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Bayview Asset Management, LLC

Private and Confidential

Executive Summary

May 2009

Confidential Not For Distribution


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I. Overview

II. Market Opportunity

III. Bayview Opportunity Master Fund, L.P.

IV. Bayview Opportunity Master Fund II, L.P.V. Bayview Capabilities

VI. Summary of Terms

VII. Biographies

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Table of Contents


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I. Overview


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Bayview Asset Management, LLC Overview

Bayview Asset Management, LLC ( Bayview or the Company ) is a fully integrated mortgage finance

company positioned to take advantage of the dislocation in the mortgage market. The Company has beena whole loan investor since 1995 and has earned a reputation as a leading investor, servicer, and trustedpartner of the financial community.

* Number of transactions excludes approximately 6,000 small private note purchases.

Bayview, which was acquired in 1993 by David Ertel (CEO), is a mortgage finance company based in CoralGables, Florida with over 650 employees and a senior management team with 12 years of average tenurewith the Company.

Bayviews mortgage investment platform is built around leading teams in Mortgage Research, LoanAcquisition, Loan Servicing, Loan Trading, Securitization, Structured Finance, and Mortgage-backedSecurities.

Bayview has purchased over $16 billion in loans from over 2,000 counterparties in over 9,000 transactionssince 1995.*

Since 1998, the Company has executed 75 different securitization transactions totaling more than $28.5billion in securities sold to over 200 institutional investors (including securities issued under the Companyssmall balance commercial platform).

In December 2007, Bayview launched Bayview Opportunity Master Fund, L.P. (BOF-I) with nearly $2billion in capital commitments.

In October 2008, affiliates of Blackstone Capital Partners V acquired a minority interest in Bayview. Bayview expects to begin raising capital for the Bayview Opportunity Master Fund II, L.P. (BOF-II), which

will make investments in residential and commercial whole loans as well as selectively in mortgage-backedsecurities.


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Historical Track Record

Bayviews mortgage investment platform has purchased $16 billion of residential mortgage loans since

1995. Bayview believes it is one of the largest buyers of scratch and dent1 mortgages in the U.S., having

focused on this sector for longer than any of its peers.

Historically, Bayview primarily used a securitization model as its funding source:

1. Acquiring loan portfolios using Bayviews balance sheet capital;

2. Securitizing the loan portfolios;

3. Realizing a gain from the securitization in the form of a cash profit plus the retention of a residualinterest (with zero basis); and

4. Using proceeds from the securitizations to purchase additional loans and fund the business.

From 1998 through 2007, the firm issued 39 term securitizations totaling $14.0 billion of bonds issued thatincluded primarily residential loans acquired in the secondary market. Important accomplishments of theBayview residential securitization program include:

A track record of buying loans at a discount to the cash proceeds received from eachsecuritization, excluding any value for the residual securities.

The combination of Bayviews due diligence procedures and underwriting criteria have translatedinto better quality loans that have consistently performed well across a wide spectrum ofvintages.

(1) A scratch-and-dent loan is a loan that generally did not qualify for the origination program for which it was intended, typically due to underwriter error.


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Historical Acquisition Volume

Bayview has a 13 year track record of investing in mortgage whole loans totaling over $16 billion of unpaid

principal balance in over 9,000 transactions with over 2,000 institutions.

$276

$473$338

$484 $433 $449 $347

$874

$1,675

$1,657 $1,475

$1,816 $1,838

$1,404

$927

$117$1 $7

$31 $94

$1,198

$51$197

$343

$0

$500

$1,000

$1,500

$2,000

$2,500

1997 1998 1999 2000 2001 2002 2003 2004 2005 2006 2007 YTD 2008

(9/30)Year

UPB(in$millions)

Com mer cial Acquis it ions Res idential Acquis it ions

Yearly Acquisition Volume by Unpaid Principal Balance (UPB)($ in millions)


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Historical Acquisitions by Collateral Type

2003 2007 Acquisitions by Collateral Type(by principal balance)

Historical Acquisi tions by Collateral Type

UPB in $000s

Unseasoned Resi (12 M0) 1,053,593 52.9% 655,676 33.5% 544,711 24.1% 378,838 16.2% 206,457 11.3% 680,592 65.2%

Residential Equity Loans 10,780 0.5% 87,254 4.5% 309,855 13.7% 500,537 21.4% 44,881 2.5% 0 0.0%

Micro Securitization 96,209 4.8% 95,863 4.9% 205,644 9.1% 78,399 3.4% 349,045 19.1% 0 0.0%

Seller Finance 71,260 3.6% 87,518 4.5% 151,114 6.7% 217,535 9.3% 166,681 9.1% 12,977 1.2%

Commercial 280,693 14.1% 441,608 22.6% 375,882 16.6% 431,517 18.5% 347,499 19.0% 111,241 10.7%

Total 1,992,495 100.0% 1,957,827 100.0% 2,260,740 100.0% 2,335,718 100.0% 1,828,509 100.0% 1,044,376 100.0%

2006 2007 2008

UPB %UPB %UPB % UPB % UPB % UPB %

2003 2004 2005


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Historical Delinquency Percentages (60+ days delinquency)

The combination of Bayviews due diligence procedures and underwriting criteria have translated into

better quality loans that have consistently performed well across a wide spectrum of vintages.

Source 1: The performance data for all of the non-BCAT transactions was aggregated and averaged by vintage.Source 2: The industry data was provided by LoanPerformance.


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Source: Actual loan to FTE ratio for Bayview, most recently available Fitch Servicer Reports for other servicers.

Servicers Ranked by Loans/Employee

Bayviews target Loan/FTE ratio is between 170 and 190. The figure above represents excess capacity.The highlighted companies are the other special servicers rated Strong by S&P.

Bayview Servicing Edge

Lowest ratio of loans per full-time employee in the industry, allows for extensive, high-touch loss mitigation

efforts.

Turn-key servicing capabilities: currently only running at 50% capacity.

Bayview is one of only five special servicers currently rated Strong by S&P, the highest possible rating.

Servicer Loans/FTE

Bayview Loan Servicing 81*Walter Mortgage Company 227Litton Loan Servicing LP 273Select Portfolio Servicing Inc. 293Nationstar Mortgage LLC 313Ocwen Loan Servicing, LLC 330Avelo Mortgage LLC 344Specialized Loan Servicing, LLC 344Wilshire Credit Corporation 345Saxon Mortgage Services, Inc. 398Accredited Home Lender Inc. 438Green Tree Servicing 494National City Home Loan Services 542

Popular Mortgage Servicing, Inc. 558Aurora Loan Services LLC 592Option One Mortgage Corporation 633LoanCare Servicing Center 753JP Morgan 897

Servicer Loans/FTE

Cenlar FSB 938Homecomings Financial 953M&T Mortgage 1,037Countrywide Home Loans 1,084Regions Mortgage 1,100Taylor Bean & Whitaker 1,125Greenpoint Mortgage Funding Inc. 1,227National City Mortgage Co 1,273Washington Mutual Bank 1,500Branch Banking & Trust 1,763Residential Capital LLC 1,903First Horizon Home Loan 2,356SunTrust Mortgage, Inc. 2,412

Wells Fargo Bank, N.A. 3,003Wachovia Mortgage Corporation 3,042Bank of America NA 3,233The Bank of New York 4,395


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II. Market Opportunity


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Market Opportunity - Overview of Market

Total U.S. Residential Mortgage Market: $10.5 Trillion

(as of May 2008)

Source: Credit Suisse (US Mortgage Strategy), Loan Performance, GNMA

The U.S. residential mortgage market is a vast market over $10 trillion in size.

Bayviews primary focus is on the Non-Securitized sector of the market (the residential whole loan sector).


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Market Opportunity Whole Loans

The large supply of whole loans coming to market, combined with Bayviews knowledge and capabilities,are expected to provide Bayview with an opportunity to invest cautiously with attractive returns for relatively

limited downside, even for economic scenarios that are worse than those implied by current market prices.

Compared with mortgage-backed securities:

Whole loans represent senior, current pay cash flows, generally characteristic of the most stablemortgage securities.

Investments in whole loans offer substantially greater transparency through Bayviews extensive

loan level due diligence process including a re-underwriting of the borrower and a fresh evaluation

of the underlying real estate collateral.

Investments in whole loans can be negotiated on a more granular loan level basis. Bayview

believes its selection process utilized to create carefully crafted pools where possible, results in

substantially better performance.

Investments in whole loans allow Bayview to leverage what it believes is a unique special servicer,

highly capable of maximizing the value of sub and non-performing loans.


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Market Opportunity Buyers Market

Bayview believes that there is limited competition on larger, more complex transactions, and that the

available for sale pipeline dwarfs the amount of capital raised by distressed funds thus far.

Fannie Mae and Freddie Mac have been tightening guidelines.

Banks and savings institutions are seeking to reduce balance sheet size.

The percentage of non-performing loans to total loans at U.S. banks and savings institutionsrose to 1.45% Q208, a level not seen since the 1980s.*

94 depositories with total mortgage loan assets of $72 billion have non-performing loans to

total loans (NPL/TL) ratios of greater than 10%. Among this universe of institutions, the

weighted average NPL/TL ratio is 15.5%.*

357 depositories with total mortgage loans of $96 billion have NPL/TL ratios of greater than

5% with 968 billion of mortgage loans.*

A total of 993 institutions have NPL/TL ratios of greater than 3% (weighted average of 5.06%).

This group of institutions have $1.1 trillion of real estate backed loans.*

Wall Street firms seeking to reduce illiquid assets:

Securities market is nonexistent for new RMBS issuance.

* Based on bank data from SNL Financial as of 9/17/08. Includes bank holding companies, commercial banks, savings banks and savings institutions.


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Market Opportunity Buyers Market

The FDIC has seized 14 depository institutions thus far in 2008 with total assets of $42.2 billion (as of

10/13/08)*.

A very small percentage of the assets have been disposed thus far.

Bayview expects the pace of seizures to accelerate, creating in excess of $100 billion of mortgage

loan assets that will be sold by the FDIC over the next several years.

The failure of a number of major U.S. financial institutions has put many traditional buyers of mortgage

assets in a highly defensive position.

Those institutions with sufficient capital and liquidity to take advantage of opportunities are optingfor long term strategic plays (i.e. Bank of America / Merrill Lynch) as opposed to shorter term asset

opportunities such as distressed portfolios.

Institutions that previously may have thought their liquidity to be sufficient have had to reconsider

the adequacy of their capital position.

Failing institutions are contributing to the supply of assets available for sale.

* Excludes the failure of Washington Mutual, which was placed in whole to JP Morgan without loss to the U.S. Government.


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III. Bayview Opportunity Master Fund, L.P.


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Overview of Bayview Opportunity Master Fund, L.P. Bayview raised $2 billion of equity capital for Bayview Opportunity Master Fund, L.P.

Initial closing was held on December 3, 2007 and a final closing was held on March 3, 2008.

Through 3/31/09, BOF-I has drawn down approximately $1.5 billion of its committed capital, and is invested in 195whole loan transactions with a fair value of $1.1 billion, RMBS and small balance commercial securities with a fairvalue of $194.2 million, and $163.7 million in cash and cash equivalents.

BOF-I Loan Composition(as of December 31, 2008 by loan basis)

Comm Non-Performing1%

Resi PerformingOriginated 2006 and

Later40%

Resi PerformingOriginated Pre 2006

29%

Comm Performing21%

Resi Non-Performing9%

Comm Performing

Comm Non-Performing

Resi Performing Originated 2006 and Later

Resi Performing Originated Pre 2006

Resi Non-Performing

* Net performance includes returns that are determined on a realized basis and an unrealized basis. With respect to investments that have not been realized, investments are marked-to-market based on Bayview's

determination of fair value in accordance with the valuation policies attached to the Confidential Private Placement Memorandum for the BOF-I feeder funds. The actual realized return on the unrealized investments will

depend, among other factors, on the value of the investments at the time of disposition, any related transaction costs and manner of disposition. Past performance is not necessarily indicative of future results. Performance

of any other funds managed by Bayview may differ from BOF-I and such difference may be material. There can be no assurance that the investment objective of BOF-I or any other funds managed by Bayview will be

achieved or that losses may not be incurred.

Net Performance*

Jan Feb Mar Apr May Jun Jul Aug Sep Oct Nov Dec YTD2007 0.08% 0.08%

2008 0.19% (0.86%) 0.61% (0.03%) 0.37% (1.06%) (0.35%) (0.50%) 0.26% (0.71%) (2.44%) (0.17%) (4.63%)

2009 0.30% 0.33% (0.04%) 0.59%


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Overview of Bayview Opportunity Master Fund, L.P.

Summary statistics

Bayviews investment strategy thus far has been to focus on acquiring performing loans inrelatively stable housing markets.

70 percent of BOF-Is whole loans (by fair value) is invested in performing (


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IV. Bayview Opportunity Master Fund II, L.P.


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Overview of Bayview Opportunity Master Fund II, L.P.

The Bayview Opportunity Master Fund II, L.P. (BOF-II or the Fund) seeks to generate attractive risk-

adjusted returns primarily based on investments in residential and commercial whole loans. To a lesser extent, as appropriate, the Fund will invest in residential mortgage-backed securities (RMBS).

Bayviews investment strategy involves buying loans at attractive unlevered yields, with the prospect of

future yield enhancement through:

Loss mitigation capability

Captive refinance program

Leverage

Securitization, and

Loan sales

Targeted asset types include:

Performing 1st lien whole loans (including Prime, Alt-A and Subprime);

Construction loans;

Non-performing 1st lien whole loans;

Performing 2nd lien whole loans;

Commercial mortgage loan pools; and

Residential mortgage-backed securities (RMBS)


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IV. Bayview Capabil it ies


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Organization Chart

* 7 real estate valuation specialists reside within Loan Servicing.

Bayview believes it has one of the most comprehensive mortgage investment platforms in the nation with651 full time employees ( FTEs ) dedicated exclusively to Bayview investments / portfolios.


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Investment Process

New entrants attracted to the potentialhigh yields available in the whole loanmarket have underestimated the barriersto entry necessary to succeed.

The infrastructure needed to purchasewhole loans requires seasoned and

specialized sourcing, trading, underwritingand special servicing personnel.

New entrants may be handicapped intheir ability to source, price, process andservice whole loans.

With full in-house infrastructure, Bayviewis able to maintain a high level of qualitycontrol.

Bayview believes it is one of the fewmarket participants with the full in-housespecialized infrastructure and growth

capacity to succeed in the whole loanmarket.

In-House

Core Competencies

Sourcing

Pricing

UnderwritingReal Estate Review

Collateral Management

Transaction Management

Research &Analytics

SpecialServicing

ValueEnhancement

RefinancingLeverageTrading


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Capabilities

Loan Servicing

400+ person primary and special servicer of residential and commercial loans with aservicing platform in Dallas, Texas and in two Florida location: Coral Gables and

Pompano Beach

Bayview owns the underlying credit for every loan that it services

One of only five special servicers with S&Ps highest special servicing rating

Lowest ratio of loans per employee in the servicing industry

Loan Sourcing

Due Diligence

Trading & Analytics

Structured Finance andSecondary Marketing

Team of 11 sales professionals and five support staff that source whole loan acquisition

opportunities from financial institutions nationwide Reach and relationships to buy small and large pools, often on a negotiated (non-

competitive) basis

Team that includes 15 underwriting professionals, six transaction managers, and sixresidential real estate valuation professionals, and 12 commercial real estateprofessionals*

Experienced transaction management, underwriting and real estate review teams withcurrent capacity to diligence over $400 million in loans (UPB) per month

Team of eight research professionals, including two Ph.D.s, that analyze home prices,mortgage credit and prepayment performance to support asset pricing models

Team of three experienced mortgage security portfolio managers to invest long andshort in mortgage securities and derivatives

Experienced commercial and residential whole loan traders that price each individualloan using internally developed pricing models and analytics, as well as loan leveldiligence comments

Extensive securitization expertise, issuing 75 deals for over $28.5 billion in ABS backedby residential and small balance commercial collateral

As of 9/30/08 completed $423 million in whole loan sales in 22 transactions with 13different buyers since March 2007

* Real estate valuation staff also has responsibilities for valuation of delinquent loans serviced by BLS.


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Deal Flow Evaluation

Review of Loan Portfolios for Sale in the Market

General pricing of the subject loan pool using proprietary analytics and other qualitative information

Elimination of Unqualified Loan Portfolios

Transaction Management / Underwriting / Real Estate Review

Detailed Review of Potential Transactions

Full Real Estate Appraisal / Broker Price Opinions / Borrower Credit Review

Documentation Check / Risk Assessment

Portfolio Pricing

Loan Level Analysis / Trader Review

Bayview

Portfolio

Final Bidding

Price Adjustment

Selection of Best Loans


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VI. Summary of Key Terms


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Summary of Key Terms Fund IIb (Private Equity Structure) (1)

Structure: f Master-feeder structure with a Delaware LP for U.S. Taxable Investors and a Cayman Islands Exempted LP for

U.S. Tax-Exempt Investors and Non-U.S. Investors.Target Initial Closing: f April 2009

Minimum Commitment: f The minimum initial commitment is $10,000,000, subject to Bayviews discretion to accept lesser amounts.

Investment Period /Drawdown:

f The Fund is expected to have a two-year Investment Period commencing on the Initial Closing Date, with fullrecycling / reinvestment during the Investment Period. Capital commitments will be drawn down during theInvestment Period at the discretion of the General Partner.

Term: f The Fund is expected to have an eight-year term.

Management Fee: f 2% on Committed Capital during Investment Period and 2% on net asset value thereafter.

Carried Interest /Preferred Return :

f 20% Carried Interest with an 8% Preferred Return.

f Carried Interest Distributions will only be made after the General Partner returns all Invested Capital plus thePreferred Return (i.e. not on an investment by investment basis).

Catch-Up f 80% (GP) / 20% (LP)

Clawback Provision f Yes

Leverage: f Each of the Master Fund and the Partnership will limit non-securitization debt by maintaining a maximum 1 to 1debt-to-equity ratio.

(1) Capitalized terms used herein have the meanings assigned to them in the Private Placement Memorandum or the Limited Partnership Agreement, as applicable. This Summary of Terms is being furnished to you solelyfor informational purposes only. For a complete understanding of the terms and conditions, please refer to the Private Placement Memorandum and the fund formation documents.


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VII. Biographies


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