Reducing Repurchase Risk

1
Reducing Repurchase Risk

• Rose Wolfe
• Wells Fargo Home Mortgage
• MBA Quality Assurance and Underwriting Conference
• September 2009

2
Repurchase Drivers

• Primary Repurchase Driver
• Loan Performance
• Secondary Repurchase Drivers
• Loan File Quality
• Fraud
• Missing Documentation

3
The Primary DriverAddressing the Initial Problem

• Loan Performance
• Dealing with Reality
• It Is What It Is!
• Looking toward the Future
• Programs and Credit Policy
• Fraud Prevention
• Collections and Servicing Processes
• Tying Originations to Performance

4
Looking Toward the FuturePrograms and Credit
Policy

• Programs and Credit Policy
• Elimination of Aggressive Programs
• Pretty Much Done!
• Reconciling Automation and Eyesight
• Using Automation as a tool
• Balancing Common Sense with the Findings Report
• Return to Documentation and Validation
• Developing the Partnerships
• Underwriting and Sales for the benefit of the
  Customer
• Clear Management Direction

5
Looking Toward the FutureFraud Prevention

• Fraud Prevention
• Education
• Its NOT just a Subprime thing!
• Leveraging Automation
• Education
• Its NOT just a Wholesale thing!
• Institute a Pre-funding Screen
• Education
• Did I mention Education?
• Management Support

6
Looking Toward the FutureCollections and
Servicing Processes

• Collections and Servicing Processes
• Servicing in the New World Order
• Integration of Credit Risk in the Servicing
  Platform
• Full Circle Communication
• Utilizing information on the Back-end to benefit
  the Front-end
• Pro-active Servicing
• Learning to Recognize the Early Warning Signs
• Leverage the lessons of HAMP and HARP

7
Looking Toward the FutureTying Originations to
Performance

• Tying Originations to Performance
• The Life Cycle of the Loan
• Raising awareness and ownership of the
  Origination Function
• The Quality Loan Application translated to
  Quality Loans
• Shifting the Culture