1. STRATMOR | GROUP We want your feedback REAL TIME Please use your phone and browse to the URL below You do NOT need a login You will be asked a series of questions throughout this session Answer on phone, and results appear instantly You can also ask questions through web page www.PollEv.com/STRATMOR

2. STRATMOR | GROUP 2 Who and What We Are PracticeDescriptionPractice Leader Benchmarking, and Financial Analysis The type of work required by CFO’s, whether independent or bank owned MBA / STRATMOR Peer Group Program (PRG), with over 80 of the top lenders participating We use our extensive industry data, going back years and through multiple rate cycles Build financial models for lenders – 5 year P&L, Balance Sheet and Capital projections Jim Cameron Nicole Yung Strategic Planning Services Strategic planning and executive leadership coaching Consideration of entering and exiting channels and markets, competitive positioning Dr. Matt Lind IT Procurement and Advisory Independent evaluation of 26 primary LOS Typically an exercise in reducing the list, and assisting with procurement Executive coaching and IT readiness Implementation and rescue efforts Len Tichy

3. STRATMOR | GROUP 3 “Torture The Data Until It Confesses” PracticeDescriptionPractice Leader Capital Markets From Best Efforts to Mandatory Agency delivery Alternate Investors Pricing strategy and execution Rob Chrisman Mergers and Acquisition Buy side advisory Sell side representation Middle man for interested parties Jeff Babcock Sales and Marketing Consumer Direct and Retail Lead generation and Lead Management E-Commerce and Direct Marketing Garth Graham Herding Making sure everything works well Making sure the partnership is moving in the right direction Helping us meet the product needs of our clients Lisa Springer

4. STRATMOR | GROUP We want your feedback REAL TIME Please use your phone and browse to the URL below You do NOT need a login You will be asked a series of questions throughout this session Answer on phone, and results appear instantly You can also ask questions through web page www.PollEv.com/STRATMOR

5. STRATMOR | GROUP 5 Projected Changes in the Population by Age (2012 – 2022) Baby Boomers: Net Sellers Gen X Net Buyers Millennials Home Buyers

6. STRATMOR | GROUP 6 Owner and Renter Occupied Households & Homeownership Rate

7. STRATMOR | GROUP 7 Sum of a Niche! 1.First time buyers 2.Millennials under 35 3.Minority borrowers 4.Evolving Product Sum of Niches!

8. STRATMOR | GROUP We want your feedback REAL TIME Please use your phone and browse to the URL below You do NOT need a login You will be asked a series of questions throughout this session Answer on phone, and results appear instantly You can also ask questions through web page www.PollEv.com/STRATMOR

9. STRATMOR | GROUP 9 How Do the Groups Compare? 1 Source: Ethics Reource Center, Ethics.org

10. STRATMOR | GROUP 10 World Events Drive Perceptions Source: Ethics Resource Center, Ethics.org Foreclosure !

11. STRATMOR | GROUP 11 Traits Of The Generations Source: Ethics Resource Center, Ethics.org

12. STRATMOR | GROUP 12 Workplace Attributes Source: Ethics Resource Center, Ethics.org

13. STRATMOR | GROUP 13 How many social media accounts do you actively use?

14. STRATMOR | GROUP 14 How active are you in Social Media?

15. STRATMOR | GROUP 15 Do you have a formalized Social Media program?

16. STRATMOR | GROUP 16 Social Media Presence

17. STRATMOR | GROUP 17 Millennials and Money  Millennials keep more of their assets in cash, less in stocks - UBS report described them as “the most conservative generation since the Great Depression”  The average Millennial investor has 52 percent of their savings in cash, compared to 23 percent for other age groups  Accenture survey found high levels of mistrust of financial institutions among Millennials and a greater reliance on the Internet, social media, and personal networks for financial advice  The ten least-liked brands among members of this generation include four of the nation’s most powerful banks—Chase, BofA, Wells Fargo and Citigroup

18. STRATMOR | GROUP 18 Millennials and Money  70 percent of Millennials thought that the way to pay for things five years from now will be totally different and one-third said they didn’t believe that they will need a bank at all in the future  Almost all (88%) of Millennials do their banking online and half of those use their smart phone to do so  Three-fourths of Millennials (73%) to be “more excited about a new offering in financial services from Google, Amazon, Apple, Paypal or Square” than from a nationwide bank

19. STRATMOR | GROUP 19 Millennial Down Payment Issue  40% of renter say “ability to generate down payment” would change their willingness to pay  Only 5% of renters said a 2% increase in rates would impact their willingness to buy a house  74% “know and understand the financial process of buying a home”  44% believe 20% down payment is required  74% fear they wouldn’t qualify admit they have NOT taken the steps to see if they would Source: Federal Reserve Bank of New York

20. STRATMOR | GROUP 20 STRATMOR Originator Census and Compensation

21. STRATMOR | GROUP 21 What percent of Retail Loan Originators are less than 35 years old?

22. STRATMOR | GROUP 22 Millennial originators (less than 35 years old) are less productive than older originators?

23. STRATMOR | GROUP 23 Background  STRATMOR believes that the more you can understand and measure the key attributes of your sales force, the better you will be able to proactively manage them  STRATMOR Originator Census survey focuses on five key areas:  Production Distribution - Consistent with conventional wisdom, do 20% of your Originators close 80% of your volume?  Productivity by Quintile - What is the average productivity of your top quintile of producers versus peers?  Originator Age - What is the average age of your originators overall? By production quintile?  Turnover - What is your Originator turnover overall? By Age? By production quintile? Many lenders maintain that they keep their core group and that turnover is limited to lower producing quintiles. Is that really true?  Tenure - What is the average tenure of originators by production quintile? Are your veterans out-producing the less experienced originators? How does your average tenure compare with peer group averages?

24. STRATMOR | GROUP 24 Distribution of Originator Age

25. STRATMOR | GROUP 25 Key Findings from 2013 LO Census  40% of the originators do 80% of the business  Top 20% doing 55-57% of the total production  Independent Mortgage companies originators top 20% do 61% of the production  The Top 20% of originators averaged 10 loans per month which is twice the average production of the next quintile who originated 4.4 loans per month  The Bottom 20% of originators averaged less than one loan per month  About 50% of the originator population is between the ages of 40-55 with an average age of 47  There was no material difference in ages by quintile  We had expected to see the Top 20% age to skew older than the average and the lower production quintiles to skew younger  The millennials productivity was the same as the older after normalizing for tenure

26. STRATMOR | GROUP 26 Key Statistics from 2013  Turnover averaged 30.1% for our sample in 2013  Average age of our survey group was 48 years old  An average originator originated 4.6 loans in 2013 with 48% of those being purchase loans

27. STRATMOR | GROUP 27 Key Statistics - Top 20%  Turnover is significantly lower for top producers at 7.3% vs. 30% overall  Average age is the same as the overall average  This tells us that Top Producers come from all age cohorts and are not always the older and more seasoned originators  The Top 20% average 10.1 loans a month or more than double the overall average

28. STRATMOR | GROUP 28 Consumer Research Online / Offline Behavior

29. STRATMOR | GROUP 29 REALTOR® Challenges  Sixty-nine percent of REALTORS® reported having a website for at least five years, 12 percent reported having a real estate blog, and 61 percent are using social media.  Realtors NEED more access to mortgage credit – it’s a need that must be met to expand their business  Only 17% of REALTORS have personal assistants, and 1/3 of those are shared, so they generally don’t have a lot of help in marketing and other lead generation activities  The typical REALTOR® is a 56-year-old white female who attended college and is a homeowner, (Fifty-seven percent of all REALTORS® are female)  They are absolutely desperate for the deal to close  And there are 100k loan officers calling on 1M realtors --- if each LO can secure 10 relationships, and can convert every referral, that is only 50 deals per YEAR!

30. STRATMOR | GROUP 30 Lengthy research period provides multiple opportunities to connect  Typical buyers search for 12 weeks  Buyers who use agent, typically contact agents after 3 weeks (which means the keep searching after that)  78% of home shoppers visit 3 or more sites prior to taking action on real estate site  Only 24% take action (generate lead) the same day they begin search  36% take up to 60 days  And 40% do not take action for up to 120 days

31. STRATMOR | GROUP 31 Age of Internet User Much Different than Typical REALTOR®  86% of those who take action on site are LESS than 55 years old  67% of those take action are less than 44 years old  And average age of Realtor is 56 years old!  Understanding Realtors is key to being successful AND  Diversify the bet into evolving Realtors or direct methods of communication?

32. STRATMOR | GROUP 32 Home Search in the Information Age 1.Look at online listings 2.Check out Mortgage rates 3.Look at more information about homes 4.Find an agent (after several weeks) 5.Look up agent on internet, AND social media 6.Talk to agent 7.Receive referral, Pre-Approval encouraged 8.Search online for comps 9.Check out neighborhood stats 10.Send link to house to influencer 11.Drive through neighborhood 12. Look at house 13.Listen to Realtor spiel about mortgage 14.Look up loan officer on social media and internet

33. STRATMOR | GROUP 33

34. STRATMOR | GROUP 34 Customer Satisfaction  MortgageSAT survey system launched August 2013 with over ~45,000 customers surveyed  We provide lenders insights into how their customer service performs across a broad range of transaction, demographic, and organizational aspects  This reveals details in overall satisfaction  Critical points in the process  Preference of how contacted  How applied  Millennials vs previous generations

35. STRATMOR | GROUP 35 Millennial Satisfaction  Based on 45,000 surveys, Millennials (those borrowers under age 34) have roughly same satisfaction then older borrowers (88 vs 89)  They are even less likely to recommend (87 vs 89) but more likely to comment on social media (74 on a 100 point scale)

36. STRATMOR | GROUP 36 First source of information  For purchase borrowers, millennials are far more likely to seek internet and friends/family for information  23% friends and family vs 14% older borrowers – highest satisfaction with 91  11% internet vs 7% internet from older borrowers  Millennials less likely (7%) to contact a branch office

37. STRATMOR | GROUP 37 Relationships can be established via Internet or Phone  Less than 10% of purchase borrowers completed the application face to face, but have slightly higher satisfaction  19% completed it via the internet  69% completed via phone  Customer satisfaction in all three methods was very similar although face to face is more likely to comment on social media

38. STRATMOR | GROUP 38 First Time Home Buyers  44% of completed purchase surveys are first time home buyers  They are actually MORE satisfied than move up buyers, and far more likely to comment on social media  Best practice is to ASK them to comment and drive referrals

39. STRATMOR | GROUP Importance of Alerts MortgageSAT automatically alerts lenders when customers are dissatisfied Quick call back from Senior Mgt has a huge impact on turning around satisfaction Having that push notification is a key to driving the quick call Note – Interaction with originator is a key driver of why choose a lender, AND big driver of satisfaction

40. STRATMOR | GROUP SPOC for origination? Higher satisfaction appears to exist when consumer only talks to one person Providing a checklist at application is a key driver of satisfaction (33 point difference!) Not asking for additional document drive satisfaction from 87 - 93

41. STRATMOR | GROUP Customer preference Customers are most satisfied when lender proactively provides status to lender 67% of customers say they want status by email or outbound phone call

42. STRATMOR | GROUP People matter Benchmarking performance by all four primary individuals (LO, Processor, Underwriter, and Closer) and Benchmarking up to all levels of management (i.e. branch, region, area, division)

43. STRATMOR | GROUP 43 Power of Big Data  Data gives you ability to predict likelihood of consumers taking action  So, a consumer who is qualified for a mortgage is a better lead than one that is not…  But it’s a better lead if you know they had a life change event …  If they are doing online search for real estate …  If they recent listed their home for sale …  Had a recent credit pull ….  Are active on social media …  Have a valid email address

44. STRATMOR | GROUP 44 Monitor Households Corporate Campaign Management - 3 rd party Data to drive marketing efforts - Monitor for life change events, such as marriage and divorce - Monitor for property events: change of address, recent home listing, increase home value - Monitor for credit events, such as recent mortgage inquiries Corporate Lead Management - Create corporate standards regarding lead assignment, including involvement of retail and consumer direct loan officers - Recruit and retain better LO’s through a commitment to retail marketing support using best of breed consumer components - Protect relationship with consumer when LO departs - Leverage corporate systems for lead management and referral management - Ensure compliance with regulatory standards, including CFPB, FCRA and Fair Lending13.5 Call Center Leads 50% of leads Retail Leads 50% of total leads

45. STRATMOR | GROUP 91% said that enhanced tools for lenders to monitor regulatory compliance during the loan cycle and/or to minimize the risk of regulatory non-compliance were “extremely important Both document management and system security tied for the next most important consideration. Overall, 82% of respondents said that greater use of document management or enhancement to imaging technology (e.g. OCR, data extraction, etc.) to improve the efficiency of the staff and the quality of the loan files was “extremely important.” STRATMOR GROUP – PROPRIETARY & CONFIDENTIAL NOT FOR EXTRNAL DISTRIBUTION STRATMOR Executive Survey: Most Important

46. STRATMOR | GROUP Technology Developments – Less Important Innovations such as mobile devices (46%) and CRM (41%) and Self Service tools (41%) all were considered less important by lenders. 46 STRATMOR GROUP – PROPRIETARY & CONFIDENTIAL NOT FOR EXTRNAL DISTRIBUTION

47. STRATMOR | GROUP 47 Questions and Comments --

48. STRATMOR | GROUP 48 Strategies to Generate Millennial Mortgage Opportunities  Hire and retain millennials  Consider mentoring by successful older staff  Creating meaning and inclusiveness  Recognition and feedback – “catch them doing something right”  Patience – accept the differences, and give them time to grow  Millennial Outreach  Hire millennials  Focus on their needs – down payment for example  Embrace their tools – mobile, text and online  Self service is expected  Use alternative referral sources  Embrace Data

49. STRATMOR | GROUP Garth Graham, Managing Director 954-325-7816 Direct garth.graham@stratmorgroup.com www.stratmorgroup.com garth.graham@stratmorgroup.com www.stratmorgroup.com What You Can Do 1.The consumer is central to the process – produce happy customers NOT just compliant loans 2.Embrace transparency – Millennials don’t trust! 3.Need to hire younger and need to mentor be successful 4.Invest in technology that enables you to connect with consumers 5.Big Data can generate big results 6.Measure and manage to high customer satisfaction

50. STRATMOR | GROUP 50 Questions and Comments --

51. STRATMOR | GROUP 51

52. STRATMOR | GROUP 52 Women and Marriage  Women are as satisfied as men  They are also more likely to comment on social media  And borrowers who are separated are happier then the others GenderPercentFrequencySatisfaction Male67%3,91790 Female32%1,87990 Information Not Provided1%6986 Number of Respondents5,865 Marital StatusPercentFrequencySatisfaction Married63%3,67290 Unmarried37%2,16290 Separated0%2692 Number of Respondents5,860

53. STRATMOR | GROUP 53 The importance of Social Media  A way to engage for professionals to engage other professionals and build brand  So, use linked in, twitter and facebook to find Realtors and other referral sources  Provide value added information – something happens nearly every day that is deserving of commentary  Make it professional and personal – how do things make you feel? What do you think about changes in the market  Engaging consumers in a compliant way – not “offering” loans, but sharing your experience in the industry  Use what you are good at – not being phony

54. STRATMOR | GROUP 54 Power of data aggregation  Outlook has plug-ins for facebook and linked in (FREE!)  Let’s you see picture and immediately link to social media page for those you are connected to  Let’s you immediately look up people on social media based on email – new borrowers (before you call them), or new Realtors before you walk in office

55. STRATMOR | GROUP 55 Power Tools - HootSuite

56. STRATMOR | GROUP 56 Sales Activity may not be a Funnel  Old model was a funnel, with the opportunities always flowing down, with fallout reducing the amount that comes out the bottom.  New Model is more like a flight path, with customers bouncing from spot to spot seeking out information.  Data analyzed by Google (search history and behavior) and Compete (click steam behavior) reveals the trend

57. STRATMOR | GROUP 57 New Sales Funnel  90% of home buyers rely on the internet as one of their primary research sources  52% turn to internet as their first step  Our MortgageSAT data for last month showed Realtors the first step for financing less than 40% of the time  Real Estate search up 50% in the past year, and up 253% in the past 4 years  40% of Real Estate search on mobile devices, an increase of 120% in past year  89% of Real Estate Consumers ALSO use a Real Estate Agent

58. STRATMOR | GROUP 58 Do you have use texts to communicate with borrowers?

59. STRATMOR | GROUP MGIC.com/social

60. STRATMOR | GROUP 60 Background  The STRATMOR Compensation Connection is an annual survey of compensation amounts and structure.  Survey is set up in modules:  Executive Management  Retail Sales  Consumer Direct Sales  TPO Sales  Fulfillment (All Channels)  Production Support  Results are available to participants and include:  Cross tabulation based on: Independents vs. bank-owned lenders Production scale brackets to differentiate between large and mid-size lenders Relevant position-related metrics (tenure, management scope)  Key executive, sales, and back office roles within your organization  Compensation structures along with compensation levels

61. STRATMOR | GROUP 61 Positions Surveyed for CD Sales Senior Consumer Direct Production Executive  The top sales position in the Consumer Direct channel Call Center Manager  Responsible for recruiting, hiring, managing, and training call center personnel including loan officers in a particular call center Campaign Manager  Coordinates and assists with the marketing activities, including database and direct mail marketing, and ecommerce marketing campaigns. Producing Team Leader  Manages the activities of a call center team, including training and managing loan officers; Also acts as a loan officer by originating loans Non-Producing Team Leader  Manages the activities of a call center team, including training and managing loan officers; Does not originate loans Loan Officer  Located in call center; receives incoming calls (leads) and attempts to convert to application; may make outbound marketing calls; counsel borrowers, recommend loan products ; Takes original application directly with borrower and coordinates with loan processors and underwriters in obtaining information necessary to close the loan. Call Screener  Assists the sales consultants by taking inbound calls from clients including providing clients with product, program and rate information

62. STRATMOR | GROUP 62 Sample Results – CD Loan Officer

63. STRATMOR | GROUP

64. 64 Consumer Direct Percent of Units  High of 46% of units in 2012  35% of units in 2014 and actually rising YTD 2015  By state is very interesting…  Highest percent of CD volume VT OK MS LA NH RI AR ME AL NM

65. STRATMOR | GROUP 65 CD is rising for both Refinance and Purchase  Refinance volume was over 50% of units 2013-2014  Purchase units have risen from 12% of units to over 21% of units in the past 5 years

66. STRATMOR | GROUP 66 Value Proposition For CD  CD refinance loans typically have higher rates than traditional retail while…. (4 bps higher in 2015, avg 3 bps over 7 years)  CD purchase loans are typically offered at lower rates than retail – 14 bps average over 7 years

67. STRATMOR | GROUP 67  36% of eligible voters are Millennials  $1.6T (Trillion) home purchases by 2018 (in a market that is only ….)  More racially diverse - Minority young householders = 28% in 1995; 41% in 2014  Married later - Young adult householders living with a spouse: 60% in the 1980s; 50% during housing boom; 42% in 2014  Higher education - Young adult householders that are college grads: 32% in the 1995; nearly half in 2014  12% of renters or 5.2 million renters nationwide plan to buy in the next year

68. STRATMOR | GROUP 68 Power of the Checklist  When Millennials receive a checklist of required documents, they have a satisfaction score of 91 (100 point scale) which drops to 51 when they are not provided a checklist  When they are then NOT asked for addition documentation not on original checklist, it rises to 95

69. STRATMOR | GROUP 69 Mobile Messaging  Younger generations over 100 messages per day, and growing

70. STRATMOR | GROUP 70

71. STRATMOR | GROUP 71