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48 NEW SFR ASSOCIATION TO EXPAND MARKET'S INFLUENCE e Five Star Institute President and CEO Ed Delgado has announced the formation of the Single-Family Rental Association (SFRA), a member-led conduit for connection and training in the growing single-family rental market. "e Single-Family Rental Association will be leading the dialogue on best practices and new business opportunities in the single- family rental market," Delgado said. "e SFRA will fill the gap as a resource for a sector that has been largely underserved and often misrepresented." According to Delgado, the SFRA will expand the SFR influence across the entire real estate industry, as participants from investors (startup, mid-cap, and large), servicers, agents, brokers, legal, technology, property management and preservation, and others join this rising market. e cornerstone of the SFRA is the Executive Leadership Council, a coalition of thought leaders which represent a cross-section of key companies and business leaders. Council members include: Chad Carpenter (CEO, Reven Housing REIT and Reven Capital, LLC); Wally Charnoff (CEO, RentRange, LLC and Investability); Laura Ferris (SVP of Product Development, Green River Capital); Miguel Gutierrez (COO, CAPREIT); Tim Herriage (CEO, 2020 REI Companies); Greg Rand (CEO, OwnAmerica); Daniel Wallace (CEO, First Key Mortgage and Co-CEO and Co-President, First Key Holdings). e SFRA will offer ongoing training and education, networking, and business opportunities, in conjunction with the Five Star Institute's Second Annual Single-Family Rental Summit on November 1-3, 2016 at the Frisco Conference Center at the Embassy Suites Hotel, Frisco, Texas. Subject matter experts at the summit will answer questions and offer solutions centered around topics related to property acquisition and management, financing and investment strategies for companies of all sizes, new technology and professional services, market changes, securitization, insurance, law, rehab, and disposition. e host sponsor of the event is OwnAmerica and star sponsors include Alacrity; Asons; Auction.com; and Williams & Williams Worldwide Auction. PRE-CRISIS INVESTORS SEE FEWER DEFAULTS Investors with property loans issued before the housing crisis continue to see fewer defaults than those for owner-occupied properties, according to a report titled, "Lower Default Rates Offset Higher Liquidation Losses in Pre-Crisis Investor- Property Loans" from Moody's Investors Service. e credit ratings agency released research that suggested the rates would persist well into 2017. "is trend will likely continue as long as the economy is growing and rental demand remains strong," the report said. "[I]f the economy slows, investor loans will default at higher rates than owner-occupied loans with similar borrower characteristics, as they did during the 2007-09 economic downturn." Moody's researchers chalked up the high rental demand to historically low rates of homeownership, steady household formations, and lingering consequences from the foreclosures and bankruptcies of the Great Recession. e report said that several factors contribute to the continuing strong rental demand, such as: A historically low homeownership rate of just above 60 percent, a result of tight lending standards A steadily growing rate of household formation Adverse credit events (foreclosure, short sale, or bankruptcy) during crisis years that are still affecting the credit of many would-be buyers Rental demand is essential to stability, with borrowers in financial trouble often resorting to renting out their properties to supplement income. "Owner-occupied loans experienced lower default rates during the 2007-09 downturn because owner-occupied borrowers had stronger incentives to keep current on their mortgages," the researchers added. ey said that investors were also "more willing to walk away from their mortgages, especially if their rental income became insufficient to cover their mortgage payments." Even so, the losses for pre-crisis investor loans and owner-occupied property loans came to about the same, according to the researchers. is was because the severity and modification rates for defaults in investor loans surpassed those for owner-occupied property loans. Default rates also tended to rise or fall in accordance with FICO scores. Investor property loans with scores less than 620 had a higher probability of defaulting than those with scores on the upper end, although these rates have come down significantly from their historic highs over the last half decade and stabilized in February.

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