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ProClose ANSWERS - your answer for everything!

It is my greatest desire to get out of this office and come visit you, see your operation in full throttle and learn more about what we at MBS ProClose® can do for your outfit.  What separates us from other doc prep is our drive to meet your particular business needs, making ProClose® the Premier Closing Service Firm for Mortgage Software and Documents.

We aren't stopping at bringing alive the vision of paperless, flawless, effortless and efficient closings.  Our all-inclusive service includes a full staff, which successfully manages the process and requirements specific to your lending shop.

In our marketplace, the phrase "Doc Prep" implies Documents -- mostly closing docs but sometimes up-front disclosures.  You expect any "Doc Prep" company to provide the closing docs necessary for any loan program you wish to do.  You expect the software to do everything your business needs and you expect it to be done correctly on the first trial.  That isn't always the case.  You may have experienced documents in your package that you don't need or, even worse, your package contained incorrect documents.  Maybe an investor did not purchase your loan.  Maybe if you had received a warning about an avoidable issue, your loan would have been sold in a timely manner.  There just isn't some magical software that has never made one of the above mistakes; if there were, everyone would be using it. However.

There is a company - our company - to help mold your software to YOUR business model - minimizing your concerns and making your priorities our priorities.  MBS manages your ProClose software by Business Analysts - experts who know the industry, who keep up with the trends, who understand the documents, requirements and the secondary market products being introduced every day.  We don't just stop at the where the industry is going, but examine where you are going within the industry.  We provide you more resources to understand the functioning of a new loan product, to handle new laws and regulations, to create custom fields for custom documents and reports and to work with you on the "process" that is your business.

What any doc prep has in their library is insufficient for tomorrow.  What any software can do today is not enough for tomorrow's needs.  MBS staff, together with your secondary and compliance teams, works to get out in front of your specific needs and growing production.  We produce the products that our Clients desire, so that it is YOU, not your software provider, who is driving the bus.

Our entire company IS your "Client Care" division.  You get the whole company.  Custom design, added compliance and secondary, process flow, documents, integration, reports, portals and exports are the work of many hands here at MBS.  Wherever you want to go, we'll lead the way.

Thank you for reading my message.  I cherish any opportunity to speak with you.  No one cares more about your closing needs than MBS ProClose®.  That's a fact upon which I will stake my reputation.

Christine M. Kirby
President

1st National Bank of Arizona

Effective June 25, 2007, prepayment penalties will no longer be allowed on the AZ Express program.  Maximum rebates on no prepayment penalty loans have been increased from 1.250 to 1.500 on the 5/1, 7/1 and 10/1 ARMs.

AHM

Critical Changes to AHM MTA 1-Month Option ARMs - American Home Mortgage has issued new product codes and made important calculation changes to their MTA 1-Month Option ARM programs.  While the old codes are still currently acceptable, the new program codes will be required on all loans locked on or after July 30, 2007.  Most importantly, MBS is in the process of analyzing the continued support of this program due to critical new calculation changes necessitated by their revisions.  Two recasts are now allowed on this program:  1) The payment will recast to an interest-only payment based on the fully indexed rate at the end of the 5th year; and 2) After the conclusion of the 10th year, the loan will recast to principal and interest payment to fully amortize over the remaining 20-year term.

This is NOT presently a popular program; however, you the client has input in the decision making process.  We want to hear from you!  What does your company and secondary staff think of this type of program?  How likely are you to offer it to your borrowers?  If likely, how many loans would you estimate each month?  Your answers and feedback will factor into our decision to make the necessary changes to continue to offer this program.  Please send your responses to investorrelations@proclose.com.

Flagstar

Announced June 20, 2007 - Flagstar adds a 10-year Interest Only option to their Flex and 75/25 products.   Programs under these products include 75/25 Fixed, Flex 97 (30-year fixed and 5/1 LIBOR ARM), Flex 100 (30-year fixed and 5/1 LIBOR ARM) and Flex with Subordinate Financing (30-year fixed and 5/1 LIBOR ARM).  Features include LPMI availability, 2/2/5 rate caps, up to 100% LTV and available 80/20 loans.  ProClose is currently adding these programs to our investor library.  Please contact your client support representative or log a case at ProClose ANSWERSTM if you have an upcoming loan for one of the above products.

GreenPoint Mortgage

July 9, 2007 GreenPoint Mortgage will be releasing new Alt A Hybrid Option ARMs.  Programs include:
1115 - 5/6 Neg AM LIBOR ARM Interest-Only 40 year
1116 - 7/6 Neg AM LIBOR ARM Interest Only
1117 - 7/6 Neg AM LIBOR ARM Interest-Only 40 year
1118 - 10/6 Neg AM LIBOR ARM Interest Only
1119 - 10/6 Neg AM LIBOR ARM Interest-Only 40 year
Please communicate to your client support representative or log a case at ProClose ANSWERSTM of your interest to have any of these programs added to your ProClose system.

Beginning with loans closed by the seller on or after August 1, 2007, GreenPoint will no longer purchase residential loans secured by a property located in Minnesota that allow for either negative amortization or prepayment penalty.  Full income documentation and "documented" evidence of a tangible net benefit to the borrower must be provided.  These new requirements and restrictions are in response to Minnesota legislature passing two bills, House File 1004 and Senate File 988, to protect consumers from alleged predatory lending practices.

Indymac Bank

Indymac introduced a new Jumbo loan program. The maximum loan amount available under this new program is $5,000,000. Formerly, the maximum was $3,000,000.  Fixed Rate, LIBOR ARMs and Interest-Only options are offered.  Submission and locking of loans under the Jumbo loan program opened June 18, 2007.

Morgan Stanley

Effective June 17, 2007, the legal name of Morgan Stanley Mortgage Capital Inc. ("MSMCI") changed to Morgan Stanley Mortgage Capital Holdings LLC ("MSMCHLLC").  Changes are being made to their Seller Guide and all other documents to reflect their new legal entity name.  No changes are needed to their closing documents.

To see the full Investor bulletin for these and other changes, go to the investor section of the clients only website.

Mortgage Bankers Association Originating and Underwriting in Today's FHA Market Conference

On June 26, 2007, the ProClose® Compliance Department attended the Originating and Underwriting in Today's FHA Market Conference.  The Mortgage Bankers Association hosted the conference and the speakers assessed the different FHA features and legislation.  Below is a summary of the topics the conference covered:

Part 1- State of Affairs Capitol Hill Update

. The House Financial Services Committee passed a reform bill (H.R. 5121) earlier this month, which modernizes the FHA's mortgage insurance programs.
. H.R. 5121 increases the loan limits and caps mortgage insurance premiums (MIP) for both single and multifamily housing programs.
. The bill also establishes an affordable housing fund that protects the mutual mortgage insurance fund and provides needed funds for the FHA programs.
. The Senate also introduced a bill (S. 3535) this month as companion legislation to H.R. 5121.  This Senate bill will be voted on soon.

Part 2 - Originating and Underwriting in Today's FHA Market

. There is a growing need for FHA loans as conventional loan requirements continue to tighten
. FHA mortgages are designed for first-time home buyers

Key Features of FHA Loans
. FHA mortgages are less expensive than non-prime loans
. FHA mortgages provide flexible down payments
. FHA mortgages are assumable and there are no prepayment penalties
. FHA appraisal standards have been scaled back.  They are now similar to conventional loan appraisal standards
. FHA offers an 85% and 95% cash out refinance program
. FHA offers the Streamline "K" Program
o The program facilitates purchase transactions in which the property needs minor rehabilitation work, as identified in a pre-purchase home inspection or the FHA appraisal.
. FHA offers Energy Efficient Mortgages (EEM)
o Allows the borrower to add any energy efficient improvements to the home into the base mortgage amount

If you have any questions regarding FHA legislation or loans, please contact David Wickman at the ProClose® Compliance Department at dwickman@proclose.com or 703-761-3148.

Federal Trade Commission Releases Report on Mortgage Disclosures

The FTC recently released the results of a Bureau of Economics study that showed that mortgage disclosure forms failed to convey key mortgage costs and terms to many consumers.  The study also suggests that there are better ways to inform consumers about mortgage products.  The results of this study are important because many mortgage experts believe it will prompt Congress into making widespread reforms to the mortgage disclosure system.

The FTC began looking at the adequacy of mortgage disclosure forms because many mortgage disclosure forms were created over thirty years ago.  The FTC believed that the disclosures no longer addressed the variety and complexity of today's mortgage products. In order to find a solution to this problem, the Bureau of Economics conducted a study which examined how consumers searched for mortgages, how consumers understood mortgage costs, and how consumers would benefit from different disclosures about mortgage costs.

Freddie Mac Examines the Effects of Adjustable Rate Mortgages

In the first quarter of 2007, Freddie Mac conducted a study on mortgage refinances.  The study found that 89 percent of borrowers who originally had a one-year adjustable rate mortgages chose a new fixed-rate mortgage when they refinanced.  The study further concluded that 84 percent of borrowers with hybrid adjustable-rate mortgages chose a fixed-rate mortgage as well.  This trend shows that borrowers are demanding the security of a fixed-rate mortgage when they refinance.  Borrowers no longer desire high-risk mortgage products because borrowers are finally aware of the risks of predatory lending and foreclosures from the news.  The trend towards fixed-rate mortgages is likely to continue until further changes and safeguards against predatory lending are put in place.