Wells Fargo Bank, National Association et al v. City of Richmond, California et al

Filing 49

Declaration of John Ertman in Support of 45 Reply to Opposition/Response, 46 Opposition/Response to Motion, 45 Motion for Preliminary Injunction, 46 Motion to Dismiss filed byDeutsche Bank National Trust Company, Deutsche Bank Trust Company Americas, Wells Fargo Bank, National Association. (Attachments: # 1 Exhibit A, # 2 Exhibit B, # 3 Exhibit C, # 4 Exhibit D, # 5 Exhibit E, # 6 Exhibit F, # 7 Exhibit G, # 8 Exhibit H, # 9 Exhibit I, # 10 Exhibit J, # 11 Exhibit K, # 12 Exhibit L, # 13 Exhibit M, # 14 Exhibit N, # 15 Exhibit O, # 16 Exhibit P, # 17 Exhibit Q, # 18 Exhibit R, # 19 Exhibit S, # 20 Exhibit T, # 21 Exhibit U, # 22 Exhibit V, # 23 Exhibit W, # 24 Exhibit X, # 25 Exhibit Y, # 26 Exhibit Z, # 27 Exhibit AA)(Related document(s) 45 , 46 ) (Tsai, Rocky) (Filed on 8/29/2013)

EXHIBIT O

From:
Sent:
To:
Subject:
Attachments:

Graham Williams [[e-mail]]
Friday, May 17, 201311:35AM
[e-mail] Lynch; Bill Lindsay
Corrected slides
Richmond corrected slides.pptx

Bill and Patrick,
In auditing the presentation sent to you I found a calculation error that drove incorrect numbers in three slides.
These slides have been corrected and they are attached. Please replace the incorrect pages in the books that I
sent you. We apologize for any inconvenience caused.
We are waiting to hear from you regarding a convenient time to discuss next steps.
Yours,

Graham Williams
Partner & CEO
Mortgage Resolution Partners
423 Washington Street, Suite 200
San Francisco, CA 94111
(o) 415.423.0016
(m) 415.971.1771

Confidential

Preventing Foreclosures in Richmond, California
Actions to Date and Recommended Next Step


In April of 2013 the City engaged Mortgage Resolution Partners MRP to act as its advisor to assist the City in exploring potential
solutions to the mortgage crisis; to assist the City by negotiating on the City’s behalf with entities which will provide the necessary
funding to the City in order to allow the City to acquire loans; and to assist the City in negotiating contracts with third parties
including owners of loans, attorneys, lenders, data companies, other government agencies and others as necessary to implement a
program or programs to benefit the City’s residents.



MRP has identified 1,681 families in the City’s jurisdiction that are burdened with underwater mortgages held in private label
mortgage backed securities (PLS).



MRP has identified public purposes for preventing foreclosures in the City



H.U.D. informs us that principal reductions of underwater PLS mortgages will prevent foreclosures that impose costs on the city,
families, lenders and neighboring property owners.



MRP has analyzed benefits to each of the 1,681 borrowers should they be included in the principal reduction program.



MRP has designed a program of principal reduction- Community Action to Restore Equity and Stability



MRP has arranged the $46 million of financing that is required to implement the initial CARES program in Richmond, CA. More
funding is available to Richmond when needed.



MRP is seeking permission to enter into negotiations on behalf of the City with mortgage servicers that represent trustees that
administer the securitization trusts in which underwater PLS mortgages in Richmond are held. The hoped for conclusion of these
negotiations would be that the loans are sold to the city, allowing the CARES program to be executed.

Confidential

Preventing Foreclosures in Richmond, California
Secured Mortgage Notes Structural Diagram, Richmond, CA

SMN Trust Series 2013-1

"Taken" Loans

PLS Trust

$

Notes

$46 million*
$60
Mortgage Cost
Basis

Loans Submitted for Refinancing

FHA Lenders

$

$46 million
$60
SMN Secured
Debt

$

$

Auction of Fallout

"Scratch and
Dent" Mortgage
Investors

* Maximum 80% of home value; excludes transaction costs and6credit support amount, if any

Investors

Confidential

Preventing Foreclosures in Richmond, California
Cash Flows For Initial Purchases of Underwater PLS in Richmond, CA
Funding Amount Analysis - Richmond, CA
Underwater PLS Loans
Loans not current
Current loans with seconds
Loans presented to servicers for purchase

1681
-419
-531
731

Loans presented to servicers for purchase
Servicer consent rate
Consensual loan pool

731
50%
365.5
365.5
75%
274

Loans purchased via consensual purchase
Average home Value
Aggregate home value

274
$211,533
$57,986,526

Aggregate home value
Estimated FMV of mortgage
Estimated funding amount

$57,986,526
80%
$46,389,221

$
$

274
211,533
57,986,526

Net Acquisition Price

Consensual loan pool
FHA qualifiying loans
Loans purchased via consensual purchase

Base Case - Richmond, CA
Loans purchased via consensual purchase
Average home Value
Aggregate home value
(80%)

$

46,389,221

Pull Through Population
Loans (% pull through)
80%
Net Proceeds (% Home Value)
95%
Proceeds to City Reserve (% of net proceeds)
Basis
Profit

$
$
$
$

219
44,069,759
(2,203,488)
(37,111,376)
4,754,895

Fallout Population
Loans (% fall out)
Net Proceeds (% Home Value)
City Reserve Recapture
Basis
Profit

20%
75%

Funder's Profit
Pull Through Population
Fallout Population
P&I on Entire Population
Estimated Transaction Fees (1%)
Total Profit

5%

$
$
$

55
8,697,979
579,865
9,277,844
0

$
$
$
$
$

4,754,895
510,281.43
(463,892.21)
4,801,284

Funders Return on Capital
Paid to City
City's Proceed per Resolution

10%
$
$

1,623,623
7,404