survey definitions cameron, stratmor group (770) 756-9722 (project manager) marina walsh, mba (202)...

PGR Survey Definitions

Spring 2018 Cycle (Full-Year Data through December 31, 2017) LINK TO TOC

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SURVEY DEFINITIONS Spring 2018 Cycle (Full-Year Data through December 31, 2017)

Table of Contents

INTRODUCTION ................................................................................................................... 2

TIMETABLE .......................................................................................................................... 3

DATA REVIEW PROCESS AND CONTACTS ........................................................................... 4

WHAT'S NEW ...................................................................................................................... 4

SELECT ASSETS .................................................................................................................... 5

PRODUCTION REVENUE ...................................................................................................... 6

PRODUCTION EXPENSES ................................................................................................... 14

PRODUCTION VOLUME ..................................................................................................... 19

CONSUMER DIRECT MATRIX BY CUSTOMER SEGMENT AND TECHNIQUE....................... 28

TOTAL PRODUCTION MIX - FICO and LTV ......................................................................... 29

TOTAL PRODUCTION MIX BY STATE.................................................................................. 29

TOTAL PRODUCTION MIX - INVESTOR/OTHER ................................................................. 30

ADDITIONAL PRODUCTION DATA ..................................................................................... 31

PRODUCTION SUPPORT EXPENSES ................................................................................... 34

GENERAL EXCLUSIONS ...................................................................................................... 37

SERVICING REVENUE ......................................................................................................... 37

SERVICING EXPENSES ........................................................................................................ 39

SERVICING PORTFOLIO ..................................................................................................... 42

SERVICING BY PRODUCT TYPE .......................................................................................... 44

PAYMENT INFORMATION ................................................................................................. 46

SERVICING (FOR COMPANIES PRIMARILY USING A SUBSERVICER) .................................. 47

CORPORATE ADMINISTRATION EXPENSES ....................................................................... 54

EMPLOYEES/FULL-TIME EQUIVALENTS (FTEs) .................................................................. 57

OPERATING STRUCTURE ................................................................................................... 63

SYSTEMS/VENDOR PROFILE .............................................................................................. 65

QUICK VIEW REPORT ........................................................................................................ 65

COMPENSATION QUICK VIEW REPORT ............................................................................ 66

ERRORS AND WARNINGS .................................................................................................. 66

APPENDIX: TECHNOLOGY EXPENSE ALLOCATIONS .......................................................... 67



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INTRODUCTION

Welcome to the Peer Group Roundtable Program (PGR) conducted by the Mortgage Bankers Association and STRATMOR Group. Since 1998, our program has provided timely and accurate benchmarking data for participating companies in the residential mortgage banking industry. The success of our program is due in large part to the accuracy and comparability of the data. The scope and clarity of the definitions and our thorough review of the data plays a key role in achieving quality “apples-apples” results. Mortgage Banking Focus - Our study focuses on residential mortgage banking including loan production and loan servicing. While many participating firms are affiliated with banks and other financial institutions, our study does not include activities and lines of business traditionally associated with banks. For example, the study excludes net interest margin on loans held in portfolio. In addition, the study excludes construction lending and the origination of home equity lines of credit unless these lines of business are inextricably interwoven into mortgage banking sales and operations activities. Economic Value Philosophy - Our focus is on the economics of the mortgage banking business, not necessarily GAAP results. Accordingly, our definitions require that lenders reflect all of the revenues and expenses related to loans PRODUCED during the period, not SOLD. For example, if a participating company originated $1.2 billion in loan volume in a given period, the company should reflect all of the revenues related to those loans (e.g. Gain on Sale, SRP, Fees, etc.) whether or not all of the loans had been sold in the Secondary Market as of period end. Consistent with this philosophy, we require portfolio lenders to impute Gain on Sale (including Servicing Value) in order to reflect results on an apples-apples basis with lenders that sell loans in the Secondary Market. We also ask that portfolio servicers impute market-rate Service Fees for loans held in portfolio. Data Organization and Structure - The following chart summarizes the way that the PGR Program data is organized from a Revenue, Expense and Channel / Line of Business perspective.

For each production channel, we collect the Revenues which include all Fees, Gain on Sale (including Servicing Value) and Net Interest Spread on Loans Held for Sale. The Direct Expense in each channel includes all expenses incurred from the point of sale through closing and funding. Production Support Expenses include Post Closing, Shipping & Delivery; Secondary; Quality Control; Production Technology; and Support-Other and are allocated to each channel based on loan count. Corporate

RetailBroker

Wholesale/Mini Corr

Correspondent Consumer Direct Servicing

Revenues

All Production Revenues Including Net Interest Spread




All Servicing Revenues

Direct Expenses

Sales and Fulfillment Expenses Thru Closing




All Direct Servicing Expenses

PRODUCTION SUPPORT – Post Closing, Shipping & Delivery; Secondary; Quality Control; Production Technology; and Support-Other– ALLOCATED TO CHANNEL BASED ON LOAN COUNT N/A

CORPORATE ADMIN – Executive; Finance & Accounting; Technology Support; HR; Compliance/Risk/Legal; Other; and Parent Allocation– ALLOCATED TO PRODUCTION CHANNELS & SERVICING BASED ON FTE

Pretax Net Income By Channel/Svc

Pretax Net Income (Loss)







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Administration costs include Executive; Finance & Accounting; Human Resources; Compliance/Risk/Legal; Parent Allocation; Technology Support; and Other. Administration costs are allocated first between Production and Servicing based on FTE and then between the Production Channels based on FTE. Peer Group Results Versus GAAP Financials - More than likely, the Peer Group Survey results will not tie to your GAAP-based financial statements. The primary reasons for this are as follows:

Line Item Classification - Your internal/GAAP statements may reflect revenues and expenses in different line items. For example, payments to third parties for appraisal and credit report fees are netted against fees collected and shown as Loan Expense in the study, which may not be consistent with how you keep your books.

Cost Center Groupings - Your cost center groupings will likely be different. For example, smaller lenders may group Production Support or Servicing activities into fewer cost centers than our study requires.

Overall Pretax Net Income (Loss) - Because Peer Group results focus on economic value created versus GAAP results, the bottom line profit or loss will often be different. For example, as discussed above, lenders may need to accrue Gain on Sale (including servicing value) for survey purposes, while such gains are deferred for GAAP until the loans are sold in the Secondary Market. As an additional example, portfolio lenders are be required to impute Gain on Sale and exclude any deferrals of fees and expenses.

Even though your Peer Group results will not likely tie to your internal/GAAP statements, the results should be easily reconciled to your books and explained to senior management. While tying out to your books makes life easier when dealing with internal management, the larger goal of the survey is to achieve quality apples-apples comparisons with Peers in order to identify profit improvement opportunities.

TIMETABLE

Below are important dates concerning the upcoming PGR cycle. See online agendas for details.

Peer Group Submission

Deadline

Roundtable

Meeting Location

Hotel

Reservation

Cut-off Date

Group L (Large Banks) February 16 March 15-16 Philadelphia, PA February 21

Group J (Large

Independents) February 16 March 22-23 Washington, DC February 28

Group I3 (Mid to Large

Independents) February 16 March 27-28 Washington, DC TBD

Group B1 (Hybrid Banks) March 1 April 10-11 Atlanta, GA March 26

Group B2 (CBCUs) March 1 April 12-13 Atlanta, GA March 26

Group I1 (Mid-Size

Independents) March 14 April 17-18 Atlanta, GA April 2

Group I2 (Mid-Size

Independents) March 14 April 19-20 Atlanta, GA April 2



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DATA REVIEW PROCESS AND CONTACTS

For definitional and content questions, or any questions regarding data input, contact:

Jim Cameron, STRATMOR Group (770) 756-9722 (Project Manager)

Marina Walsh, MBA (202) 557-2817 (Project Manager)

Jenny Masoud, MBA (202) 557-2879

Michael Mayer, STRATMOR Group (248) 345-7445

Jonathan Penniman, MBA (202) 557-2943

Nicole Yung, STRATMOR Group (770) 876-2028

Please note that a primary data analyst will be assigned to you at the beginning of each cycle. This analyst will be responsible for following up with you on a periodic basis to check the progress of your data submission. The analyst will also be responsible for compiling data review questions based on your original completed submission. Be assured that all of the members on the MBA and STRATMOR team work closely together to ensure proper and consistent treatment of data reporting. Note the deadlines for data submission above. It is critical for the success of the program for our analysts to have sufficient time to work through your data issues. Thus, please make every effort to meet the submission deadline. A preliminary version of the outputs will be distributed prior to the Peer Group Roundtable. Following the meeting, we will send each company follow-up data issues to address for the final printing of the data books.

For updates on company contact information, data book distribution or meeting attendees:

Jenny Masoud, MBA (202) 557-2879

For PGR website or other technical support:

June Wang, MBA (202) 557-2834

WHAT'S NEW

We have made certain changes and clarifications to the definitions since the Spring 2017 PGR Cycle:

1. Select Assets. Removed most mortgage banking assets; kept the Mortgage Servicing Right Assets

(book value of MSRs) and for depositories, the total bank assets.

2. Production Revenue.

a. Added guidance for the treatment of imputed secondary gain and servicing rights. Changed

some of the servicing fee assumptions and servicing multiple guidance for the imputed

servicing values.

b. For secondary marketing gain, clarified the treatment of contra revenue related to

compensation paid by the lender to a third party MSR-holder for the right to refinance a loan

for which the lender is already currently the subservicer. Contra-revenue should be included

in secondary marketing gain, not capitalized MSRs.

3. Production Mix.

a. Added separate breakout for loan volume associated with a state-bond program.

b. Removed separate breakout for loan volume associated with the HARP program.

c. Removed the detailed production FICO mix in $ and # by band, but kept the simple average

FICO score.

d. Revisited the Consumer Direct Matrix and changed some of the lead generation techniques

and definitions.



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4. Additional Production Data. Added the average number of underwriter touches per file.

5. Production Support. Condensed post-closing, shipping and delivery into one function.

6. Servicing Revenue and Expense.

a. Changed the guidance on imputed servicing fees by product type for loans held in portfolio.

b. Condensed Loan set-up, transfers and payoffs into one function.

c. Expanded the default function into collections, loss mitigation and other default.

7. Servicing Mix. Removed the detailed servicing FICO mix in $ and # by band, but kept the simple

average FICO score.

8. Operating Structure. Added a question on whether any fulfillment operations (processing,

underwriting and/or closing) were combined with fulfillment operations from other channels.

9. FTEs. Expanded the default function into collections, loss mitigation and other default.

10. Vendors/Systems. Added a question on predominant model for appraiser selection: AMC; In-House:

Panel or List; or Combo.

SELECT ASSETS

Data on these assets should represent the average balances for the period ending December 31, 2017. Use

either monthly (13-month average from December 31, 2016 through December 31, 2017) or quarterly averages

(5-quarter-end average from December 31, 2016 through December 31, 2017), whichever is available and best

represents the activities for the period.

MORTGAGE SERVICING RIGHTS

Imputed Mortgage Servicing Rights (Portfolio Loans Only): This line item should include imputed servicing

rights on loans originated for investment (held in portfolio). This may require tracking imputed mortgage

servicing rights from prior periods in order to properly account for the amortization/loan decay.

Actual Mortgage Servicing Rights - Represents the book value of originated and purchased mortgage servicing

rights as reported using either, or a combination of the lower-of-cost-or-market accounting method (LOCOM)

or the fair value accounting method (FV). Also include servicing in excess of contractually specified servicing

fees.

Total Mortgage Servicing Rights (Imputed and Actual) - This represents the book value (as opposed to market

value) of mortgage servicing rights and is automatically populated as the sum of both imputed and actual MSRs

as reported above.

FOR DEPOSITORIES ONLY: TOTAL BANK ASSETS

Total Bank Assets - For divisions or subsidiaries of banks, thrifts, or bank holding companies, please report the

estimated total assets for this institution.



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PRODUCTION REVENUE

All revenue should be rounded to and entered in thousands ($000s) and should cover the 12-month period

from January 1, 2017 through December 31, 2017.

GENERAL EXCLUSIONS FROM PRODUCTION REVENUE

1. Construction lending revenue and expense unless the construction lending operations are completely

integrated into the mortgage banking sales and operations functions such that “carving out” the

construction lending results would be impractical. If “carving out” is not possible, income related to

construction loans that have not converted to permanent loans, including interest spread during

construction period and other fees should be included in Production Revenue - Other. The expense of

managing draws belongs in Direct Production Expense: Other Fulfillment. The FTEs responsible for

managing the draws belong in FTEs: Other Fulfillment.

2. Revenue and expense associated with reverse lending and servicing unless the reverse lending operations

are completely integrated into the mortgage banking sales and operations functions such that “carving

out” the results would be impractical. If “carving out” is not possible, net income related to reverse

mortgages should be included in Production Revenue - Other.

3. Any deferrals or adjustments of revenue and expense, in accordance with latest accounting rules.

4. Exclude all local, state and federal income taxes.

PRODUCTION CHANNEL DESCRIPTIONS

Production includes origination/purchase, processing/registration, underwriting and closing/funding. The

following definitions are used in production section to reflect the various production channels:

Retail - Originated through loan officers (who are employees of your company) within standard or bank branch

network systems. Loans that are closed through this channel may be sold to an aggregator, sold directly into

the secondary market through agencies such as Fannie Mae, Freddie Mac, or Ginnie Mae, or held in portfolio.

Direct face-to-face contact with the mortgagor is characteristic of this channel. Include production from ABA

JV's with builders and realtors in this category.

Broker Wholesale/Mini-Corr - Processed loan applications that are purchased by you and generally closed in

your name with documents drawn by you. Activities you perform associated with loans in this channel are

typically underwriting and closing activities; you may also perform some level of processing (such as registering

the loan in the system for pipeline management purposes). Usually, you as the lender take responsibility for

disclosures and RESPA cures.

Include table-funded and mini-correspondent loans in this channel. Table-funded and mini-correspondent loans

are generally similar to other loans originated through mortgage brokers in terms of drawing of documents,

timing of funding disbursement and the level of work performed by fulfillment staff, except that the loans are

closed in the broker’s name, not your name.

In the case that you have a hybrid wholesale model or “mini-correspondent” wholesale model in which account

executives are shared, include all associated loans in the Broker Wholesale/Mini Corr channel. In such

arrangements, you may offer your counter-parties the option of closing in your name vs. their name but

documents are usually drawn by you.

Correspondent - Closed loans that you purchase. The activities performed by you include minimal processing

(such as registering the loan in the system for pipeline management purposes), some level of underwriting



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unless the correspondent is a delegated underwriter for you, and funding the loan upon purchase. Generally,

the loan is closed in the correspondent's name as opposed to the participant's.

Exclusions from Correspondent Channel:

Exclude Co-Issue Arrangements from the Acquirer Perspective. Such MSR acquisition arrangements

more closely resemble flow servicing purchases and tend to skew production results for the large

lenders. Co-Issue loans are captured in the Servicing Portfolio section as loans added under “Flow

Servicing Purchases.”

Exclude Trading Desk/Capital Markets Activities. Such arrangements usually mean no sales and

fulfillment support on the part of the buyer including no loan processing, underwriting or closing

support. Thus, there would be no mortgage banking operational expense involved in such

transactions.

Exclude Mini-Correspondent models and instead report such operations as part of Broker-

Wholesale/Mini-Corr channel.

Consumer Direct - Loans typically originated through outbound or inbound telemarketing, mail and/or Internet

methods (either in-house or outsourced to another entity) for purchase and refinance purposes. Inquiries

received through this channel and referred to another channel (most likely, the Retail channel) should not be

included in the production or application results for this channel. Production in this channel may include

affiliate relationships, such as financial advisory or retail bank relationships, which involve referring borrowers

to a centralized call center.

PRODUCTION REVENUE LINE ITEMS

All revenue should be rounded to and entered in thousands ($000s) and should cover the 12-month period

from January 1, 2017 through December 31, 2017.

Fee Income - Include processing, underwriting, closing, document prep, fraud review, verification and other

administration fees typically included in “Origination Charges” section of the Loan Estimate and Closing

Disclosures with certain exceptions.

Exceptions:

Exclude discount points. Any discount points collected which are used to "buy down" the interest rate

on the loan should be included in Secondary Marketing Gain. If fee income is baked into the pricing

(rate/point combination), do not impute a 1% fee; reclassify such fees into Secondary Marketing Gain,

which is where corporate pricing margin should be reflected.

Exclude “imputed” fee income. For example, waived fees for Employee loans, Private Banking

customer loans or other borrowers should not be imputed and included here, even if an intercompany

credit is received from the parent.

Exclude any net “pass-through” income or loss which should be reported under “Other Expense - Loan

Expense.” Such items include credit reports, appraisals and appraisal reviews, surveys, lender

inspections, termite inspections, tax services, fraud research, and AVM reports.

Actual Capitalized Value of MSRs - Serviced for Others - This item represents the servicing value capitalized

and recorded (or to be recorded) in financial statements. Special Note: In certain cases, a lender might

compensate their correspondent partners or other parties (such as MSR owners for which that lender handles

the servicing as part of a subservicing arrangement) in order to receive the right to originate a loan and/or

retain that servicing customer. For PGR purposes, please gross-up the capitalized value of MSRs to its FULL



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VALUE and show the contra revenue - the amount credited to the correspondent partner or other parties (MSR

owner) - under Actual Secondary Marketing Gain.

Imputed Capitalized Value of MSRs - Held in Portfolio - This item represents the imputed MSRs on loans

originated for portfolio. As a general guide, refer to the following chart:

Loan Type Service Fee (bps) Multiple Imputed MSR (bps)

Conventional – Non-Jumbo 25 4x 100

Conventional – Jumbo 25 3x 75

Government 30 3x 90

Capitalized MSRs should be based on loan production, not sales. In addition, it should exclude excess servicing,

which belong in the Secondary Marketing Gain line items. The following table illustrates the recommended

approach:

Description of Product $ Production $ Loans Sold Comments

Originated for Portfolio $100 million N/A Impute MSRs

Originated for Sale to Others -

Svc Retained $50 million $60 million Reflect MSRs on $50 million

Originated for Sale to Others -

Svc Released $75 million $60 million

Reflect SRPs received on $75

million

Totals $225 million $120 million

Based on the above example, the company would reflect OMSRs and SRP based upon the $225 million of loans

produced for the period.

SRP Loans Sold-Servicing Released - Servicing Released Premium (SRP) - Based on loan production (not sales),

include the premium received for selling the loan on a servicing released basis. Exclude any bulk servicing sales

from this line item; such bulk sales belong in servicing revenues. See notes under Capitalized Value of MSRs

above.

Fees Paid/Received - Broker/Correspondent (+/-) - Amounts paid to brokers and/or correspondents for

applications and/or loans purchased. This amount should represent the amount paid to the broker and/or

correspondent upon purchase of the application or the loan. Include incentives paid to brokers for reaching

certain volume thresholds or other criteria here. Note that this amount will typically be a negative number (i.e.,

a debit on the general ledger) and should be entered as such. However, the number may be positive to the

extent that fees are received for brokering loans out to 3rd party lenders.

For joint ventures or affiliate relationships, amounts paid to JV Partners for minority interest gains/losses

should be reflected in Other Income whether a gain or loss.

Intercompany payments made from the mortgage company to an affiliate should be reflected in "Other

Expenses (Marketing)". Such payments would include payments of “referral” fees for sourcing mortgages. For

example such fees could include payments to Financial Advisors or payments for referring customers to the

mortgage division.



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Actual Secondary Marketing Gain (+/-) - Sold to Others - This line item now has the following elements related

to loans that are sold to others. Imputed secondary gain for loans kept in portfolio are reported on a separate

line item.

Gain/Loss (+/-) on Pipeline, Hedging and Loan Sale Activities - Gain or loss on activities directly

related to pipeline management, warehouse hedging, and loan sales. Include the difference between

expected sales proceeds and actual sale proceeds. This includes the net gain or loss for any non-

delivery fees, net gain or loss from options, futures or other hedging instruments, pair-offs,

commitment fees and fees for services on unfulfilled commitments. This also includes the net

cash/market gain or loss for selling loans (on an immediate basis to investors or on forward delivery to

investors) for all loans. Include Excess Servicing gains as well as any “per loan” fees charged by

Investors. Note that if Secondary Marketing Gain has been lowered by your investor for net funding

related to repurchases/indemnifications from prior periods, please make an effort to gross up the

secondary marketing gain and reflect the losses in the memo item: Losses for Prior Period Production.

Note on Treatment of Pipeline Valuation Changes and Hedging. Practically speaking, mortgage

companies record their secondary marketing gain at the time of the rate lock, rather than at closing. In

addition, hedge gains or losses on a current pipeline of locked, but not yet closed, loans may be

included in the financials at period-end. To the extent possible, we ask that any secondary marketing

or hedge gains or losses related to this locked pipeline be excluded. Include only secondary gains and

hedging gains/losses related to closed loans held for sale. Here is a simple chart to clarify:

Stage Treatment

Loans Held for Sale as of December 31

Include hedge gains/losses; Include secondary gain

Pipeline as of December 31 Exclude hedge gains/losses; Exclude secondary gain

Pricing Subsidy/Gain - The expected loss or gain on the base price of the loan at the time the loan is

priced. This amount is the result of a corporate decision regarding how loans are priced. Mortgage

lenders continually adjust pricing as they manage the price and volume dynamic. Lenders may decide

to increase their expected loss (subsidy) on loans in order to attract more volume. In the case of

relationship pricing (such as special pricing for bank customers), report the subsidy here; do not apply

or impute a “make-whole” credit from another division of company.

To the extent that loans are originated "underwater" or with a subsidy, the subsidy amount should be

reflected in this line item.

Overages Collected from Borrower - Represents amounts collected from borrowers that exceed

amounts required by the rate sheet. For example, if the rate sheet for a 4.5% 30 year fixed rate loan

required 1 discount point and the loan officer collected 1.5 discount points, this would result in a 50

bps overage.

Concessions/Shortages Granted to Borrower and Lender-Paid Closing Costs - Represents instances

where your company collects fewer discount points from the borrower than required by the rate

sheet. Includes lender-paid closing costs and waivers (such as waivers of appraisal and credit report

fees), offered as concessions to borrower. However, out of tolerance cures in relation to closing costs

go in other expense - loan expense.



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Contra-Revenue for Right to Refinance - In certain cases, a lender might compensate their

correspondent partners or other parties (such as MSR owners for which that lender handles the

servicing as part of a subservicing arrangement) in order to receive the right to refinance a loan and

retain that servicing customer. For PGR purposes, please report the contra revenue - the amount

credited to the correspondent partner or other parties (MSR owner) - here. Be sure to gross up the

value of servicing (OMSR+SRP) to its full value.

State Fees - State-required lender-paid taxes (such as NY and OK fees) should be reflected in Net

Secondary Marketing Gain as a Contra-Revenue item. Lenders typically pass through such fees to

borrowers in the form of a higher rate/point combination.

In the Correspondent Channel - Any EPD insurance either “paid” by the correspondent to the lender

(in the form of a price adjustment) or from the lender to a third-party insurer.

Example #1: The following example captures the treatment of Secondary Marketing Gain. Assume:

$100,000 30-year fixed rate loan locked in at 3.5%.

Loan is locked in with investor at a best efforts price of 100.75.

The rate sheet price for this loan is par (100) based on a 75 basis point desired pricing margin for

Secondary.

The investor SRP grid reflects 125 bps service release premium for this loan.

Loan ultimately sold for 100.50 due to late delivery.

Typically, Secondary Marketing personnel will determine the price at which a loan can be sold on a given day

when creating the rate sheet. In the above example, Secondary knew the loan could be sold for 100.75 and

therefore priced the loan at par in order to achieve a desired 75 basis point pricing margin. However, the

expected sales proceeds of 100.75 include a Service Release Premium of 125 basis points. Therefore, the

expected base price of the loan (without SRP) is 99.50. Based on our definitions, this would result in SRP of 125

and a Secondary Marketing Loss of 50 basis points. The two amounts net to the 75 bps expected pricing margin.

However, if the loan is ultimately sold for an amount that is different from the expected sales price, then this

difference should also be reflected in Net Secondary Marketing Gain/Loss. In the above example, the loan was

sold for 100.50 instead of the expected 100.75 due to late delivery, which would result in a total Net Secondary

Marketing loss of 75 basis points.

PGR Line Item Example BPs Comments

Servicing Released Premium (SRP) 125 bps Investor Schedule

Secondary Marketing Gain/Loss (Subsidy) (50 bps)

Corporate Pricing Decision

Secondary Marketing Gain/Loss (25 bps) Late Delivery



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EXAMPLE #2: The following example captures the treatment of Secondary Marketing Gain for those lenders

reporting in the Correspondent Channel.

Pricing from Secondary Department Example % Comments

Base Sales Price

101.25

Premium paid to the

Correspondent w/o SRP

SRP 1.50 SRP Value

Net Adjusters -0.25 Any Price Adjusters

Total Paid 102.5 Total paid to Correspondent

PGR Line Item Example BPs Comments

Fees Paid: Broker/Correspondent

(250 bps)

Total paid to Correspondent

Secondary Marketing Gain 125 bps Premium

Secondary Marketing Gain 25 bps Price Adjusters

Capitalized Value of MSRs 150 bps SRP Value

Imputed Secondary Marketing Gain (+/-) - Held in Portfolio - Using the definitions and guidance for Secondary

Marketing Gain (+/-) - Sold to Others, report the imputed secondary marketing gain for loans that are held in

portfolio. This gain should be relevant to the loan production volume reported under Production Mix as

“Originated for Portfolio.”

This imputed amount should be based on either the anticipated secondary marketing gain were the loans sold

to other investors in current market conditions (less the value of the servicing which is treated separately), or

alternatively a reasonable estimate of the net present value of the future income stream for these loans based

on a market-dictated discount rate. To the extent that loans are originated "underwater" or with a subsidy, the

subsidy amount should be reflected in this line item. For portfolio lenders, this subsidy amount may need to be

imputed if not reflected in internal financial statements.

As a general guide, based on past PGR reporting in 2015 and 2016, the imputed secondary marketing gain on all

portfolio loans averaged 120 basis points, excluding the value of the servicing which is treated separately.

Current Period EPD, Repurchase, Other Loan Losses (enter negative) - Please reflect losses associated with

early payment defaults, early payoffs, repurchases, investor indemnifications and other related loan losses for

current period production volume only. Use the following guidelines:

Include FIN 45 provision for current period sale-to-others production. Under the reserve method,

participating companies should reflect the current period Provision for Loan Losses resulting from

current period production only (not adjustments resulting from prior periods’ production).

If your current period loan losses are being taken against an old reserve, and you are not currently

reserving on new production, show the actual charge-offs for the current-period production anyway,

even though there would be no P&L impact in accordance with GAAP.

In the event of a RESPA audit violation or other audit violation, include the penalty here so long as it is

related to one particular loan from the current period. Overall business practice violations should be

included in Corporate Administration - Compliance/Risk/Legal - Other Expense.



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For portfolio loans, DO NOT impute a provision based on sale-to-others production. If 100% of your

production is held in portfolio, this line item should be left blank.

In the Memo Item at the bottom of the Production Revenues section entitled “Memo Item: Losses for

Prior Period Production”, please report:

o Losses related to prior periods net of any net recoveries or write-ups.

o Any losses incurred on loans that are repurchased from investors and classified as "Held for

Investment", whether the loans are sold on a discounted basis or foreclosed and liquidated.

o In the event of a RESPA audit violation or other audit violation, include the penalty here so

long as it is related to one particular loan from a prior period. Overall business practice

violations should be included in Corporate Administration - Compliance/Risk/Legal - Other

Expense.

o If Secondary Marketing Gain has been lowered by your investor/aggregator for net funding

related to repurchases/indemnifications from prior periods, gross up the secondary

marketing gain and reflect the losses in this line item.

Allocate losses between production and servicing based on the matrix below. While we acknowledge that

some companies charge losses to Servicing while other companies are more aggressive in charging such

losses back to Production, in the interest of Peer Group comparability we require the allocation of losses to

Production and Servicing as summarized here:

PRODUCTION - LOSSES RESULTING FROM SERVICING - FORECLOSURE AND REO LOSSES

Early Payoffs (EPO)

Any SRP recapture

Early Pay Default (EPD)

Agency “make-whole” payments

Investor indemnifications

Loan repurchases from investors

Uninsured loans

Discounted loan sales (scratch and dent,

sub-performing, non-performing

Credit loss portion of Gain on Sale (a)

Provision for loan loss at time of

origination

Unreimbursed Expenses - e.g. 1/3

attorney costs, FHA interest loss,

unreimbursed servicer advances,

unclaimable expenses, interest

loss/penalties due to missed investor

deadlines or servicer error

Net losses from VA Net Value or VA

Total Debt Bids, Non Conveyance of

HUD loans (b)

Footnotes:

a) For example, if Secondary Marketing Gain is 200 bps which incorporates a credit loss assumption of 5 bps,

please reflect Secondary Marketing Gain at 205 bps and a credit loss of (5 bps) in the “EPD, Repurchase and

Other Loan Losses” line item.

b) While VA Buydowns and HUD Non-Conveyance loans could arguably be classified as Production losses, we

consider these losses to be servicing losses for survey purposes. We view such losses part of the “cost of doing

business” as a government servicer.

Other Income - This category may include the following:

Loan origination assistance fees (fees earned for acting as a fulfillment outsourcing provider to other

lenders)

Expense management branch corporate assistance fees



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Interest spread and fees related to construction loans that have not converted to permanent loans

(only if "carving out" construction results are impractical). Note that the cost of managing draws

belongs in Direct Production Expense - Fulfillment.

Income earned on 203(k) loans. Note that the cost of managing draws belongs in Direct Production

Expense - Fulfillment.

For joint ventures or affiliate relationships, amounts paid to JV Partners for minority interest

gains/losses should be reflected here, whether a gain or loss. Gross revenues and expenses of the JV

should still be reported in other revenue and expense line items as appropriate.

* Note: Any net “pass-through” income or loss should be reported under “Other Expense - Loan Expense”

rather than “Other Production Income.” Such items include credit reports, appraisals and appraisal reviews,

surveys, lender inspections, termite inspections, tax services, fraud research, and AVM reports. State-required

lender-paid taxes (such as NY and OK fees) should be considered contra revenue and included in Production

Revenues - Secondary Marketing Gain.

Interest Expenses and Bank Fees - Total cost for interest and bank fees paid, for example, interest paid on

warehouse or parent lines of credit. This interest expense category should not be reduced for the benefit

received on custodial balances (a/k/a float income earned on servicing escrow balances). If no interest is

charged to fund loans in the warehouse an amount should be imputed using an arm's length transaction basis.

If your company used corporate debt to fund origination activities specifically, include the approximate interest

expense related to funding these origination activities here. For loans closed and immediately placed in

Portfolio, do not impute interest expense.

Interest Revenue - Interest revenue collected and accrued on loans held for sale. This amount should be net of

the servicing fee earned/collected. This interest revenue line should not include interest earned on loans held

for investment or loans held on the parent company's balance sheet. For loans closed and immediately placed

in Portfolio, do not impute interest revenue here. Instead, an Imputed Secondary Marketing Gain on Day 1

should be reported in “Imputed Secondary Marketing Gain (+/-) - Held in Portfolio” above.

MEMO ITEM - LOSSES FOR PRIOR PERIOD PRODUCTION

EPD, Repurchase and Other Loan Losses related to Loans Originated in Prior Periods (enter negative) - As a

negative number, report indemnifications and other loan losses related to prior periods net of any net

recoveries or write-ups. In the unlikely event that recoveries exceed losses, this number will be positive.

In a perfect world, the reserve on the balance sheet would be enough to absorb all future actual losses without

hitting this line item. So losses for prior period production would actually be loan loss expense that was charged

because the reserve on the balance sheet was not enough to absorb the actual losses. If a repurchase or

indemnification loss arises that was not contemplated in the reserve, a lender either has to increase the reserve

(which results in charging expense) or they charge the expense directly with the actual loss incurred. So Prior

Period Losses is actually Prior Period Losses that had not been reserved for thus hitting expense in the current

reporting period. For survey purposes, this cost does not hit net financial income for the current reporting cycle

but instead is treated as a memo item for reference.

Notes on Inclusions and Exclusions:

In the event of a RESPA audit violation or other audit violation, include the penalty here so long as it is

related to one particular loan from a prior period. Overall business practice violations should be

included in Corporate Administration - Compliance/Risk/Legal - Other Expense.



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If Secondary Marketing Gain has been lowered by your investor/aggregator for net funding related to

repurchases/indemnifications from prior periods, gross up the secondary marketing gain and reflect

the losses here.

See the definitions above under “Current Period EPD, Repurchase, Other Loan Losses” for more

clarification.

MEMO ITEM – WEIGHTED AVERAGE SERVICE FEE

Weighted Average Service Fee (Percent) – Based on all mortgage originations in the reporting period, whether

sold to others or held in portfolio, estimate the weighted average base service fee (excluding excess) based on

product type and loan characteristics. Enter the figure as percent. For example, 25 basis points would be

reported as 0.25.

PRODUCTION EXPENSES

OVERVIEW: In general, the PGR Survey includes FOUR places to enter company operating expenses:

1. Production Expenses (This Section): Includes “direct costs” associated with the production function, such

as sales, processing/registration, underwriting and closing/funding. The total direct Production Expense as

reported here is further divided into sales costs vs. fulfillment costs (processing, underwriting, closing and

other fulfillment) in the subsequent section.

2. Production Support Expenses: Includes other production activities such as secondary marketing, post-

closing, production technology, shipping and quality control.

3. Corporate Administration Expenses: Includes corporate overhead costs that are not directly related to

either production or servicing such as finance/accounting, network administration, human resources,

executive functions and parent company allocations.

4. Servicing Expenses: Includes costs associated with servicing a loan from loan set-up/boarding through

payoff or removal from servicing system for other reasons.

OTHER NOTES: When completing this section, bear in mind the following cases:

1. Expenses related to Production through ABA's (e.g. builder and realtor JVs) should be reflected on the

appropriate expense line item even if you are recording net income in one line item per the Equity

Method. This may require "grossing up" the net income number by showing all of the revenue and expense

components in the appropriate income statement line items.

2. Executive level personnel (such as the SVP/EVP of Production) should be allocated to the appropriate

channels based on the level of "day-to-day" operational activities versus level of strategic activities. The

appropriate treatment of production executives is best illustrated by the following examples:

a. Example 1 - VP of Retail Production: Charge to Production Expenses - Retail Channel.

b. Example 2 - SVP of Loan Production, responsible for all channels - Charge to Production Expenses

through an appropriate allocation, such as loan volume or time spent. Be sure to allocate FTE

based on the same method.

c. Example 3 - SVP of Loan Production, small company, also responsible for overall management of

company including Servicing - Charge to Corporate Admin - Executive

PRODUCTION EXPENSE LINE ITEMS

Before starting, please review the Employees/FTEs section for the types of job titles that belong in Direct Production (Sales, Processing, Underwriting, Closings and Other Fulfillment functions) vs. Production Support.



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Compensation (L.O. Commissions) - Commissions paid to loan officers or account executives in accordance with

their employment agreement. Include allowances, such as auto, telephone and office equipment. Also include

recoverable or non-recoverable draws against the commission here, including wages that loan officers or

account executives need to “earn through” in order to get further incentives. To the extent that loan officers or

account executives receive overtime pay, prorate the overtime pay between Commissions and Salary. Exclude

branch and regional sales manager overrides, as well as branch manager "bottom line" bonuses, which should

all go in the Bonus line item below.

Compensation (Salaries) - Salaries for permanent and temporary, full-time and part-time employees. Includes

sick pay, vacation pay, unworked pay, pay adjustments, retro pay, shift differentials, and overtime.

This line item should include any base salary paid to loan officers or account executives for which there is no

draw against commission. To the extent that loan officers or account executives receive overtime, prorate the

overtime pay between commissions and salary.

Compensation (Bonuses, Mgr. Overrides) - Bonuses for permanent and temporary employees, including signing

and retention bonuses as well as incentive payments to employees that may be based on factors such as

application or closed loan volume, profits, etc. Branch manager "bottom line" bonuses should be reflected in

this line item. Also, include long-term or deferred awards such as stock options. If bonuses were paid out in the

current reporting cycle for the previous year performance, the bonuses should have been recorded for the

previous year under accrual accounting. Only include bonuses related to the current reporting period

production here. Lastly, include branch and regional sales manager overrides here.

Compensation (Benefits) - Include benefits such as insurance, severance, employer paid taxes, pension, and

other employee related expenses.

Occupancy & Equipment – Rent (including desk rentals), heat, light, power, physical security, fire retarding

system, real estate taxes, repairs and maintenance to premises, building supplies, computer hardware and

software costs (including depreciation of these items), furniture and office equipment (including depreciation

of these items, if applicable), general moving, leasehold improvements, facilities management, reproduction

equipment, and property taxes. This figure should include the depreciation charged for financial reporting

purposes if your company owns the facilities. However, costs of a front-end loan origination system and the

personnel dedicated to the system maintenance should be included in “Production Support Expense -

Production Technology” occupancy & equipment category rather than as a direct production expense.

Important Note: Computer hardware depreciation (PC’s, printers and peripherals) and/or technology

equipment lease costs for all production sales and fulfillment employees should be charged here and not

included in Corporate Administration.

Other Expenses (Loan Expense) - Include the lender’s cost (net of the fees received from the borrower) for

credit reports, appraisals, surveys, lender inspections, termite inspections, tax services, AVM reports, and other "pass-through" expenses in which the lender selects the provider for borrower, the borrower selects from a lender list of providers, or the borrower shops for the services separately. Out of tolerance cures in relation to these closing costs and fees, if applicable, should be included here.

As a general guide, the following net pass-through expenses should be included in this category:

Appraisal

Attorney document review

Credit report

Flood zone certification



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Tax service fee

HOA fee

Recording or transfer tax fees

Survey

Termite inspection

Lender inspection

Settlement fees

As a general guide, the following types of expenses DO NOT BELONG in this category:

Post-Closing QC Fees (belongs in Production Support - Quality Control -Other Expense, Misc)

Investor Funding Fee (belongs in Production Revenue by Channel - Secondary Marketing Gain)

Per-Loan Fees paid to LOS Vendor in lieu of depreciation or other expenses on an in-house Loan

Origination System (belongs in Production Support - Production Technology - Other Expense)

Other Expenses (Marketing/Leads) - Marketing, lead generation, advertising, and internal mailing costs should

be reflected here to the extent that they are directly identified for a particular channel. Marketing expenses

should include “hard” costs such as direct mail, advertising, billboard, radio, TV etc. that create leads or

inbound calls for sales follow up. Include advertising services agreement (ASA) fees here as well.

Do not include the cost of a telemarketing center or call center in Marketing Expenses. Such costs are related to

converting leads to apps to closed loans rather than generating leads. Also, general advertising and branding

costs that benefit multiple production channels should be excluded and instead, recorded in Production

Support Expense - Other.

Other Expenses (Outsourcing) –Outside service provider or contract labor (paid on a per-piece or per-function

basis rather than on a per-FTE basis). Exclude contract underwriting expense, which belongs in Compensation

(Salaries), with underwriters also being reported in the FTE section. Also exclude temp costs, which belong in

Compensation (Salaries).

Other Expenses (Miscellaneous) - Sales staff licensing costs, telephone, postage, stationary & supplies,

entertainment, travel and other production costs, which have not been previously identified. Exclude goodwill

amortization, which belongs in the corporate administrative section.

PRODUCTION EXPENSE COLUMN ALLOCATION: SALES VS. FULFILLMENT

We ask that you allocate Direct Production Expenses to either "Sales" or "Fulfillment" expense categories. In

addition, within the Fulfillment category, we ask that you allocate Fulfillment expenses to either: “Processing”,

“Underwriting”, “Closing” and “Other Fulfillment”. Do not incorporate costs associated with production support

functions (such as post-closing; shipping/delivery; production technology; etc.) or corporate administration

functions. Be sure to review the job titles used for each of these categories to ensure that compensation and

other personnel expenses line up with the reported FTEs in the FTE section. The Compensation Quick View

section can be used to check compensation per FTE figures for reasonableness.

SALES EXPENSES ($000s)

Sales expenses include:



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All costs (including all compensation, occupancy and equipment, other) associated with a loan officer,

account executive, branch manager, regional mortgage sales manager and head of sales. Note that

loan officer and branch manager commissions are automatically allocated to sales expense.

Costs associated with prequalification, the application process, cultivating broker, correspondent and

corporate relationships.

Sales staff licensing and sales training.

Marketing and advertising costs such as television, radio, billboard, telemarketing leads and direct

mail. Note that Other Expense - Marketing Leads is automatically allocated to sales expense.

Recruiting and head-hunter fees for all sales personnel, including loan officers.

If a management employee has responsibility for both Sales and Fulfillment functions, then that employee's compensation should be allocated as appropriate.

As a general guide, include all costs (compensation, occupancy and equipment and other) associated with the following job titles:

Account executive

Branch manager

Business development

manager

TPO business coordinator

(liaison between brokers and

fulfillment staff)

Broker and correspondent

auditors

Builder relationship

managers

Heads of the production

channel

Head of Sales

Loan officer and account

executive recruiters

Loan Officer

Loan officer assistant

Loan officer licensing

specialists and sales trainers

Non-producing branch

managers

Non-producing regional

managers Regional manager

Sales and marketing

assistants

Marketing support specialists

Sales branch receptionists

FULFILLMENT EXPENSES ($000s)

Fulfillment expenses incorporate processing, underwriting, closing and other fulfillment functions as outlined below.

Processing – Include activities associated with determining initial eligibility, sending the Loan Estimate to the borrower, assembling necessary documents, verifying data, obtaining appraisals and surveys, and other activities necessary to complete the loan application package. Also, include loan file assembly (if applicable) and reviews prior to underwriting and registration associated with Broker Wholesale/Mini-Corr and Correspondent production.


Account Manager

Appraisal Management Company

(AMC) Coordinator

Client Account Specialist

Copy Clerk

Copy Room Team Leader

Condition Reviewers

(Correspondent Channel)

Data Integrity Clerk

Disclosure Associate or

Supervisor

Document Assembly

Specialist

Document Set-Up Clerk

Fee Services Analyst

File Clerk

Loan Coordinator

Loan Estimate Preparer

Mortgage Operations

Support Specialist

Opener

Pipeline Coordinator

Processor

Purchase review auditors

(Correspondent channel

only)

Re-Disclosure Associate

Transaction Coordinator

Quality Assurance

Analyst

Validator



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Underwriting – Include the costs for underwriting all loans, including correspondent loans and second mortgages or funded HELOCs (if part of the mortgage division for a retail bank). Include appraisal review activities (e.g. AVM reviews and additional desk reviews) as well as fraud research activities.

As a general guide, include all costs (compensation, occupancy and equipment and other) associated with the following job titles. Be sure to include contract underwriter costs as part of “compensation” rather than “other expense”. Likewise, contract underwriters should be included in the FTEs section as employees.

Appraisal Reviewer

Collateral Specialist

Condo Underwriter

Credit Officers

Credit Analysts

Credit Risk Specialist/Supervisor

Escalation Underwriter

Exception Underwriter

Fraud Specialist

Fraud Researcher

Junior, Senior, and all

Other Underwriters

Scenario Desk

Supervisor

Pre-Closing Appraisal

Reviewer

Underwriter Assistant

Underwriting

Manager/ Head of

Underwriting

Valuations

Coordinator

Closing/Funding – Include such closing activities as preparing and assembling closing documents, conducting quality assurance prior to funding, conducting other pre-closing reviews, and funding all mortgage loans (whether Retail, Broker Wholesale/Mini-Corr, Correspondent, or Consumer Direct).


Check and Wire

Coordinator

Closing Assistant

Closing Disclosures

Preparer

Closing Manager/ Head of

Closing

Doc Drawer

Funder

Funding Assistant

Pre-Funding Reviewer

Pre-Closing Reviewer

Quality Assurance Specialist

Senior Funder

Wiring, Final Pricing and Purchase

Advise Coordinator (Correspondent

Channel)

Closing Document Preparer (Mini-

Correspondent)

Other Fulfillment – Include any remaining fulfillment costs. If you fully outsource the fulfillment function for

certain loans to an outsource provider, include those costs here. In addition, note that “Other Expense – Loan Expense” will be automatically populated in this bucket.


Administrative Assistant for

Fulfillment Operations

Affordable Lending Program

Manager

Community Reinvestment Act

(CRA) Specialist

Condo Specialist

Construction-to-Perm

Specialist

Construction Loan or

Renovation Loan Coordinator

(manages draws)

Co-Op Specialist

Counterparty Risk Assessors

(Broker and Correspondent

channels)

Document Scanners and Imagers

(if imaging performed upfront)

Head of Production Operations

Executive Assistant for Fulfillment

Operations

Facilities Assistant for Fulfillment

Operations’ Facilities

Financial/Business Analyst

for Fulfillment Operations

Help Desk / Support Desk

Manager for Fulfillment

Operations

Manager or Supervisor of

Overall Fulfillment

Operations (not specific

to processing,

underwriting, closing)

Operations Support Clerk

Receptionist for




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PRODUCTION VOLUME

Format: Based on which channels were checked on the business activity screen, you will have access to one or

more production volume screens in $000s and Count: 1) Retail Production Volume; 2) Broker Wholesale/Mini-

Corr Production Volume; 3) Correspondent Production Volume; and/or 4) Consumer Direct Production Volume.

Error-Checking: At the top of each screen, we ask that you report total channel volume. This data entry will be

used as the “master” for the purposes of the auto-calculations: % to total channel volume by $ and #”. If there

is a discrepancy between the total channel volume reported here, and the total channel volume reported for

the subsequent volume break-outs, your percentage totals in the auto-calculations will not equal 100%. This is

an indication that the discrepancy needs to be resolved.

TOTAL CHANNEL VOLUME

Report production volume in thousands of dollars ($000s) and loan count. The average loan balance is

automatically calculated as the loan volume in $000s, multiplied by 1,000, then divided by loan count. Please

check $ volume rounding if the average loan balances do not make sense. NOTE: This section must be

completed in order to generate statistics by loan type on % of total channel volume by $ and #.

FIRSTS/SECONDS/HELOCS

First Mortgages (Traditional) - Traditional first-lien mortgage loans that have priority over all other liens or

claims on a property in the event of default. Such mortgages may be either refinances or purchase money.

First Mortgages (Home Equity) - First lien mortgage loans that include either a one-time lump-sum payment to

the borrower (closed-end) or the funded portion of a revolving line of credit and are secured by the value of the

home.

First Mortgages (Subtotal) - The sum of the first mortgages above. NOTE: This line item must be populated in

order to generate first mortgage statistics by loan type in the last section of this screen.

Second Mortgages (Piggyback) - Closed-end second mortgages originated at the same time as the first

mortgage (or shortly thereafter utilizing the same loan documentation). Exclude state-bond second liens, if

applicable, but the first mortgage tied to a state-bond program should be reported as a state-bond loan in the

applicable production mix section below.

Second Mortgages (Stand-Alone) - Closed-end second mortgages originated at a different time as the first

mortgage, utilizing different loan documentation.

Second Mortgages (Subtotal) - The sum of the second mortgages above.

Funded HELOCs (Piggyback) - Funded Home Equity Lines of Credit (HELOCs) originated during the period and at

the same time as the first mortgage (or shortly thereafter). Do not include HELOCs commitments extended to

borrowers for which there was no initial draw. For this purpose, please include only the fundings on new, initial

commitments for the current period.

Funded HELOCs (Stand-Alone) - Funded Home Equity Lines of Credit (HELOCs) originated during the period and

not simultaneously with a first mortgage. Rather, these loans are funded at the time of commitment with an

initial draw. Do not include stand-alone HELOCs commitments extended to borrowers for which there was no



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initial draw. For this purpose, please include only the fundings on new, initial commitments for the current

period.

Funded HELOCs (Subtotal) - The sum of the funded HELOC loans above.

AGENCY ELIGIBILITY

Agency Eligible - Loans which conform to size and credit quality guidelines and would be eligible for sale to

Fannie Mae and Freddie Mac under any of their loan programs; these loans may not necessarily be sold to

Fannie Mae/Freddie Mac. This would include loans formerly classified as "Other" (e.g. "A minus" product) that

are processed through agency automated underwriting systems.

While we understand that Fannie Mae or Freddie Mac will purchase government loans, please EXCLUDE

government loans from the “Agency Eligible” category for survey purposes.

Non-Agency Eligible - Loans which generally do not conform to size and credit quality guidelines and would not

be eligible for sale to Fannie Mae and Freddie Mac under their loan programs. In addition, include government

loans here, whether or not they are eligible for sale to Fannie Mae or Freddie Mac.

GOVERNMENT SHARE

Government (FHA) - Residential loans insured by the Federal Housing Administration. These loans are not

necessarily part of Ginnie Mae or other agency mortgage-backed securities.

Government (VA) - Residential loans guaranteed by the Veteran’s Administration. These loans are not

necessarily part of Ginnie Mae or other agency mortgage-backed securities.

Government (USDA) - Residential loans guaranteed by the U.S. Department of Agriculture / Rural Housing

Service. These loans are not necessarily part of Ginnie Mae or other agency mortgage-backed securities.

Government (Other) - All other residential government loans, such as housing finance agency program loans

that provide their own insurance and are not combined with another FHA, VA, USDA/RHS, or conventional loan

program. If combined with another loan program, include as part of that loan type. Note that there is a

separate volume breakout below for state bond loans vs all other loans to capture activity of HFA and state-

bond assisted loan programs.

Government (Subtotal) - The sum of the loans above.

Non-Government (Conventional) - Residential conventional loans that are not affiliated with FHA, VA, USDA-

RHS, or other government entity.

STATE BOND / ALL OTHER

State Bond – Loans that are at least partially funded through a state-bond program (issuance of Mortgage

Revenue Bonds) and are designed to provide eligible homebuyers a below-market interest rate and/or down



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payment assistance. The programs are available throughout the United States and sponsored by state or local

Housing Finance Agencies (HFA).

All Other - All other loans not classified as “State Bond” based on the above definition.

INTEREST ONLY/ NOT INTEREST ONLY

Interest Only - Loans in which the borrower makes interest only payments (instead of both the principal and

the interest) for a fixed period of time. The interest only period of an interest only mortgage is typically 1, 3, 5,

7, 10 or 15 years. After this period is over, the loan's principal and interest are amortized for the rest of the

loan's life, so monthly payments will include both principal and interest. Do not include “Option ARMs” in this

category. While an Option ARM borrower may opt to pay interest only, the borrower may also pay based on

negative amortization or to pay on an amortized basis.

Not Interest Only - All other loans not classified as “interest only” based on the above definition.

JUMBO / NON-JUMBO

Jumbo - Loans which exceeded the existing Fannie Mae and Freddie Mac lending limit at the time of

origination. Include all jumbo loans here, whether QM or non-QM. Also include “Conforming Jumbo” loans in

this category (loans greater than the lending limit that are nonetheless considered conforming under the

provisions of the Housing and Economic Recovery Act for “high cost” areas).

Non-Jumbo - All other loans not classified as “jumbo” based on the above definition.

REFINANCE (RATE/TERM VS. CASH OUT) / PURCHASE

Refinance (Rate/Term) - Loans where a borrower achieved a lower interest rate and/or a different term for the same real estate. May also include construction-perm loans (e.g. limited cash-out construction-perm loans), if the borrower already owns the land prior to the closing of interim construction financing. Refinance (Cash Out) - Refinanced loans in which the total principal amount involved is at least 5 percent greater than the principal amount outstanding of the existing mortgage(s) being refinanced, and all or a portion of home equity is converted to cash to the borrower. For example, the increase in home value allowed the borrower to finance the same (or greater) unpaid principal balance and receive the difference from the increased home value in cash at closing. Piggy back loans should be classified the same as the underlying first mortgage. Standalone 2nd mortgages or HELOCs should be classified as Cash-Out Refinances by definition.

Refinance (Subtotal) – All loans, whether rate/term or cash-out, which did not involve the transfer of real

estate.

Purchase (1st-Time Homebuyer) - Loans which involve the transfer of real estate and at least one borrower of the property was identified as a first-time homebuyer. Use the definition of first-time homebuyer in accordance with the Uniform Residential Loan Application (Form 1003) in Section VIII. At least one borrower must respond “No” to Declaration M: “Have you had an ownership interest in a property in the last three years?” May include construction-perm loans, if the borrower is buying both the land and the improvements (i.e. the house) and is a first-time homebuyer.

Purchase (All Other) - All other loans which involve the transfer of real estate. May include construction-perm

loans, if the borrower is buying both the land and the improvements (i.e. the house) and is not a first-time

homebuyer.



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Purchase (Subtotal) - All loans which involve the transfer of real estate, including certain Construction-Perm

(CP) loans as outlined above.

REFINANCE (STREAMLINE VS. ALL OTHER) / PURCHASE

Refinance (Streamline) - Loans in which the home refinancing process is simplified and expedited for the borrower through less stringent documentation or waivers to such documentation as income and employment verification, bank account and credit score verification, and an appraisal of the home. Refinance (All Other) - All other loans that were generally originated with standard documentation.

Refinance (Subtotal) – All loans, whether streamline or any other, which did not involve the transfer of real

estate.

Purchase (Subtotal) - All loans which involve the transfer of real estate. This line item is auto-populated based

on reporting in the previous refinance (rate/term vs. cash out) / purchase mix section.

QM / NON-QM

Qualified Mortgage (QM) - Any loan that:

1. Meets certain product feature standards that has a debt-to-income ratio of 43 percent or less, or

2. Is eligible for purchase, guarantee, or insurance by a GSE, FHA, VA, or USDA. Loans eligible for GSE purchase or guarantee are considered QMs as long as the GSEs are in conservatorship or until January 10, 2021, whichever occurs first. QM loans are presumed to meet the Ability-to-Repay requirements under Dodd-Frank. QM loans are presumed to meet the Ability-to-Repay requirements under Dodd-Frank.

QM (Safe Harbor) - A QM safe harbor loan is a Qualified Mortgage that:

1. Under the CFPB definition has an APR that does not exceed the Average Prime Offer Rate (APOR) by 150 bps or more and meets the other standards for a QM established by the Bureau; or

2. Is originated under the FHA program and does not exceed the APOR for a comparable mortgage by more than the combined percentage of the annual mortgage insurance premium (MIP) and 1.15 percentage points and meets other FHA guidelines; or

3. Is originated in the VA or USDA guaranteed loan programs and generally meet the applicable program requirements. (Note: USDA guaranteed loans that comply with the CFPB’s points and fees limits are considered qualified mortgages until January 10, 2021, or until USDA publishes its own qualified mortgage rule, whichever comes first).

These loans receive a presumption of compliance with the Ability to Repay/QM rule in the form of a safe harbor. A safe harbor confines any litigation that a loan was not QM to whether the QM standards were met. Safe harbor QM loans are generally the most affordable loans and only available to borrowers with stronger credit histories.

QM (Rebuttable Presumption) - A QM rebuttable presumption loan is a QM that under the CFPB definition has an APR that is at least 150 bps greater than the APOR and meets the other standards for a QM established by the CFPB; or is originated under the FHA program, exceeds the Average Prime Offer Rate (APOR) for a comparable mortgage by more than the combined percentage of the annual mortgage insurance premium (MIP) and 1.15 percentage points and meets other FHA guidelines. (Note: Certain VA Interest Rate Reduction Loans (IRRRLs) are considered rebuttable presumption loans).



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These loans gain a rebuttable presumption of compliance with the Ability-to-Repay/QM rule that could allow a more protracted court proceeding if a borrower challenges whether a QM was originated. Such loans, if available, can be expected to be costlier than QM safe harbor loans.

Non-QM - Mortgages that do not meet QM standards. For example, such mortgages may have certain features such as interest-only, prepayment penalties, negative amortization provisions or have points and fees that are greater than 3 percent of the loan amount for loan amounts $101,953 and over.

Excluded from QM Rule - Mortgages that are not subject to the Ability-to-Repay/QM rule provisions under the Dodd-Frank Act as implemented by the CFPB and other agencies. Examples of exclusions include: loans originated through housing finance agencies under certain state-bond programs, reverse mortgages, HELOCs, streamlined refinances of non-standard mortgages, loans originated through the Hardest Hit Fund program, among others.

FIXED RATE / ARM

Fixed Rate - Loans in which the interest rate remains constant for the duration of the loan. This category should

also include balloon loans.

ARM - Loans in which the interest rate may fluctuate at any time during the duration of the loan. This category

should also include fixed rate loans with an adjustment period such as 3/27, 5/25, 7/23, 10/20 and fixed rate

loans converting to ARM loans such as 3/1, 5/1, 7/1, 10/1.

CONSTRUCTION-PERM / OTHER

Construction-Perm (“CP) Loans - Single loans with one-time closing in which there are two separate phases: 1)

the home construction phase, in which the loan is a variable rate line of credit and funds are advanced based

on a predetermined schedule; and 2) the permanent loan phase, in which the loan automatically modifies once

construction is completed. Note: For a given period, please include CP loans that have modified to permanent

status in production volume. Do not include CP loans that are still in the construction phase as of the end of the

reporting period.

All Other Loans - All remaining loans originated that are not construction-perm loans.

SERVICING PORTFOLIO RETENTION / NEW CUSTOMER

Servicing Portfolio Retention ("0" for Production-Only Companies) - Loans closed as a result of inbound or

proactive outbound inquiries made by or to existing servicing clients for either refinance or new purchases.

Include purchase loans of an existing servicing client to the extent that the servicing client closed its new loan

within 90 days of paying off its old loan. NOTE: For companies that originate loans but do not own mortgage

servicing rights (MSRs), please input “0” here and all of production in one of the "New Customer" categories

below.

New Customer - Loans closed with customers that had no prior mortgage relationship with your company for at

least twelve months.

ORIGINATED FOR PORTFOLIO / ORIGINATED FOR SALE TO OTHERS



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Originated for Portfolio (Held for Investment) - Loans that were delivered to the bank/thrift/parent or related

affiliates as the ultimate investor. If closed loans were pooled into securities which were held on balance sheet

(of company or parent/affiliate), please include such loans in “Originated for Sale to Others” below.

Originated for Sale to Others - Loans that were delivered and settled with unaffiliated third parties such as

Fannie Mae, Freddie Mac, Ginnie Mae, private whole-loan Investors, and FHLBs. Also include loans delivered to

an affiliated company such as a parent bank or REIT if the affiliate ultimately sells the loan to another entity or

securitizes the loan.

Note that the sum of loans originated for portfolio and loans originated for sale to others by production

channel should be equal to the volumes reported in the more detailed investor mix under “Total Production

Mix - Investor/Other”.

UNDERWRITING OPERATIONS (RETAIL, BROKER WHOLESALE/MINI-CORR AND CONSUMER DIRECT CHANNELS ONLY)

Loans Closed via Fully Automated Underwriting System Only - Loans underwritten through a fully automated

underwriting system without an employed or contracted underwriter. This category should include loans

receiving an AU approval (from a “certified” loan officer or processor) that move to closing without a “live”

underwriter touch. If a “live underwriter” (as defined in the FTE section) reviews and/or validates all or a

portion of the loan file prior to closing, include below.

Loans Closed via “Live” Underwriter or Combo - Loans reviewed in whole or in part by a trained underwriter,

whether employed or contracted. If a loan file is sent through an automated underwriting system, then

reviewed, re-underwritten or validated by a trained underwriter prior to closing, include such “combination”

loans here as well.

FUNDED / BROKERED / FEE-FOR-SERVICE (RETAIL AND CONSUMER DIRECT CHANNELS ONLY):

Funded - All loan production that is not considered to be “brokered” (i.e. loans actually funded by the lender).

Brokered - Loan production for which an initial application is taken, the loan file is fully or partially processed

but sent to a third party lender to be closed and funded.

Fee-for-Service – Loans that are processed and/or underwritten by your company through a fulfillment fee-for-

service arrangement. For such loans, fulfillment service fee income is recorded but there are no origination fees

or income associated with selling the loan in the secondary market nor service released premiums or

capitalized servicing to report.

BRANCH STRUCTURE (RETAIL CHANNEL ONLY)

Via Mortgage Sales Offices - Loans originated via loan officers assigned to non-bank mortgage sales offices.

Mortgage Sales Offices are mortgage company or mortgage division branches as opposed to bank branches.

Via Bank Branches - Loans originated via loan officers assigned to bank branches or loan officers assigned to

service a number of local bank branches or co-located with a bank branch. If a bank branch merely refers

mortgage customers to a standard non-bank branch or call center, this would not constitute production via a

bank branch. Note that all bank referrals (whether referrals are made to a bank branch loan officer, a call

center or a mortgage sales office loan officer) are captured in the "Bank/Affiliate Referred" section below.



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Via Expense Management Branches - Loans originated via expense management branch arrangements. An

expense management branch is much like a franchise arrangement, where the branch manager is responsible

for the P&L, and typically is responsible for leases, personnel decisions etc. After payment of a "franchise fee"

to the sponsoring corporate entity, expense management branch owners are paid based on the residual

profitability of the branch. (Please do not count production from satellite offices as expense management

branch production)

BANK REFERRED (RETAIL AND CONSUMER DIRECT CHANNELS ONLY):

Bank/Affiliate Referred - All loans originated as a result of a lead or referral from an affiliate department or

company, regardless of whether the referral was eventually handled by a bank branch, call center or a standard

non-bank branch. For bank affiliated lenders, a referral may come from retail bank branches, the trust area,

private banking, and the like. For non-bank affiliated companies, the referral may come from a builder, realtor,

financial advisor, insurance or tax preparation affiliate, or joint venture partner.

Not Referred by Bank/Affiliate - Loans originated that did not arise from bank/affiliate referrals. This would

include loans sourced by loan officers from individual borrower, nonaffiliated builder and realtor relationships,

etc.

BUILDER-AFFILIATED (RETAIL CHANNEL ONLY):

Builder Captive - Loan production that finances new home construction for customers of a home builder and in

which the home builder and your mortgage company are wholly-owned subsidiaries of the same corporation.

Builder Partner - Loan production that finances new home construction for customers of a home builder.

Unlike a builder captive, this home builder is a strategic partner with your mortgage company but not owned by

the same corporate entity.

All Other - All loan production that is not included above, including “spot” business for builder-affiliated

mortgage companies.

INSIDE SALES / OUTSIDE SALES (BROKER WHOLESALE/MINI-CORR CHANNEL ONLY):

Inside Sales - Loan production in which the sales staff (e.g. account executives) are centralized and typically

generate customer leads through a call center-type operation.

Outside Sales - Loan production in which the sales staff (e.g. account executives) are “in the field” and

decentralized in order to generate customer leads in a particular geographic area.

BORROWER PAID / LENDER PAID (BROKER WHOLESALE/MINI-CORR CHANNEL ONLY):

Borrower Paid Transaction - Loan production in which the borrower pays compensation (in the form of

origination and processing fees) directly to the broker in a loan transaction and the broker does not receive any

additional compensation from the lender.

Lender Paid Transaction - Loan production in which the lender pays compensation directly to the broker in a

loan transaction and the broker may not receive any compensation or fees from the borrower. In this case,

pricing is negotiated between the lender and the broker.

TYPE OF FUNDING TRANSACTION (BROKER WHOLESALE/MINI-CORR CHANNEL ONLY):



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Traditional Broker - Loans that are purchased by your company from a mortgage broker and closed in your

company’s name.

Table-Funded - Loans that are closed in the Broker’s name, with funds belonging to your company, and then

immediately assigned to your company.

Mini-Correspondent (“Mini-Corr”) - Mini-Corr lenders sometimes offer counter-parties the option of closing the

loan in their name with their funds vs. closing in the lender’s name. Such production is often viewed as an

extension of the Broker Wholesale/Mini-Corr channel, typically using the same sales and fulfillment staff.

HOUSE ACCOUNTS / ASSIGNED AE (BROKER WHOLESALE/MINI-CORR AND CORRESPONDENT CHANNELS ONLY):

No Assigned Account Executive (House Accounts) - Loan Production for which no account executive is assigned

and for which no account executive commissions are earned.

Assigned Account Executive - Loan Production for which there is an assigned account executive and for which

an account executive earns a commission.

DELEGATED UNDERWRITING (CORRESPONDENT CHANNEL ONLY)

Delegated Underwriting - Loans purchased from third party lenders that have delegated underwriting

authority. Such loans are underwritten by the third party lender in accordance with the guidelines provided by

the lender that is purchasing the loans.

NOTE: The intent of the delegated vs. non-delegated breakout is to relate cost of underwriting to the actual

volume of underwriting decisions made by your company vs. a third party lender from whom you buy loans.

Delegated underwriting is NOT intended to be synonymous with contract underwriting. Both scenarios require

that files be underwritten to your company guidelines, but differ in control of the underwriters. Delegated

underwriting would not have costs associated on your company expense ledger because the third party lender,

from whom you buy closed loans, maintains the underwriting staff. Whereas, in the case of contract

underwriting, the relationship is typically managed by your company and the costs are reflected in your

company’s underwriting department (even if your company collects a fee to offset those costs).

Non-Delegated Underwriting - Loans purchased from third party lenders that do not have delegated

underwriting authority. Such loans are underwritten prior to closing by the lender that is purchasing the closed

loan.

BULK VS FLOW (CORRESPONDENT CHANNEL ONLY)

Bulk - Loans purchased from third party lenders on a bulk or mini-bulk basis. Sellers pool multiple loans and

buyers offer a bid on the entire collection of loans included in the pool. The bid is based on the characteristics

of the pool as a whole.

Flow - Loans purchased from third party lenders on a flow basis. Each loan is purchased individually, regardless

of whether other loans are included in the commitment.

MANDATORY VS BEST EFFORTS DELIVERIES (CORRESPONDENT CHANNEL ONLY)



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From the perspective of your company as the secondary market buyer, report the percentage delivered to you through either best efforts or mandatory delivery method. Be sure that you have answered how your company is buying loans from correspondents, NOT how your company is selling loans into the secondary market (which is requested in the Total Production Mix section).

Mandatory - Delivery method that requires the seller (mortgage originator) to make delivery to your company

by a certain date or incur a pair-off fee for unfilled trades. Includes assignments of trade (AOTs), direct trades,

bulk trades and single loan mandatory deliveries. Generally, mandatory mortgage locks or trades command a

higher price than best-efforts locks, because there are fewer hedge costs for your company, the secondary

market buyer. In other words, the seller must manage and hedge the interest rate risk and is paid for taking

that risk.

Best Efforts - Delivery method when the sale of a mortgage in your company requires that the seller (mortgage

originator) make a "best efforts" attempt to deliver the mortgage to you. This type of trade exists to transfer

the risk that a loan will not close from the originator to your company, the secondary market buyer.

FIXED VS ARM PRODUCT TYPES (FIRST MORTGAGE ONLY)

This section captures FIRST MORTGAGE production volume by loan type. At the top of this screen (under

Firsts/Seconds/HELOCs), we asked that you report your total first mortgage production. This data entry will be

used as the “master” for the purposes of the auto-calculations: % to total first mortgage volume by $ and #”. If

there is a discrepancy between the total first mortgage volume reported here, and the total first mortgage

volume reported under “Firsts/Seconds/HELOCs”, your percentage totals in the auto-calculations will not equal

100%. This is an indication that the discrepancy needs to be resolved.

Fixed Rate First Mortgages:

15-year Fixed - First mortgages in which the mortgage rate remains fixed throughout the 15-year life of the

loan.

30-Year Fixed - First mortgages in which the mortgage rate remains fixed throughout the 30-year life of the

loan.

Interest Only - First mortgages in which the borrower makes interest only payments (instead of both the

principal and the interest) for a fixed period of time. The interest only period of an interest only mortgage is

typically 1, 3, 5, 7, 10 or 15 years. After this period is over, the loan's principal and interest are amortized for

the rest of the loan's life, so monthly payments will include both principal and interest. Note: in the case of

interest only fixed mortgages, the mortgage rate remains the same throughout the life of the loan.

Other Fixed -Other first mortgages in which the mortgage rate (not necessarily the payment) remains fixed

throughout the life of the loan, such as 20-year fixed rate first mortgages.

Adjustable Rate First Mortgages:

In certain circumstances, it may appear that certain loans belong in more than one category. For example, a

2/28 could either be a traditional ARM or interest only. In such cases, use the following “order of precedence”:

1. Determine the volume for interest-only ARMs

2. Based on the remaining, determine the volume for hybrid vs. traditional ARMs

3. All remaining (should be minimal), place in the “Other” bucket.



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ARM >= 3 Years (excluding Interest Only) - Adjustable rate first mortgages with an initial fixed-rate period of 3

years or longer (usually 3/1, 5/1, 7/1 or 10/1), which then switches to an annually-adjusted ARM.

ARM < 3 Years (excluding Interest Only) - Adjustable rate first mortgages with an initial fixed rate period of less

than 3 years.

Interest Only - First mortgages in which the borrower makes interest only payments (instead of both the

principal and the interest) for a fixed period of time. The interest only period of an interest only mortgage is

typically 1, 3, 5, 7, 10 or 15 years. After this period is over, the loan's principal and interest are amortized for

the rest of the loan's life, so monthly payments will include both principal and interest. Note: in the case of

interest only ARMs, the mortgage rate does not remain the same throughout the life of the loan.

Other ARM - Other first mortgages in which the mortgage rate adjusts throughout the life of the loan.

CONSUMER DIRECT MATRIX BY CUSTOMER SEGMENT AND TECHNIQUE

For those lenders in the Consumer Direct channel, this matrix provides detailed volume information (in loan

count) to better capture your business model. It asks for both the volume by customer segment and lead

generation technique used. Below are the definitions for both the customer segments and lead generation

techniques.

VOLUME (LOAN COUNT) BY CUSTOMER SEGMENT

Servicing Portfolio Retention ("0" for Production-Only Companies) - Loans closed as a result of inbound or

outbound inquiries made by or to existing servicing clients for either refinance or new purchases. Include

purchase loans of an existing servicing client to the extent that the servicing client closed its new loan within 90

days of paying off its old loan. NOTE: For companies that originate loans but do not service loans, please input 0

here.

New Customer - Loans closed with customers that had no prior mortgage relationship with your company for at

least twelve months. Please report the breakdown of new customers generated through:

Affiliate - Bank/Member Customer: Loans closed for existing retail bank customers (deposit, checking,

retirement etc.) or existing credit union members who were referred to your mortgage unit. If you are

an insurance company, include insurance company members referred to your mortgage unit here as

well.

Affiliate - Financial Advisory Customer: Referrals from financial advisory firms with whom you have a

partnership or financial advisory customers within your companies who were referred to your

mortgage unit.

Affiliate - Employee Loans: Loans offered to employees and/or their immediate family members and

friends through a “friends & family” loan program.

Affiliate - Other: Referrals from all other affiliate organizations with whom you partner, such as joint

ventures, real estate partnerships, builder partnerships, etc.

Third-Party Customer: No prior relationship with lender or affiliate.

VOLUME (LOAN COUNT) BY PRIMARY/INITIAL LEAD GENERATION TECHNIQUES

There are a total of nine different lead generation techniques for input. We ask you to allocate volume by

customer segment to these nine lead generation areas. While there may be several lead generation techniques

used for a single loan, use the PRIMARY or INITIAL lead generation technique used. For your convenience, we



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have a total column (Column 10), that is automatically calculated. Note the “Total” box in the right-hand,

bottom corner of the matrix should equal your total direct marking closed loan volume in count.

1. Lead Aggregator / Purchased Leads: Loans resulting from referrals received from lead aggregators, such

as LendingTree, Zillow, Bank Rate Monitor or LowerMyBills. This category should also include trigger leads

from credit bureaus.

2. Triggered Leads: Loans resulting from trigger leads received from the credit bureaus, whether related to

existing servicing customers or other customers.

3. Direct Mail / Telemarketing: Loans in which the customer responded to a direct mail piece, statement

insert, email or outbound telemarketing call.

4. Media (Radio, TV, Print): Loans in which the customers (whether new customers or existing servicing

customers) responded to a television commercial, radio announcement, print media or other form of

advertisement besides a web advertisement.

5. Website / Web Ads: Loans in which the customer visited the company website proactively or were

directed to the website through web advertising or social media and either requested more information

through the website, or completed an application through the website prior to speaking with a loan officer.

6. Relocation: Loans resulting from internal or external corporate relocation programs.

7. Loan Officer Sourced: Loans that were sourced through a loan officer’s own personal contacts, such as

realtors, family and friends, civic groups and other personal affiliations

8. Warm Hand-Offs / Referrals: Loans resulting from "warm" referrals from financial advisory firms, real

estate partnerships and other intermediaries, the retail bank, or a company’s own servicing shop, in which

the intermediary discussed the mortgage and acted in a lead generation and/or sales capacity on behalf of

the mortgage company.

9. Other: All other loans with a different lead source from those above.

10. Sum of Items 1-9.

TOTAL PRODUCTION MIX - FICO and LTV

Avg. FICO Score - The arithmetic average FICO score for all loans closed during this period.

Production LTV Mix (based on $000s and count) - First Mortgage Only - Please provide the percentage of first

lien mortgage loans originated during the period with Loan-to-Values (LTVs) in the indicated ranges. For

purposes of this schedule, exclude second mortgages and HELOC from the population. The percentages should

add to 100%. The first table should capture LTV mix percentages based on dollar amount of loans originated,

while the second table should include mix percentages based on the number of loans originated.

Weighted Average LTV (1st Mortgage) - Please provide the Weighted Average loan to value ratio for all first

lien mortgage loans produced during the period.

Weighted Average CLTV - Please provide the Weighted Average Combined loan to value ratio for all loans

produced during the period. For example, for an 80/10/10 loan (80% First and 10% Second), the CLTV would be

90%. For loans that you do not have the first mortgage, but you have the second you should assume or impute

an LTV on the first lien.

TOTAL PRODUCTION MIX BY STATE

Total Production Mix by State (based on $000s only) - To the nearest two decimals, please provide the

percentage of dollar loan volume originated in the particular geographic states during this period. The

percentage should add to 100%.



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TOTAL PRODUCTION MIX - INVESTOR/OTHER

PRODUCTION MIX BY INVESTOR TYPE

Enter the percentage (to the nearest 2 decimals) of loans originated in the following categories:

Originated for Portfolio - Loans that were delivered to the bank/thrift/parent or related affiliates as the

ultimate investor. If closed loans were pooled into securities which were held on balance sheet (of company or

parent/affiliate), please include such loans in “Originated for Public/Private Securitization” below.

Originated for Sale to Fannie Mae/Freddie Mac (Cash Window) - Loans that were delivered and settled with

either Fannie Mae or Freddie Mac on a whole-loan basis. Also known as the “whole loan conduit”, lenders

deliver loans to Fannie Mae or Freddie Mac in exchange for cash. When a mortgage is sold as a whole loan, the

lender gets the price of the mortgage from the sale, or the net pass-through rate (PTR = note rate - servicing

fee). Fannie Mae or Freddie Mac then pool the loans into MBS securities.

Originated for Sale to Fannie Mae/Freddie Mac (MBS) - Loans delivered and settled with either Fannie Mae or

Freddie Mac, and pooled into mortgage backed securities by the mortgage banker (rather than Fannie Mae or

Freddie Mac). In the MBS execution, the buy-up/buy-down program can be utilized to fit a loan into a particular

MBS coupon by buying up or buying down the guaranty fee. (Coupon = note rate - servicing fee - guaranty fee).

A lender can also retain excess servicing in lieu of using the buy up/buy down program.

Originated for Ginnie Mae I or II Program - Loans that were delivered and settled with Ginnie Mae. FHA and VA

loans originated and sold on a whole loan basis should be classified in the Private Investor - Whole Loan

category below.

Originated for Private Investors - Whole Loan - Loans that were delivered and settled with private investors on

a whole loan basis. This category should include FHA and VA loans originated and sold on a whole loan basis to

private investors. In addition, please include all agency-eligible loans that were sold to private investors. This

category should also include all Assignment of Trade (AOT) loans and any brokered (vs. funded) loans reported

in the Retail channel.

Originated for Unaffiliated Private Investors - Servicing Retained - Loans that were delivered and settled with

unaffiliated private investors, including various FHLBs, on a servicing retained basis.

Originated for Sale to Affiliate - Servicing Retained or Servicing Released - Loans that were delivered on a

servicing-retained or servicing released basis to an affiliated company, including but not limited to a parent

bank or REIT. This affiliated company is then responsible for packaging and securitizing the loans. The difference

between this category and "portfolio" is that ultimately the affiliate sells the loan to another entity or

securitizes and does not just hold in portfolio, like a traditional bank may.

Originated for Public/Private Securitization - Loans that were directly securitized either publicly or privately by

your company, as opposed to through an agency such as Fannie Mae, Freddie Mac or Ginnie Mae. This should

include loans that were securitized and either held on the balance sheet of your company or parent/affiliate or

sold in the secondary market.

Originated for Sale to Others (Subtotal) - this is automatically populated as the sum of the above five items.

ORIGINATED FOR SALE TO OTHERS: DELIVERY METHOD FOR SELLING LOANS INTO SECONDARY MARKET



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Of those loans originated for sale to others only, report the percentage delivered to the secondary market through either best efforts or mandatory delivery method. Be sure that you have answered how your company is selling loans into the secondary market and not how your company is buying loans from correspondents. (In the Correspondent Channel section, we have a separate breakout of mandatory vs best efforts from the perspective of those companies buying the loans).

Best Efforts - Delivery method when the sale of a mortgage in the secondary mortgage market requires that the

seller (mortgage originator) make a "best efforts" attempt to deliver the mortgage to the buyer. This type of

trade exists to transfer the risk that a loan will not close from the originator to the secondary market buyer.

Mandatory - Delivery method that requires the seller (mortgage originator) to make delivery to the buyer by a

certain date or pair-out of the trade. Includes assignments of trade (AOTs), direct trades, bulk trades and single

loan mandatory deliveries. Generally, mandatory mortgage locks or trades command a higher price in the

secondary mortgage market than best-efforts locks, because there are fewer hedge costs for the buyer (i.e. the

seller must manage and hedge the interest rate risk and is paid for taking that risk).

PRODUCTION MIX BY SERVICING RELEASED VS SERVICING RETAINED

Servicing Released - Co-Issue - Percentage of closed loans in which the servicing rights related to those loans

were sold to a third party through a co-issue arrangement and for which your company received a servicing

release premium.

Servicing Released - All Other - Percentage of closed loans in which the servicing rights related to those loans

were sold to a third party through another type of arrangement (primarily whole-loan sales) and for which your

company received a servicing release premium.

Servicing Released (Subtotal) - this is automatically populated as the sum of the above two items.

Servicing Retained - Percentage of closed loans in which the servicing rights related to those loans were kept

and a capitalized value of the servicing right was reported. Also, include whole loans held in portfolio here. For

“production only” companies, report “0” in this line item.

FIRST MORTGAGE PRODUCTION MIX BY CROSS-SELL PRODUCT

1ST Mortgage Loans Originated with at least one Cross Sell-Product (based on count) - Please reflect the

percentage of first mortgage loans originated with at least one new cross-sell product at the time of origination

or within 30 days of origination, whether or not your production division receives credit for such products.

Cross sell products may include but are not limited to the following:

Real estate loans - Piggyback second mortgage, funded or unfunded HELOC

Consumer loans - Auto, boat, RV, etc.

Demand deposit and investment products - Checking, savings, IRA, money market, CD

Other - Credit cards, debit cards, direct deposit, online banking, insurance products

Loans Originated with no Cross-Sell Product - Please reflect the percentage of first mortgage loans originated

without a new cross-sell product at the time of origination.

ADDITIONAL PRODUCTION DATA

PRODUCTION PROCESSING TIMES



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Average Days from Application to Intent to Proceed (ITP) - (Refinance and Purchase Closed Loans) - Break out

the number of days by loan type (refinance vs. purchase) and channel, using the following parameters:

For the Retail, Broker Wholesale/Mini-Corr and Consumer Direct Channels, the average number of

calendar days from the receipt of the required six pieces of information from the borrower

(borrower's name; borrower's monthly income; borrower's social security number; property address;

estimate of value of the property; and loan amount) and the point in time that the borrower provides

an intent to proceed (ITP) with the mortgage application process either in writing, electronically or

orally. Exclude cancellations from this avg. number of days.

Average Days from Application to Closing - (Refinance and Purchase Closed Loans) - Break out the number of

days by loan type (refinance vs. purchase) and channel, using the following parameters:


calendar days from the receipt of the required six pieces of information from the borrower

(borrower's name; borrower's monthly income; borrower's social security number; property address;

estimate of value of the property; and loan amount) and the point in time the loan is closed.

Average Days from Registration to Funding- (Refinance and Purchase Closed Loans) - Break out the number of

days by loan type (refinance vs. purchase) using the following parameters:

For the Correspondent Channel, the average number of calendar days FROM loan registration (the

date in which loan data is first entered or uploaded into the Correspondent lender’s loan origination

system) TO the point in time the loan is funded by the Correspondent lender.

Average Days from Closing/Funding to Shipping – For loans held for sale (excluding loans held in portfolio), use

the following parameters:


calendar days from the point in time the loan is closed to the point in time the required loan

documentation is transmitted to the investor.

For the Correspondent Channel, the average number of calendar days from the point in time the loan

is funded by the correspondent lender to the point in time the required loan documentation is

transmitted to the ultimate investor (Fannie Mae, Freddie Mac etc.)

The average number of days from closing to shipping should be less than the average days in

warehouse.

Average Days in Warehouse - For loans held for sale only (excluding loans held in portfolio), the average

number of calendar days from the point in time the loan is closed to the point in time the investor settles on

the loan. For this purpose, a loan is not considered sold if placed in a repo facility. The average number of days

in warehouse should be greater than the average days from closing to shipping.

Vintage Pull -Through - To the nearest two decimals, please provide the percentage of loan applications (by

count) that closed during this period, excluding timing differences between applications and closings across

different reporting periods (such as an application in December and closing in January). To calculate this

percentage, we suggest that you:

1. Determine total number of applications taken during the period. 2. REMOVE all applications that were still being processed or underwritten as of the end of the period. 3. Of this new application pool, enter the number of applications that closed/funded during the period. 4. Calculate vintage pull-through as #3 / (#1 - #2) * 100.



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UNDERWRITER TOUCHES

Average Number of Underwriter Touches per Application File – The average number of times an underwriter

was triggered to review any or all of an application file in order to provide an initial decision, review and/or

clear conditions, or provide a final approval.

REGISTRATION, LOCK AND APPLICATION VOLUME

Registration Volume (#) (Correspondent Channel Only) - The gross number of loan registrations received from

correspondents during the reporting period. A loan registration occurs when loan data is first entered or uploaded into the Correspondent lender’s loan origination system. While most registered loans are locked in, a loan may be registered without locking in the interest rate and loan terms (i.e. a “floating” registration). Include all registrations whether the information is entered manually, or uploaded through Correspondent portal software. Registrations represent the first point at which the Correspondent lender becomes aware of the borrower. Note: a registration may not necessarily be an application. For PGR purposes, an application involves the receipt of the full application package and disclosures from the correspondent intending to sell the loan. This package would include the all documents required by the Correspondent lender to make an underwriting and pricing decision on the loan.

Lock Volume (#) - The gross number of mortgage applications (by production channel) that were locked-in with

the secondary marketing department at a specific interest rate, term length, and dollar amount during the reporting period. Include all locks, whether closed or not, during the reporting period. In the case of re-locks, only include once and do not double-count.

Loan Application Volume ($000s) - (Refinance and Purchase Applications) - The dollar volume of refinance and

purchase loan applications received during the period by channel. This should not include "pre-qualification"

applications for which there is no property identified.

For Retail, Broker Wholesale/Mini-Corr, and Consumer Direct Channels, use the RESPA definition of application

(also used for the MBA’s Weekly Application Survey). An application for RESPA means the submission of a

borrower's financial information in anticipation of a credit decision, which shall include the following six pieces

of information:

[1] borrower's name

[2] borrower's monthly income

[3] borrower's social security number to obtain a credit report

[4] property address

[5] estimate of value of the property

[6] loan amount

Once either the lender (Retail and Consumer Direct) or the broker (Broker Wholesale/Mini-Corr) has these six

pieces, an application has been created per RESPA. Applications can be submitted in writing, electronically, or

orally. If submitted orally, a written record of the event must be included.

For the Correspondent Channel, an application for PGR purposes involves the receipt of the full application

package and disclosures from the correspondent. This package would include all documents needed to make an

underwriting and pricing decision on the loan. Oftentimes, the Number of Registrations > the Number of



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Applications > the Number of Locks, although with certain Correspondent lenders, a loan can be locked without

receipt of full application package.

For treatment of re-submission: If a borrower initially submits an application with the six pieces of required

information and receives the triggered Loan Estimate, then either 1) withdraws the application, or 2) takes no

further action and the window of ten business days after the borrower’s receipt of the Loan Estimate lapses,

any future re-submission should be treated as a separate application.

PRODUCTION SUPPORT EXPENSES

The following production support activities are included in this section: secondary marketing, post closing,

production technology, shipping, delivery and quality control. The types of job titles that should be included in

each area of Production Support are listed below each category.

Column Definitions:



Compensation (Bonuses) - Bonuses for all permanent and temporary employees, including signing and

retention bonuses. This line item should also include incentive payments to employees that may be based on

factors such as application or closed loan volume, profits, etc.

Compensation (Benefits) - Benefits such as insurance, employer paid taxes, pension, and other employee

related expenses.






purposes if your company owns the facilities.

Note: Computer hardware depreciation (PC’s, printers and peripherals) and/or technology equipment lease

costs for all production support employees (employees whose compensation is included under production

support) should be charged here, and not included in Corporate Administration.

Other Expenses - Telephone usage, postage, stationary & supplies, advertising, entertainment, travel, training,

outside service, recording fees and other costs associated with originating, closing and selling a mortgage loan

which have not been previously identified. Expenses associated with outsourcing a function (such as insuring)

or third party contractors in support of this function should be included here.

Line Items:

Post Closing, Shipping & Delivery – Includes recording signed closing documents, processing the settlement

package and cash received at closing, and verifying cash received relative to the Loan Estimate and disclosures.

This function also includes the insuring function, trailing document follow up, and activities related to loan

warehousing, i.e. getting the collateral package to the warehouse lender if applicable. Other functions include

matching loans with investor commitments, ensuring loan files are complete and documents copied, preparing

transmittal documents, making physical or automated delivery of loan files, meeting delivery dates as stated in



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investor commitments, and repackaging loans as necessary and working out investor conditions. MERS and

assignment or recordation expenses should be included in this category. As a general guide, include expenses

for the following job titles:

Capital Markets Associate

Delivery Specialist

Document Control

Specialist

Document Management

Specialist

Exceptions Clerk

Final Documents Mail

Clerk

Final Documents Supervisor

Final Documents Specialist

Government Insuring Clerk

Loan Documentation

Processor

Mail Center Clerk Indexer

Pooling Specialist

Post-Closing Auditor

Post-Closing Associate

Post-Closing Reviewer

Post-Closing Supervisor

Release Manager

Scanner / Imaging Clerk

Shipping Clerk

Trailing Documents Processor

Secondary - Activities associated with managing the pipeline, loan locks, pricing, negotiating investor

commitments, managing marketing risks, reviewing new loan products and hedging the warehouse and

pipeline. Include product development research in this line item as well. As a general guide, include expenses

for the following job titles:

Asset Sales Specialist

Business Analyst

Capital Markets Analyst,

Director, Manager,

Supervisor

Hedging Analyst, Director,

Manager, Supervisor

Investor Accounting

Support

Model Developer

MSR Risk Analyst,

Manager

Pipeline Manager

Pricing Manager

Pricing Systems Support

Product Development Specialist

Product and Pricing Analyst

Investor Relationship Manager

Secondary Markets Analyst, Director,

Manager, Supervisor

Secondary Systems/Procedures

Analyst

Trading Officer

Quality Control - Required and non-required agency related quality control functions including file reviews on a

given percentage of closed loans and branch audits. Include only post-closing audits here; pre-funding audits

belong in Direct Production Expense as a fulfillment cost. As a general guide, include expenses for the following

job titles:

Credit Quality Assurance

Specialist, Analyst

Credit Compliance

Specialist

Mortgage Compliance

Auditor

Quality Control Analyst,

Clerk, Manager, Supervisor

Reverification Specialist

Post-funding QC auditor

Production Technology - Before completing this line item, please refer to “Technology Expense Allocation” in

the Appendix to these Definitions. This bucket should contain all technology costs directly related to loan

production, including systems costs for point of sale (POS), loan origination systems (LOS), mortgage

transaction/digital provider costs (such as Blend, Roostify, FormFree etc.), imaging systems or any other

ancillary systems directly related to the production operation. Include per-loan costs associated with the use of

an outside technology vendor in lieu of implementing or purchasing a new system. This includes per-loan LOS

and POS registration costs, or costs associated with loading new loans onto your LOS/POS systems as part of a

“Software as a Service (SaaS)” arrangement. In addition, any per-loan imaging service fees should be included

here.



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As a general guide, include expenses for the following job titles:

POS/LOS Programmer

Systems Support

Technology Vendor

Coordinator

Systems Project

Manager

Systems Conversion

Manager

Exclusions from Production Technology Expense:

Per-loan underwriting system costs should be excluded from this section and instead, be part of Direct

Production Expense – Underwriting Expense because these are costs supporting a specific production

fulfillment function (in this case, underwriting).

Likewise, the costs of software programs for specific departments should be charged to the

department. For example, the cost of quality control vendor packages should be reflected in Quality

Control.

Corporate expenses related to LAN/WAN, desktop support and help desk should be reflected in

Technology Support in Corporate Administration. (Such costs will be allocated globally to Production

and Servicing).

Computer hardware depreciation (PC’s, printers and peripherals) and/or technology equipment lease

costs. Such charges should be reflected in Occupancy and Equipment in the applicable channel or

department.

Support-Other - Other production related activities not covered either in the direct production or production

support categories listed above such as repurchase and out of tolerance cure defense, credit policy

management (setting credit policy for overall company and setting underwriting policy guidelines), writing

credit and policy guidelines, credit administration, HMDA and RESPA scrubs, and recordkeeping. Exclude

training or marketing costs; such costs belong in the specific production or production support function where

the training occurs. If training is required of all production employees, pro-rate the costs between the various

production functions similar to how occupancy and equipment costs are allocated. As a general guide, include

expenses for the following job titles:

Business Systems Analyst

Interim Servicer (for

production-only companies

solely)

Credit Policy Manager

Production Financial

Analyst

Strategic Project Manager

Home Mortgage Disclosure Act (HMDA)

Specialist

Repurchase Defense Specialist

TRID-related Cure Specialist

Include interim servicing only if you are a production-only company. For those that originate and service loans,

whether in-house, through a subservicer, or through a combination approach, such costs and FTEs for interim

servicing and the average interim servicing portfolio volume belong in the servicing section, not here. Note: If

this line item is over 25% of total production support expenses, we ask that you re-check definitions to ensure

proper allocation.



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SERVICING (for Companies Primarily Servicing In-House)

GENERAL EXCLUSIONS

1. Exclude any revenues, expenses and portfolio volume related to your legacy subprime servicing unit,

unless such loans comprise less than ten percent of your total servicing portfolio and such loans are

generally serviced by the same staff as your prime loans, as opposed to a completely separate division.

2. Interest income on loans held for investment or held by the parent company.

3. Interest expense to fund any goodwill related assets and/or any corporate related overhead not directly

associated with production, secondary or servicing activities.

4. Prepayment fee revenue generally passed through to third party investors for loans serviced for others.

Prepayment fee revenue for loans held in portfolio should therefore also be excluded.

SERVICING REVENUE

Servicing Fees - Total revenue generated through fees received for servicing mortgage loans. This amount

should be net of the guaranty fee charged by the secondary market agency or private conduit to guarantee

timely payment of principal and interest to the investors in mortgages underlying a mortgage backed security.

The amount should include the on-going cash flows from excess servicing.

Servicing fees on loans held for sale or loans owned by a parent company where the mortgage entity is the

servicer of record should be included here. If servicing fees are not credited to you or the amount received is

not a market fee then an amount equivalent to an arms-length transaction should be included. A "rule of

thumb" to use is 25 basis points for conventional conforming and jumbo fixed rate loans, 25 basis points for

adjustable rate loans, 30 basis points for government loans and 50 basis points for acquired non-performing

loans. Another method for determining a market servicing fee is to use the amounts received for third party

owned assets for comparable products. In summary, service fees should be imputed on portfolio loans at

"normalized" rates as described above, and any intercompany servicing/subservicing fee should be eliminated.

Note on Master Servicing - If possible, please exclude all revenues and expenses associated with master

servicing activities. Also, exclude Master Servicing loans (loans for which you do not perform the primary

servicing) from portfolio data for survey purposes.

Subservicing Fees - Fees collected for servicing loans that you are not the servicer of record (you do not own

the servicing rights but perform this service for a third party, non-affiliated company who does own the

servicing rights).

Late Fees - Fees collected (not accrued) due to a loan being delinquent. You may receive late fees if your

servicing is contracted out.

Ancillary Income - Other fees collected from the borrower (other than late fees reported above) such as

insurance (e.g., credit life and force placed referrals or premiums); biweekly program fees; assumption fees

(including processing fees, legal name change fees, and FHA/VA and conventional fees); conversion fees

(including modification fees); payoff fees; faxing fees; amortization table fees; credit search fees; loan history

statement fees; and loss mitigation incentive fees earned from investors. This line item should also include

referral fees received from affiliates for cross selling products such as insurance or home equity lines of credit.

You may still receive ancillary income if your servicing is contracted out to a third party.

Note: Do not include prepayment penalty income here. We view prepayment penalties as portfolio/investor

income which therefore should be excluded from the survey.



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Net Interest Income:

Interest Revenue - Interest revenue earned on escrow balances (a/k/a float income). This would include

interest on funds that are held in trust for payment of mortgagors' taxes, insurance, P&I, or other fiduciary

funds. If credit is not given on the servicing general ledger for these custodial balances an imputed amount

earned by your company should be included. This imputed amount should agree to an increase in Interest

Expenses and Bank Fees. This line item should not include interest income earned on Ginnie Mae Early Buyouts.

Such interest should be reflected in Ginnie Mae Early Buyout Income.

Interest Expenses on Assets and Escrows (enter negative #) - This amount now includes several different types

of interest expense, specifically: 1) interest expense incurred for funding mortgage servicing rights and any

interest expense on corporate debt specifically used to finance servicing-related activities. If you issue bonds to

finance multiple assets or activities, make a good faith effort to assign appropriate interest expense for the MSR

financing; 2) unrecoverable interest expense for advances on principal and interest or taxes and insurance; 3)

interest expenses incurred to finance other assets (e.g. Fixed Assets) related to your servicing operations and 4)

interest paid to the borrower for their escrow balances in states that require such payment. Note: this line item

should not include interest expense incurred to finance Ginnie Mae Early Buyouts. Such interest should be

included in Ginnie Mae Early Buyout Income.

Prepayment Interest Shortfall (enter negative #) - This amount includes ONLY interest required to be paid by

the servicer to investors for prepayments or partial prepayments. For example, the servicer may need to

advance an entire month's interest to the investor even though a borrower pays off a mortgage in the middle of

the month. Other terms for this interest expense are "compensating interest" and "MBS interest expense”. This

should be entered as a negative number on the screen.

Mortgage Servicing Right Financial Items:

Amortization of Servicing Rights/ Loan Decay (enter negative #) - Due to changing accounting treatment of

mortgage servicing rights, please report either of the following:

Amortization of Servicing Rights: Includes the total annual amount of amortization of servicing rights

and excess servicing receivables (classified as interest-only strip securities). Also, this amount should

include estimated amortization of imputed MSRs related to portfolio loans.

Losses due to Loan Decay/Aging: Includes the total annual loss of servicing right valuations and excess

servicing receivables (classified as interest-only strip securities) related to loan aging. Should include

estimated loan decay/aging of imputed MSRs related to portfolio loans.

Gains/Losses on Changes in MSR Valuations (+/-) - Due to changing accounting treatment of mortgage

servicing rights, please report either of the following:

Net Recapture (Loss) on Servicing Valuations: Net recapture (loss) associated with adjustments in the

carrying value of the servicing portfolio. Includes impairment adjustments as well as net recoveries.

Please note that under LOCOM (lower-of-cost-or-market), the recapture can never exceed the original

basis even if the market value exceeds original basis.

Other Gains (Losses) on Servicing Valuations: Net gain (loss) associated with adjustments in the

carrying value of the servicing portfolio due to factors other than loan aging or decay such as changes

in servicing valuations due to new performance data on specific loan types. Please note that under the

Fair Value option, the mortgage servicing rights can be “marked-to-market” and even exceed the

original basis.



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Hedge Gain/Loss (+/-) - Includes recognized gains/losses associated with investment instruments (hedges) used

in managing the mortgage servicing rights assets on and off the balance sheet. This category also includes

amortization of deferrals. To the extent that firms are hedging by holding actual assets on their balance sheet

(e.g. Treasury securities), the interest revenue generated by the securities should be included in Hedge

gain/loss (not in the interest revenue line item)

Bulk Sales of Servicing Rights (+/-) - The net gain or loss associated with the sale of servicing rights during the

period.

GINNIE MAE EARLY BUYOUT INCOME (+/-)

Please capture all of the income and expense related to Ginnie Mae Early Buyouts ("EBO") as a stand-alone

memo item. It should include all investor-related gains and losses including interest revenue, interest expense

incurred to finance EBO, and any gain or loss on the ultimate disposition of EBO. Note: EBO net income will not

roll up to Total Servicing Revenues or Net Financial Income.

SERVICING EXPENSES

Column Definitions:





factors such as the number of units handled, profits, etc.


related expenses.






purposes if your company owns the facilities.

Important Note: Computer hardware depreciation (PC’s, printers and peripherals) and/or technology

equipment lease costs for all servicing employees should be charged here and not included in Corporate

Administration.

Other Expenses - Telephone, postage, stationary & supplies, advertising, entertainment, travel, lockbox and

other outside service costs, and any other direct costs which have not been previously identified. Include

expenses associated with contracting out servicing functions and/or third party providers of servicing functions.

For example, if you are paying subservicing fees to a 3rd party subservicer then such fees should be reflected in

this line item.

Foreclosure and REO Losses - Represents all costs (whether actuals, provision or amounts in excess of

provision) associated with unreimbursed default-related servicing expenses, as well as compensatory fees and

certain credit losses related to servicing FHA and VA loans. Unreimbursed default-related servicing expenses



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include items such as FHA interest loss, disallowed or unclaimable attorney fees, unreimbursed property

inspection charges, other unreimbursed servicer advances, unclaimable but required default-related

expenditures, and unreimbursed expenses associated with servicer errors or non-compliance with investor

standards. Also include any additional compensatory fees for servicer non-compliance. Finally, include losses

and/or the provision for losses that have arisen from 1) VA Net Value or VA Total Debt Bids and 2) HUD Non-

Conveyance

Please exclude the following from this line item:

Unreimbursed expenses and credit related losses on Portfolio loans.

Any gain or loss recorded on the sale or disposition of Ginnie Mae Early Buyout loans. Such gain or loss

should be reflected in "Ginnie Mae Early Buyout Income."

We recommend allocating losses to Production and Servicing as summarized in the following table:

PRODUCTION - LOSSES RESULTING FROM SERVICING - FORECLOSURE AND REO

LOSSES

Early Payoffs (EPO)

Any SRP recapture





Uninsured loans

Discounted loan sales (scratch and

dent, sub-performing, non-performing



origination

Unreimbursed default-related

Expenses - e.g. 1/3 attorney

costs, FHA interest loss,


loss/penalties due to missed

investor deadlines or servicer

error

Compensatory fees for non-

compliance

Net losses from VA Net Value or

VA Total Debt Bids, Non

Conveyance of HUD loans (b)

Footnotes:

a) For example, if Gain on Sale is 200 bps which incorporates a credit loss assumption of 35 bps, please reflect

Gain on Sale at 235 bps and a credit loss of 35 bps in the “EPD, Repurchase and Other Loan Losses” line item.

b) While VA Buydowns and HUD Non Conveyance loans could arguably be classified as Production losses, we

consider these losses to be servicing losses for survey purposes. We view such losses part of the “cost of doing

business” as a government servicer.

Line Items:

Escrow - Includes activities associated with escrow analysis, real estate taxes, and insurance. Escrow analysis

includes analyzing the borrower's escrow account to ensure that the payment is sufficient to pay all escrow

items and handling escrow refunds. Taxes include tax payments for escrow accounts, tax search for non-escrow

accounts, tax service maintenance (check tax service reports, reconcile bills, and request payment), special

assessments, and research. Insurance includes insurance payments for escrow accounts, reviews for coverage

on non-escrow accounts, force placing insurance when necessary, insurance claim processing, mail processing,

and research. The types of insurance include hazard insurance, mortgage insurance (FHA, PMI, VA), optional



41

insurance (life insurance, disability insurance, and other employee related expenses), flood insurance, and

blanket fire insurance.

Collections - Involves following investor, regulatory and other internal guidelines in order to cure defaults and

maintain low delinquency rates. Collections activities primarily involve loans that are 30-60 days delinquent.

Involves following all of the terms and conditions of establishing Qualified Right Party Contact (QRPC). Also

may include handling outbound and inbound inquiries related to the earliest-stage delinquencies.

Loss Mitigation - Involves efforts to prevent foreclosures and mitigate investor losses through home retention

programs (forbearance plans, repayment agreements or loan modifications) or non-foreclosure forfeiture

options (short sales and deed-in-lieus). These loss mitigation efforts may be for loans in default or loans for

which there is a foreseeable default.

Other Default – Includes activities related to foreclosures, bankruptcy, real estate owned and general default

support. The foreclosure process involves following state law and also following procedures dictated by the

type of loan (i.e. FHA, VA, conventional). The bankruptcy process involves protecting the loan asset by

monitoring bankruptcy actions, ensuring compliance with federal bankruptcy code, and ensuring property

preservation of security involved in the bankruptcy action. The real estate owned function involves all post-

foreclosure servicing activities, such as claims, conveyance, property preservation, and the disposal of acquired

properties required by your Pooling and Servicing Agreement (“PSA”). Asset disposition costs should be

excluded unless required under your PSA and included as a required servicer activity. General default support

includes quality assurance and overall management of the default department.

Investor Reporting - Includes accurately accounting for, reporting, and remitting the payments to end

investors, including reconciliation of all custodial accounts (including mortgage accounting in a depository).

Cashiering - Includes receiving and posting payments (on-site, ACH, lockbox), ensuring accurate application of

the payments to the customers' accounts, the end investors' accounts, and your company's corporate accounts.

Also includes payment processing for payoffs, daily system balancing, custodial accounting, and research.

Customer Service - Includes activities associated with customer inquiry - whether verbal (via customer call

center), written or web-generated. Other duties include year-end processing, customer statements, updating

customer records, ARM recalibration research, and handling simple assumptions or non-default-related

modification requests.

Administration - The remaining functions not identified in other listed functional areas. Include management

and administrative staff who oversee the operations of the entire servicing department; record retention and

retrieval; quality assurance; handling of special loans, servicing policy and procedures; and servicing

performance measurement and strategy functions.

Cost Exclusions:

Exclude ongoing MSR valuation and hedging of servicing rights. Belongs in Corporate Administration –

Finance and Accounting.

Exclude certain functions related to acquisition of mortgage servicing rights specifically:

o MSR Due Diligence and Acquisitions: Exclude entirely unless related to the boarding or

servicing transfer process.

o Co-Issue Arrangements: Exclude entirely unless related to the boarding or servicing transfer

process.

Exclude the cost or depreciation of imaging hardware or software. If your company has purchased

imaging software or hardware, this expense should go under "Servicing Technology". However, costs

for personnel assigned to handle servicing-related imaging or imaging services should be included

here.

Note: If this line item is over 25% of total direct servicing expenses, we ask that you re-check definitions to

ensure proper allocation.



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Servicing Technology - Before completing this line item, please refer to “Technology Expense Allocation” in

the Appendix to these Definitions.

Includes costs associated with all technology directly related to servicing. This should include expenses related

to service bureau, vendor supported or proprietary systems. Overall corporate expenses related to LAN/WAN,

desktop support and help desk should be reflected in Technology Support in Corporate Admin. (Such costs will

be allocated globally to Production and Servicing).

Computer hardware depreciation (PC’s, printers and peripherals) and/or technology equipment lease costs for

all servicing employees should not be charged to Servicing Technology. Rather, such charges should be

reflected in Occupancy and Equipment in the applicable servicing department.

Include costs of Project Management Office (PMO staff) if the staff is solely dedicated to Servicing Technology

projects. Also include costs related to the purchase of imaging software and hardware here to the extent that

imaging benefits the servicing function. If imaging software or hardware benefits both Production and

Servicing, an appropriate allocation should be made to Production Technology.

New Loan Set-Up, Transfers and Payoffs - Includes boarding new loans on the servicing system, payoffs and

transfers out, such as transfers of a subservicing portfolio or servicing loan sale. Include activities associated

with discharge, satisfaction, and/or reconveyance of the mortgage/deed-of-trust upon payment in full of the

mortgage loan. Note that some companies account for new loan setup under the production area. For purposes

of this study, please allocate all costs associated with new loan setup here. In addition, this function should

include setting up escrow buckets, which some firms may record in the escrow department.

SERVICING PORTFOLIO

OWNED SERVICING ($000s and Count)

Beginning Balance (beginning of reporting period) - Dollars/numbers of loans outstanding in your servicing

portfolio in which you own the servicing rights and perform the servicing activities as of the beginning of the

reporting period. This includes loans in foreclosure and loans in REO prior to conveyance to the investor. Be

sure to include whole loans that you still own, board on your servicing system, and service on an interim basis

prior to selling to a third party investor (usually one to three months but could be up to six months). If you have

already sold the whole loans and are servicing the loans on an interim basis on behalf of an investor who owns

the servicing rights, include such loans in “subservicing.”

New Servicing from Production - Loans added to the servicing portfolio that were originated through your

company’s Retail, Consumer Direct, Broker Wholesale/Mini-Corr and/or Correspondent production channels.

Flow Servicing Purchases - Loans added to the servicing portfolio through a co-issue arrangement (and not

reported in the production volume section).

Bulk Servicing Purchases - Loans added to the servicing portfolio acquired on a bulk basis (and not reported in

the production volume section).

Bulk Servicing Sales (enter negative #) - Loans sold on a bulk basis. Note that the gains or losses on the bulk

sale should be reported under Servicing Revenues - Gain/Loss on the Bulks Sale of Servicing Rights.” This

amount must be entered as a negative number.



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Flow Servicing Sales (enter negative #) - Loans sold on a flow basis. For this purpose, flow sales are defined as

servicing sales on all loans originated during the past twelve months. This line item should include loans

originated, boarded on the servicing system, and then sold servicing released. This may also include loans that

are routinely aggregated for a few months and sold in bulk to enhance secondary marketing execution. Also, be

sure to include interim servicing sold servicing released but still boarded on your servicing system for a short

period of time. Interim servicing is part of the entire servicing package. This may result in a high churn for

service release sellers, but that is OK because boarding and releasing loans takes work and impacts costs.

Runoff (enter negative #) - Loan balances amortizing down and loans that payoff throughout the period. Note

for the count screen this will only represent loans that have paid off. This amount must be entered as a

negative number.

Ending Balance (end of reporting period) - The beginning balance plus new servicing added from the

production division plus servicing purchases minus servicing sales minus runoff. This field will be automatically

calculated.

Average Portfolio Balance - The average outstanding balance of your servicing portfolio throughout the

reporting period. This should be calculated using 13-month end balances (December 31, 2016 through

December 31, 2017).

Valuation of Owned Servicing - The average perceived market value of the servicing rights in the servicing

portfolio for the 13-month end balances (December 31, 2016 through December 31, 2017). This amount should

be entered as a percentage. If your company believes its servicing portfolio is worth 125 basis points the

amount that should be entered in this field is 1.25. For this purpose, the market value of servicing should

include Excess Servicing Rights. Be sure to report the average market value from January 1 through December

31, NOT the value of mortgage servicing rights as of December 31, 2017.

SUBSERVICING ($000s and Count):

Beginning Balance (Beginning of Reporting Period) - Enter dollars/numbers of loans outstanding in your

servicing portfolio in which you do not own the mortgage servicing rights as of the beginning of the reporting

period. Include interim servicing on behalf of a third party investor where the servicing rights transfer routinely

lags the loan sale by one to three months.

New Loans Added "Flow Basis" - New servicing added to your servicing system from existing customers added

throughout the period ("flow basis") as the loans are originated or purchased. The loan set up may be either

manual or electronic.

Bulk Additions - New servicing added to your servicing system from either new customers obtained or through

existing customers who provide their production periodically (such as quarterly) rather than ongoing. For

servicing obtained from new customers this line item represents the transfer of their existing servicing portfolio

to you on a bulk basis. The loan set up may be either manual or electronic.



negative number.

Flow Reductions (enter negative #) - Existing subservicing removed from your servicing system due to the sale

of loans on a flow basis.



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Bulk Reductions (enter negative #) - Existing servicing removed from your servicing system either due to the

sale of the loans by the owner of the servicing or loss of the subservicing customer. This amount must be

entered as a negative number.

Ending Balance (end of reporting period) - The beginning balance plus bulk additions plus flow additions minus

runoff minus bulk reductions. This field will be automatically calculated.

Average Portfolio Balance - The average outstanding balance of the subservicing servicing portfolio throughout

the reporting period. This should be calculated using 13-month end balances (December 31, 2016 through

December 31, 2017).

CROSS-SELL:

Average Number of Cross-Sell Products Per Servicing Customer - The average number of cross-sell products

per servicing customer, whether or not your servicing division receives credit for such products. Include all

products other than the first mortgage administered through your company or an affiliate. Cross sell products

may include but are not limited to the following:

Real estate loans - Second mortgages, HELOCs (non-piggyback)

Consumer loans - Auto, boat, RV, etc.

Demand deposit and investment products - checking, savings, IRA, money market, CD

Other - Credit cards, debit cards, direct deposit, online banking, insurance products

% of Servicing Customers with Multiple Products - The percentage of servicing customers with multiple

products with your company or an affiliate. Include all products other than first mortgages whether or not your

servicing division receives credit for such products.

SERVICING BY PRODUCT TYPE

The amounts for the following classification represent the average balance during the reporting period of the

distribution of your servicing portfolio. This should be calculated using 13-month end balances (December 31,

2016 through December 31, 2017).

Note: Record portfolio loans in the appropriate category based upon the product type. For example, if a

government loan is held in portfolio, it should be reflected in the Government line item.

SERVICING BY TYPE ($000s and Count):

Conventional Conforming - Loans conforming to size and credit quality guidelines and would be available for

sale to Fannie Mae and Freddie Mac under any of their loan programs; these loans are not necessarily owned

by Fannie Mae/Freddie Mac. Exclude “Jumbo Conforming” loans as explained below.

Jumbo - Loans which exceeded the existing Fannie Mae and Freddie Mac lending limit at the time of

origination. Include all loans classified as jumbo at the time of origination here, whether QM or non-QM. Also

include “Conforming Jumbo” loans in this category (loans greater than the lending limit that are nonetheless

considered conforming under the provisions of the Housing and Economic Recovery Act for “high cost” areas).

If a servicer has jumbo government loans, report such loans here as well.



45

Government - Loans insured by the Federal Housing Administration, guaranteed by the Veterans

Administration or U.S. Department of Agriculture / Rural Housing Service, or other government-affiliated loans

such as state bond program loans. These loans are not necessarily owned by Ginnie Mae.

Non-Prime - Loans which did not qualify or were not saleable to Fannie Mae, Freddie Mac or Ginnie Mae due to

credit quality. This category would also include non-performing loans that were purchased or transferred from

another servicer.

Other - Loans which are not included in the above categories, such as state housing finance agency loans.

SERVICING BY LOANS WITH ESCROW ACCOUNTS ($000s and Count)

The amounts for the following classifications represent the average balance during the reporting period of the



Note: The total principal balance and loan count for Servicing Distribution by Escrow Account should equal the

totals for Servicing Distribution by Product Type.

Loans with Escrow Accounts - This should include serviced loans with escrow accounts (e.g. for taxes and

insurance), even if the balance in the escrow account is minimal.

Loans without Escrow Accounts - This should include serviced loans without escrow accounts.

SERVICING BY INVESTOR TYPE ($000s and Count)




Note: The total principal balance and loan count for Servicing Distribution by Investor Type should equal the

totals for Servicing Distribution by Product Type.

Loans Serviced for Portfolio/Affiliates - This should include loans serviced for Portfolio. This may include the

parent company or an affiliate. Include loans in Inventory (Held for Sale).

Note: if your company forms a Fannie Mae MBS and actually keeps the security on the balance sheet (in bank

or affiliate portfolio), then this servicing should be classified as "Serviced for Others (SFO)" rather than

"Serviced for Portfolio". Likewise, do not include serviced loans in a private MBS regardless of whether you

have a residual interest. Such loans belong in SFO as well.

Serviced for Fannie Mae/Freddie Mac - Average balance and number of loans reported to Fannie Mae or

Freddie Mac

Serviced for Ginnie Mae I or II Program - Average balance and number of loans reported to Ginnie Mae

Serviced for FHLB, Private Investors, Securities, Other - Average balance and number of loans reported to the

various FHLBs, private investors, securitization trustees and conduits. If your company holds the residual piece

of a securitization, please include such loans here rather than “In Portfolio.”



46

Loans Serviced for Others (Subtotal) - This is automatically populated as the sum of the above three items. This

should include loans that are not owned by your company, the parent company or an affiliate, but are serviced

for non-affiliated third parties (e.g., Freddie Mac, Fannie Mae, private investors, etc.). However, this line may

include Agency MBS that are owned by your company, parent or affiliate.

Total Number of Investors Serviced - Please provide the average number of investors for whom you serviced

during the year, including Freddie and Fannie. For example, if you serviced for Freddie, Fannie and 3 private

investors you should reflect "5" in this field. If you service only for portfolio/affiliate, please reflect a "1" in this

field. Note that with the exception of Freddie Mac and Fannie Mae, the number of investors should be roughly

equivalent to the number of separate investor remittance reports that you produce on a monthly basis.

PAYMENT INFORMATION

PAYMENT RECEIPT SYSTEM

Please enter the percent of the number of loans serviced for which payments are collected through:

Mail (Coupons)

Mail (Statements)

ACH/Electronic: Recurring Bill Payment

Other (e.g. Bank Branch, Speed Pay or Non-Recurring Online Bill Payment)

The total of numbers 1 through 4 should equal 100. The percentages should reflect how payments are actually

received. For example, if a borrower receives a coupon but uses Western Union "speed pay", the payment

should be shown in "Other" instead of "Coupons."

AVERAGE SERVICING PORTFOLIO DELINQUENCY, FORECLOSURE AND REO %

30-Day, 60-Day and 90+ Day Delinquencies ($ and #) - Please provide the average percentage of delinquent

loans (excluding loans in foreclosure), in dollars and units. Preferably use the 13-month or 5-quarter averages

from the period December 31, 2016 through December 31, 2017.

MBA Methodology for Delinquencies (example for calculating delinquencies at a set point in time; in this case,

month end December): As of the close of business December 31 - report as 30 days delinquent the number of

loans for which the June 1 installment has not been paid; as 60 days delinquent the number of loans for which

the May 1 and June 1 installments have not been paid; report as 90 days or more delinquent the number of

loans not yet in foreclosure and for which the April 1, May 1, June 1, or earlier installments have not been paid.

Do not include loans in foreclosure as they will be reported separately.

Loans Subject to Forbearance Agreements should be reported as delinquent even if a restructured loan

payment plan has been agreed to by both parties. The length of the delinquency is determined by the number

of missed payments. The loan remains delinquent until it is current in accordance with the original loan

contract.

Note: If a loan is delinquent and a bankruptcy is filed, the loan should continue through the various stages of

delinquency until the bankruptcy is resolved. (The loan would thus be reported in a delinquency category as

well as the bankruptcy bucket above).



47

Note on Delinquency: Odd Due Dates: Loans may be structured where the payments were due on days other

than the first of the month. For such “Odd Due Date” loans, we will use the following set of rules for

delinquency classification:

Survey Delinquency Category Number of Days Delinquent Due Date

0-29 12/2 or after

30 days 30-59 11/2-12/1

60 days 60-89 10/2-11/1

90 + days 90+ 10/1 or before

In Foreclosure ($ and #) - Enter the average percentage of your servicing portfolio that was in the process of

foreclosure. Preferably use the 13-month or 5-quarter averages from the period December 31, 2016 through

December 31, 2017.

Loans are considered “in Foreclosure” regardless of the date the foreclosure process was initiated. Loans

should be classified as "In Foreclosure" according to your investor's or local requirements. INCLUDE loans

where the servicing has been suspended in accordance with any of your investor's foreclosure requirements.

EXCLUDE loans where the foreclosure has been completed to the extent that the investor has acquired any of

the following: title to the real estate, an entitling certificate, title subject to redemption, or title awaiting

transfer to FHA or VA.

Note: If a loan is already in foreclosure and the mortgagor files a bankruptcy petition, the loan will remain “in foreclosure” until the bankruptcy is resolved.

REO ($ and #) - Enter the average percentage of your servicing portfolio that was in real-estate owned (“REO”)

status. Preferably use the 13-month or 5-quarter averages from the period December 31, 2016 through

December 31, 2017.

AVERAGE BANKRUPTCY STATUS (%)

In Bankruptcy ($ and #) - Enter the average percentage of your servicing portfolio that was in “bankruptcy”

status. Preferably use the 13-month or 5-quarter averages from the period December 31, 2016 through

December 31, 2017.

SERVICING FICO (%)

Average FICO Score for Servicing Portfolio - Arithmetic average FICO score for all loans serviced. To calculate

this figure, please use the latest FICO scores available.

SERVICING PORTFOLIO - AGE CHARACTERISTICS (%)

Age Distribution ($ and #) - Provide the percentage of your total servicing portfolio during the period with ages

in the indicated month ranges

Average Age of Servicing Portfolio (Months) - Arithmetic average age in months for all loans serviced.

SERVICING (FOR COMPANIES PRIMARILY USING A SUBSERVICER)



48

This section should be populated by companies that retain mortgage servicing rights but rely primarily on a subservicer for operational requirements. Nonetheless, these companies have a “skeleton” staff to handle reporting, oversight and exceptions, as may be required by investors. The in-house staff may also service a limited number of loans in-house while still retaining a subservicer for the majority of loans. General Exclusions from this section include:

1. Interest income on loans held for investment or held by the parent company.

2. Interest expense to fund any goodwill related assets and/or any corporate related overhead not directly

associated with production, secondary or servicing activities.

3. Prepayment fee revenue generally passed through to third party investors for loans serviced for others.

Prepayment fee revenue for loans held in portfolio should therefore also be excluded.

AVERAGE SERVICING PORTFOLIO (FOR COMPANIES PRIMARILY USING A SUBSERVICER)

Average Servicing Volume - The average outstanding balance of your owned servicing portfolio throughout the

reporting period. This should be calculated using 13-month end balances (December 31, 2016 through

December 31, 2017). For companies that just began to retain servicing in the given reporting period, continue

to report volume for the entire reporting period, regardless of whether there were 0 balances in the months

prior to retaining servicing rights. Use the following approach:

Svg Balance ($000s) Svg Balance (#) Notes

31-Dec 0 0 No retained servicing

30-Jan 0 0 No retained servicing

28-Feb 0 0 No retained servicing

31-Mar 0 0 No retained servicing

30-Apr 0 0 No retained servicing

31-May 39,098 170 Began to retain servicing

30-Jun 82,098 350 Added 180 loans

31-Jul 82,098 350 Did not add or subtract loans

31-Aug 104,165 444 Added 100 loans, subtracted 6

30-Sep 128,015 579 Added 150 loans, subtracted 15

31-Oct 139,977 637 Added 70 loans, subtracted 12

30-Nov 148,237 677 Added 50 loans, subtracted 10

31-Dec 158,847 727 Added 60 loans, subtracted 10

Avg Volume 67,887 303 Average svg portfolio for period

Valuation of Owned Servicing - The average perceived market value of the servicing rights in the servicing

portfolio for the reporting period. This amount should be entered as a percentage of owned servicing volume. If

your company believes its servicing portfolio was worth an average of 125 basis points during the period, the

amount that should be entered in this field is 1.25.

NOTE: In the Select Assets section, you are asked to report the gross book value (rather than perceived market

value) of mortgage servicing rights. For companies new to servicing, be sure to use the same approach that was

used for determining average servicing volume, by including the months for which there were no retained

mortgage servicing rights to report yet. The Book value will be divided by the average servicing volume to arrive

at a basis point calculation.



49

AVERAGE DELINQUENCY, FC AND REO (FOR COMPANIES PRIMARILY USING A SUBSERVICER)

Average 30-day, 60-day and 90+-Day Delinquency (%) - Please provide the average percentage of delinquent

loans. Preferably use the 13-month or 5-quarter averages from the period December 31, 2016 through

December 31, 2017.

MBA Methodology for Delinquencies (example for calculating delinquencies at a set point in time; in this case,

month end December): As of the close of business December 31 - report as 30 days delinquent the number of

loans for which the December 1 installment has not been paid; as 60 days delinquent the number of loans for

which the November 1 and December 1 installments have not been paid; report as 90 days or more delinquent

the number of loans not yet in foreclosure and for which the October 1, November 1, December 1 or earlier

installments have not been paid. Do not include loans in foreclosure as they will be reported separately.

Loans Subject to Forbearance Agreements should be reported as delinquent even if a restructured loan

payment plan has been agreed to by both parties. The length of the delinquency is determined by the number

of missed payments. The loan remains delinquent until it is current in accordance with the original loan

contract.

Note: If a loan is delinquent and a bankruptcy is filed, the loan should continue through the various stages of

delinquency until the bankruptcy is resolved. (The loan would thus be reported in a delinquency category as

well as the bankruptcy bucket above).

Note on Delinquency: Odd Due Dates: Loans may be structured where the payments were due on days other

than the first of the month. For such “Odd Due Date” loans, we will use the following set of rules for

delinquency classification:

Survey Delinquency Category Number of Days Delinquent Due Date

0-29 12/2 or after

30 days 30-59 11/2-12/1

60 days 60-89 10/2-11/1

90 + days 90+ 10/1 or before

In Foreclosure (%) - Enter the average percentage of your servicing portfolio in units that was in the process of

foreclosure. Preferably use the 13-month or 5-quarter averages from the period December 31, 2016 through

December 31, 2017.

Loans are considered “in Foreclosure” regardless of the date the foreclosure process was initiated. Loans

should be classified as "In Foreclosure" according to your investor's or local requirements. INCLUDE loans

where the servicing has been suspended in accordance with any of your investor's foreclosure requirements.

EXCLUDE loans where the foreclosure has been completed to the extent that the investor has acquired any of

the following: title to the real estate, an entitling certificate, title subject to redemption, or title awaiting

transfer to FHA or VA.

Note: If a loan is already in foreclosure and the mortgagor files a bankruptcy petition, the loan will remain “in foreclosure” until the bankruptcy is resolved.

REO (%) - Enter the average percentage of your servicing portfolio in units that was in real-estate owned

(“REO”) status. Preferably use the 13-month or 5-quarter averages from the period December 31, 2016 through

December 31, 2017.



50

AVERAGE SERVICING BY INVESTOR TYPE (FOR COMPANIES PRIMARILY USING A SUBSERVICER)



2016 through December 31, 2017) in $ and count. The total principal balance and loan count for Servicing

Distribution by Investor Type should equal the totals for Average Servicing Portfolio reported above.

Loans Serviced for Portfolio/Affiliates - This should include loans serviced for Portfolio. This may include the

parent company or an affiliate. Include loans in Inventory (Held for Sale).

Note: if your company forms a Fannie Mae MBS and actually keeps the security on the balance sheet (in bank

or affiliate portfolio), then this servicing should be classified as "Serviced for Others (SFO)" rather than

"Serviced for Portfolio". Likewise, do not include serviced loans in a private MBS regardless of whether you

have a residual interest. Such loans belong in SFO as well.

Serviced for Fannie Mae/Freddie Mac - Average balance and number of loans reported to Fannie Mae or

Freddie Mac

Serviced for Ginnie Mae I or II Program - Average balance and number of loans reported to Ginnie Mae

Serviced for FHLB, Private Investors, Securities, Other - Average balance and number of loans reported to the

various FHLBs, private investors, securitization trustees and conduits. If your company holds the residual piece

of a securitization, please include such loans here rather than “in Portfolio.”

Loans Serviced for Others (Subtotal) - This is automatically populated as the sum of the above three items. This

should include loans that are not owned by your company, the parent company or an affiliate, but are serviced

for non-affiliated third parties (e.g., Freddie Mac, Fannie Mae, private investors, etc.). However, this line may

include Agency MBS that are owned by your company, parent or affiliate.

SERVICING CHURN (FOR COMPANIES PRIMARILY USING A SUBSERVICER)

Beginning Balance (beginning of reporting period) - Dollars/numbers of loans outstanding in your servicing

portfolio as of the beginning of the reporting period. This includes loans in foreclosure and loans in REO. Be

sure to include whole loans that you still own and service on an interim basis prior to selling to a third party

investor (usually one to three months but could be up to six months).

New Servicing from Production - Loans added to the servicing portfolio that were originated through your

company’s Retail, Consumer Direct, Broker Wholesale/Mini-Corr, and/or Correspondent production channels.

Flow Servicing Purchases - Loans added to the servicing portfolio through a co-issue arrangement (and not

reported in the production volume section).

Bulk Servicing Purchases - Loans added to the servicing portfolio acquired on a bulk basis (and not reported in

the production volume section).

Bulk Servicing Sales (enter negative #) - Loans sold on a bulk basis with net gains or losses reported in Servicing

Revenues. This amount must be entered as a negative number.

Flow Servicing Sales (enter negative #) - Loans sold on a flow basis. For this purpose, flow sales are defined as

servicing sales on all loans originated during the past twelve months. This line item should include loans



51

originated, boarded on the servicing system on interim basis, and then sold servicing released. This may also

include loans that are routinely aggregated for a few months and subsequently sold to enhance secondary

marketing execution.



negative number.

Ending Balance (end of reporting period) - The beginning balance plus new servicing added from the

production division plus servicing purchases minus servicing sales minus runoff. This field will be automatically

calculated.

SERVICING REVENUE AND EXPENSE (FOR COMPANIES PRIMARILY USING A SUBSERVICER)

Servicing Fees - Total revenue generated through fees received for servicing mortgage loans. This amount

should be net of the guaranty fee charged by the secondary market agency or private conduit to guarantee

timely payment of principal and interest to the investors in mortgages underlying a mortgage backed security.

The amount should also include the on-going cash flows from excess servicing. However, do not net

subservicing fees paid to a third-party servicer here. Instead, include the servicing fees paid in Servicing

Expense - Other Expense.

Servicing fees on loans held for sale or loans owned by a parent company where the mortgage entity is the

servicer of record should be included here. If servicing fees are not credited to you or the amount received is

not a market fee then an amount equivalent to an arms-length transaction should be included. A "rule of

thumb" to use is 25 basis points for conventional conforming and jumbo fixed rate loans, 25 basis points for

adjustable rate loans, 30 basis points for government loans and 50 basis points for acquired non-performing

loans. Another method for determining a market servicing fee is to use the amounts received for third party

owned assets for comparable products. In summary, service fees should be imputed on portfolio loans at

"normalized" rates as described above, and any intercompany servicing/subservicing fee should be eliminated.

Late Fees and Ancillary Income - Include late fees collected (not accrued) due to a loan being delinquent. Also

include Ancillary Income such as QuickPay fees, biweekly program fees; assumption fees (including processing

fees, legal name change fees, and FHA/VA and conventional fees); conversion fees (including modification

fees); payoff fees; faxing fees; amortization table fees; credit search fees; loan history statement fees; and loss

mitigation incentive fees earned from investors. This line item should also include referral fees received from

affiliates for cross selling products such as insurance or home equity lines of credit.

Notes on Late Fees and Ancillary Income:

1. You may still receive late fees and ancillary income if your servicing is contracted out to a third party.

However, in the event that you do not receive a portion of late fees or ancillary income (because such

revenues go straight to the subservicer), do not report that portion.

2. Do not include prepayment penalty income here. We view prepayment penalties as portfolio/investor

income which therefore should be excluded from the survey.

Net Interest Income:

Interest Revenue - Interest revenue earned on escrow balances (a/k/a float income). This would include

interest on funds that are held in trust for payment of mortgagors' taxes, insurance, P&I, or other fiduciary

funds. If credit is not given on the servicing general ledger for these custodial balances an imputed amount



52

earned by your company should be included. This imputed amount should agree to an increase in Interest

Expenses and Bank Fees.

Interest Expenses (enter negative #) - This amount now includes several different types of interest expense,

specifically: 1) interest expense incurred for funding the servicing assets; 2) unrecoverable interest expense for

advances on principal and interest or taxes and insurance; 3) interest expenses incurred to finance other assets

(e.g. Fixed Assets); 4) interest paid to the borrower for their escrow balances in states that require such

payment and 5) T interest required to be paid by the servicer to investors for prepayments or partial

prepayments. For example, the servicer may need to advance an entire month's interest to the investor even

though a borrower pays off a mortgage in the middle of the month. Other terms for this interest expense are

"compensating interest", "MBS interest expense" and "prepayment interest shortfall.

Mortgage Servicing Right Financial Items:

Amortization of Servicing Rights/ Loan Decay (enter negative #) - Due to changing accounting treatment of

mortgage servicing rights, please report either of the following:

Amortization of Servicing Rights: Includes the total annual amount of amortization of servicing rights

and excess servicing receivables (classified as interest-only strip securities). Also, this amount should

include estimated amortization of imputed MSRs related to portfolio loans.

Losses due to Loan Decay/Aging: Includes the total annual loss of servicing right valuations and excess

servicing receivables (classified as interest-only strip securities) related to loan aging. Should include

estimated loan decay/aging of imputed MSRs related to portfolio loans.

Gains/Losses on Changes in MSR Valuations (+/-) - Due to changing accounting treatment of mortgage

servicing rights, please report either of the following:

Net Recapture (Loss) on Servicing Valuations: Net recapture (loss) associated with adjustments in the

carrying value of the servicing portfolio. Includes impairment adjustments as well as net recoveries.

Please note that under LOCOM (lower-of-cost-or-market), the recapture can never exceed the original

basis even if the market value exceeds original basis.

Other Gains (Losses) on Servicing Valuations: Net gain (loss) associated with adjustments in the

carrying value of the servicing portfolio due to factors other than loan aging or decay such as changes

in servicing valuations due to new performance data on specific loan types. Please note that under the

Fair Value option, the mortgage servicing rights can be “marked-to-market” and even exceed the

original basis.

Hedge Gain/Loss (+/-) - - Includes recognized gains/losses associated with investment instruments (hedges)

used in managing the mortgage servicing rights assets on and off the balance sheet. This category also includes

amortization of deferrals. To the extent that firms are hedging by holding actual assets on their balance sheet

(e.g. Treasury securities), the interest revenue generated by the securities should be included in Hedge

gain/loss (not in the interest revenue line item)

Bulk Sales of Servicing Rights (+/-) - The net gain or loss associated with the sale of servicing rights during the

period.

Servicing Expenses:

Compensation (Salaries, Benefits, Etc.) - Salaries for permanent and temporary, full-time and part-time

employees. Includes sick pay, vacation pay, unworked pay, pay adjustments, retro pay, shift differentials, and

overtime. Benefits such as insurance, employer paid taxes, pension, and other employee related expenses.



53

Bonuses for all permanent and temporary employees, including signing and retention bonuses. This line item

should also include incentive payments to employees that may be based on factors such as the number of units

handled, profits, etc.






purposes if your company owns the facilities. Computer hardware depreciation (PC’s, printers and peripherals)

and/or technology equipment lease costs for any servicing employees, if applicable, should be charged here

and not included in Corporate Administration.

Other Expenses - Include all subservicing fees paid to the third-party subservicer here (rather than netting

subservicing fees paid against servicing fee revenues). Also include the following if applicable: telephone,

postage, stationary & supplies, advertising, and any other direct costs which have not been previously

identified. Include any other outsourcing expenses associated with contracting out servicing functions and/or

use of third-party providers of servicing functions.

Foreclosure and REO Losses - Represents the costs associated with unreimbursed servicing expenses,

compensatory fees and certain credit losses primarily related to servicing FHA, VA and other government loans.

Unreimbursed servicing expenses include items such as FHA interest loss, disallowed or unclaimable attorney

fees, unreimbursed property inspection charges, other unclaimable but required expenditures, and

unreimbursed expenses associated with servicer errors or non-compliance with investor standards. Also include

any additional compensatory fees for servicer non-compliance. Finally, include net losses and/or the provision

for losses that have arisen from 1) VA Net Value or VA Total Debt Bids and 2) HUD Non-Conveyance loans.

Please exclude unreimbursed expenses and credit related losses on Portfolio loans.

While we acknowledge that some companies charge losses to Servicing while other companies are more

aggressive in charging such losses back to Production, in the interest of comparability we recommend allocating

losses to Production and Servicing as summarized in the following table:

PRODUCTION - LOSSES RESULTING FROM SERVICING - FORECLOSURE AND REO

LOSSES

Early Payoffs (EPO)

Any SRP recapture





Uninsured loans

Discounted loan sales (scratch and

dent, sub-performing, non-performing



origination

Unreimbursed Default-Related

Expenses - e.g. 1/3 attorney

costs, FHA interest loss,


loss/penalties due to missed

investor deadlines or servicer

error

Compensatory fees due to non-

compliance

Net losses from VA Net Value or

VA Total Debt Bids, Non

Conveyance of HUD loans



54

# IN-HOUSE SERVICING EMPLOYEES (FOR COMPANIES PRIMARILY USING A SUBSERVICER)

For companies that hold mortgage servicing rights but primarily use a subservicer for their servicing operations,

there is usually still a team of in-house employees who coordinate with the subservicer, ensure investor

reporting is accurate and oversee the work of the subservicer. These employees may also service in-house a

limited number of loans. Report such FTEs here rather than in the FTE section.

GINNIE MAE EARLY BUYOUT INCOME (+/-)

Please capture all of the income and expense related to Ginnie Mae Early Buyouts ("EBO") as a stand-alone

memo item. It should include all investor-related gains and losses including interest revenue, interest expense

incurred to finance EBO, and any gain or loss on the ultimate disposition of EBO. Note: EBO net income will not

roll up to Total Servicing Revenues or Net Financial Income.

CORPORATE ADMINISTRATION EXPENSES

The following corporate administration expense categories are included in this section: Executive, Finance/Accounting, Technology/Support, Human Resources, Compliance/Risk/Legal, Executive-Other, and Parent Company Allocation. For private companies, Senior Executives who are also owners of the company may receive compensation based on a variety of factors including the following:

The desire to provide “distributions” to owners in the form of deductible compensation

Tax planning issues

Liquidity needs of owners

Owner’s desire to diversify personal assets To the extent that Senior Executives/CEO’s receive compensation that may be abnormally high or low based on factors other than job roles, duties, responsibilities and performance, this may result in Executive Compensation Expense that is not comparable with Peers. Since the primary goal of the PGR Survey is to create reliable “apples-apples” comparisons with Peers, this may require an adjustment to compensation for Peer Group purposes. For example, if an Owner/CEO was paid $1.5 million but a reasonable market rate for non-owner CEO’s of comparable companies was $700,000, we would ask that our participant reflect the “market-based” compensation of $700,000 for the CEO. While we run the risk of introducing increased subjectivity into the Peer Group data, our overriding goal is to create the best apples-apples comparisons. As an extreme example, some private companies strive to “flatten” income by paying out the majority of profits to owners. This clearly misrepresents the true performance of the company and makes apples-apples comparisons difficult. Exclusion for Banks: FDIC insurance costs or any FDIC insurance cost allocations should be excluded from the survey entirely.

Column Definitions:





55



factors such as application or closed loan volume, profits, etc.


related expenses.






purposes if your company owns the facilities. This figure should also include the costs of any mainframes

needed and the personnel dedicated to overall system maintenance.

Goodwill - Represents the amortization expense charged for the goodwill asset recorded on the balance sheet.

Other Expenses - Telephone, postage, stationary & supplies, advertising, entertainment, travel, outside service

(such as company-wide training) and any other costs, which have not been previously identified. Include any

franchise fees here as well.

Line Items:

Executive - Includes activities of the executive office (president; chief executive officer; and their related

administrative support). The SVP/EVP of Production should be allocated to the appropriate production channels

based the level of "day to day" operational activities versus level of strategic activities. For instance, if this

individual is mainly involved in global/strategic activities related to both production and servicing, he/she

should be included here. The rule of thumb is that smaller originators will most likely report this individual here

in the Corporate Administration - Executive function, while the larger originators will include this individual as

part of Direct Production (Sales and/or Fulfillment) for the applicable production channel.

As a general guide, include the costs for the following job titles:

Chief Executive Officer

President

Chairperson

Senior Executive, Multi-

Product or Multi-Channel

Support Staff for these

positions

Finance/Accounting - Includes activities associated with preparing financial statements for management,

creating monthly accounting entries, internal and external audit expenses, preparing budgets and forecasts,

preparing journal entries for payroll and reconciling payroll accounts. Also includes corporate capital markets

and treasury activities associated with managing MSR assets and warehouse lines. Fees paid to auditors should

also be included here.




56

Chief Financial Officer

Controller

Assistant Controller

Treasurer

Cash Management Specialist

Warehouse Lending

Coordinator or Analyst

Financial Analyst,

Corporate

Financial Reporting

Specialist, Corporate

Support functions for

these positions

Technology Support - Before completing this line item, please refer to “Technology Expense Allocation” in the

Appendix to these Definitions.

Includes the activities performed by you (or as a specifically identified part of a parent company allocation)

associated with maintaining the networks, desktop hardware, and desktop software for all mortgage

employees. This includes the costs of any mainframes needed and the personnel dedicated to overall system

maintenance. Costs directly related to Production Systems should be reflected in Production Technology in

Production Support. Costs directly related to Servicing should be reflected in the Servicing Technology cost

center. The costs recorded in this line item will be allocated to Production and Servicing based upon a standard

formula for all companies.

Computer hardware depreciation (PC’s, printers and peripherals) and/or technology equipment lease costs

should not be charged to Technology Support. Rather, such charges should be reflected in Occupancy and

Equipment in the applicable channel or department.

If your company has business intelligence systems for tracking productivity and other metrics for the company,

include those business intelligence tool costs here.

If your company has a project management office (PMO) for global technology projects, include such costs

here. Be sure to also allocate FTEs to corporate technology in the FTE section.


Chief Information Officer

Chief Technology Officer

IT Global Administrator

Network Administrator

Help Desk Specialist

Disaster Recovery Specialist

IT Security Coordinator

Project manager for

technology-related projects

Other staff of project

management office (PMO) for


Support functions for the

above

Human Resources - Include general activities associated with hiring, terminating, and managing the benefits for

the permanent and temporary labor force. This includes costs for credit checks, background screening, finger

printing, and other costs associated with hiring personnel. However, if recruiting fees are paid for specific job

titles such as loan officers, such costs belong in the relevant function rather than here. As a general guide,

include the costs for the following job titles:

Human Resources Officer

Benefits Specialist

Payroll Officer

Compensation Manager

Compensation Design

Specialist

Compliance/Risk/Legal - Include the cost of overall corporate compliance, state licensing for institutions (not

individual employees), risk management and governance, corporate audit, customer complaints management

and legal departments. Overall business practice violations, as well as errors & omissions (E&O) insurance and

property and casualty (P&C) insurance, should be included here under “Other Expense”. For your Production



57

unit, in the event of a RESPA audit violation or other audit violation, include the penalty under “EPD,

Repurchase and Other Losses” as it is related to one particular loan. For your Servicing unit, include

compensatory fees and investor indemnifications under “Foreclosure and REO Losses.”


Head, Risk Management

General Counsel

Corporate Paralegal

Chief Compliance Officer

Internal Auditor

State Licensing

Administrator

Customer Complaints

Manager


above

Other - Other activities not already identified by the other corporate administrative activities listed within this

section such as overall corporate record retention, mailroom, vendor management, political and charitable

contributions, membership dues, and corporate-wide marketing and corporate-wide training. If marketing or

training is specific to a particular function or group of employees, report within that function rather than here.


Project management

office (PMO) staff if

unrelated to technology

(if related to tech, goes

in Corporate Technology)

Vendor management

Corporate customer satisfaction

Corporate marketing

Corporate training

Corporate record retention

Corporate mailroom

Parent Allocation/Cost - Represents a cost transfer from the parent company to the mortgage entity for their

overhead costs. Include any management fees charged by parent, if such costs cannot be broken out into the

other corporate administration categories. To the degree that costs such as telephone and occupancy which is

directly attributable to the production and servicing divisions is identified by the parent in its computation of

the allocation, these items should be included in the appropriate cost categories listed within this study, not in

this line item.

TOTAL TECHNOLOGY CAPITAL EXPENDITURES

This is a stand-alone field to report your company's total capital expenditures for the period from January 1,

2017 through December 31, 2017 for technology. Please include the gross amount of all capitalized technology

expenditures, whether they related to production support; servicing; or corporate administration.

EMPLOYEES/FULL-TIME EQUIVALENTS (FTEs)

Employment data should represent the average number of full-time equivalents for the 12-month period

ending December 31, 2017. For column definitions, please use the same definitions defined under production,

servicing, production support and corporate administration respectively.

FTEs - Figures for full-time equivalents should be based on the following formula for all permanent full-time and

part-time employees and temporary employees. It does not include positions approved, but unfilled. To



58

incorporate part-time employees as well as employees that leave the company and are not yet replaced during

a reporting cycle, FTEs should be calculated as follows:

Total number of regular business hours actually worked (excluding overtime) during the

reporting period

FTE

=

Total number of business hours during the reporting period

(For most companies this will be 52 x 40 = 2,080 hours or 26 x 40 = 1,040 hours)

Note that many companies' hourly employees work a 37.5 or 35 hour work week. If this is the case, the

denominator of the above formula should be adjusted to reflect your workweek. We recognize that salaried

employees typically work in excess of the designated workweek for hourly employees. However, the salaried

employees should be counted based on when your company employed them to coincide with the

compensation reported in the expense section.

PRODUCTION FTEs (see definition of "FTE" in the above section):

SALES STAFF:

This section should include sales staff (whether permanent or temporary/contractor) involved in the various

production channels. For personnel that oversee different functions, such as heads of production for multiple

channels, please allocate the FTE directly to the respective channels (rather than putting in Production

Support). Be sure that the corresponding expense is also allocated in direct Production Expense.

Avg. Number of Loans Officers/Producing Branch Managers - Captures the average loan officer (LO) FTEs.

Include all producing branch managers in this number; do not prorate based on the percentage of time spent

managing vs. originating loans. If your company employs non-producing branch managers, include in the

category below. Exclude personal banking representatives at retail bank branches that simply refer loans to the

mortgage division.

Avg. Number of Account Executives - Captures the average Account Executive (AE) FTEs for the Broker

Wholesale/Mini-Corr and Correspondent Channels.

Avg. Number of Non-Producing Branch Managers - Captures the average non-producing branch manager FTEs.

Note: Producing branch managers should be included in the sales staff section above.

Loan Officer (LO) Assistants - Include those sales professionals specifically hired by loan officers or through a

corporate loan officer training program to assist loan officers in originating loans. LO assistants usually are not

yet licensed, but many graduate up to a loan officer position eventually.

Other Non-Producing Sales Staff - Include sales personnel other than loan officers, account executives, and

non-producing branch managers. Examples include:



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Business development manager

TPO business coordinator (liaison

between brokers and fulfillment

staff)

Broker and correspondent

auditors

Builder relationship managers

Heads of the production channel

Loan officer and account

executive recruiters

Loan officer licensing specialists

and sales trainers

Non-producing regional

managers

Sales and marketing

assistants who are not

directly responsible or who

do not directly receive credit

for originating loans.

Marketing support

specialists

Sales branch receptionists

FULFILLMENT (NON-SALES) STAFF:

This section should include fulfillment staff (whether permanent or temporary) involved in the various

production channels. Please note that fulfillment staff DOES NOT include production support FTEs (e.g. Post

Closing, Shipping, Secondary etc.). Production Support FTEs should be included in the FTE section titled

"Production Support." For personnel that oversee different functions, such as heads of operations for multiple

channels, please allocate the FTE directly to the respective channels (rather than putting in Production

Support). Be sure that the corresponding expense is also allocated in direct Production Expense.

Avg. Number of Processors - Captures the average loan processor FTEs and processing managers. This category

should also include those responsible for gathering loan documentation, and/or validating the information on

loans that are underwritten by an automated underwriting system. For the Broker Wholesale/Mini-Corr and

Correspondent channels, processors may be responsible for "follow up" processing. That is, the initial

processing was handled by the broker or correspondent. As a general guide, include:

Account Manager

Appraisal Management

Company (AMC)

Coordinator

Client Account Specialist

Copy Clerk

Copy Room Team Leader

Condition Reviewers

(Correspondent Channel)

Data Integrity Clerk

Disclosure Associate or

Supervisor

Document Assembly Specialist

Document Set-Up Clerk

Fee Services Analyst

File Clerk

Loan Coordinator

Loan Estimate Preparer

Mortgage Operations Support

Specialist

Opener

Pipeline Coordinator

Processor

Purchase review auditors

(Correspondent channel only)

Re-Disclosure Associate

Transaction Coordinator

Quality Assurance Analyst

Validator

Avg. Number of Underwriters - Captures the average underwriter FTEs and underwriting managers. Please

include contract underwriters (e.g. from MI companies) in this category. As a general guide, include:

Appraisal Reviewer

Collateral Specialist

Condo Underwriter

Credit Officers

Credit Analysts

Credit Risk

Specialist/Supervisor

Escalation Underwriter

Exception Underwriter

Fraud Specialist

Fraud Researcher

Junior, Senior, and all other

Underwriters

Pre-Closing Appraisal Reviewer

Scenario Desk Supervisor

Underwriter Assistant

Underwriting Manager/ Head of

Underwriting

Valuations Coordinator

Avg. Number of Closers - Captures the average loan closer FTEs and closing managers. If your company uses

"Funders", please include them in this category. This should include any FTE that works exclusively with the

closing department or function (e.g. scheduler). As a general guide, include:



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Check and Wire Coordinator

Closing Assistant

Closing Disclosures Preparer

Closing Manager/ Head of Closing

Doc Drawer

Funder

Funding Assistant

Pre-Funding Reviewer

Pre-Closing Reviewer

Quality Assurance Specialist

Senior Funder

Wiring, Final Pricing and Purchase Advise

Coordinator (Correspondent Channel)

Closing Document Preparer (Mini-

Correspondent)

Avg. Number of Other Fulfillment Staff – Captures the remaining fulfillment (non-sales) staff FTEs. As a general

guide, include

Administrative Assistant for


Affordable Lending Program

Manager

Community Reinvestment

Act (CRA) Specialist

Condo Specialist

Construction-to-Perm

Specialist

Construction Loan or

Renovation Loan

Coordinator (manages

draws)

Co-Op Specialist

Counterparty Risk Assessors

(Broker and Correspondent

channels)

Document Scanners and

Imagers (if imaging performed

upfront)

Head of Production

Operations

Executive Assistant for


Facilities Assistant for

Fulfillment Operations’

Facilities

Financial/Business Analyst for


Help Desk / Support Desk

Manager for Fulfillment

Operations

Manager or Supervisor of

Overall Fulfillment Operations

(not specific to processing,

underwriting, closing)

Operations Support Clerk

Receptionist for Fulfillment

Operations

As a general guide, the following types of job DO NOT BELONG in this category:

Chief Credit Officer/ Credit Policy Specialist (belongs in Production Support-Other)

Network Engineer (belongs in Corporate Administration - Technology)

Human Resource Generalists (belongs in Corporate Administration - Human Resources)

Technology Analysts (belongs in Production Support-Production Technology)

Quality Control Reviewers (post-close) (belongs in Production Support-QC)

TEMPORARY/CONTRACTOR VS. PERMANENT SALES STAFF (% BASED ON FTE COUNT)

Please provide the percentage of total channel sales FTEs that are temporary/contractor vs. permanent. In

general, a permanent FTE is eligible to receive benefits such as healthcare that are not provided to temporaries

or contractors. A temporary/contractor includes an individual provided by a Temp Agency or a contractor who

conducts the operational work that would otherwise be conducted by a permanent FTE. Unlike outsource

providers or management consultants, temps and contractors are included in the count for total Production

FTEs which is the basis of all productivity metrics. The sum of these items should equal 100% for each channel.

TEMP VS. PERMANENT FULFILLMENT (NON-SALES) STAFF

Please provide the percentage of total channel fulfillment (non-sales) FTEs that are temporary/contractor vs.

permanent. The sum of these items should equal 100% for each channel.

Note: If "Other Fulfillment Staff" comprise over 25% of total Fulfillment FTEs, we ask that you re-check

definitions to ensure proper allocation.



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OTHER PERSONNEL INFORMATION

Number of Loan Officer Terminations - The number of voluntary and involuntary LO departures during the

survey period. This would include loan officers who are part of an entire branch that have left your company

during the reporting period.

Number of Account Executive Terminations (Voluntary/Involuntary) - The number of voluntary and

involuntary AE departures during the survey period.

Active Broker and Correspondent Accounts (Closed at Least One Loan in Past 12 Months):

# House Accounts (No Assigned Account Executive) - The number of brokers or correspondents for whom there

is no assigned account executive (“house accounts”) and for whom you have closed a loan or purchased a

closed loan in the past twelve months.

# Accounts with Assigned Account Executive- The number of brokers or correspondents for whom there is an

assigned account executive and for whom you have closed a loan or purchased a closed loan in the past twelve

months.

Total Active Broker and Correspondent Accounts (past 12 months) - This is an automatic calculation of the

number of brokers or correspondents for whom you have closed a loan or purchased a closed loan in the past

twelve months and is the sum of the two line items above.

Active Correspondent Accounts (Closed at Least One Loan in Past 12 Months):

Financial Institutions - The number of correspondents that can be classified as credit unions, community banks,

or other depositories and for whom you have purchased a closed loan in the past twelve months.

Independents - The number of correspondents that can be classified as independent mortgage bankers with

their own warehouse lines of credit and for whom you have purchased a closed loan in the past twelve months.

Total Active Correspondent Accounts (past 12 months) - This is an automatic calculation of the number of

correspondents for whom you have purchased a closed loan in the past twelve months and is the sum of the

two line items above and should also tie to the number of active Correspondent Accounts for House vs.

Assigned Account Executive breakout.

PRODUCTION SUPPORT, SERVICING AND CORPORATE ADMINISTRATION FTES

Column Definitions:

Average Permanent FTEs - This would include personnel who are permanent employees (either full-time or

part-time).

Temporary/Contractor FTEs - This includes any individual who is not a permanent employee and whose

compensation is includes as part of “salaries” regardless of whether eligible to receive benefits and/or bonuses.

Note that outsourced labor (defined as labor paid on a "per piece" or “per assignment” basis not an hourly

basis) are not to be included here; rather outsource costs are included in other expenses.

Line Items for Production Support:



62

Post Closing, Shipping and Delivery - As a general guide, the following types of job titles:

Capital Markets Associate

Delivery Specialist

Document Control

Specialist

Document Management

Specialist

Exceptions Clerk

Final Documents Mail

Clerk

Final Documents Supervisor

Final Documents Specialist

Government Insuring Clerk

Loan Documentation

Processor

Mail Center Clerk Indexer

Pooling Specialist

Post-Closing Auditor

Post-Closing Associate

Post-Closing Reviewer

Post-Closing Supervisor

Release Manager

Scanner / Imaging Clerk

Shipping Clerk

Trailing Documents Processor

Secondary - As a general guide, include the following types of job titles:

Asset Sales Specialist

Business Analyst

Capital Markets Analyst, Director,

Manager, Supervisor

Hedging Analyst, Director,

Manager, Supervisor

Investor Accounting Support

Model Developer

MSR Risk Analyst, Manager

Pipeline Manager

Pricing Manager

Pricing Systems Support

Product Development Specialist

Product and Pricing Analyst

Investor Relationship Manager

Secondary Markets Analyst,

Director, Manager, Supervisor

Secondary Systems/Procedures

Analyst

Trading Officer

Quality Control - As a general guide, include the following types of job titles:

Credit Quality Assurance Specialist,

Analyst

Credit Compliance Specialist

Mortgage Compliance Auditor

Quality Control Analyst, Clerk,

Manager, Supervisor

Reverification Specialist

Post-funding QC auditor

Production Technology - As a general guide, include the following types of job titles:

POS/LOS Programmer

Systems Support

Technology Vendor

Coordinator

Systems Project Manager

Systems Conversion Manager

Note: Systems support specialists that work specifically on one type of production function (such as secondary

marketing or quality control) should be included in that functional area rather than here.

Support-Other - As a general guide, include the following types of job titles:

Business Systems Analyst

Interim Servicer (for production-

only companies solely)

Credit Policy Manager

Production Financial Analyst

Strategic Project Manager

Home Mortgage Disclosure Act

(HMDA) Specialist

Repurchase Defense Specialist

TRID-related Cure Specialist

Line Items for Servicing: Please refer to Servicing Expenses section for functional descriptions.

Line Items for Corporate Administration:



63

Executive - As a general guide, include the following types of job titles:

Chief Executive Officer

President

Chairperson

Senior Executive, Multi-

Product and/or Multi-

Channel

Support Staff for the

above

Finance & Accounting - As a general guide, include the following types of job titles:

Chief Financial Officer

Controller

Assistant Controller

Treasurer

Cash Management Specialist

Warehouse Lending

Coordinator or Analyst

Financial Analyst, Corporate

Financial Reporting Specialist,

Corporate

Support functions for the above

Technology Support - As a general guide, the following types of job titles are usually included in this category:

Chief Information Officer

Chief Technology Officer

IT Global Administrator

Network Administrator

Help Desk Specialist

Disaster Recovery Specialist

IT Security Coordinator

Project manager for


Other staff of project

management office (PMO) for



above

Human Resources- As a general guide, include the following types of job titles:

Human Resources Officer

Benefits Specialist

Payroll Officer

Compensation Manager

Compensation Design

Specialist

Compliance/Risk/Legal- As a general guide, include the following types of job titles:

Head, Risk Management

General Counsel

Corporate Paralegal

Chief Compliance Officer

Internal Auditor

State Licensing Administrator

Customer Complaints

Manager


above

Other - As a general guide, include the following types of job titles:

Project management office

(PMO) staff if unrelated to

technology (if related to

technology, include FTE in

corporate technology)

Vendor management

Corporate customer

satisfaction

Corporate marketing

Corporate training

Corporate record retention

Corporate mailroom

OPERATING STRUCTURE

OWNERSHIP

Public Company - A company that has issued securities through an initial public offering (IPO) and is traded on

at least one stock exchange or in the over the counter market.



64

Private Company - A company whose ownership is private. As a result, it does not need to meet the Securities

and Exchange Commission filing requirements of public companies.

ORGANIZATION OF SALES AND OPERATIONS

Number of Production Sales Offices/Branches:

Mortgage Sales Office - Enter the number of mortgage sales offices by production channel. If sales offices were

opened or closed during the course of this reporting period, estimate the average number of sales offices for

the reporting period.

Retail Channel: This should include mortgage sales offices, not bank branches. If a Loan Officer works

out of their home or simply “rents a desk” at a bank or affiliate location, please do not count as a sales

office. A mortgage sales office may also include some combination of other activities such as

processing, underwriting or closing.

Broker Wholesale/Mini-Corr/Correspondent Channel: The number of sales offices reported should

only include those sales offices dedicated to the broker or correspondent sales function. If an account

executive works out of their home, please do not count as a sales office. Also, if office space is

reserved at the Fulfillment center for AE use, do not count.

Bank Branch- Enter the number of retail bank branches that are actively involved in the mortgage banking

segment. For this purpose, this would include bank branches that have staff on site dedicated to mortgage

origination (at least Loan Officers on site or a Loan Officer assigned to service a number of local bank branches).

If a bank branch merely refers mortgage customers to a standard mortgage branch or call center, this should

not constitute a bank branch and should be excluded.

Expense Management - Enter the number of expense management branches by production channel. An

expense management branch is much like a franchise arrangement, where the branch manager is responsible

for the P&L, and typically is responsible for leases, personnel decisions etc. After payment of a "franchise fee"

to the sponsoring corporate entity, expense management branch owners are paid based on the difference

between a fixed revenue credit per funded loan, less the expenses of the branch. (Please do not count satellite

offices as a branch/location).

Fulfillment Information:

Number of Fulfillment/Operations Centers- Enter the number of fulfillment/operations centers by production

channel. A fulfillment or operations center is a location where at least one function (e.g. processing;

underwriting; closing) takes place. If loans for more than one production channel use the same fulfillment

center, include that fulfillment center under both channels. Note that fulfillment centers may also (but not

necessarily) include production support functions such as post closing, shipping and delivery.

Retail Channel: For the Retail channel, this category should only include Operations Centers that serve

multiple Sales Offices. For example, if a ten Retail Sales Offices send their loans to a Regional

Operations center for some combination of Processing, Underwriting and Closing, then you should

reflect ten Mortgage Sales Offices and one Fulfillment/Operations Center. In addition, include

fulfillment/operations centers that are collocated with corporate headquarters.

Broker Wholesale/Mini-Corr Channel and Correspondent Channel: Enter the number of fulfillment

centers where at least one of the following activities occurs: processing, underwriting or closing. In

this channel, fulfillment centers may also contain desk space for AEs, however the primary activity of

the center is to fulfill loans.



65

Number of Processing Locations - Enter the total number of processing locations by production channel. A

processing location is any location (such as a retail branch or sales office, fulfillment/operations center or a

center attached to a corporate office) where loan processing is performed. For example, if a company has 20

mortgage branches, 12 of which process loans and in addition has a regional operations center that handles the

processing for the other 8 branches, you would reflect 13 processing locations in the survey. If a processing

location serves more than one production channel (e.g. Retail and Broker Wholesale/Mini-Corr), please include

that location under both channels.

Number of Underwriting Locations - Enter the number of locations that have underwriters on site and where

loan underwriting is performed. See the example above under "Processing Locations" for additional clarity. If

loans are run through an automated underwriting system by the field sales force, this would not count as an

underwriting location. If Underwriting is only performed at the corporate office, please enter "1" for each

active channel. If an underwriting location serves more than one production channel (e.g. Retail and Broker

Wholesale/Mini-Corr), please include that location under both channels.

Number of Closing Locations - Enter the number of locations where the closing function is performed. If Closing

is only performed at the corporate office, please enter "1" for each active channel. Examples for Completing

the Sales and Fulfillment Section Above:



66

Retail Channel

Mortgage

Sales Offices

Fulfillment/

Operations

Centers

(should never be

> than

max of one of the

three to the right)

Processing

Locations

Underwriting

Locations

Closing

Locations

Entirely

Decentralized

(all work

performed at

Retail

branch)

25 0 25 25 25

Centralized

Fulfillment

(fulfillment at

corporate HQ)

25 1 1 1 1

Regionalized

Fulfillment

(fulfillment at

regional centers)

25 5 5 5 5

Mixed Fulfillment

(processing

at branches;

underwriting and

closing at only

select branches)

25 0 25 5 5



67

Broker Wholesale/Mini-Corr Channel

Mortgage

Sales Offices

Fulfillment/

Operations

Centers

(should

never be >

than

max of one

of the

three to the

right)

Processing

Locations

Underwriting

Locations

Closing

Locations

Entirely

Decentralized

(all work

performed at

Broker

branch; AEs have

desks at branch )

25 25 25 25 25

Centralized

Fulfillment

(fulfillment at

corporate HQ;

AEs have local

offices)

25 1 1 1 1

Regionalized

Fulfillment

(fulfillment at

regional centers,

AEs work from

home)

0 5 5 5 5

OTHER ORGANIZATIONAL INFORMATION

Were Fulfillment Operations (Processing, Underwriting and/or Closing) Combined with Fulfillment Operations

from Other Channels during this Period? (Yes/No). If you have multiple production channels, answer either Yes

or No from the drop-down box for each Production Channel. If you are only in one production channel, answer

“N/A” in the drop-down box.

Number of ABA Relationships (Retail Channel Only) - Include the total number of separate affiliated business

arrangements with real estate companies, home builders, title companies, etc.

Number of Advertising Services Agreements (Retail Channel Only) - Include the total number of separate

strategic advertising agreements with realtors, home builders or other entities.

Did You Rent Space in Realtor or Other Third-Party Offices during this Period? (Yes/No). Answer either Yes or

No from the drop-down box.

Number of Borrower States - This field should represent the number of states that your company is lending in,

defined by borrower property location. For example, if the company has Correspondent or Broker



68

Wholesale/Mini-Corr operations centers in 5 states (physical locations) but buys or funds loans in 40 states

(defined by borrower property), you should enter "40" in this field.

Capture Rate (Builder Captives Only; Retail Channel Only) - Provide a percentage estimate for the number of

loans closed through your mortgage company related to buy-side transactions, in relation to the total number

of possible buy-side home sales by the home builder during the period. Example: If your mortgage company

handled 20 of the 100 buy-side home sale transactions during the period, enter “20.00”, for 20 percent.

Number of Servicing Centers - Enter the number of physical locations that house significant loan servicing

functions. Servicing centers may be divided based on geography or function. Servicing centers may or may not

use the same loan servicing computer systems. If a specific function is outsourced (e.g. Escrow), do not include

this as one of the loan servicing center locations.

Total Number of Retail Bank Branches - Report the average number of retail bank branches for commercial

banks and thrifts, whether or not they actively engage in mortgage banking activities, for the given reporting

period. We want to gage the extent of your company’s retail bank footprint. If you are an independent

mortgage company, please report “0”. The number reported here should be greater than or equal to the

number of bank branches actively involved in the mortgage banking segment and reported above.

Total Number of Retail Bank Households - Report the average number of retail bank households for the

reporting period. A retail bank household has a discrete address where at least one person residing at that

address has at least one retail deposit or loan product with the institution. Retail deposit products would

include checking accounts, savings accounts, CDs, and retirement accounts. Retail loan products would include

home equity loans and lines of credit, mortgages (whether held in portfolio or serviced for others), auto or

other vehicle loans and personal loans. If you are an independent mortgage company, please report “0”.

UNUSUAL ACCOUNTING ENTRIES

Provide explanation of any unusual accounting entries such as adjustments for past periods, unusual write-

downs, changes in accounting practices, one-time charges, loss reserve adjustments, reversals, etc.

SYSTEMS/VENDOR PROFILE

The purpose of this section is to aid us in better understanding your information systems and vendors used.

Please provide the name of the vendor or system used for the functions listed.

Some categories only warrant a “Yes” or “No” response, as marked accordingly.

If the system or vendor is unknown, type "Unknown"

If the system is not applicable, type "N/A".

Separate multiple systems or vendors with commas. Please do not give specific references to your company

name in your text response, as this information will be printed in the data books.

QUICK VIEW REPORT

The purpose of the "Quick View Report" is to provide you with a screen which maintains a running total of the

revenues, expenses and production volumes which are entered in various separate screens and are additive. No

data may be entered in this section. It is for verification of data entry accuracy only. The person entering data

may wish to periodically check the Summary section to ensure that cumulative totals are at the level expected.



69

When data entry is complete, the total figures for the reported categories in the Quick View Report should

generally equal the totals on your general ledger or other appropriate internal accounting system. If this is not

true, the Quick View Report offers a clue to the location of data entered in error.

COMPENSATION QUICK VIEW REPORT

To ensure alignment between reported personnel (full-time equivalents, or “FTEs”) and personnel costs, we

added a section called “Compensation Quick View.” The screen takes your personnel expenses by category and

divides by the number of reported FTEs, to arrive at total personnel expense per FTE for the year. Prior to

submitting your data, please review this screen to ensure that the numbers are reasonable.

ERRORS AND WARNINGS

This section provides a summary of automatically generated errors and warnings. It will be populated when you

hit the “Submit” button on the Table of Contents Screen.



70

APPENDIX: TECHNOLOGY EXPENSE ALLOCATIONS

In the Peer Group Survey, technology expenses, including depreciation, are reported in three separate areas: 1)

Production Support; 2) Servicing; and 3) Corporate Administration. Total technology capital expenditures

(whether related to production or servicing or another area) are also reported as one lump-sum amount in the

Corporate Administration section.

One common problem area in the data collection process is differentiating between technology expenses that

should be allocated to “corporate administration” versus direct production and/or servicing. Each company has

a different way of managing technology and the corresponding technology personnel and expenses. Our goal is

to create a clear roadmap for participants to allocate technology costs and personnel in a consistent manner.

While our allocation methodology may not correspond to your company’s standard practice, our overarching

objective is to enhance comparability with peers in order to identify opportunities for expense/efficiency

improvements.

Another common problem is in the treatment of computer hardware depreciation (PC’s, printers and

peripherals) and/or technology equipment lease costs. For the PGR Survey, such charges should be excluded

entirely from the three technology expense buckets and reflected in Occupancy and Equipment in the

applicable channel or department.

The following graph summarizes the Peer Group Survey technology allocation structure:

Total Technology Expenses Total Technology Capital Expenditures

Individual Department Expenses

Production Support• Systems costs including depreciation

for point of sale, loan origination systems, mortgage transaction technology/digital provider, imaging systems or any other cross-functional systems directly related to production

• Personnel and other costs for supporting these production systems

• May include per-loan vendor service costs such as imaging fees, or costs associated with “Software as a Service (SaaS)” models

Servicing• Service bureau (BKFS, Fiserv etc) fees

(in “Other Expense”)• Proprietary systems including

depreciation (in “Occupancy and Equipment”)

• Personnel and other costs for supporting these systems

Corporate Administration• Overall corporate expenses related to

LAN/WAN, desktop support and general help desk

• Personnel and other costs for supporting these activities

• Such costs will be allocated globally based on FTEs to Direct Production and Servicing.

• Should not generally exceed 40% of total technology expenses.

Computer Hardware Depreciation & Leases • PC’s, printers and peripherals and/or

technology equipment lease costs• Allocated as occupancy and equipment

charge to direct production channels and various departments within production support, servicing and corporate administration.

• Allocated based on # FTEs if no other allocation method in place.

Per-Loan Automated Underwriting Fees• Belong in direct production expense –

Other Expense.

• Gross amount of all capitalized technology expenditures, whether they related to production support; servicing; or corporate administration.

• Line item is located under “Corporate Administration” in the PGR Survey.

NOTE: To the extent possible, corresponding technology personnel count should also be allocated to these three areas in the Employee/FTE section of the survey, corresponding to personnel expenses reported in the three areas.