National Mortgage & Consumer Lending Services (MCL)

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The mortgage and consumer lending industry has experienced unprecedented changes. Financial services and housing are the nations most challenged economic sectors, and the industry is under the scrutiny of regulators, lenders, consumers and the public media. New reforms, regulations and agencies, such as the Consumer Financial Protection Bureau, have been established to help manage ongoing industry risk. This dynamic environment directly impacts a mortgage and consumer lending organizations financial, operational and regulatory requirements, so organizations must manage related risks.

How KPMG Can Help

Our experience covers the operational and financial pillars of the Mortgage and Consumer Lending industry and is complemented by our FS Regulatory, FS Performance and Technology, and Forensics Assistance practices.

The Loan Life Cycle & The Four Pillars

Loan Origination & Secondary Marketing Operations & Finance

Loan & Portfolio Servicing Operations

Portfolio/Finance & Accounting

Post Loan Sale

Pre-qualification Processing Underwriting/Scorecards Appraisals Pre-closing Closing Funding Post-closing Pipeline Management/Best Execution Shipping & Delivery Quality Control Rate Locks & Hedging

Loan File Set-Up/On-boarding Payment Processing Tax & Insurance Escrow Management Investor Reporting Custodial Accounting & Doc Management Delinquency Management Loss Mitigation Third Party Vendor Management Cross-sell Maximization Portfolio Retention Customer Service (Inbound and Outbound) Quality Control

Modeling & Model Validation Capital Markets Securitization/Whole Loan Sales/Portfolio Loan, Portfolio, and ABS/MBS Valuations Liquidity Accounting Advisory ALLL ALM Capital Requirements Servicing Assets Risks related to Warehouses, SPVs, and Correspondences Hedging

Regulation AB readiness and consulting CDO/CLO Note Valuation Reports CDO/CLO, REMICs, PFICs, CFCs, Partnerships, Grantor Trust, NIMS, Mortgage REITs Waterfall Payment Verification Market Discount and Original Issue Discount Tax Calculations Representation & Warranty Assessments Efficient Tax Structuring Tax Loan Modification Calculations REMIC Schedule Q/Excess Inclusion and PFIC / 5471 gathering and reporting Bad debt deduction support Integrated computation reporting platform

REGULATION/COMPLIANCE/AUDIT PERFORMANCE AND TECHNOLOGY FORENSICS ASSISTANCE

What We Do: Representative Service Offerings

Operations and Processes

Servicing Operations

Interest Rate Risk

Default Management

Operational assessments Process improvement services Business process flow mapping Underwriting Assistance (Automated Programs, QC, Scorecard Development, Compliance)

Loan Boarding Document Management Vendor Management Investor Reporting Quality Control

Asset-liability management (ALM) modeling Mortgage pipeline and hedging modeling Model validation for ALM & mortgage pipeline management Risk Management Consulting Liquidity Strategies

Gap analyses of meeting Treasury, GSE, and regulatory requirements Transactional testing for loss mit (incl. loan mods) and foreclosures; credit/compliance policies and procedural violations Fraud detection and prevention review analyses HAMP/HARP

Analytics & Credit Risk Management

Management and Regulatory Reporting Technology Services

Behavioral and cash flow model validation and development Loan loss reserve forecasting process reviews and FAS 5 model validation Migration analyses for roll rate determination and collections operations efficiencies Credit data mining and modeling Evaluation of credit data mart design and utilization Credit analytics gap assessments, process reviews and roadmaps

Performance Management Dashboards Costing Analysis Business Intelligence Benchmarking/Gap Analysis

Risk, compliance and financial package implementation Contact center technologies and process redesign Testing (unit, system and UAT, stress) Implementation planning and rollout, including training

Post Loan Sale

Payment Verification Regulation AB readiness and consulting Securitization Vehicle Tax Compliance and Reporting Market Discount and Original Issue Discount Tax Calculations Significant Loan Modification Calculations and Model/System Solutions (Tax) Representation and Warranty Exposures

Consumer Compliance

Regulatory examination/litigation preparedness and/ or assistance Compliance management program and governance reviews Fair lending assessments and ongoing monitoring Third party vendor management reviews for consumer compliance

Model Development

Lease Accounting Model Effective Yield Model FDIC Loss Share Tracking and Reporting Model Tax Reporting Modules Servicing Rights Valuation Modeling Basel III Modeling

Program/Project Management

Valuation Services

Large-scale program initiatives Small to mid scale project initiatives Program/project reporting facilitation Staff augmentation in the field by subject matter professionals

Residential and commercial mortgage and asset-backed Securities valuations Assistance with estimating loan losses associated with distressed mortgages Reasonableness reviews of managements valuation model and assumptions Mergers and acquisition due diligence and advisory Consumer Whole Loan Pools Servicing Assets

Accounting, Tax and Other Assurance Services

CDO and CLO

Structured products cash flow modeling RMBS, ABS, and CMBS Agreed-UponProcedures and Transaction Services Other-than-temporary impairment analysis, modeling and policy reviews ASC 860, ASC 810, ASC 310-20 review and project management Benchmark studies, market surveys, and trend analyses

PFIC and CFC Tax Reporting QEF and other investor tax compliance Effective Date Procedures, Payment Date Procedures, and Monthly Report Procedures Transaction Services

The KPMG Advantage

The National Mortgage and Consumer Lending Practice is:

A group whose offerings span operational needs such as business process improvement and redesign, compliance assistance with new regulations, and financial analysis at the portfolio and loan level. A National Subject Matter Professional Group with approximately 200 fully dedicated professionals focused on the complex and ever-changing financial, operational, and regulatory needs of the mortgage and consumer lending industry. Our approach allows us to provide comprehensive services by drawing on the resources of our financial, accounting and tax services to the securitization industry. Our experienced Structured Finance professionals leverage their skills and sophisticated technology to help identify, analyze and resolve a range of financial, liquidity and regulatory challenges, including managing credit, interest rate, balance sheet and other risks, and preparing for strategic activities such as asset acquisition and liquidation, and mergers and acquisitions.

We provide broader advisory services, as well as external and internal audit subject matter assistance to the majority of Financial Institutions, Government Agencies, and Specialty Finance Companies. For example:

Five of the top 10 global institutions Five of the top 8 US banks Four of the top 10 Fortune 1000 commercial banks Seventy percent of the top 15 Mortgage and Consumer Lending Companies

In addition to mortgage lending companies and government sponsored entities, we serve the following consumer lending asset classes: Credit Cards/Unsecured Debt Auto/Equipment Leasing Student Lending Non-bank Retail/Utilities

MCL Contacts
Mark Twerdok U.S. Credit Risk Services Leader 412-232-1599 mtwerdok@kpmg.com Viktor Beletskiy Principal 703-286-8036 vbeletskiy@kpmg.com Kimberly Davis-Riffe Partner 703-286-6850 kdavisriffe@kpmg.com Pedro Goitia Partner 703-286-8140 pgoitia@kpmg.com John Hermle Partner 703-286-8125 jhermle@kpmg.com Shelley Lee Hing Partner 703-286-8339 sleehing@kpmg.com David Pang Partner 703-286-8293 djpang@kpmg.com Anthony Sepci Partner 213-955-8665 asepci@kpmg.com Tina Stoliar Partner 949-885-5838 tstoliar@kpmg.com Douglas Williams Partner 703-286-8380 dwilliam@kpmg.com

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