid.
Guaranteed around-the-clock power, back it all up with our 100%
Power SLA and 100% Network Uptime SLA
Data center is locked off and guarded and only accessed by
authorized hosting personnel via military-grade pass card access
and biometric finger scan units
20. Technology
Data management for distance teams is secured via Adobe LiveCycle
Rights Management ES2
Product Specifications and security features include:
LiveCycleLaunchpad ES2 interface to identify files for protection.
Create and set a policy that limits users' access and privileges.
All actions taken on the document are recorded for audit and
compliance purposes.
Proactively protect confidential data or other sensitive
information from being leaked outside the organization.
Restrict confidential information internally to only certain
individuals.
Enable more secure collaboration to improve supply chain
communication.
Improve compliance with industry regulations or standards.
21. Staffing
MCG has a paperless, Green platform that allows us to hire the most
experienced talent nationwide
All personnel background checked through Accurint/Lexis Nexis for
state and federal clearance
All auditors pass rigorous underwriting and quality control
evaluations for certification
Remote security fingerprints assigned and monitored
Adobe LiveCycle Rights Management ES2
15 years average experience risk management underwriting
Recertified annually
22. Reporting
New FNMA requirements
Reports must cover QC reviews
Format up to lender specifications
Still required if QC outsourced
Excerpt from D1-3-08
Reporting customized to meet client needs
Random or statistical sampling can be performed by our analytics
team through independent software programs
Secure systems interface can be created to work virtually through
our customers platforms
23. Reporting, continued
24. Lender must have procedures to address response and resolution to identified defects 25. Lender must notify FNMA of any breaches or misrepresentation within 30 days