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VISIT US ONLINE @ DSNEWS.COM industry participants new to the servicing game and those expanding their operations. "The technology improvements are designed to help move loans along the pipeline much more quickly, and help users meet their obligations to their stakeholders,"Reed said. "Ginnie Mae has seen large volumes of business move from the top 13 issuers to smaller players in the market," said Michael Drayne, SVP of Ginnie Mae's Office of Issuer and Portfolio Management. The top 13 had 90 percent of the business last year. In the next 18 months, Ginnie Mae expects its volume to grow 10 percent, or $150 billion. "That would make you think that the business from the top 13 had been about $135 billion (90 percent of $150 billion)," Drayne said. "They haven't grown that much; they may have even shrunk. What that means is that there has been a significant change in smaller investors." "The smaller investors are mortgage bankers moving into this part of the business to earn income from servicing portfolios and new participants in the mortgage market looking to serve as pipeline conduits," Drayne said. "They present different issues for us," Drayne noted. So, Ginnie Mae vets the business plans, business processes, and compliance programs of any company that it is considering working with to ensure it will meet expectations. That means, looking at not only reported financial statements, but also audited financial statements for items including ratio of servicing fees from different sources to protect against over-concentration. Staffing expertise of business partners is another critical element in evaluating servicing relationships, multiple panel participants said. The risk profile of servicers is increasing along with the complexity of the business itself, according to David Allison, SVP of Dovenmuehle Mortgage, Inc. "The risk/return ratio has changed more in the last two years than it has in the last 20," Allison said. "Brand quality is the key risk in working with any servicer or subservicer because any poor customer service will reflect negatively on the brand," Allison said, adding that credit management is another critical factor for any business partner. The conference specifically focuses on property preservation issues in the mortgage servicing industry. The two-day event, featured Alfred Pollard, general counsel of the Federal Housing Finance Agency, as the keynote speaker. Some of the issues Pollard touched on were crafting solutions in the middle of a crisis and the mission to build, contract, and maintain Fannie Mae and Freddie Mac. The event also included a special session on the industry's response to Hurricane Sandy and lessons learned from Rita and Katrina. Another timely session discussed what the election means for the FHA and the housing industry. Safeguard Properties is a large privately held mortgage field services company based in Valley View, Ohio. The company inspects and maintains defaulted and foreclosed properties for mortgage service companies, lenders, investors, and other financial institutions. The next day Scott Rasmussen, founder of the Rasmussen Reports, spoke on what the election meant for the U.S. and the housing industry and how the public's opinion could drive change in the country. Indiana 3.01% 90+ Day Delinquency Rate Foreclosure Rate september 2012 1.59% 2.80% 1.72% 2.87% 8.2% -7.6% -2.7% 9.2% Top County LouIsa CounTy 90+ Day Delinquency Rate 2.69% 6.24% year ago 2.49% 5.78% percent point change 8.4% 7.9% Top Core-Based statistical area CLInTon, Ia 90+ Day Delinquency Rate 3.18% 4.17% year ago 3.35% 3.72% percent point change -5.0% 12.0% note: The 90+ Day delinquecy rate is the percentage of outstanding mortgage loans that are 90plus days delinquent. The foreclosure rate is the percentage of outstanding mortgage loans currently in foreclosure. State rank is based on the September 2012 foreclosure rate. All figures are rounded to the nearest decimal. The unemployment rate reflects preliminary September 2012 figures released by the Bureau of Labor Statistics. All other data courtesy of Lender Processing Services. 90+ Day Delinquency Rate Foreclosure Rate september 2012 2.30% -10.9% -10.2% BourBon CounTy 90+ Day Delinquency Rate september 2012 7.37% 2.09% 6.61% 3.06% 11.5% -31.6% -5.8% Top Core-Based Statistical Area ATChiSon, KS Foreclosure Rate 90+ Day Delinquency Rate september 2012 Foreclosure Rate september 2012 7.33% 3.48% year ago 3.38% year ago 7.55% 4.21% percent point change note: 4.23% percent point change Top Core-Based Statistical area -21.1% Foreclosure Rate year ago percent point change 4.00% -11.9% 3.99% year ago 3.16% 6.7% Top County september 2012 90+ Day Delinquency Rate 5.9% 2.12% 0.4% Foreclosure Rate FrankForT, In Unemployment Rate 1.90% 2.29% Top County -21.2% Foreclosure Rate september 2012 SwITzerland CounTy 3.60% Foreclosure Rate september 2012 percent point change -10.3% 2.84% -11.9% year ago 4.40% 90+ Day Delinquency Rate 5.9% percent point change percent point change -4.6% 5.2% rank: 35 Unemployment Rate 3.95% 3.16% Unemployment Rate year ago year ago Safeguard Properties Holds 9th Annual Property Preservation Conference Safeguard Properties held its ninth annual National Property Preservation Conference last month in Chicago. Foreclosure Rate september 2012 rank: 25 Kansas rank: 13 90+ Day Delinquency Rate Iowa 3.06% percent point change -3.0% The 90+ Day delinquecy rate is the percentage of outstanding mortgage loans that are 90plus days delinquent. The foreclosure rate is the percentage of outstanding mortgage loans currently in foreclosure. State rank is based on the September 2012 foreclosure rate. All figures are rounded to the nearest decimal. The unemployment rate reflects preliminary September 2012 figures released by the Bureau of Labor Statistics. All other data courtesy of Lender Processing Services. -17.3% 10.3% note: The 90+ Day delinquecy rate is the percentage of outstanding mortgage loans that are 90plus days delinquent. The foreclosure rate is the percentage of outstanding mortgage loans currently in foreclosure. State rank is based on the September 2012 foreclosure rate. All figures are rounded to the nearest decimal. The unemployment rate reflects preliminary September 2012 figures released by the Bureau of Labor Statistics. All other data courtesy of Lender Processing Services. 107

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