MortgageIT — ASF West (January 2006)
24 slides from MortgageIT's conference presentation, Jan 30, 2006
Slide 1: ASF West
ASF West January 2006 Proprietary and Confidential
Slide 2: Disclaimer
Disclaimer The information contained herein has been prepared solely for informational purposes and is not an offer to buy or sell or a solicitation of an offer to buy or sell any security or instrument or to participate in any trading strategy. Any offer of securities is and shall be made pursuant
Slide 3: Corporate Overview
Corporate Overview T HOLDINGS, INC.
Slide 4: Today
Today Mortgage REIT headquartered in New York City, with 2,328 employees in 53 branches across 23 states Nationwide origination platform produced over $13 billion of loans in 2004 and approximately $29 billion in 2005 Completed Initial Public Offering of $175 million on NYSE in July 2004. Trading un
Slide 5: Corporate Structure
Corporate Structure Real Estate Investment Trust (REIT) Taxable Mortgage Banking Subsidiary (TRS) Wholesale Wholesale Retail Correspondent Subprime (67%) (10%) (12%) (11%) Percentages based on total 2005 originations of $29.2 billion 4
Slide 6: Company Highlights
Company Highlights 2005 Developments Maintained quarterly dividend of $0.48 throughout the year Issued and sold $75 million in private placements of trust preferred securities Grew investment portfolio by 77% Issued $4.4 billion of RMBS in 6 securitizations Recent Results Earned adjusted net income
Slide 7: An Established Company
An Established Company 18 years of operating experience Brokered or sold whole loans exclusively until launch of securitization program $5.8 billion of securitizations to date Delivered on promise to Paid first regular quarterly create self-originated common stock portfolio of $2.4 billion Launched
Slide 8: Mortgage Origination Platform (TRS)
Mortgage Origination Platform (TRS) 7
Slide 9: Loan Production Growth
Loan Production Growth 200% 175% 150% 125% 100% 75% 50% 25% 0% (25%) (50%) 3Q:04 4Q:04 1Q:05 2Q:05 3Q:05 4Q:05 Industry Quarterly Y/Y Growth (%) MortgageIT Quarterly Y/Y Growth (%) Source: Mortgage Bankers Association and MortgageIT 8
Slide 10: National Origination Platform
National Origination Platform Balanced Footprint Mitigates Risk W SP W W (2) R (11) SP W W W R (2) W R W SP R W (6) W W W W SP SP W W W SP W (3) SP W (3) 4Q:05 Fundings Corporate Headquarters CL R Retail Origination Office > $100 mm SP W Wholesale Operations Center $50 mm to $100 mm SP Sub-Prime Ope
Slide 11: Origination Mix
Origination Mix Balanced, Diversified Lending Maximizes Adaptability Home Equity/Seconds Sub-Prime 7.1% Jumbo Correspondent Alt A Wholesale 4.8% 11.5% Prime Government 2.4% 16.1% 23.0% Retail 7.4% 67.3% 9.1% Wholesale 51.2% Sub-Prime Conforming Based on 4Q:05 funding mix by volume 10
Slide 12: ARM Funding Volume
ARM Funding Volume Significant Growth in ARM Originations Drives Portfolio $4,983 $5,032 $5,000 $4,000 $3,461 Originations ($ in millions) $3,000 $2,498 $2,158 $2,000 $1,499 $1,607 $1,000 $550 $0 1Q:04 2Q:04 3Q:04 4Q:04 1Q:05 2Q:05 3Q:05 4Q:05 11
Slide 13: MortgageIT REIT Portfolio
MortgageIT REIT Portfolio 12
Slide 14: High Quality Portfolio
High Quality Portfolio Our strategy is to build a low credit loss portfolio capable of providing stable earnings and reliable cash flow available for dividend WA FICO of 732 92% owner occupied WA LTV of 74% Average loan size of $289K All first lien loans Max. loan size of $1.5 million 43% fully docu
Slide 15: Portfolio Characteristics
Portfolio Characteristics (1) MHL Securitizations WA Sec. 2005-5 2005-4 2005-3 2005-2 2005-1 2004-2 2004-1 Portfolio Aggregate Size ($MM) 5,489 905 721 722 678 1,017 635 811 Avg. Loan Balance ($M) 289 290 270 271 296 303 299 290 WA Coupon (%) 5.49 5.87 5.72 5.80 5.40 5.16 5.10 5.36 WA FICO 732 732 7
Slide 16: Portfolio Loan Selection
Portfolio Loan Selection Select the highest quality loans with the best risk-adjusted return attributes Minimum Origination/Selection Criteria (partial list) 1st lien residential mortgage loans Self-originated with risk-based pricing FICO >= 650 Non-Owner-Occupied requires Full Doc or LTV <=70% Mult
Slide 17: Underwriting
Underwriting 16 T HOLDINGS, INC.
Slide 18: Structure
Structure Organization Chief Lending Officer Head of Credit and Product Development National Underwriting Manager Regional Credit Managers Regional Approach Strong knowledge of local real estate market and individual brokers Regional Credit Managers provide support for individual underwriters Underw
Slide 19: General Guidelines
General Guidelines Desktop underwriter and loan prospector used in conjunction with manual underwriting on certain loan products Parameters for score, mortgage history, ratios are overlaid on AUS decision Credit Reports Tri-merged reports Stated loans use lower of middle credit score from all borrow
Slide 20: Documentation Standards
Documentation Standards While we relax certain income and asset verification standards under our low-doc programs, other qualification requirements and pricing are tightened to ensure an adequate risk/reward mix Program Employment Income Assets Ratios Full/Alt Doc 2 yrs Verified Verified Verified Ca
Slide 21: Interest Only Criteria
Interest Only Criteria Qualifying ratios are calculated using interest only payment at the note rate Potential payment shocks (at rate reset and IO expiration) are staggered for the majority of portfolio loans: 6-month and 1-year ARMs have a 10-year IO term Alt-A Hybrid ARMs have a 10-year IO term H
Slide 22: Quality Control
Quality Control 21
Slide 23: Quality Control
Quality Control QC loan selection done by random statistical sampling of origination channels, brokers, products or functional areas Closed Loan Audit Performed and reported monthly by third-party vendor (Integrated Compliance Solutions) Selection occurs within the first week after the month the loa
Slide 24: Compliance
Compliance All loans are reviewed by underwriting, closing and funding for compliance with federal and state regulations All mortgage loans must comply with all applicable federal, state and local laws and regulations Particular focus on the following regulations: Truth in Lending (TILA) Real Estate