For Capital Markets

Because the Old Rules No Longer Apply

The mortgage-backed securities (MBS) market will never be the same again. The rules are changing—inexorably, unavoidably, dramatically. What the market will ultimately become is only gradually emerging.

The current market can seem like a labyrinth with no obvious paths to success.

ONE THING’S FOR SURE,

HOWEVER—RISK VISIBILITY

IN THE NEW MARKET WILL

BE CRITICAL. NO ONE

WITH MONEY AT RISK

CAN AFFORD TO TAKE

SECURITIES VALUE ON

FAITH ANYMORE

The Securitization DilemmaThe risk profi le of the new MBS market has already changed from historical patterns in an unsettling way: the rules themselves have become the primary risk factor.

The mortgage-backed securities market continues to limp along, crippled by concerns about how Dodd-Frank and others will be implemented, how quickly GSE involvement will disappear, how much of a factor the government will continue to be, when interest rates will begin to rise—and by how much, and for how long—and…and…

Market uncertainty remains at unprecedented levels.

What Is New Diligence™?New Diligence from CoreLogic® harnesses the extraordinary breadth and depth of our proven information and human resources to give you effective, actionable post-crisis insight into today’s MBS marketplace—and prepare you for what’s coming next, no matter what it is.

New Diligence combines CoreLogic data, applications, and expertise into carefully focused solutions that provide the insights you need to understand your options in making key business choices—then helps you move faster than competitors to implement them.

Tailored to your specifi c needs, New Diligence brings together our:

What Should You Do?How do you deal with core business uncertainty? Since there’s little you can do with confi dence before the new regulatory environment emerges, it’s tempting just to wait and see. But that carries its own risk—that when stability returns, you’ll be so far behind you can’t catch up.

A better alternative is to prepare for all likely outcomes—then adapt to the new reality as it unfolds.

To take such an approach, you need a partner with enough experience and resources to anticipate—and understand—all of the possible outcomes. You don’t need a partner who might downplay the likelihood of certain outcomes just to mask their own limitations.

How Does It Work?To see how New Diligence can marshal CoreLogic resources to answer your most diffi cult MBS pricing, performance, trending, evaluation, and forecasting questions—and do it faster, more accurately, more clearly than ever before—please read on…

► Data Resources

► Asset Valuation and Risk Assessment

► Housing Analytics and Market Trends

► Due Diligence and Advisory Solutions

To simplify accurate evaluations of:

► Loans

► Pools

► Portfolios

► MBS/ABS securities

Data ResourcesNew Diligence starts by uncovering accurate facts about the assets driving value, relying on the industry-leading completeness and accuracy of our data. Although New Diligence solutions can access any CoreLogic database or database service—we most often use:

► Data Quality

► Non-Agency RMBS Securities Data

► Servicing Data

► Home Equity Data

► Real Estate Property Data

► Credit Data

► Tax Delinquency Data

► Match and Append Database Services

Data Quality Evolved over decades, our data quality control system is an enterprise-wide effort that assures the accuracy, completeness, consistency, timeliness, validity, and security of the data in our repositories. We dynamically update all databases continuously, normalize incoming data to streamline its use, classify it to comply with current regulatory standards, and provide advanced security safeguards to assure data integrity, confi dentiality, and availability.

The datasets include:

Non-Agency RMBS Securities Data

Our LoanPerformance™ securities database—the largest repository of loan-level information on U.S. RMBS—tracks the prepayment and credit delinquency risk of over $1 trillion in residential mortgage-backed securities (more than 97% of outstanding pool balances) plus loan-level detail on the underlying collateral of 15,000+ private-issue securities (12,000 active).

Servicing Data

Our LoanPerformance Servicing database includes up to 41 million active prime and subprime mortgages, with delinquency, prepayment, and roll-rate metrics to the Zip code-level—offering thousands of analytics options on the full dataset or on defi ned cohorts. These metrics are available for both the prime and subprime servicing subsets.

Our servicing platform also offers anonymized fi ltering and performance-measurement metrics that provide fl exible, focused, time-saving ad hoc reporting in addition to one-click, always-current standard reports. All mortgage ARM variations are covered, with access to the Zip code-level.

Anonymized loan-level access to over 150 million anonymized prime and subprime loans is also available for data modeling, trending, and custom metric development.

CoreLogic databases are increasingly powering combined-workfl ow solutions, designed to solve problems quicker by overlaying data in new ways.

Home Equity Data

Our LoanPerformance HomeEquity database includes 7 million+ active home equity loans and lines of credit, more than 80% of all bank-owned secondary loans. Our home equity platform can be used to benchmark home equity and second mortgage portfolios to the national market, to compare portfolio performance to industry standards—including delinquency, prepayment, and utilization—and to assess credit policy, servicing-cost management, geographic risk levels, and prospective portfolio purchases.

Historical loan-level data on over 27 million home equity loans and HELOCs is also available to support your own modeling and custom analytics needs.

Real Estate Property Data

The CoreLogic Real Estate database—the largest in the world—provides property and lien information covering all U.S. residential, commercial, vacant, government, and other property types. These data include:

► 99+ percent of U.S. residential properties (147 million)

► 100 percent of U.S. county, municipal, special tax districts

► 870 million+ historical transaction records, spanning 40+ years

► 99+ percent of commercial real estate properties (26 million+)

► 94 million+ mortgage applications

► 25 million credit reports provided per year

Credit Data

CoreLogic partners with the leading credit-reporting agencies, giving us access to the enabling access to the most up-to-date borrower credit scores and credit data for RMBS. We match anonymized borrower credit profi les to private-label securitized mortgage deals in the LoanPerformance Securities database. The resulting loan-level information extends the number of data points available for delinquency and loss forecasting—to help New Diligence teams optimize pricing strategies, improve model accuracy, and enhance ongoing deal surveillance.

The combined data power a number of new tools:

► Credit-Append Products Analytics utilizing enhanced data with single or multiple bureau credit scores and/or related attributes

► Credit Monitoring Solutions Single- or multiple-bureau trigger-based monitoring of consumers in portfolios—for account reviews, searches for undisclosed debt, etc.

► Occupancy Reviews Link securities data with public record and credit data to determine the occupancy status of mortgages in a portfolio

Tax Delinquency Data

Our New Diligence tax services—which range from providing basic tax services to the complete outsourcing of traditional tax functions—help 22 of the top 25 servicers manage more than 28 million loans, representing over half of all fi rst mortgages in the United States. As a result of these extensive long-term operations, our property tax database has grown to 147 million+ parcels. The size and scope of our property tax data repository gives our New Diligence teams a comprehensive framework to use in analyzing and interpreting property tax information.

Match and Append Database Services

Our Match and Append Database Services combine access to the nation’s largest property and ownership databases with inclusion of additional metrics uncovered and appended by our network of fi eld researchers—providing you often-unexpected insights into critical risk factors.

From in-depth details about single or multiple properties to markers indicating trends for a neighborhood’s properties to historical lending practices and patterns—or any metric you choose—our experts can quickly fi nd and attach them to individual fi les or entire portfolios.

Asset Valuation and Risk AssessmentOnce our New Diligence team begins accessing the data needed to solve its defi ned challenge, they utilize a wide array of sophisticated CoreLogic analytics and modeling tools to determine the value of underlying assets and current/future levels of risk—tools that include:

CoreLogic Bond Tracker

CoreLogic Bond Tracker offer investors and issuers granular, dynamic, transparent credit assessments of non-agency RMBS, bond risk-retention tranches, and residential mortgage securities portfolios. They also provide regulated institutions the information they need to comply with Dodd-Frank-mandated requirements for assessing investment-grade credit risk.

Always current, CoreLogic Bond Tracker include ongoing life-of-bond surveillance through automated quarterly updates of key data. These dynamic updates will ultimately include property valuation adjustments, anonymized loan-level borrower credit performance, and market-wide developments like forecast HPI changes, governmental modifi cation programs, or industry servicing standards.

Unlike traditional RMBS and credit ratings, the AAA through D credit scores provided by CoreLogic Bond Tracker are based on clear, current, verifi able loan-level evidence—as opposed to traditional opinion-based RMBS credit grades derived from diffi cult-to-validate criteria.

Borrower Analytics

Our sophisticated borrower analytics tools reveal pivotal borrower intent and measures behaviors that can predict mortgage default. Drawing on property data, borrower demographics, and other relevant data, they scores borrowers’ willingness to make loan payments, their capability of doing so, and their current fi nancial distress—classifying them in meaningful clusters.

This information can help determine:

► Portfolio valuation and pricing – letting asset managers, whole loan traders, securities issuers and investors manage and price distressed loan portfolios with greater accuracy

► Portfolio strategy – analysis of principal factors affecting distressed loans can help defi ne portfolio strategy by clarifying how various treatment strategies will affect performance

► Portfolio surveillance – identifying the relative impact of defi ned borrower, property, and market movements can signify the need for a different treatment approach

RiskModel®

RiskModel’s statistical models and stochastic methods let our New Diligence teams assess portfolio- and loan-level risks at all stages of the mortgage lifecycle, both for the short-term and over the life of the loan or bond. By combining rich data with advanced analytics and proprietary modeling, RiskModel can project:

► Prepayments, defaults, losses, cashfl ows

► Current mortgage status and any changes, including all stages of delinquency

► Terminal events, including voluntary prepayment and two forms of liquidation

► Probability of default (PD)

► Loss given default (LGD)

► Loss severity

The latest version of RiskModel has been signifi cantly enhanced to make it easy to understand the default and prepayment risk of the higher-quality loans that make up the majority of post-2007 residential mortgage originations. Drawing on recent-vintage, anonymized performance data from the CoreLogic Loan-Level Market Analytics database, RiskModel can now deliver insights into current production that securities-only-based models can’t.

RiskModel is also the only commercially available risk model that integrates CoreLogic HPI® data, enabling more than 80% of loans in the development dataset to be modeled at the Zip-code level.

Pre-Bid Snapshot

Our Pre-Bid Snapshot gives New Diligence clients a quick, decisive, cost-effective competitive advantage in the mortgage-pool bidding process. With the speed of automation and the reliability of CoreLogic data and analytics, it generate fast facts about property factors underlying the pool’s value—generating loan-by-loan assessments of pool collateral that identifi es any encumbrances affecting value, like open liens, non-owner occupancy status, fl ood zone concerns, and more.

Secondary Lien Analytics

Our secondary lien analytics tools help you uncover potential loan and portfolio default and prepayment risk by determining—and detailing—collateral debt. It does this by:

By simultaneously examining potential factors that may include geography, price tier, property type, subject property factors and other variables, GeoAVM cascades reduce the time and money spent on valuation compared to more traditional processes.

Broker Price Opinions (BPOs)

Our nationwide network of 12,000+ brokers and agents delivers high-quality broker price opinions (BPOs), fi lling a critical intelligence gap for issuers and investors.

CoreLogic BPOs offer important benefi ts:

► The ability to meet high-volume valuation needs quickly and affordably

► Highly accurate valuations for greater confi dence in making decisions

► Appropriate disposition sales prices to curtail missed opportunity losses

Our New Diligence teams order on-site BPO reviews to verify property information and assess property condition faster and more affordably than full appraisals. As a leading provider of AVMs, full appraisals, and various hybrid valuation services, we fully understand the role BPOs play—and how to ensure they deliver the unbiased accuracy, speed, and reliability needed.

HomeStandings™ Valuation Scoring

Assessing a home’s value requires knowledge of its surrounding neighborhood and the many local characteristics that infl uence its sales price and on-market time, including:

► Foreclosure rates

► Foreclosure exposures

► Distress dominance

► School district rank

► Crime rate

► Sale price

The HomeStandings grade helps New Diligence teams capture these and other pricing factors for quick reference, with an accompanying report clarifying how and why they factor into the score. Considering these real-world valuation infl uences enables the home’s projected valuation to conform closely to the likely price the market would produce were it sold today.

► Exposing all open mortgages per property

► Estimating current property market values via PASS® Prospector AVM

► Calculating the equity (or negative equity)

► Calculating the cumulative loan-to-value ratio (CLTV)

GeoAVM® Automated Valuation Models

Our GeoAVM suite of automated valuation products and services derives its name from a sophisticated geo-preference sorting system that auto-analyzes the historic accuracy of each AVM in each geographic area to determine an impartial and accurate AVM cascade.

Housing Analytics and Market TrendsIf your New Diligence challenge includes a signifi cant pricing component or depends on projections of future portfolio or bond performance—the team will access our state-of-the-art real estate statistics toolset, the Real Estate Analytics Suite. Its components include:

CoreLogic Home Price Index (HPI®)

The CoreLogic Home Price Index delivers the most comprehensive early view of current home price trends, a critical factor in mortgage and market risk assessment. Whether engaged by originators, broker-dealers, servicers or hedge fund investors, our New Diligence teams depend on their fast, accurate, robust assessment of real-world collateral valuation risks.

Jun-

05

Aug

-05

Oct

-05

Dec

-05

Feb

-06

Ap

r-0

6

Jun-

06

Aug

-06

Oct

-06

Dec

-06

Feb

-07

Ap

r-0

7

Jun-

07

Aug

-07

Oct

-07

Dec

-07

Feb

-08

Ap

r-0

8

Jun-

08

Aug

-08

Oct

-08

Dec

-08

Feb

-09

Ap

r-0

9

Jun-

09

National

Arizona

California

Florida

Massachusetts

Nevada

North Carolina

50.00%

40.00%

30.00%

20.00%

10.00%

0.00%

-10.00%

-20.00%

-30.00%

-40.00%

Real Estate Analytics graph showing 12-Month HPI change data comparing the national HPI trend to those of selected states.

CoreLogic HPI Forecasts

Home price forecasting can anticipate key trends and future volatility in real-estate markets. However, forecasting methodologies vary greatly and can yield decisively different results. CoreLogic HPI Forecasts is designed to bring rigorous professional discipline to the process so our clients can accurately gauge future real estate risk.

The CoreLogic Home Price Index forecasting model predicts house price movements at the Zip code, county, CBSA, state and national levels at monthly intervals. In each geographic market, the model generates predicted house price changes for up to 24 months in the future.

Current forecast coverage includes:

Our Real Estate Analytics analyze HPI data to produce HPI Forecasts, MarketTrends, and ListingTrends—statistically precise information about current and future real estate trends

► 6,700 + Zip codes

► 1,100 + counties

► 960 CBSAs

► 50 states + DC

► CoreLogic Home Price Index (HPI®)

► CoreLogic HPI Forecasts

► MarketTrends

► ListingTrends

► HPI Valuation Engine

MarketTrends

MarketTrends is the industry’s only neighborhood report on home sales, market distress, negative equity, and mortgage performance. Its monthly reports combine Zip code-level public records of home sales, prices, foreclosure fi lings, and mortgage performance data to provide snapshots that identify potential expansion opportunities, valuation trends, performance analysis approaches, and benchmarking standards.

Derived from multiple CoreLogic data sources—including public record, servicing and securities databases—MarketTrends helps New Diligence consultants understand underlying market health and its infl uence at all geographic levels.

ListingTrends

ListingTrends is a unique modeled dataset we derive from partners of CoreLogic MLS data providers. It provides New Diligence teams the kind of real-world pricing actualities needed to analyze housing inventory supply and pricing trends with real confi dence.

Statistics derived from ListingTrends data offer early insight into emerging real estate risks and opportunities. Its monthly updates are bellwethers of changing trends, providing timely indicators of the current housing market and its possible future direction.

ListingTrends’ property-level data is captured monthly, scrubbed, modeled, and aggregated at the Zip code, county, CBSA, state, and national levels—resulting in comprehensive U.S. coverage.

HPI Valuation Engine

The HPI Valuation Engine is a unique tool which facilitates the estimation of market value for single or multiple properties using the CoreLogic Housing Price Index (HPI). The HPI Valuation Engine requires only three property level inputs: Zip code, prior sales date and sales amount, to trigger a proprietary and intelligent cascade mechanism that generates a market value. The Home Price Index Valuation Engine has a 100% hit rate. The CoreLogic cascading methodology selects the ideal tier and geographic combination maximizing the probability that the estimated market value will be within 10% of the actual property value. HPI Valuation Engine also produces a confi dence score, which assesses the accuracy and quantifi es the confi dence in the estimate. The HPI Valuation Engine allows clients to rapidly identify value and prioritize risk according to market exposure

MarketTrends map showing California new REO sales by county.

% of New REO Sales By County

< 30%

30.0% - 45.0%

45.0% - 55.0%

55.0% - 70.0%

> 70.0%

Sacramento

Stockton

ModestoFremontOakland

San Jose

Fresno

Bakersfield

Los AngelesGlendale

Santa Ana

San DiegoChula Vista

Due Diligence and Advisory Solutions With credit, legal, and operational expertise in banking, ratings, trading, investing, mortgage origination, and mortgage servicing, our Advisory Services professionals can help you create and implement the due diligence solution you need to fi nd the answers you want.

Due Diligence Services

Our due diligence team creates customized loan fi le review strategies that leverage our data, analytics, and professional experience to identify risk—whether it be credit, collateral, compliance. or fraud—at the loan level. We then work with you to design a solution that aligns with your business goals and delivers the information you need to make confi dent, informed decisions.

► Non-Performing Loan Review We analyze distressed portfolios at the loan level to verify collateral valuations, ensure predatory lending regulation compliance, and evaluate collection status and payment history to help you formulate loan-by-loan execution strategies.

► Acquisition and Securitization Review Our consultative services and automated tools help you maintain compliance with investor and rating agency “third-party review” criteria, including adherence to fraud, misrepresentation, data quality, and underwriting guideline requirements.

► Quality Control Review We provide outsourced quality- control solutions for originators that are customized to your guidelines, accommodate variability in volumes, and deliver an independent assessment of your program adherence.

► Data Scrub We develop and execute data-validation reviews targeting specifi c elements and data sources that provide reliable results for improved risk management.

Advisory Services

Advisory Services group provides experienced insight in using our wealth of data and analytics/modeling tools to create quick, custom-targeted results. With experience in buy-side perspectives, bond trading, credit ratings, fi nancial engineering, and mortgage origination and servicing, we cut through complexity and confusion to fi nd the information, insights, and ideas you need—quickly, clearly, painlessly.

Advisory group specialties include:

► Origination and Lending Analysis

► Servicing—Purchase and Sale Analytics

► Loan Portfolio Management

► Regulatory Insight, Planning, and Tactical Response

► Securities Valuation, Ratings, and Related Assessments

Due to our ongoing participation in industry and government advisory organizations, we are extremely well-versed in likely new compliance and disclosure requirements stemming from Dodd-Frank and other regulatory initiatives.

Consulting

Advisory group New Diligence consultants focus on specifi c problems with laser-like intensity. Given their range of banking, credit, and operational expertise, this can include virtually anything mortgage-related. The advisory team combines business-process understanding with industry acumen, technical knowledge, and statistical expertise to complement your resources.

Each new assignment begins with a detailed plan laid out for your approval. Once a strategy is in place, New Diligence consultants marshal multi-dimensional CoreLogic assets and services to design a methodology, perform all necessary modeling, analyze the results, and test them cross-functionally to validate the recommendations.

This process is transparent every step of the way—ensuring that our case-specifi c New Diligence methodology will stand up to the rigors of market, regulatory, and in-house scrutiny.

corelogic.com

FOR MORE INFORMATION PLEASE CALL 415-536-3500

© 2013 CoreLogic, Inc. All rights reserved.

CORELOGIC, the CoreLogic logo, TRUESTANDINGS, RISKMODEL, PASS, HPI LOANPERFORMANCE, HOMESTANDINGS, NEW DILIGENCE, WILLCAP and VECTOR are trademarks of CoreLogic, Inc. and/or its subsidiaries. All other trademarks are the property of their respective holders. No trademark of CoreLogic shall be used without express written consent of CoreLogic.

2-NDCM-0313-06