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» LENDER/SERVICER PROFILE VISIT US ONLINE @ DSNEWS.COM ONE2WATCH Selene Finance Larry B. Litton, Jr. CEO company vitals Karen Bellezza Headquarters: Houston, Texas President Phone: 877.735.3637 s tat e s s e r v ic e d* Online: SeleneFinance.com Shane Ross COO Staffing » Servicing staff: Approx. 190, including 96 loss mitigation specialists » Servicing sites: 3 servicing summary * Selene Finance is a residential mortgage company that specializes in special servicing. The company was founded in 2007 to address specific needs in the mortgage industry and provide creative loan resolution strategies designed to preserve homeownership. In 2012, Selene expanded its portfolio to include performing loans and MSR acquisitions. Selene reports that its loan servicing team boasts an average of more than 16 years of mortgage and credit management experience. Selene operates three servicing sites in Texas, Pennsylvania, and Florida. company's l atest California December 21, 2012 Portfolio Stats » Residential servicing portfolio: 24,219 loans; $5.5B (UPB) Take a look inside the numbers (Acquired $8B Ginnie Mae MSRs not reflected in these numbers) Portfolio Growth Loan Count » 2012: 24,219 loans » 2011: 8,048 loans » Annual Change: +200% Unpaid Principal Balance (UPB) » 2012: $5.5B » 2011: $1.9B » Annual Change: +189% Delinquency Stats » 30-day delinquency rate: 2.31% » 60-day delinquency rate: 1.23% » 90+ day delinquency rate: 27.89% (Elevated rate because some clients buy seriously delinquent loans or loans already in foreclosure) Loss Mitigation Stats » Short sales completed: 449 Foreclosure Stats » Foreclosures completed: 2,888 » Foreclosure rate: 2.8% REO Stats » REO holdings: 753 *Statistics for FY 2012 Fitch Upgrades Selene Finance's Primary & Special RMBS Servicer Ratings Fitch's newly assigned 'RPS3+' rating and Stable Outlook for prime product reflects Selene's ability to service this product in line with its demonstrated performance for other products. In addition, Fitch believes Selene's high touch model of servicing loans at risk or delinquent, as well as their investor portal, will allow Selene to add value to a prime portfolio. Selene maintains a low number of accounts per FTE allowing for focused servicing of distressed assets. Selene's mortgage specialists in collections and loss mitigation effectively act as the single point of contact with the borrowers. Accounts per employee averaged 105 for the loan resolution department responsible for managing the distressed assets at the time of Fitch's review. Selene improved both average speed to answer and abandonment rates from the last review. This highlights Selene's increased enhancements to its technology to provide automated and efficient tools for its mortgage specialists in assisting its customers. —Business Wire January 12, 2012 Selene's Larry Litton on the Rise of Smaller Special Servicing Shops The default servicing industry is in a state of transition, according to Larry B. Litton Jr., CEO of Selene Finance and it's the smaller, more nimble servicing operations that will have the advantage in reacting quickly to the new rules and changes that are in store. "We don't have a big legacy portfolio, which would create challenges for someone trying to implement…new things to deal with the changing industry," Litton said of the special servicing firm he joined in October—a firm he describes as having a lot of flexibility when it comes to executing such regulatory directives as single point of contact (SPOC) and vendor management protocols. Litton says many of the bigger servicing shops are still set up to do what he considers commoditized types of processes, such as simple payment processing, and aren't able to adapt quickly to the regulatory changes coming down the line. —DSNews.com servicer r atings Fitch Ratings: Residential Primary Servicer, Subprime » RPS3+; Residential Primary Servicer, Prime » RPS3+; Residential Special Servicer » RSS3+ Standard & Poor's: Residential Mortgage Servicer » ABOVE AVERAGE 16.05% Florida 13.22% New York Pennsylvania Maryland 7.18% 6.87% 6.30% *As of December 31, 2012 90+ Day Delinquencies— Top Five States* Florida 1,443 California135 Maryland40 New York 40 Arizona 32 *No. of loans/properties as of December 31, 2012 REO Concentration— Top Five States* Florida 113 California 53 New York 52 Illinois 41 Pennsylvania 39 *No. of loans/properties as of December 31, 2012 SWOT STATEMENT (Strength, Weakness, Opportunity, Threat) Selene continues to add staff to the organization commensurate with growth in its portfolio. The firm has strong compliance and governance processes, technology, and people with broad experience in order to expand its portfolio. The strong special servicing platform developed over the last few years is easily leveraged for MSR and other performing loan servicing opportunities. Source: Selene Finance Sources: Selene Finance (1/17/2013), Fitch Ratings (3/12/2012), Standard & Poor's (3/2/2012) 87