outreach financial services
TRANSCRIPT
New Foreclosure Wave is Coming Published: Thursday, 15 Dec 2011 | 9:54 AM ET By: CNBC Real Estate Reporter
Outreach Financial Services, LLC Improving Results in Distressed
Mortgage Servicing
Company Overview
Jacksonville, FL based distressed mortgage component servicer licensed through operational alliance with proven large client services provider
Provides integration into mortgage loss mitigation process, focusing on
improved borrower contacts, more mod qualifications, lower re-defaults
We drive leading quality right party contacts, modifications and sustain rates by innovative and proven methods and an unmatched proposition of help to borrowers
Have exclusive alliance with the nationally known credit counseling
network which provides in-person holistic counseling , and works to stabilize borrower debt, free up cash and restore communications
(866) 972-3937 [email protected]
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OFS goal was to fill industry void and attempt to quantify value of foreclosure prevention counseling
Selected STRATMOR Group, a leading mortgage industry consultancy, and Matt Lind, MIT and Harvard with Ph.D. in applied mathematics
Primary data points of comparison were : 1) incremental modifications 2) post-modification redefault rates from counseling
Used data from 2010 NFMC study by the Urban Institute on 180K NFMC counseled and 155K non-counseled distressed mortgages
Press Release and White Paper available via link and may be downloaded at www.OutreachFS.com/Investor
(866) 972-3937 [email protected]
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(866) 972-3937 [email protected]
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Reduction in Monthly PITI Payments ($)
Mod rates: 4%
Re-defaults: 57%
Results: BTC* of 4:1
BTC of 7:1 with avg $550 lower mortgage + $300 debt + other borrower spending cuts
Each $300 in lower monthly exp.: cures by 46%
A modest in incremental mods pushes BTC to 10:1 plus
Applied to a portfolio of 1,000 borrowers, all receiving holistic financial counseling, BTC of 7:1=$7.15 million of losses avoided, BTC of 10:1=$10 million of losses avoided
*BTC=Benefit to cost. **Assumes average loss of $70,000 and average cost of $1,000 per file, applicable to an average grouping of
distressed mortgages.
(866) 972-3937 [email protected]
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Investor Servicer Consumer
Loss avoidance-to-cost benefit (BTC) +/- 7:1 to 10:1
Favorable overall economics
Much needed stability, reduced expenses, improved cash flows
Reduced balance sheet/operating losses and costs
Reduced balance sheet, operating costs and losses.
Single point of contact
Reduced litigation exposure Reduced litigation exposure Greater financial stability
Immediate results (30-60 days) Increased revenues Better service
Improved servicer health, improved distressed mortgage values
Reduction in potential compensatory challenges
Increased chances of home retention
Better pool and sale values, more borrower insight
Improved public relations More positive outcomes on exit
Select or programmatic insertion into servicing process
Increased counseling capacity, faster results
Significant value to cost benefit
(866) 972-3937 [email protected]
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Holistic Accountability: DMP* reduces monthly expenditures, increases cash for mortgage payment, gets borrower on budget and accountable, borrower has to contribute
Servicing Integration: OFS will produce even better foreclosure prevention rates as we leverage the counseling effort into the loss mitigation process
Greater Regulatory Freedom: Non-profit counselors work entire debt stack and generate higher modification rates with higher sustainability
Proven Model: Through our affiliate counseling alliance and their member agencies have been providing counseling to distressed borrowers and yielding significant results for lenders for decades
Sustainability: Core assumption of improved borrower cash flow, stabilization of all debt in addition to borrower commitment and path support high BTC results
*DMP=Debt management plan, which includes auto, credit cards, other consumer debt in addition to the mortgage
Outreach Financial Services, LLC Improving Results in Distressed
Mortgage Servicing
Thank You