S-4/A

As filed with the Securities and Exchange Commissionon March 28, 2011

Registration No. 333-171370

UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

Washington, D.C. 20549

Amendment No. 2

to

FORM S-4

REGISTRATION STATEMENT UNDER THE SECURITIES ACT OF 1933

NATIONSTAR MORTGAGE LLC	NATIONSTAR CAPITAL CORPORATION
(Exact name of registrant as specified in its charter)	(Exact name of registrant as specified in its charter)
Delaware	Delaware
(State or other jurisdiction of incorporation or organization)	(State or other jurisdiction of incorporation or organization)
6162	6162
(Primary standard industrial classification code number)	(Primary standard industrial classification code number)
75-2921540 (I.R.S. Employer Identification No.)	27-1996157 (I.R.S. Employer Identification No.)
350 Highland Drive Lewisville, Texas 75067 (469) 549-2000	350 Highland Drive Lewisville, Texas 75067 (469) 549-2000
(Address, including zip code, and telephone number, including area code, of principal executive offices)	(Address, including zip code, and telephone number, including area code, of principal executive offices)

and the Guarantors identified in Table of Additional Registrant Guarantors below

Anne Sutherland, Esq.	Duane McLaughlin, Esq.
Executive Vice President and General Counsel	Cleary Gottlieb Steen & Hamilton LLP
Nationstar Mortgage LLC	One Liberty Plaza
350 Highland Drive	New York, New York 10006
Lewisville, Texas, 75067	(212) 225-2000
(469) 549-2000
(Name, address, including zip code, and telephone number, including area code, of agent for service)	(Copies of all communications, including communications sent to agent for service)

Approximate date of commencement of proposed sale to the public: As soon as practicable after this registration statement becomes effective.

If the securities being registered on this Form are being offered in connection with the formation of a holding company and there is compliance with General Instruction G, check the following box.  o

If this Form is filed to register additional securities for an offering pursuant to Rule 462(b) under the Securities Act, check the following box and list the Securities Act registration statement number of the earlier effective registration statement for the same offering.  o

If this Form is a post-effective amendment filed pursuant to Rule 462(d) under the Securities Act, check the following box and list the Securities Act registration statement number of the earlier effective registration statement for the same offering.  o

The registrant hereby amends this registration statement on such date or dates as may be necessary to delay its effective date until the registrant shall file a further amendment which specifically states that this registration statement shall thereafter become effective in accordance with Section 8(a) of the Securities Act or until the registration statement shall become effective on such date as the Securities and Exchange Commission, acting pursuant to said Section 8(a), may determine.

Table of Additional Registrant Guarantors

Name	Jurisdiction	I.R.S. Employer ID #	Address and Telephone #
Centex Land Vista Ridge Lewisville III General Partner, LLC	Delaware	75-2921540	350 Highland Drive Lewisville, Texas 75067 (469) 549-2000
Centex Land Vista Ridge Lewisville III, L.P.	Delaware	20-3437712	350 Highland Drive Lewisville, Texas 75067 (469) 549-2000
Harwood Service Company LLC	Delaware	75-2925375	350 Highland Drive Lewisville, Texas 75067 (469) 549-2000
Harwood Insurance Services, LLC	California	75-2921540	350 Highland Drive Lewisville, Texas 75067 (469) 549-2000
Harwood Service Company Of Georgia, LLC	Georgia	73-1643246	350 Highland Drive Lewisville, Texas 75067 (469) 549-2000
Harwood Service Company Of New Jersey, LLC	New Jersey	74-3047401	350 Highland Drive Lewisville, Texas 75067 (469) 549-2000
Homeselect Settlement Solutions, LLC	Delaware	20-1356314	350 Highland Drive Lewisville, Texas 75067 (469) 549-2000
Nationstar 2009 Equity Corporation	Delaware	27-1285662	350 Highland Drive Lewisville, Texas 75067 (469) 549-2000
Nationstar Equity Corporation	Nevada	75-2711305	350 Highland Drive Lewisville, Texas 75067 (469) 549-2000
Nationstar Industrial Loan Company	Tennessee	75-2786875	350 Highland Drive Lewisville, Texas 75067 (469) 549-2000
Nationstar Industrial Loan Corporation	Minnesota	75-2903483	350 Highland Drive Lewisville, Texas 75067 (469) 549-2000
NSM Recovery Services Inc.	Delaware	27-3275696	350 Highland Drive Lewisville, Texas 75067 (469) 549-2000
NSM Foreclosure Services Inc.	Delaware	27-3916074	350 Highland Drive Lewisville, Texas 75067 (469) 549-2000

The information in this preliminary prospectus is not complete and may be changed. These securities may not be sold until the registration statement filed with the Securities and Exchange Commission is effective. This preliminary prospectus is neither an offer to sell nor a solicitation of an offer to purchase these securities in any jurisdiction where the offer or sale is not permitted.

SUBJECT TO COMPLETION, DATED March 28, 2011

PROSPECTUS

Nationstar Mortgage LLC

Nationstar Capital Corporation

Offer to Exchange any and all of our outstanding unregistered 10.875% Senior Notes due 2015
for $250,000,000 aggregate principal amount of our new 10.875% Senior Notes due 2015
that have been registered under the Securities Act of 1933, as amended

Terms of the Exchange Offer

•  We are offering to exchange any and all of our outstanding 10.875% Senior Notes due 2015 that were issued on March 26, 2010 (the “Old Notes”) for an equal amount of new 10.875% Senior Notes 2015 (the “New Notes”, and together with the Old Notes, the “Notes”).

•  The exchange offer expires at 5:00 p.m., New York City time, on          , 2011 (such date and time, the “Expiration Date”, unless we extend or terminate the exchange offer, in which case the “Expiration Date” will mean the latest date and time to which we extend the exchange offer).

•  Tenders of Old Notes may be withdrawn at any time prior to the Expiration Date.

•  All Old Notes that are validly tendered and not validly withdrawn will be exchanged.

•  The exchange of Old Notes for New Notes generally will not be a taxable exchange for U.S. federal income tax purposes.

•  We will not receive any proceeds from the exchange offer.

•  The terms of the New Notes to be issued in the exchange offer are substantially the same as the terms of the Old Notes, except that the offer of the New Notes is registered under the Securities Act of 1933, as amended (the “Securities Act”), and the New Notes have no transfer restrictions, rights to additional interest or registration rights.

•  The New Notes will be senior unsecured obligations of each of Nationstar Mortgage LLC and Nationstar Capital Corporation, jointly and severally, and will be unconditionally guaranteed, jointly and severally, by each of our existing and future domestic subsidiaries other than non-guarantor subsidiaries as defined by the indenture governing the New Notes. See “Description of the New Notes.”

•  The New Notes will not be listed on any securities exchange. A public market for the New Notes may not develop, which could make selling the New Notes difficult.

We are making the exchange offer in reliance on the position of the staff of the SEC as set forth in interpretive letters addressed to third parties in other transactions, including the SEC staff’s no-action letter, Exxon Capital Holdings Corporation, available May 13, 1988. See “Description of the Exchange Offer—Resale of the New Notes.”

Each broker-dealer that receives New Notes for its own account pursuant to the exchange offer must acknowledge that it will deliver a prospectus in connection with any resale of such New Notes. The letter of transmittal accompanying this prospectus states that by so acknowledging and by delivering a prospectus, a broker-dealer will not be deemed to admit that it is an “underwriter” within the meaning of the Securities Act. This prospectus, as it may be amended or supplemented from time to time, may be used by a broker-dealer in connection with resales of New Notes received in exchange for Old Notes where such Old Notes were acquired by such broker-dealer as a result of market-making activities or other trading activities. Starting on the Expiration Date (as defined herein) and ending on the close of business 90 days after the Expiration Date, we will make this prospectus available to any broker-dealer for use in connection with any such resale. See “Plan of Distribution.”

Investing in the New Notes to be issued in the exchange offer involves certain risks. See “Risk Factors” beginning on page 17.

We are not making an offer to exchange Notes in any jurisdiction where the offer is not permitted.

Neither the Securities and Exchange Commission (the “SEC”) nor any state securities commission has approved or disapproved of these securities or passed upon the adequacy or accuracy of this prospectus. Any representation to the contrary is a criminal offense.

The date of this prospectus is          , 2011.

TABLE OF CONTENTS

	Page
Where You Can Find More Information		ii
Market And Industry Data		iii
Websites		iii
Prospectus Summary		1
Risk Factors		17
Cautionary Statement Regarding Forward-Looking Statements		38
Selected Historical Consolidated Financial Data		40
Description Of The Exchange Offer		43
Management’s Discussion And Analysis Of Financial Condition And Results Of Operations		53
Glossary Of Industry Terms		82
Industry		85
Business		90
Changes In And Disagreements With Accountants On Accounting Or Financial Disclosure		109
Quantitative And Qualitative Disclosures About Market Risk		110
Management, Board Of Managers And Board Of Directors		113
Compensation Discussion & Analysis		116
Certain Relationships And Related Party Transactions		126
Security Ownership Of Certain Beneficial Owners And Management		127
Description Of The New Notes		129
Form, Book-Entry Procedures And Transfer		184
Certain U.S. Federal Income Tax Consequences		187
Plan Of Distribution		190
Use Of Proceeds		190
Legal Matters		190
Experts		190
Index To Consolidated Financial Statements		F-1
Letter Of Transmittal		A-1
EX-5.1
EX-5.2
EX-5.3
EX-10.5
EX-10.6
EX-10.7
EX-12.1
EX-23.1

We have not authorized anyone to give any information or make any representation about the offering that is different from, or in addition to, that contained in this prospectus or the related registration statement. If you are in a jurisdiction where offers to sell, or solicitations of offers to purchase, the securities offered by this document are unlawful, or if you are a person to whom it is unlawful to direct these types of activities, then the offer presented in this document does not extend to you. The information contained in this document speaks only as of the date of this document unless the information specifically indicates that another date applies.

WHERE YOU CAN FIND MORE INFORMATION

We have filed with the SEC a registration statement on Form S-4 to register this exchange offer of the New Notes, which you can access on the SEC’s website at http://www.sec.gov. This prospectus, which forms part of the registration statement, does not contain all of the information included in that registration statement. For further information about us and about the New Notes offered in this prospectus, you should refer to the registration statement and its exhibits. You may read and copy any materials we file with the SEC at the public reference room maintained by the SEC at 100 F Street, N.E., Washington, D.C. 20549. These materials are also available to the public from the SEC’s website at http://www.sec.gov.

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MARKET AND INDUSTRY DATA

Certain market and industry data included in this prospectus has been obtained from third party sources that we believe to be reliable. Market estimates are calculated by using independent industry publications, government publications and third party forecasts in conjunction with our assumptions about our markets. We have not independently verified such third party information. While we are not aware of any misstatements regarding any market, industry or similar data presented herein, such data involves risks and uncertainties and is subject to change based on various factors, including those discussed under the headings “Cautionary Statement Regarding Forward-Looking Statements” and “Risk Factors” in this prospectus.

WEBSITES

The information contained on or that can be accessed through any of our websites is not incorporated in, and is not part of, this prospectus or the registration statement.

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PROSPECTUS SUMMARY

This prospectus summary contains basic information about our company and the offering. It may not contain all the information that may be important to you. For certain industry terms, investors are referred to the section entitled “Glossary of Industry Terms” beginning on page 82. Investors should carefully read this entire prospectus, including the information set forth under “Risk Factors” and “Management’s Discussion and Analysis of Financial Condition and Results of Operations” and in our consolidated financial statements and related notes. Unless otherwise indicated or the context otherwise requires, references in this prospectus to “Nationstar,” the “Company,” “we,” “us” or “our” refer collectively to Nationstar Mortgage LLC and its subsidiaries. With respect to the discussion of the terms of the notes on the cover page, in the section entitled “Prospectus Summary—Summary of the Exchange Offer,” in the section entitled “Prospectus Summary—Summary of the New Notes” and in the section entitled “Description of the New Notes,” references to “we,” “us” or “our” include only Nationstar Mortgage LLC and Nationstar Capital Corporation and not any other subsidiaries of Nationstar Mortgage LLC.

Company Overview

We are a leading residential mortgage company specializing in residential mortgage loan servicing and residential mortgage loan originations. Our business primarily consists of two Operating Segments: Servicing and Originations.

Loan Servicing

We are one of the largest independent loan servicers in the United States. Our servicing portfolio consists of mortgage servicing rights acquired from or subserviced for various third parties as well as loans we originate through our integrated origination platform. As of December 31, 2010, our servicing portfolio included over 389,000 loans with an aggregate unpaid principal balance of $64.2 billion. We service mortgage loans in all 50 states, and we are licensed as a residential mortgage loan servicer and/or a third party debt collector in all states that require such licensing. Our Servicing Segment produces recurring, fee-based revenues based upon contractually established servicing fees.

Servicing fees primarily consist of an amount based on the aggregate unpaid principal balance of the loans serviced and also include ancillary fees such as late fees and insufficient funds fees. In addition, we earn interest income on amounts deposited in collection accounts and amounts held in escrow to pay property taxes and insurance, which we refer to as float income. We also generate incentive fees from owners of the loans that we service for meeting certain loss-mitigation metrics and for arranging successful loss mitigation programs. Moreover, the U.S. federal government pays us incentive fees for loans that we successfully modify within the parameters of the Home Affordable Modification Program, or HAMP. In addition, we leverage our loan servicing business and customer base to provide several complementary services that generate fee-based revenues.

We use a flexible, high-touch servicing model that focuses on personal contact with borrowers and is designed to decrease borrower delinquencies and defaults on mortgages and to increase borrower repayment performance with a goal of home ownership preservation. Our operating culture emphasizes individual collector accountability for asset performance (what we refer to as credit loss ownership) and loss mitigation practices to improve asset performance and cash flow and to reduce credit losses. Our servicing model and operating culture have proven especially valuable in the current distressed residential market, and we have established an excellent track record servicing credit-sensitive loans.

We believe that our demonstrated performance in servicing loans for a government-sponsored enterprise facilitated our acquisitions of two significant mortgage servicing rights portfolios totaling approximately $25.0 billion since November 2008. These two portfolios were previously serviced by other servicers. These acquisitions helped us grow our servicing portfolio from $12.7 billion on December 31, 2007, to $64.2 billion on December 31, 2010, including approximately $25 billion in

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unpaid principal balance which we boarded in November and December 2010, when we entered into a subservicing agreement with a government sponsored enterprise.

Loan Originations

We are also one of the few high-touch servicers in the United States with a loan origination platform. We currently originate primarily prime agency and government conforming residential mortgage loans, and we are licensed to originate residential mortgage loans in 49 states. Our Originations Segment diversifies our offering of mortgage services and further stabilizes our revenue stream. In 2009, we originated $1.5 billion in aggregate principal balance entirely consisting of prime residential mortgage loans. In 2010, our originations totaled $2.8 billion in aggregate principal balance. We originate loans through our three loan origination channels:

•  Consumer Direct Retail Channel—through which we market refinancing and purchase money mortgage loans directly to selected consumers from our centralized call center;

•  Distributed Retail Channel—through which we market refinancing and purchase money mortgage loans directly to consumers from local branches; and

•  Wholesale Channel—through which we market our refinancing and purchase money mortgage loans to third party mortgage brokers.

We originate purchase money loans and refinance existing loans, including loans that we service. Our strategy is to mitigate the credit, market and interest rate risk from loan originations by either selling newly originated loans or placing them in government-sponsored enterprise or government securitizations. We typically sell new loans within 30 days of origination, and we do not expect to hold any of the loans that we currently originate on our balance sheet on a long-term basis. At the time of sale, we have the option to retain the mortgage servicing rights on loans we originate.

Our origination capability differentiates us from other non-bank, high-touch loan servicers without an integrated origination platform by:

•  providing us with an organic source of new loans to service as existing loans are repaid or otherwise liquidated as originated loans serviced by us typically generate higher returns than comparable mortgage servicing rights that we would acquire from a third party;

•  providing an attractive supplementation to our servicing loss mitigation strategies by allowing us to modify and refinance mortgage loans, including loans that we service;

•  creating a diversified source of revenue; and

•  building brand recognition.

Legacy Assets and Other

We also have a legacy asset portfolio, which consists primarily of non-prime and nonconforming residential mortgage loans, most of which we originated from April to July 2007. In November 2009, we term-financed our legacy assets with non-recourse debt that requires no additional capital or equity contributions. In conjunction with the transaction, we reclassified our legacy assets to “held for investment” on our consolidated balance sheet, which allowed us to eliminate further mark-to-market accounting exposure on these assets. We continue to service these loans using our high-touch servicing model. Additionally, we consolidated certain securitization trusts where it was determined that we had both the power to direct the activities that most significantly impact the VIE’s economic performance and the obligation to absorb losses or the right to receive benefits that could potentially be significant to the VIE, pursuant to new consolidation accounting guidance related to VIEs adopted on January 1, 2010.

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Industry Overview

Loan Servicing

According to Inside Mortgage Finance, there were $10.5 trillion in residential mortgage loans outstanding in the United States as of December 31, 2010, and each mortgage loan requires servicing. Loan servicers normally earn a servicing fee of 25 to 50 basis points per annum on the unpaid principal balance of loans serviced, as well as associated ancillary fees, such as late fees. Consequently, a loan servicer can create value for both itself and the owner of the mortgage loan by increasing the number of borrowers that remain current in their repayment obligations. Owners may include a lender, investor or residential mortgage-backed securities trust, in the case of a securitized pool of mortgages.

Loan servicing primarily involves the calculation, collection and remittance of principal and interest payments, the administration of mortgage escrow accounts, the collection of insurance claims, the administration of foreclosure procedures, the management of real estate owned and the making of required advances. Loan servicers play a key role in the residential mortgage market by providing loan servicing functions on behalf of the owners of loans including collecting the scheduled principal and interest payments, as well as taxes and insurance; performing customer service functions; and taking active steps to mitigate any potential losses associated with borrower delinquencies and defaults. Typically, a servicer is contractually obligated to service a mortgage loan in accordance with accepted servicing industry practices as well as applicable regulations and statutes. A servicer’s rights and obligations are governed by the pooling and servicing agreement for the underlying loans. A subservicer’s rights and obligations are governed by the subservicing agreement with the third party that owns the related mortgage servicing rights.

To the extent a borrower does not make a payment, servicers are generally required to make advances of principal and interest, taxes and insurance and legal fees until such time as the underlying property is liquidated or the servicer determines that additional advances will not be recoverable from future payments, proceeds or other collections on the mortgage loan. In the event of foreclosure, servicers are entitled to reimbursement of advances from the sale proceeds of the related property. Typically, in the event such proceeds are insufficient to reimburse the advances in full, which we refer to as a non-recoverable advance, servicers are entitled to reimbursement of advances from collections on other mortgage loans in the related residential mortgage-backed securities trust. For this reason, advances and the right of reimbursement are typically senior to the claims of holders of securities issued by the residential mortgage-backed securities trusts.

Loan Originations

According to Inside Mortgage Finance, total residential mortgage originations in the United States were $1.6 trillion in 2010, a decrease of 13% compared to 2009. Of the 2010 originations, approximately 87% were conforming mortgages guaranteed by government-sponsored enterprises, including Fannie Mae and Freddie Mac, or government agencies such as the Federal Housing Administration and the Department of Veterans Affairs. From 2006 to 2010, the annual aggregate principal balance of newly originated mortgage loans that were either insured or guaranteed by government agencies or sold to government-sponsored enterprises or into government securitizations increased from $1.1 trillion to $1.4 trillion, or at a compound annual growth rate, which we refer to as CAGR, of 6%.

The United States residential mortgage market consists of a primary mortgage market that links borrowers and lenders and a secondary mortgage market that links lenders and investors. In the primary mortgage market, residential mortgage lenders such as mortgage banking companies, commercial banks, savings institutions, credit unions and other financial institutions originate or provide mortgages to borrowers. Lenders obtain liquidity for originations in a variety of ways, including by selling mortgages or mortgage-related securities into the secondary mortgage market. Loan originators that are banks also have access to customer deposits to fund their originations business.

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The secondary mortgage market consists of institutions engaged in buying and selling mortgages in the form of whole loans (i.e., mortgages that have not been securitized) and mortgage- related securities. Government-sponsored enterprises, such as Fannie Mae and Freddie Mac, and a government agency, Ginnie Mae, participate in the secondary mortgage market by purchasing mortgage loans and mortgage-related securities for investment and by issuing guaranteed mortgage-related securities.

Industry Trends

Loan Servicing

In a weak economic and credit environment with elevated delinquencies and defaults, servicing becomes operationally more challenging and more capital intensive as servicers need to add and train staff to manage the increase in delinquent borrowers. In addition, servicers are generally required to make advances on delinquent mortgage loans for principal and interest payments, taxes, insurance, legal fees and property maintenance fees, all of which are typically recovered upon foreclosure or liquidation. According to the Mortgage Bankers Association, delinquent loans and foreclosures have increased from $0.6 trillion at December 2006 to $1.4 trillion at December 31, 2010. Furthermore, Fannie Mae estimates that as of December 31, 2010, it had $764 billion of assets within its own portfolio with characteristics that we believe make them credit-sensitive.

The majority of loan servicing in the United States is performed by the nation’s money center banks such as Bank of America, Wells Fargo, JPMorgan Chase and Citibank, which together service approximately 54% of all outstanding mortgage loans on one to four-family residences as of December 31, 2010. These bank-owned servicers mainly service prime, performing mortgages and are most effective at routine account management of portfolios with low delinquencies that require limited interaction with borrowers. The traditional servicer model was constructed to process simple payments and minimize costs, and functioned well in environments characterized by low delinquencies and defaults. However, in the current environment of rising delinquencies, extensive foreclosures and elevated real estate owned activity, traditional servicers are experiencing higher operating costs, and their performance is declining due to the high level of foreclosures and liquidation processes. According to CalculatedRisk, from 2007 through 2010, approximately 3.4 million homes were lost to foreclosure and as of September 30, 2010, more than 3.5 million mortgages were in foreclosure or 90+ days delinquent.

We believe that there is a growing recognition that the incremental cost of high-touch servicing, with a strong emphasis on asset performance and foreclosure avoidance, is a value added service as the credit loss savings that result are greater than those realized from traditional loan servicing business models. Holders of residential mortgage credit risk are demanding better performance and many are moving the servicing of their loans to specialized servicing companies with expertise and focus on asset performance.

The passage of both the Emergency Economic Stabilization Act of 2008 on October 1, 2008, and the U.S. federal government’s Making Home Affordable Plan announced on February 18, 2009, which we refer to as the MHA, and other related government initiatives provided an advantage for servicers with loss mitigation expertise. The MHA provides a financial incentive to servicers to modify qualifying loans in accordance with the plan’s guidelines and requirements.

Loan Originations

Residential mortgage loans are generally originated through either a direct lending network or a mortgage brokerage network. A direct lending network consists of retail branches, Internet and telephone-based operations. Typical referral sources for a direct lending network include realtors, homebuilders, credit unions, small banks and affinity groups.

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The length of time from the origination or purchase of a mortgage loan to its sale or securitization generally ranges from 10 to 60 days, depending on a variety of factors including loan volume, product type, interest rates and capital market conditions. An important source of capital for the residential mortgage industry is warehouse lending. These facilities provide funding to mortgage loan originators until the loans are sold to investors in the secondary mortgage loan market.

The MHA and other similar initiatives, along with low interest rates and a high rate of refinancing activity, provide opportunities for servicers that also conduct originations to leverage their servicing portfolio by refinancing existing loans.

Our Strengths

We believe the following competitive strengths contribute to our market position and differentiate us from our competition.

Attractive Business Model with Strong Cash Flow

We have an attractive business model as one of the few high-touch servicers in the United States with an integrated loan origination platform.

Our Servicing Segment produces recurring, fee-based revenues based upon contractually established servicing fees, and we are exposed to minimal credit risk with respect to the mortgage loans that we service. We believe that we continue to demonstrate our ability to produce lower delinquency rates on the loans we service, including credit-sensitive loans, compared to our competitors, and we believe that we will continue to acquire mortgage servicing rights at attractive prices from mortgage investors or provide subservicing for third parties that value our servicing capabilities.

We believe that our Originations Segment differentiates us from other high-touch servicers without an origination platform by providing us with a more cost-effective alternative to purchasing new mortgage servicing rights as the unpaid principal balance of our existing servicing portfolio decreases over time; diversifying and stabilizing our revenue in a variety of interest rate environments; and building brand recognition.

We generate significant cash flow for debt service as a result of the profitability of our Operating Segments. We believe that our focus on asset performance and operational efficiency has enabled us to strengthen our relationships with the government-sponsored enterprises and other third parties and has allowed us to grow our earnings from our Operating Segments.

Substantial Liquidity and Access to Multiple Capital and Funding Sources

We maintain substantial levels of funding and liquidity through multiple capital and funding sources for our Operating Segments. We have access to multiple funding sources, and we believe that our liquidity sources are sufficient to meet our immediate and future needs. These sources include servicing advance lines to finance our Servicing Segment, warehouse lines to finance our Originations Segment and loans from government-sponsored enterprises to facilitate the acquisition of mortgage servicing rights. As of December 31, 2010, we had a total of $706.0 million of unused capacity under our existing servicing advance facilities and origination warehouse lines. We believe that our strong relationships with liquidity providers and our continued ability to access sufficient capital during the recent economic downturn demonstrate the depth of our liquidity and access to capital. See “Management’s Discussion and Analysis of Financial Condition and Results of Operations—Liquidity and Capital Resources” and “Management’s Discussion and Analysis of Financial Condition and Results of Operations—Contractual Obligations.”

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Servicing Platform with Loss Mitigation Focus

We believe that, by focusing on personal contact with borrowers, our high-touch servicing approach reduces credit losses and maximizes cash collections for credit-sensitive loans. This highly flexible model allows for customization to meet individual borrower requirements, and is further differentiated by providing personal contact at critical borrower touch points, including via telephone, mail, electronic communications and other personal contact methods. Our approach facilitates strong relationships with borrowers and greater employee accountability for desired performance. We believe that our servicing expertise and focus on optimal outcomes reduces credit impairments and losses to loan investors. We believe that this model presents continued opportunities for growth.

Scalable Platform and Established Track Record

Establishing a servicing platform requires significant initial capital investments, infrastructure, licensing and expertise to properly service credit-sensitive loans, which creates substantial barriers to entry. We operate a highly scalable platform, with the capacity to add up to a total of approximately $15 billion of unpaid principal balance to our servicing operations within 90 to 120 days with minimal incremental fixed costs. We can service these additional accounts with our existing infrastructure, real estate and technology platform.

Additionally, we have used our high-touch servicing model and our mix of proprietary and commercially available technology solutions to establish a track record of superior performance in servicing credit-sensitive loans. The unpaid principal balance of the loans we serviced increased 406% from December 31, 2007 to December 31, 2010, primarily through acquiring mortgage servicing rights and entering into subservicing agreements. We believe these acquisitions and agreements can be attributed to our established track record in servicing credit-sensitive residential mortgage loans, and we believe that our track record, together with our scalable platform, positions us well relative to our competitors to acquire similar portfolios in the future.

Culture of Credit Loss Ownership and Accountability

Since our inception, our operating culture has emphasized superior operational and financial performance, credit loss ownership (our term for individual collector accountability for asset performance), employee development and customer relations. We establish financial and operational goals across all levels of the organization, and compensation for all of our employees is based upon achieving the desired results. As a result, we have a streamlined organizational structure that allows us to react to business needs and changes in an expeditious manner. We hire recent college graduates and teach them our business through a systematic training program. We primarily develop existing employees for management positions. We strongly endorse promotion from within and routinely identify and place senior level staff in our Manager in Training program as a developmental tool to prepare them for supervisory positions. Supervisors typically then rotate through progressively more complex management assignments to improve both their technical and managerial proficiency.

We believe that our culture of credit loss ownership and accountability has enabled us to outperform the industry. As of December 15, 2010, according to Loan Performance.com, our 60 or more day delinquency rate for our legacy assets (as a percentage of original balance) was approximately 12%, while the delinquency rate for the ABX 07-2 Mortgage Index was approximately 24%.

Stable and Seasoned Management Team

Our senior management team is comprised of experienced mortgage industry executives with an average of approximately 25 years in the industry and a track record of generating financial and operational improvements. Several members of our management team have held senior positions at other residential mortgage companies. In addition, our senior management team has remained in place through multiple business cycles and has a demonstrated ability to adapt to changing market

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conditions. We believe that the experience of our senior management team and its management philosophy are significant contributors to improving the operating performance of our Company.

Our Strategy

Our primary goal is to increase the value of our loans and our clients’ loans by reducing delinquencies and credit losses. This goal is achieved through our culture, processes and expertise. We plan to grow our revenue and operating cash flow by employing the following business strategies:

Capitalizing on Industry Opportunities

We believe we are well positioned to benefit from the current trends in the residential mortgage industry. The disruption in the mortgage industry has resulted in limited access to funding and capital, lower than anticipated performance of residential portfolios and a strong demand for high-touch servicing. We believe that competitors with significant residential exposure or limited access to capital have shifted their operations to selling residential real estate assets, including mortgage servicing rights. This allows existing strong servicers the opportunity to acquire or subservice additional portfolios at attractive valuations. Additionally, due to a variety of economic factors, residential loan delinquencies and related losses are at historical highs prompting government-sponsored enterprises and other owners of residential mortgage loans to focus on home ownership preservation and servicing for superior credit performance. The heightened focus in these areas has led to a strong demand for high-touch servicers by these owners. Also, we believe that many of the largest loan servicers—who are experiencing unprecedented levels of delinquencies and losses—do not have sufficient internal capacity to perform high-touch servicing in their own portfolios and, as a result, may look to independent high-touch servicers to assist them in servicing their portfolios. As a result, we believe that there will continue to be strong demand for experienced high-touch servicers with a proven ability to improve loan performance. We also believe that there will be significant opportunities to continue to acquire mortgage servicing rights at attractive prices.

Maintaining and Growing Our Steady Fee-Based Servicing Portfolio

Our servicing business produces recurring, fee-based revenues based upon contractually established servicing fees. We intend to continue to utilize our established and scalable servicing platform to grow our servicing operations organically and through acquisitions. We believe that we will continue to benefit from our strong relationship with government-sponsored enterprises and other third party investors, which we believe will enable us to acquire additional servicing rights at attractive prices and subservicing contracts in order to grow our business. Additionally, we have invested in our loan administration and customer service servicing divisions to accommodate the increased scale and size of our portfolio, which allows us to service newly originated prime mortgage loans at attractive return levels in a variety of operating and economic environments.

Continuing To Expand Our Originations Platform

Our Originations Segment diversifies our offering of mortgage services and further stabilizes our revenue stream by providing us with a natural hedge against fluctuations in prevailing interest rates. We have a diversified, multi-channel strategy to continue to build our prime originations platform in order to organically replace servicing run-off. Through our origination platform, we are also able to create loan servicing assets at valuation levels below where our servicing competitors can purchase comparable mortgage servicing rights. Also, we can recapture loan payoffs in our existing servicing portfolio by providing origination services to our existing borrowers.

We believe that there are significant opportunities to originate loans for servicers and other financial institutions lacking origination capacity, and we intend to capitalize on these opportunities by expanding our retail channels. Our expansion efforts will focus primarily on purchase money lending, which is a stable origination source through various interest rate cycles. Unlike certain competitors

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who are required to utilize third party intermediaries in transactions with the government-sponsored enterprises and Ginnie Mae, we are a direct lender with the capability to sell loans directly to the government-sponsored enterprises and to securitize loans directly with Ginnie Mae. We believe that this capability allows us to control the credit quality of the loans we originate, thereby reducing our repurchase risk.

Engaging in Opportunistic Acquisitions and New Business Opportunities

There are numerous banks, insurance companies and other financial entities that have significant exposure to the residential mortgage sector. Our management, together with our dedicated servicing and origination relationship teams and our sponsor, Fortress Investment Group LLC, or Fortress, have extensive business and corporate expertise, receive numerous requests to review potential acquisition opportunities and continually conduct due diligence to identify potential opportunistic acquisitions. We are currently seeking out opportunities and believe there will continue to be significant opportunities to take advantage of the dislocation in the residential mortgage sector and acquire assets at attractive valuations. We intend to opportunistically grow our business through acquiring mortgage servicing rights, subservicing rights, servicing platforms and originations platforms. We may purchase assets and/or platforms of significant size. We believe there are several assets and platforms currently for sale in our industry and we are currently in the process of pursuing a number of such opportunities.

Company History

Nationstar Mortgage LLC is a Delaware limited liability company. We were formed in 1994 in Denver, Colorado as Nova Credit Corporation, a Nevada corporation. In 1997, we moved our executive offices and primary operations to Dallas, Texas and changed our name to Centex Credit Corporation. In 2001, Centex Credit Corporation was merged into Centex Home Equity Company, LLC, a Delaware limited liability company (“CHEC”). In 2006, FIF HE Holdings, LLC, acquired all of our outstanding membership interests (the “Acquisition”), and we changed our name to Nationstar Mortgage LLC. Nationstar Capital Corporation, a Delaware corporation, is our wholly-owned subsidiary formed solely for the purpose of being a corporate co-issuer of the notes.

Fortress Investment Group

As of December 31, 2010, FIF HE Holdings, LLC, a holding company, is the sole member of Nationstar Mortgage LLC, owning 100% of our outstanding membership interests. FIF HE Holdings, LLC, in turn, is owned by certain private equity funds managed by an affiliate of Fortress and company management. Fortress is a leading global investment management firm with approximately $44.6 billion in fee paying assets under management as of December 31, 2010. Fortress is headquartered in New York and has affiliates with offices in Charlotte, Dallas, Frankfurt, London, Los Angeles, New Canaan, Philadelphia, Rome, Singapore, Sydney and Tokyo.

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Fortress has extensive experience and expertise in the residential mortgage and financial services sectors. Senior management members have managed businesses at many leading financial firms, including BlackRock, Goldman Sachs, Lehman Brothers and UBS. Fortress has a strong track record of investing in the residential mortgage sector, including current or prior investments in: AMRESCO Inc., Conseco Finance Corp., Capstead Mortgage Corp., Italfondiario S.p.A., American General Finance Inc., GreenPoint and Bombardier.

Risk Factors

Participation in this exchange offer involves substantial risk. You should carefully consider the risk factors set forth in the section entitled “Risk Factors” and the other information contained in this prospectus prior to participating in the exchange offer. See “Risk Factors” beginning on page 17.

Ownership Structure

Set forth below is the ownership structure of Nationstar Mortgage LLC and its subsidiaries as of March 28, 2011.

Corporate Information

Our executive offices are located at 350 Highland Drive, Lewisville, Texas 75067 and our telephone number is (469) 549-2000.

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Summary of the Exchange Offer

Background	On March 26, 2010, we issued $250,000,000 aggregate principal amount of Old Notes in an unregistered offering. In connection with that offering, we entered into a registration rights agreement on March 26, 2010 (the “Registration Rights Agreement”) in which we agreed, among other things, to complete this exchange offer. Under the terms of the exchange offer, you are entitled to exchange Old Notes for New Notes evidencing the same indebtedness and with substantially similar terms. You should read the discussion under the heading “Description of the Notes” for further information regarding the New Notes.
The Exchange Offer	We are offering to exchange, for each $1,000 aggregate principal amount of our Old Notes validly tendered and accepted, $1,000 aggregate principal amount of our New Notes.
	We will not pay any accrued and unpaid interest on the Old Notes that we acquire in the exchange offer. Instead, interest on the notes will accrue from the most recent date to which interest has been paid or, if no interest has been paid, from and including March 26, 2010, the date on which we issued the Old Notes.
	As of the date of this prospectus, approximately $250,000,000 aggregate principal amount of the Old Notes are outstanding.
Denominations of New Notes	Tendering holders of Old Notes must tender Old Notes in minimum denominations of $2,000 and integral multiples of $1,000 in excess thereof. New Notes will be issued in minimum denominations of $2,000 and integral multiples of $1,000 in excess thereof.
Expiration Date	The exchange offer will expire at 5:00 p.m., New York City time, on          , 2011, unless we extend or terminate the exchange offer in which case the “Expiration Date” will mean the latest date and time to which we extend the exchange offer.
Settlement Date	The settlement date of the exchange offer will be as soon as practicable after the Expiration Date of the exchange offer.
Withdrawal of Tenders	Tenders of Old Notes may be withdrawn at any time prior to the Expiration Date.
Conditions to the Exchange Offer	Our obligation to consummate the exchange offer is subject to certain customary conditions, which we may assert or waive. See “Description of the Exchange Offer—Conditions to the Exchange Offer.”
Procedures for Tendering	To participate in the exchange offer, you must follow the automatic tender offer program (“ATOP”), procedures established by The Depository Trust Company (“DTC”), for tendering Old Notes held in book-entry form. The ATOP procedures require that the exchange agent receive, prior to the Expiration Date of the exchange offer, a computer-

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	generated message known as an “agent’s message” that is transmitted through ATOP and that DTC confirm that:
	• DTC has received instructions to exchange your Old Notes; and
	• you agree to be bound by the terms of the letter of transmittal.
	For more details, please read “Description of the Exchange Offer—Terms of the Exchange Offer” and “Description of the Exchange Offer—Procedures for Tendering.” If you elect to have Old Notes exchanged pursuant to this exchange offer, you must properly tender your Old Notes prior to 5:00 p.m., New York City time, on the Expiration Date. All Old Notes validly tendered and not properly withdrawn will be accepted for exchange. Old Notes may be exchanged only in minimum denominations of $2,000 and integral multiples of $1,000 in excess thereof.
Consequences of Failure to Exchange	If we complete the exchange offer and you do not participate in it, then:
	• your Old Notes will continue to be subject to the existing restrictions upon their transfer;
	• we will have no further obligation to provide for the registration under the Securities Act of those Old Notes except under certain limited circumstances; and
	• the liquidity of the market for your Old Notes could be adversely affected.
Taxation	The exchange pursuant to the exchange offer generally will not be a taxable event for U.S. federal income tax purposes. See “Certain U.S. Federal Income Tax Considerations” in this prospectus.
Use of Proceeds	We will not receive any cash proceeds from the issuance of the New Notes in this exchange offer.
Exchange Agent	Wells Fargo Bank, National Association is the exchange agent for the exchange offer.

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Summary of the New Notes

Issuers	Nationstar Mortgage LLC, a Delaware limited liability company, and Nationstar Capital Corporation, a Delaware corporation.
Securities Offered	$250,000,000 aggregate principal amount of 10.875% Senior Notes due April 1, 2015.
Maturity Date	April 1, 2015.

Interest Rate 10.875% per annum, payable semi-annually in arrears on April 1 and October 1 of each year, commencing October 1, 2010. Interest on the New Notes will accrue from the most recent date to which interest has been paid or, if no interest has been paid, from and including March 26, 2010.

Guarantees	The New Notes will be guaranteed on an unsecured senior basis by each of our existing and future domestic subsidiaries, other than our securitization and certain finance subsidiaries and subsidiaries that in the future we designate as excluded restricted and unrestricted subsidiaries.
Ranking	The New Notes and the guarantees will be our and the guarantors’ general unsecured senior indebtedness, respectively, and will:
	• rank equally in right of payment to all of our and the guarantors’ existing and future indebtedness and other obligations that are not, by their terms, expressly subordinated in right of payment to the notes and the guarantees;
	• rank senior in right of payment to any of our and the guarantors’ existing and future senior subordinated and subordinated indebtedness and other obligations that are, by their terms, expressly subordinated in right of payment to the notes and the subsidiary guarantees; and
	• be effectively junior in right of payment to all of our and the guarantors’ existing and future senior secured indebtedness and other obligations to the extent of the value of the assets securing such indebtedness and other obligations.
Form and Denomination	The New Notes will be issued in fully-registered form. The New Notes will be represented by one or more global notes, deposited with the trustee as custodian for DTC and registered in the name of Cede & Co., DTC’s nominee. Beneficial interests in the global notes will be shown on, and any transfers will be effective only through, records maintained by DTC and its participants.
	The New Notes will be issued in minimum denominations of $2,000 and integral multiples of $1,000 in excess thereof.
Optional Redemption	We may redeem the New Notes, in whole or in part, at any time prior to April 1, 2013, at a price equal to 100% of the aggregate principal amount of the New Notes plus the applicable “make whole” premium, as described in “Description of the New Notes—Redemption—Optional Redemption,” plus accrued and unpaid interest, if any, to the applicable redemption date.

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	We may redeem the New Notes, in whole or in part, at any time on or after April 1, 2013, at the applicable redemption price specified in “Description of the New Notes—Redemption—Optional Redemption,” plus accrued and unpaid interest, if any, to the applicable redemption date.
	In addition, we may redeem up to 35% of the aggregate principal amount of the New Notes at any time on or prior to April 1, 2013 with the net cash proceeds from certain equity offerings at the applicable redemption price specified “Description of the New Notes—Redemption—Optional Redemption,” plus accrued and unpaid interest, if any, to the applicable redemption date.
Change of Control	If certain change-of-control events occur, we must offer to repurchase all of the New Notes at 101% of their principal amount, plus accrued and unpaid interest, if any, to the repurchase date.
Asset Sales	If we sell assets under certain circumstances, we will be required to make an offer to purchase the New Notes at their face amount, plus accrued and unpaid interest, if any, as of the purchase date.
Absence of a Public Market	The New Notes are new securities for which there currently is no market and we cannot assure you that any public market for the New Notes will develop or be sustained.
Certain Covenants	The indenture governing the New Notes will, among other things, limit our ability and the ability of our subsidiaries to:
	• incur or guarantee additional indebtedness;
	• incur liens;
	• pay dividends on or make distributions in respect of our capital stock or make other restricted payments;
	• make investments;
	• consolidate, merge, sell or otherwise dispose of certain assets; and
	• enter into transactions with our affiliates.
	These covenants are subject to important exceptions, limitations and qualifications as described in “Description of the New Notes—Certain Covenants.”
Listing	We do not intend to list the New Notes on any securities exchange.
Governing Law	The New Notes are governed by, and construed in accordance with, the laws of the State of New York, without regard to conflicts of laws principles thereof.
Book-Entry Depository	DTC.
Trustee	Wells Fargo Bank, National Association.
Risk Factors	You should refer to the section entitled “Risk Factors” for a discussion of material risks you should carefully consider before deciding to invest in the New Notes.

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SUMMARY CONSOLIDATED FINANCIAL DATA

The following tables summarize consolidated financial information for our business. You should read these tables along with “Management’s Discussion and Analysis of Financial Condition and Results of Operations,” “Business” and our consolidated financial statements and the related notes included elsewhere in this prospectus.

The summary consolidated statement of operations data for the years ended December 31, 2008, 2009 and 2010 and the summary consolidated balance sheet data as of December 31, 2009 and 2010 have been derived from our audited financial statements included elsewhere in this prospectus. The summary consolidated balance sheet data as of December 31, 2008 has been derived from our audited financial statements, which is not included in this prospectus.

	Year Ended December 31,
	2008			2009			2010
	(in thousands)
Statement of Operations Data:
Revenues:
Total fee income	$	74,007		$	100,218		$	184,084
Gain (loss) on mortgage loans held for sale		(86,663	)		(21,349	)		77,344
Total revenues		(12,656	)		78,869			261,428
Total expenses and impairments		147,777			142,367			220,976
Other income (expense):
Interest income		92,060			52,518			98,895
Interest expense		(65,548	)		(69,883	)		(116,163	)
Loss on interest rate swaps and caps		(23,689	)		(14	)		(9,801	)
Fair value changes in ABS securitizations		—			—			(23,297	)
Total other income (expense)		2,823			(17,379	)		(50,366	)
Net income (loss)	$	(157,610	)	$	(80,877	)	$	(9,914	)

	As of December 31,
	2008		2009		2010
	(in thousands)
Balance Sheet Data:
Cash and cash equivalents	$	9,357	$	41,645	$	21,223
Mortgage servicing rights		110,808		114,605		145,062
Total assets		1,122,001		1,280,185		1,947,181
Unsecured senior notes		—		—		244,061
Notes payable		810,041		771,857		709,758
Nonrecourse debt—Legacy Assets		—		177,675		138,662
ABS nonrecourse debt		—		—		496,692
Total liabilities		866,079		1,016,362		1,690,809
Total members’ equity		255,922		263,823		256,372

	Year Ended December 31,
	2008			2009			2010
	(in thousands)
Other Data:
Net cash provided by (used in):
Operating activities	$	40,212		$	(83,641	)	$	(101,653	)
Investing activities		(34,643	)		29,983			101,196
Financing activities		(37,463	)		85,946			(19,965	)
Adjusted EBITDA (1) (non-GAAP measure)		23,141			48,644			65,306
Operating Segments:
Interest expense from unsecured senior notes		—			—			24,628
Change in fair value of mortgage servicing rights		11,701			27,915			6,043
Depreciation and amortization		1,172			1,542			1,873
Share-based compensation		1,633			579			8,999

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Notes

(1)

Adjusted EBITDA is a key performance measure used by management in evaluating the performance of our segments. Adjusted EBITDA represents our Operating Segments’ income (loss), and excludes income and expenses that relate to the financing of the unsecured senior notes, depreciable (or amortizable) asset base of the business, income taxes (if any), exit costs from our 2007 restructuring and certain non-cash items. Adjusted EBITDA excludes results from our legacy asset portfolio and certain securitization trusts that were consolidated upon adoption of the new accounting guidance eliminating the concept of QSPE.

Adjusted EBITDA provides us with a key measure of our Operating Segments’ performance as it assists us in comparing our Operating Segments’ performance on a consistent basis. Management believes Adjusted EBITDA is useful in assessing the profitability of our core business and uses Adjusted EBITDA in evaluating our operating performance as follows:

•  Financing arrangements for our Operating Segments are secured by assets that are allocated to these segments. Interest expense that relate to the financing of the unsecured senior notes is not considered in evaluating our operating performance because this obligation is serviced by the excess earnings from our Operating Segments after the debt obligations that are secured by their assets.

•  To monitor operating costs of each Operating Segment excluding the impact from depreciation, amortization and fair value change of the asset base, exit costs from our 2007 restructuring and non-cash operating expense, such as share-based compensation. Operating costs are analyzed to manage costs per our operating plan and to assess staffing level, implementation of technology based solutions, rent and other general and administrative costs.

Management does not assess the growth prospect and profitability of our legacy asset portfolio and certain securitization trusts that were consolidated upon adoption of the new accounting guidance, except to the extent to assess cash flows from the assets in the legacy asset portfolio are sufficient to service its debt obligations.

We also use Adjusted EBITDA (with additional adjustments) to measure our compliance with covenants such as leverage coverage ratios for our unsecured senior notes.

Adjusted EBITDA has limitations as an analytical tool, and should not be considered in isolation, or as a substitute for analysis of our results as reported under generally accepted accounting principles in the United States (“GAAP”). Some of these limitations are:

•  Adjusted EBITDA does not reflect our cash expenditures, or future requirements for capital expenditures or contractual commitments;

•  Adjusted EBITDA does not reflect changes in, or cash requirements for, our working capital needs;

•  Adjusted EBITDA does not reflect the cash requirements necessary to service principal payments related to the financing of the business.

•  Adjusted EBITDA does not reflect the interest expense, or the cash requirements necessary to service interest or principal payments, on our corporate debt;

•  although depreciation and amortization and changes in fair value of mortgage servicing rights are non-cash charges, the assets being depreciated and amortized will often have to be replaced in the future, and Adjusted EBITDA does not reflect any cash requirements for such replacements; and

•  other companies in our industry may calculate Adjusted EBITDA differently than we do, limiting their usefulness as comparative measures.

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Because of these and other limitations, Adjusted EBITDA should not be considered as measures of discretionary cash available to us to invest in the growth of our business. Adjusted EBITDA is presented to provide additional information about our operations. Adjusted EBITDA is a non-GAAP measure and should be considered in addition to, but not as a substitute for or superior to, operating income, net income, operating cash flow and other measures of financial performance prepared in accordance with GAAP. We compensate for these limitations by relying primarily on our GAAP results and using Adjusted EBITDA only supplementally.

	Year Ended December 31,
	2008			2009			2010
	(in thousands)
Net Income (Loss) to Adjusted EBITDA Reconciliation
Net income (loss)	$	(157,610	)	$	(80,877	)	$	(9,914	)
Add:
Net (income) loss from Legacy Portfolio and Other		164,738			97,263			24,806
Net income (loss) from Operating Segments		7,128			16,386			14,892
Adjust for:
Interest expense from unsecured senior notes		—			—			24,628
Depreciation and amortization		1,172			1,542			1,873
Change in fair value of mortgage servicing rights		11,701			27,915			6,043
Exit costs(a)		1,507			2,222			—
Share-based compensation		1,633			579			8,999
Fair value changes on interest rate swap(b)		—			—			9,801
Ineffective portion of cash flow hedge		—			—			(930	)
Adjusted EBITDA	$	23,141		$	48,644		$	65,306

(a) Relates to restructuring program initiated in 2007, which included closing several offices and the termination of a portion of our workforce. Restructuring charges for the years ended December 31, 2008 and 2009, are primarily due to reserves on future lease payments.

(b) Relates to an interest rate swap agreement which was treated as an economic hedge under ASC 815 since inception to September 30, 2010.

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RISK FACTORS

You should carefully consider the risks described below, together with all the other information included in this prospectus, before deciding to participate in the exchange offer and to invest in the New Notes. See also “Cautionary Statement Regarding Forward-Looking Statements” in this prospectus.

Risks Related to Our Business and Industry

Our foreclosure proceedings in certain states have been delayed due to inquiries by certain state Attorneys General, court administrators, and state and federal governmental agencies, the outcome of which could have a negative effect on our operations or liquidity.

Certain state Attorneys General, court administrators and governmental agencies, as well as representatives of the federal government, have issued letters of inquiry to mortgage servicing companies, including us, requesting written responses to questions regarding policies and procedures, especially with respect to notarization and affidavit procedures. These requests or any subsequent administrative, judicial or legislative actions taken by these regulators court administrators or other governmental entities may subject us to fines and other sanctions, including a foreclosure moratorium or suspension. Additionally, because we do business in all fifty states, we may be affected by regulatory actions or court decisions that are taken on the individual state level.

In addition to these inquiries, four state Attorneys General have requested that mortgage servicers, like us, suspend foreclosure proceedings pending internal review to ensure compliance with applicable law. Pursuant to these requests and in light of industry-wide press coverage regarding mortgage foreclosure documentation practices, we, as a precaution, have delayed foreclosure proceedings in 23 states so that we may evaluate our foreclosure practices and underlying documentation. Such inquiries may cause an extended delay in the foreclosure process.

Even in states where we have not suspended foreclosure proceedings or where we have lifted or will soon lift any such delayed foreclosures, we have faced, and may continue to face, increased delays and costs in the foreclosure process. For example, we have incurred, and may continue to incur, additional costs related to the re-execution and re-filing of certain documents. We may also be required to take other action in our capacity as a servicer in connection with pending foreclosures. In addition, the current legislative and regulatory climate could lead borrowers to contest foreclosures who would not have contested such foreclosures under ordinary circumstances, and we may incur increased litigation costs if the validity of a foreclosure action is challenged by a borrower. Delays in foreclosure proceedings could also require us to make additional servicing advances and draw on our servicing advance facilities, or delay the recovery of advances, which could materially affect our earnings and liquidity and increase our need for capital.

The continued deterioration of the residential mortgage market may adversely affect our business, financial condition or results of operations.

Since mid-2007, adverse economic conditions, including high unemployment, have impacted the residential mortgage market, resulting in unprecedented delinquency, default and foreclosure rates, leading to increased loss severities on all types of residential mortgage loans due to sharp declines in residential real estate values. Falling home prices have resulted in higher loan-to-value ratios and combined loan-to-value ratios, which yield lower recoveries in foreclosure, and result in an increase in loss severities above those that would have been realized had property values remained the same or continued to increase. As loan-to-value ratios increase, borrowers are left with insufficient equity in their homes to permit them to refinance their existing loans. This may also give borrowers an incentive to default on their mortgage loan even if they have the ability to make principal and interest payments, which we refer to as strategic defaults.

Adverse economic conditions may also impact our Originations Segment. Declining home prices and increasing loan-to-value ratios may preclude many potential borrowers, including borrowers whose existing loans we service, from refinancing their existing loans. An increase in prevailing interest rates

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could decrease our origination volume through our Consumer Direct Retail originations channel, our largest originations channel by volume from December 31, 2006 to December 31, 2010, because this channel focuses predominantly on refinancing existing mortgage loans.

A continued deterioration or a delay in any recovery in the residential mortgage market may reduce the number of mortgages we service or new mortgages that we originate, reduce the profitability of mortgages currently serviced by us or adversely affect our ability to sell mortgage loans originated by us or increase delinquency rates. Any of the foregoing could adversely affect our business, financial condition or results of operations.

We may experience serious financial difficulties as some servicers and originators have experienced.

Since late 2006, a number of servicers and originators of residential mortgage loans have experienced serious financial difficulties and, in some cases, have gone out of business. These difficulties have resulted, in part, from declining markets for their mortgage loans as well as from claims for repurchases of mortgage loans previously sold under provisions that require repurchase in the event of early payment defaults or for breaches of representations and warranties regarding loan quality and certain other loan characteristics. Higher delinquencies and defaults may contribute to these difficulties by reducing the value of mortgage loan portfolios and requiring originators to sell their portfolios at greater discounts to par. In addition, the cost of servicing an increasingly delinquent mortgage loan portfolio may be rising without a corresponding increase in servicing compensation. The value of many residual interests retained by sellers of mortgage loans in the securitization market has also been declining in these market conditions. Overall origination volumes are down significantly in the current economic environment. According to Inside Mortgage Finance, total U.S. residential mortgage origination volume decreased from $3.0 trillion in 2006 to $1.6 trillion in 2010. Any of the foregoing could adversely affect our business, financial condition or results of operations.

Borrowers with adjustable rate mortgage loans are especially exposed to increases in monthly payments and they might not be able to refinance, which might cause delinquency, default and foreclosure and therefore adversely affect our business.

As of December 31, 2010, adjustable rate mortgage loans by count made up approximately 14% of our servicing portfolio. Borrowers with adjustable rate mortgage loans are being exposed to increased monthly payments when the related mortgage loan’s interest rate adjusts upward from an initial fixed rate or a low introductory rate, as applicable, to the rate computed in accordance with the applicable index and margin. Borrowers with adjustable rate mortgage loans seeking to refinance their mortgage loans to avoid increased monthly payments as a result of an upwards adjustment of the mortgage loan’s interest rate may no longer be able to find available replacement loans at comparably low interest rates. This increase in borrowers’ monthly payments, together with any increase in prevailing market interest rates, may result in significantly increased monthly payments for borrowers with adjustable rate mortgage loans, which may cause delinquency, default and foreclosure.

A significant change in delinquencies for the loans we service could adversely affect our financial results.

Delinquency rates have a significant impact on our revenues, our expenses and on the valuation of our mortgage servicing rights as follows:

•  Revenue.  An increase in delinquencies will result in lower revenue for loans that we service for government-sponsored enterprises because we only collect servicing fees from government-sponsored enterprises for performing loans. Additionally, while increased delinquencies generate higher ancillary fees, including late fees, these fees are not likely to be recoverable in the event that the related loan is liquidated. In addition, an increase in delinquencies lowers the interest income we receive on cash held in collection and other accounts.

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•  Expenses.  An increase in delinquencies will result in a higher cost of service due to the increased time and effort required to collect payments from delinquent borrowers. It may also result in an increase in interest expense as a result of an increase in our advancing obligations.

•  Liquidity.  An increase in delinquencies also could negatively impact our liquidity because of an increase in borrowing under our advance facilities.

•  Valuation of mortgage servicing rights.  We base the price we pay for mortgage servicing rights on, among other things, our projections of the cash flows from the related pool of mortgage loans. Our expectation of delinquencies is a significant assumption underlying those cash flow projections. If delinquencies were significantly greater than expected, the carrying value of our mortgage servicing rights could exceed their estimated fair value, which is based on our cash flow projections. When the carrying value of mortgage servicing rights exceeds their fair value, we would suffer a valuation adjustment, which has a negative impact on our financial results.

A further increase in delinquency rates could therefore adversely affect our business, financial condition or results of operations.

Decreasing property values have caused an increase in loan-to-value ratios, resulting in borrowers having little or negative equity in their property, which may reduce new loan originations and provide incentive to borrowers to strategically default on their loans.

According to First American CoreLogic, from December 2006 to December 2010, the number of borrowers who owe more on a related mortgage loan than the property is worth, or have negative equity in their property, has increased from 7% to 23%. We believe that borrowers with negative equity in their properties are more likely to strategically default on mortgage loans and that a significant increase in strategic defaults could materially affect our business. Also, with the exception of loans modified under the MHA, we are unable to refinance loans with high loan-to-value ratios. Increased loan-to-value ratios could reduce our ability to originate loans for borrowers with low or negative equity and could adversely affect our business, financial condition or results of operations.

The industry in which we operate is highly competitive.

We operate in a highly competitive industry that could become even more competitive as a result of economic, legislative, regulatory and technological changes. In the servicing industry, we face competition in areas such as fees and performance in reducing delinquencies and entering successful modifications. Competition to service mortgage loans comes primarily from large commercial banks and savings institutions. These financial institutions generally have significantly greater resources and access to capital than we do, which gives them the benefit of a lower cost of funds. Additionally, our servicing competitors may decide to modify their servicing model to compete more directly with our servicing model, or our servicing model may generate lower margins as a result of competition or as overall economic conditions improve.

In the mortgage loan originations industry, we face competition in such areas as mortgage loan offerings, rates, fees and customer service. Competition to originate mortgage loans comes primarily from large commercial banks and savings institutions. These financial institutions generally have significantly greater resources and access to capital than we do, which gives them the benefit of a lower cost of funds.

In addition, technological advances and heightened e-commerce activities have increased consumers’ accessibility to products and services generally. This has intensified competition among banking as well as non-banking companies in offering mortgage loans and loan servicing. We may be unable to compete successfully in our industries and this could adversely affect our business, financial condition and results of operations.

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We might not be able to maintain or grow our business if we can not identify and acquire mortgage servicing rights on favorable terms.

From December 31, 2007 to December 31, 2010, we have grown the aggregate unpaid principal balance of the loans we service from $12.7 billion to $64.2 billion, primarily through acquisitions. Our servicing portfolio is subject to “run off,” meaning that mortgage loans serviced by us may be repaid at maturity, prepaid prior to maturity, refinanced with a mortgage not serviced by us or liquidated through foreclosure, deed-in-lieu of foreclosure or other liquidation process or repaid through standard amortization of principal. As a result, our ability to maintain the size of our servicing portfolio depends on our ability to originate additional mortgages and to acquire the right to service additional pools of residential mortgages. We may not be able to acquire servicing rights on terms favorable to us or at all. In determining the purchase price for servicing rights, management makes certain assumptions, many of which are beyond our control, including, among other things:

•  the rates of prepayment and repayment within the underlying pools of mortgage loans;

•  projected rates of delinquencies, defaults and liquidations;

•  future interest rates;

•  our cost to service the loans;

•  ancillary fee income; and

•  amounts of future servicing advances.

We may not be able to realize our significant investments in personnel and our technology platform if we cannot identify and acquire mortgage servicing rights on favorable terms.

We have made, and expect to continue to make, significant investments in personnel and our technology platform to allow us to service additional loans. In particular, prior to acquiring a large portfolio of mortgage servicing rights, we invest significant resources in recruiting, training, technology and systems. We may not realize the expected benefits of these investments to the extent we are unable to increase the pool of residential mortgages serviced, or we do not appropriately value the mortgage servicing rights that we do purchase. Any of the foregoing could adversely affect our business, financial condition and results of operations.

We may not realize all of the anticipated benefits of potential future acquisitions.

Our ability to realize the anticipated benefits of potential future acquisitions of servicing portfolios, originations platforms and/or companies will depend, in part, on our ability to scale-up to appropriately service any such assets, and/or integrate the businesses of such acquired companies with our business. The process of acquiring assets and/or companies may disrupt our business, and may not result in the full benefits expected. The risks associated with acquisitions include, among others:

•  coordinating market functions;

•  unanticipated issues in integrating information, communications and other systems;

•  unanticipated incompatibility of purchasing, logistics, marketing and administration methods;

•  retaining key employees; and

•  the diversion of management’s attention from ongoing business concerns.

Moreover, the success of any acquisition will depend upon our ability to effectively integrate the acquired servicing portfolios, origination platforms or businesses. The acquired servicing portfolios, originations platforms or businesses may not contribute to our revenues or earnings to any material extent, and cost savings and synergies we expect at the time of an acquisition may not be realized

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once the acquisition has been completed. If we inappropriately value the assets we acquire or the value of the assets we acquire declines after we acquire them, the resulting charges may negatively affect the carrying value of the assets on our balance sheet or our earnings. Furthermore, if we incur additional indebtedness to finance an acquisition, the acquired business may not be able to generate sufficient cash flow to service that additional indebtedness. Unsuitable or unsuccessful acquisitions could adversely affect our business, financial condition and results of operations.

We may be unable to obtain sufficient capital to meet the financing requirements of our business.

Our financing strategy includes the use of significant leverage. Accordingly, our ability to finance our operations and repay maturing obligations rests in large part on our ability to borrow money. We are generally required to renew our financing arrangements each year, which exposes us to refinancing and interest rate risks. In addition, a large portion of our outstanding debt, including our MBS Advance Financing Facility, our ABS Advance Financing Facility, our MSR Notes, our $300 Million Warehouse Facility, our $100 Million Warehouse Facility, our $75 Million Warehouse Facility and our GSE ASAP+ Short-Term Financing Facility, matures prior to 2013. See “Management’s Discussion and Analysis of Financial Condition and Results of Operations—Summary of Other Indebtedness.” Our ability to refinance existing debt and borrow additional funds is affected by a variety of factors including:

•  limitations imposed on us under the notes and other financing agreements that contain restrictive covenants and borrowing conditions that may limit our ability to raise additional debt;

•  the decline in liquidity in the credit markets;

•  prevailing interest rates;

•  the strength of the lenders from whom we borrow;

•  borrowing on advance facilities is limited by the amount of eligible collateral pledged and may be less than the borrowing capacity of the facility; and

•  accounting changes that may impact calculations of covenants in our debt agreements.

In the ordinary course of our business, we periodically borrow money or sell newly-originated loans to fund our servicing and origination operations. See “Management’s Discussion and Analysis of Financial Condition and Results of Operations—Liquidity and Capital Resources.” Our ability to fund current operations and meet our service advance obligations depends on our ability to secure these types of financings on acceptable terms and to renew or replace existing financings as they expire. Such financings may not be available with the government-sponsored enterprises or other counterparties on acceptable terms or at all.

An event of default, a negative ratings action by a rating agency, an adverse action by a regulatory authority or a general deterioration in the economy that constricts the availability of credit—similar to the market conditions that we have experienced during the last two years—may increase our cost of funds and make it difficult for us to renew existing credit facilities and obtain new lines of credit. We intend to continue to pursue opportunities to acquire loan servicing portfolios, originations platforms and/or businesses that engage in loan servicing and/or loan originations. Our liquidity and capital resources may be diminished by any such transactions. Additionally, we believe that a significant acquisition may require us to raise additional capital to facilitate such a transaction, which may not be available on acceptable terms or at all. If we are unable to obtain sufficient capital on acceptable terms for any of the foregoing reasons, this could adversely affect our business, financial condition or results of operations.

We may not be able to continue to grow our loan origination volume.

Our loan origination business consists of refinancing existing loans and, increasingly, providing purchase money loans to homebuyers. The origination of purchase money mortgage loans is greatly

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influenced by traditional business partners in the home buying process such as realtors and builders. As a result, our ability to secure relationships with such traditional business partners will influence our ability to grow our purchase money mortgage loan volume and, thus, our loan origination business.

As we grow our retail origination business, we may not be able to receive the necessary volume of referrals or compete successfully with other retail branches in the communities. In addition, we may not recover investments made in acquiring or establishing branches or achieve margins acceptable to us. Our wholesale origination business operates largely through third party mortgage brokers who are not contractually obligated to do business with us. Further, our competitors also have relationships with our brokers and actively compete with us in our efforts to expand our broker networks. Accordingly, we may not be successful in maintaining our existing relationships or expanding our broker networks.

While we intend to use sales lead aggregators and Internet marketing to reach new borrowers, our Consumer Direct Retail origination platform may not succeed because of the referral-driven nature of our industry. Further, our largest customer base consists of the borrowers whose existing loans we service. Because we primarily service credit-sensitive loans, many of our existing servicing customers may not be able to qualify for prime mortgage loans with us and/or may pose a higher credit risk than other consumers. Furthermore, our Consumer Direct Retail origination platform focuses predominantly on refinancing existing mortgage loans. This type of origination activity is sensitive to increases in interest rates. If we are unable to continue to grow our loan origination business, this could adversely affect our business, financial condition or results of operations.

Our counterparties may terminate our servicing rights and subservicing contracts.

The owners of the loans we service and the primary servicers for the loans we subservice, may, under certain circumstances, terminate our mortgage servicing rights or subservicing contracts, respectively.

As is standard in the industry, under the terms of our master servicing agreement with government-sponsored enterprises, they have the right to terminate us as servicer of the loans we service on their behalf at any time and also have the right to cause us to sell the mortgage servicing rights to a third party. In addition, they may also have the right to require us to assign the mortgage servicing rights to a subsidiary and to sell our equity interest in the subsidiary to a third party. Under our subservicing contracts, the primary servicers for whom we conduct subservicing activities have the right to terminate our subservicing rights with or without cause, with little notice and little to no compensation. In November and December 2010, through our relationship with the same government-sponsored enterprise, we boarded subservicing rights totaling approximately $25 billion in unpaid principal balance. We expect to continue to acquire subservicing rights, which could exacerbate these risks.

If we were to have our servicing or subservicing rights terminated on a material portion of our servicing portfolio, this could adversely affect our business, financial condition and results of operations.

Federal, state and local laws and regulations may materially adversely affect our business.

Federal, state and local governments have recently proposed or enacted numerous laws, regulations and rules related to mortgage loans generally, and foreclosure actions in particular. These laws, regulations and rules may result in delays in the foreclosure process, reduced payments by borrowers, modification of the original terms of mortgage loans, permanent forgiveness of debt and/or increased servicing advances. In some cases, local governments have ordered moratoriums on foreclosure activity, which prevent a servicer or trustee, as applicable, from exercising any remedies they might have in respect of liquidating a severely delinquent mortgage loan. Several courts also have taken unprecedented steps to slow the foreclosure process or prevent foreclosure altogether.

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Due to the highly regulated nature of the residential mortgage industry, we are required to comply with a wide array of federal, state and local laws and regulations that regulate, among other things, the manner in which we conduct our servicing and originations business and the fees we may charge. These regulations directly impact our business and require constant compliance, monitoring and internal and external audits. A material failure to comply with any of these laws or regulations could subject us to lawsuits or governmental action, and this could adversely affect our business, financial condition and results of operations.

In addition, there continue to be changes in legislation and licensing in an effort to simplify the consumer mortgage experience, which require technology changes and additional implementation costs for loan originators. We expect legislative changes will continue in the foreseeable future, which may increase our operating expenses.

Any of these changes in the law could adversely affect our business, financial condition or results of operations. See “Business—Regulation.”

Unlike competitors that are banks, we are subject to state licensing requirements and substantial compliance costs.

Because we are not a depository institution, we do not benefit from a federal exemption to state mortgage banking, loan servicing or debt collection licensing and regulatory requirements. We must comply with state licensing requirements in all fifty states and the District of Columbia, and we are sensitive to regulatory changes that may increase our costs through stricter licensing laws, disclosure laws or increased fees or that may impose conditions to licensing that we or our personnel are unable to meet. Future state legislation and changes in regulation may significantly increase the compliance costs on our operations or reduce the amount of ancillary fees, including late fees that we may charge to borrowers. This could make our business cost-prohibitive in the affected state or states and could materially affect our business.

Pending legislative changes in mortgage-backed securities and securitization may adversely affect our business.

There are federal and state legislative proposals pending or under consideration that could, if enacted, require loan originators to retain a minimum beneficial interest in mortgage-backed securities that they sell through a securitization. Due to the volume of our origination business, any such legal requirement would result in us retaining a larger amount of mortgage-backed securities on our balance sheet. Additionally, proposed federal legislation would permit borrowers in bankruptcy to restructure mortgage loans secured by primary residences. Bankruptcy courts could, if this legislation is enacted, reduce the principal balance of a mortgage loan that is secured by a lien on mortgaged property, reduce the mortgage interest rate, extend the term to maturity or otherwise modify the terms of a bankrupt borrower’s mortgage loan. Any of the foregoing could materially affect our financial condition and results of operations.

Our business would be adversely affected if we lost our licenses.

Our operations are subject to regulation, supervision and licensing under various federal, state and local statutes, ordinances and regulations. In most states in which we operate, a regulatory agency regulates and enforces laws relating to mortgage servicing companies and mortgage origination companies such as us. These rules and regulations generally provide for licensing as a mortgage servicing company, mortgage origination company or third party debt collector, as applicable, requirements as to the form and content of contracts and other documentation, licensing of our employees and employee hiring background checks, licensing of independent contractors with whom we contract, restrictions on collection practices, disclosure and record-keeping requirements and enforcement of borrowers’ rights. In certain states, we are subject to periodic examination by state

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regulatory authorities. Some states in which we operate require special licensing or provide extensive regulation of our business.

We believe that we maintain all material licenses and permits required for our current operations and are in substantial compliance with all applicable federal, state and local regulations. We may not be able to maintain all requisite licenses and permits, and the failure to satisfy those and other regulatory requirements could result in a default under our servicing agreements and have a material adverse effect on our operations. Those states that currently do not provide extensive regulation of our business may later choose to do so, and if such states so act, we may not be able to obtain or maintain all requisite licenses and permits. The failure to satisfy those and other regulatory requirements could result in a default under our servicing agreements and have a material adverse effect on our operations. Furthermore, the adoption of additional, or the revision of existing, rules and regulations could adversely affect our business, financial condition or results of operations.

We may be required to repurchase loans we originated, or will originate, if our loans fail to meet certain criteria or characteristics or under other circumstances.

The indentures governing our securitized pools of loans and our contracts with purchasers of our whole loans contain provisions that require us to repurchase the related loans under certain circumstances. While our contracts vary, they contain provisions that require us to repurchase loans if:

•  Our representations and warranties concerning loan quality and loan circumstances are inaccurate, including representations concerning the licensing of a mortgage broker;

•  We fail to secure adequate mortgage insurance within a certain period after closing;

•  A mortgage insurance provider denies coverage; and

•  We fail to comply, at the individual loan level or otherwise, with regulatory requirements in the current dynamic regulatory environment.

We believe that, as a result of the current market environment, many purchasers of residential mortgage loans are particularly aware of the conditions under which servicers must repurchase loans and would benefit from enforcing any repurchase remedies that they may have. If we are required to repurchase a significant amount of loans that we originate and sell or securitize, this could adversely affect our business, financial condition or results of operations.

We may incur litigation costs and related losses if the validity of a foreclosure action is challenged by a borrower or if a court overturns a foreclosure.

We may incur costs if we are required to, or if we elect to, execute or re-file documents or take other action in our capacity as a servicer in connection with pending or completed foreclosures. We may incur litigation costs if the validity of a foreclosure action is challenged by a borrower. If a court were to overturn a foreclosure because of errors or deficiencies in the foreclosure process, we may have liability to a title insurer of the property sold in foreclosure. These costs and liabilities may not be legally or otherwise reimbursable to us, particularly to the extent they relate to securitized mortgage loans. In addition, if certain documents required for a foreclosure action are missing or defective, we could be obligated to cure the defect or repurchase the loan. A significant increase in litigation costs could adversely affect our liquidity, and our inability to be reimbursed for an advance could adversely affect our business, financial condition or results of operations.

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We are required to follow the guidelines of the government-sponsored enterprises with which we do business, and we are not able to negotiate our fees with these entities for the purchase of our loans. Our competitors may be able to sell their loans to these entities on more favorable terms.

Even though we currently only originate prime agency and government conforming loans, because we previously originated non-prime mortgage loans, we believe that we are required to pay a higher fee to access the secondary market for selling our loans to government-sponsored enterprises. We believe that because many of our competitors have always originated prime loans, they are able to sell newly originated loans on more favorable terms than us. As a result, these competitors are able to earn higher margins than we earn on originated loans, which could materially impact our business.

In our transactions with government-sponsored enterprises, we are required to follow specific guidelines that impact the way we service and originate mortgage loans including:

•  our staffing levels and other servicing practices;

•  the servicing and ancillary fees that we may charge;

•  our modification standards and procedures; and

•  the amount of advances reimbursable.

We cannot negotiate these terms with the government-sponsored enterprises and they are subject to change at any time. A significant change in these guidelines that has the effect of decreasing our fees or requires us to expend additional resources in providing mortgage services could decrease our revenues or increase our costs, which could adversely affect our business, financial condition or results of operations.

We are required to make servicing advances that can be subject to delays in recovery or may not be recoverable in certain circumstances.

During any period in which a borrower is not making payments, we are required under most of our servicing agreements to advance our own funds to meet contractual principal and interest remittance requirements for investors, pay property taxes and insurance premiums, legal expenses and other protective advances. We also advance funds to maintain, repair and market real estate properties on behalf of investors. As home values change, we may have to reconsider certain of the assumptions underlying our decisions to make advances and, in certain situations, our contractual obligations may require us to make certain advances for which we may not be reimbursed. In addition, in the event a mortgage loan serviced by us defaults or becomes delinquent, the repayment to us of the advance may be delayed until the mortgage loan is repaid or refinanced or a liquidation occurs. A delay in our ability to collect an advance may adversely affect our liquidity, and our inability to be reimbursed for an advance could adversely affect our business, financial condition or results of operations.

Changes to government mortgage modification programs may adversely affect future incremental revenues.

Under HAMP and similar government programs, a participating servicer may be entitled to receive financial incentives in connection with any modification plans it enters into with eligible borrowers and subsequent “pay for success” fees to the extent that a borrower remains current in any agreed upon loan modification. While we participate in and dedicate numerous resources to HAMP, we may not continue to participate in or realize future revenues from HAMP or any other government mortgage modification program. Changes in legislation regarding HAMP that result in the modification of outstanding mortgage loans, and changes in the requirements necessary to qualify for refinancing mortgage loans may impact the extent to which we participate in and receive financial benefits from such programs, or may increase the expense of participating in such programs. Changes in governmental loan modification programs could also result in an increase to our costs.

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Under the MHA, a participating servicer may receive a financial incentive to modify qualifying loans, in accordance with the plan’s guidelines and requirements. The MHA also allows us to refinance loans with a high loan-to-value ratio of up to 125%. This allows us to refinance loans to existing borrowers who have little or negative equity in their homes. Changes in legislation or regulations regarding the MHA could reduce our volume of refinancing originations to borrowers with little or negative equity in their homes. Changes to HAMP, the MHA and other similar programs could adversely affect our business, financial condition or results of operations.

We are highly dependent upon programs administered by government-sponsored enterprises such as Fannie Mae and Freddie Mac to generate revenues through mortgage loan sales to institutional investors. Any changes in existing U.S. government-sponsored mortgage programs could materially and adversely affect our business, financial position, results of operations or cash flows.

Our ability to generate revenues through mortgage loan sales to institutional investors depends to a significant degree on programs administered by government-sponsored enterprises, such as Fannie Mae and Freddie Mac, a government agency, Ginnie Mae, and others that facilitate the issuance of mortgage-backed securities in the secondary market. These government-sponsored enterprises play a critical role in the residential mortgage industry, and we have significant business relationships with many of them. Almost all of the conforming loans that we originate qualify under existing standards for inclusion in guaranteed mortgage securities backed by government-sponsored enterprises. We also derive other material financial benefits from these relationships, including the assumption of credit risk by these government-sponsored enterprises on loans included in such mortgage securities in exchange for our payment of guarantee fees and the ability to avoid certain loan inventory finance costs through streamlined loan funding and sale procedures.

Any discontinuation of, or significant reduction in, the operation of these government- sponsored enterprises or any significant adverse change in the level of activity in the secondary mortgage market or the underwriting criteria of these government-sponsored enterprises could adversely affect our business, financial condition or results of operations.

The conservatorship of Fannie Mae and Freddie Mac and related efforts, along with any changes in laws and regulations affecting the relationship between Fannie Mae and Freddie Mac and the U.S. federal government, may adversely affect our business and prospects.

Due to increased market concerns about the ability of Fannie Mae and Freddie Mac to withstand future credit losses associated with securities held in their investment portfolios, and on which they provide guarantees, without the direct support of the U.S. federal government, on July 30, 2008, the government passed the Housing and Economic Recovery Act of 2008. On September 7, 2008, the Federal Housing Finance Agency, or the FHFA, placed Fannie Mae and Freddie Mac into conservatorship and, together with the U.S. Treasury, established a program designed to boost investor confidence in their respective debt and mortgage-backed securities. As the conservator of Fannie Mae and Freddie Mac, the FHFA controls and directs the operations of Fannie Mae and Freddie Mac and may (i) take over the assets of and operate Fannie Mae and Freddie Mac with all the powers of the shareholders, the directors and the officers of Fannie Mae and Freddie Mac and conduct all business of Fannie Mae and Freddie Mac; (ii) collect all obligations and money due to Fannie Mae and Freddie Mac; (iii) perform all functions of Fannie Mae and Freddie Mac which are consistent with the conservator’s appointment; (iv) preserve and conserve the assets and property of Fannie Mae and Freddie Mac; and (v) contract for assistance in fulfilling any function, activity, action or duty of the conservator.

In addition to the FHFA becoming the conservator of Fannie Mae and Freddie Mac, the U.S. Treasury and the FHFA have entered into preferred stock purchase agreements between the U.S. Treasury and Fannie Mae and Freddie Mac pursuant to which the U.S. Treasury will ensure that each of Fannie Mae and Freddie Mac maintains a positive net worth.

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Although the U.S. Treasury has committed capital to Fannie Mae and Freddie Mac, these actions may not be adequate for their needs. If these actions are inadequate, Fannie Mae and Freddie Mac could continue to suffer losses and could fail to honor their guarantees and other obligations. The future roles of Fannie Mae and Freddie Mac could be significantly reduced and the nature of their guarantees could be considerably limited relative to historical measurements. Any changes to the nature of the guarantees provided by Fannie Mae and Freddie Mac could redefine what constitute agency and government conforming mortgage-backed securities and could have broad adverse market implications. Such market implications could adversely affect our business, financial condition or results of operations.

The geographic concentration of our servicing portfolio may result in a higher rate of delinquencies and may affect our financial condition.

As of December 31, 2010, approximately 18%, 16% and 5% of the aggregate outstanding loan balance in our servicing portfolio is secured by properties located in California, Florida and Texas, respectively. Some of these states have experienced severe declines in property values and are experiencing a disproportionately high rate of delinquencies and foreclosures relative to other states. To the extent that these states continue to experience weaker economic conditions or greater rates of decline in real estate values than the United States generally, a concentration of the loans we service in those regions may be expected to increase the effect of the risks listed in this “Risk Factors” section. The impact of property value declines may increase in magnitude and it may continue for a long period of time. Additionally, if states in which we have greater concentrations of business were to change their licensing or other regulatory requirements to make our business cost prohibitive, this could require us to stop doing business in those states or increase the cost of doing business in those states and could adversely affect our business, financial condition or results of operations.

We use financial models and estimates in determining the fair value of certain assets, such as mortgage servicing rights and investments in debt securities. If our estimates or assumptions prove to be incorrect, we may be required to record impairment charges, which could adversely affect our earnings.

We use internal financial models that utilize, wherever possible, market participant data to value certain of our assets, including our mortgage servicing rights, newly originated loans held for sale and investments in debt securities for purposes of financial reporting. These models are complex and use asset-specific collateral data and market inputs for interest and discount rates. In addition, the modeling requirements of mortgage servicing rights are complex because of the high number of variables that drive cash flows associated with mortgage servicing rights. Even if the general accuracy of our valuation models is validated, valuations are highly dependent upon the reasonableness of our assumptions and the predictability of the relationships that drive the results of the models. If loan loss levels are higher than anticipated, due to an increase in delinquencies or prepayment speeds, or financial market illiquidity continues beyond our estimate, the value of certain of our assets may decrease. We may be required to record impairment charges, which could impact our ability to satisfy minimum net worth covenants of $150.0 million and borrowing conditions in our debt agreements and adversely affect our business, financial condition or results of operations. Errors in our financial models or changes in assumptions could adversely affect our business, financial condition or results of operations.

Our earnings may decrease because of changes in prevailing interest rates.

Our profitability is directly affected by changes in prevailing interest rates. The following are the material risks we face related to changes in prevailing interest rates:

•  an increase in prevailing interest rates could generate an increase in delinquency, default and foreclosure rates resulting in an increase in both operating expenses and interest expense and could cause a reduction in the value of our assets;

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•  a substantial and sustained increase in prevailing interest rates could adversely affect our loan origination volume because refinancing an existing loan would be less attractive for homeowners and qualifying for a loan may be more difficult for consumers;

•  an increase in prevailing interest rates would increase the cost of servicing our outstanding debt, including our ability to finance servicing advances and loan originations;

•  a decrease in prevailing interest rates may require us to record a decrease in the value of our mortgage servicing rights; and

•  a change in prevailing interest rates could impact our earnings from our custodial deposit accounts.

Any such change in prevailing interest rates could adversely affect our business, financial condition or results of operations.

Our hedging strategies may not be successful in mitigating our risks associated with interest rates.

From time to time, we have used various derivative financial instruments to provide a level of protection against interest rate risks, but no hedging strategy can protect us completely. The derivative financial instruments that we select may not have the effect of reducing our interest rate risks. In addition, the nature and timing of hedging transactions may influence the effectiveness of these strategies. Poorly designed strategies, improperly executed and documented transactions or inaccurate assumptions could actually increase our risks and losses. In addition, hedging strategies involve transaction and other costs. Our hedging strategies and the derivatives that we use may not be able to adequately offset the risks of interest rate volatility and our hedging transactions may result in or magnify losses. Furthermore, interest rate derivatives may not be available at all, or at favorable terms, particularly during economic downturns. Any of the foregoing risks could adversely affect our business, financial condition or results of operations.

A downgrade in our servicer ratings could have an adverse effect on our business, financial condition or results of operations.

Standard & Poor’s and Fitch rate us as a residential loan servicer. Our current favorable ratings from the rating agencies are important to the conduct of our loan servicing business. These ratings may be downgraded in the future. Any such downgrade could adversely affect our business, financial condition or results of operations.

We depend on the accuracy and completeness of information about borrowers and counterparties.

In deciding whether to extend credit or to enter into other transactions with borrowers and counterparties, we may rely on information furnished to us by or on behalf of borrowers and counterparties, including financial statements and other financial information. We also may rely on representations of borrowers and counterparties as to the accuracy and completeness of that information and, with respect to financial statements, on reports of independent auditors. We additionally rely on representations from public officials concerning the licensing and good standing of the third party mortgage brokers through whom we do business. While we have a practice of independently verifying the borrower information that we use in deciding whether to extend credit or to agree to a loan modification, including employment, assets, income and credit score, if any of this information is intentionally or negligently misrepresented and such misrepresentation is not detected prior to loan funding, the value of the loan may be significantly lower than expected. Whether a misrepresentation is made by the loan applicant, the mortgage broker, another third party or one of our employees, we generally bear the risk of loss associated with the misrepresentation. We have controls and processes designed to help us identify misrepresented information in our loan origination

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operations. We, however, may not have detected or may not detect all misrepresented information in our loan originations and/or our business partners. Any such misrepresented information could adversely affect our business, financial condition or results of operations.

Technology failures could damage our business operations and increase our costs.

The financial services industry as a whole is characterized by rapidly changing technologies, and system disruptions and failures caused by fire, power loss, telecommunications failures, unauthorized intrusion, computer viruses and disabling devices, natural disasters and other similar events, may interrupt or delay our ability to provide services to our borrowers. Security breaches, acts of vandalism and developments in computer capabilities could result in a compromise or breach of the technology that we use to protect our borrowers’ personal information and transaction data. Systems failures could cause us to incur significant costs and this could adversely affect our business, financial condition or results of operations.

The success and growth of our business will depend upon our ability to adapt to and implement technological changes.

Our mortgage loan origination business is currently dependent upon our ability to effectively interface with our brokers, borrowers and other third parties and to efficiently process loan applications and closings. The origination process is becoming more dependent upon technological advancement, such as our continued ability to process applications over the Internet, accept electronic signatures, provide process status updates instantly and other borrower-expected conveniences. Maintaining and improving this new technology and becoming proficient with it may also require significant capital expenditures. As these requirements increase in the future, we will have to fully develop these technological capabilities to remain competitive and any failure to do so could adversely affect our business, financial condition or results of operations.

Any failure of our internal security measures or breach of our privacy protections could cause harm to our reputation and subject us to liability.

In the ordinary course of our business, we receive and store certain confidential information concerning borrowers. Additionally, we enter into third party partnerships to assist with various aspects of our business, some of which require the exchange of confidential borrower information. If a third party were to compromise or breach our security measures or those of the vendors, through electronic, physical or other means, and misappropriate such information, it could cause interruptions in our operations, expose us to significant liabilities, reporting obligations, remediation costs and damage to our reputation. Any of the foregoing risks could adversely affect our business, financial condition or results of operations.

Our vendor relationships subject us to a variety of risks.

We have significant vendors that, among other things, provide us with financial, technology and other services to support our servicing and originations businesses. With respect to vendors engaged to perform activities required by servicing criteria, we have elected to take responsibility for assessing compliance with the applicable servicing criteria for the applicable vendor and are required to have procedures in place to provide reasonable assurance that the vendor’s activities comply in all material respects with servicing criteria applicable to the vendor. In the event that a vendor’s activities do not comply with the servicing criteria, it could negatively impact our servicing agreements. In addition, if our current vendors were to stop providing services to us on acceptable terms, including as a result of one or more vendor bankruptcies due to poor economic conditions, we may be unable to procure alternatives from other vendors in a timely and efficient manner and on acceptable terms, or at all. Further, we may incur significant costs to resolve any such disruptions in service and this could adversely affect our business, financial condition or results of operations.

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The loss of the services of our senior managers could have an adverse effect on our business.

The experience of our senior managers is a valuable asset to us. Our management team has an average of approximately 25 years of experience in the residential mortgage origination and servicing industry and has been with us for an average of approximately 10 years. We do not maintain key life insurance policies relating to our senior managers. The loss of the services of our senior managers could adversely affect our business, financial condition or results of operations.

Our historical financial statements do not reflect payments for income taxes.

Our historical financial statements set forth in this prospectus do not reflect any payments for income taxes. The indenture governing the notes permits us to distribute to our equity holders amounts (based generally on a hypothetical calculation of combined federal, state and local income taxes we would owe if we were taxable as a corporation) to pay their income taxes for so long as we are treated as a disregarded entity or partnership for income tax purposes. If we become taxable as a corporation, the indenture governing the notes generally will permit us to pay our combined tax group’s federal, state and local income taxes. See “Description of the New Notes—Limitation on Restricted Payments.”

Our business could suffer if we fail to attract and retain a highly skilled workforce.

Our future success will depend on our ability to identify, hire, develop, motivate and retain highly qualified personnel for all areas of our organization, in particular skilled managers, loan servicers, debt collectors, loan officers and underwriters. Trained and experienced personnel are in high demand, and may be in short supply in some areas. Many of the companies with which we compete for experienced employees have greater resources than we have and may be able to offer more attractive terms of employment. In addition, we invest significant time and expense in training our employees, which increases their value to competitors who may seek to recruit them. We may not be able to attract, develop and maintain an adequate skilled workforce necessary to operate our businesses, and labor expenses may increase as a result of a shortage in the supply of qualified personnel. If we are unable to attract and retain such personnel, we may not be able to take advantage of acquisitions and other growth opportunities that may be presented to us and this could materially affect our business, financial condition or results of operations.

Legal proceedings and related costs could adversely affect our financial results.

We are routinely involved in legal proceedings concerning matters that arise in the ordinary course of our business. The outcome of these proceedings may adversely affect our financial results. In addition, a number of participants in our industry have been the subject of class action lawsuits and regulatory actions by states’ attorneys general. Litigation and other proceedings may require that we pay settlement costs, damages, penalties or other charges, which could adversely affect our financial results. See “Business—Legal Proceedings.”

Negative public opinion could damage our reputation and adversely affect our earnings.

Reputation risk, or the risk to our business, earnings and capital from negative public opinion, is inherent in our business. Negative public opinion can result from our actual or alleged conduct in any number of activities, including lending and debt collection practices, corporate governance, and from actions taken by government regulators and community organizations in response to those activities. Negative public opinion can also result from media coverage, whether accurate or not. Negative public opinion can adversely affect our ability to attract and retain customers, trading counterparties and employees and can expose us to litigation and regulatory action. Although we take steps to minimize reputation risk in dealing with our customers and communities, this risk will always be present in our organization.

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Fortress indirectly controls our sole equityholder and there may be situations in which the interests of Fortress and the holders of the notes will not be aligned.

FIF HE Holdings, LLC, a holding company, is our sole member, owning 100% of our outstanding membership interests. FIF HE Holdings, LLC, in turn, is owned by certain private equity funds managed by an affiliate of Fortress and our past and present management. As a result, Fortress is able to control our business direction and policies, including mergers, acquisitions and consolidations with third parties and the sale of all or substantially all of our assets. Consequently, circumstances may arise in which the interests of Fortress could be in conflict with your interests as a holder of the notes, and Fortress may pursue transactions that, in their judgment, could enhance their equity investment, even though the transaction might involve risks to holders of the notes.

Risks Related to the New Notes

Our substantial indebtedness may limit our financial and operating activities and our ability to incur additional debt to fund future needs.

As of December 31, 2010, we and our guarantors had approximately $1,690.8 million of total indebtedness and unfunded availability of approximately $706.0 million under our various financing facilities. Our substantial indebtedness and any future indebtedness we incur could:

•  require us to dedicate a substantial portion of cash flow from operations to the payment of principal and interest on indebtedness, including indebtedness we may incur in the future, thereby reducing the funds available for other purposes;

•  make it more difficult for us to satisfy and comply with our obligations with respect to the notes;

•  subject us to increased sensitivity to increases in prevailing interest rates;

•  place us at a competitive disadvantage to competitors with relatively less debt in economic downturns, adverse industry conditions or catastrophic external events; or

•  reduce our flexibility in planning for or responding to changing business, industry and economic conditions.

Our substantial obligations could have other important consequences. For example, our failure to comply with the restrictive covenants in the agreements governing our indebtedness, including the indenture governing the notes, which limit our ability to incur liens, to incur debt and to sell assets, could result in an event of default that, if not cured or waived, could harm our business or prospects and could result in our bankruptcy.

We may incur more debt, which could exacerbate the risks described above.

We and our subsidiaries are able to incur additional indebtedness in the future, subject to the limitations contained in the agreements governing our indebtedness, including the indenture governing the notes. Although these agreements generally restrict us and our restricted subsidiaries from incurring additional indebtedness, these restrictions are subject to important exceptions and qualifications. If we or our subsidiaries incur additional debt, the related risks could be magnified.

We may not be able to generate sufficient cash flow to meet our debt service obligations including the notes.

Our ability to generate sufficient cash flow from operations to make scheduled payments on our debt obligations including the notes will depend on our current and future financial performance, which is subject to general economic, financial, competitive, legislative, regulatory and other factors that are beyond our control. If we do not generate sufficient cash flow from operations to satisfy our

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debt obligations, including interest payments and the payment of principal at maturity, we may have to undertake alternative financing plans, such as refinancing or restructuring our debt, selling assets, reducing or delaying capital investments or seeking to raise additional capital. Such alternative financing plans may not be available or may not be able to generate timely and sufficient amount of proceeds to satisfy our debt obligations. Additional financing may not be obtained on acceptable terms, or permitted under the terms of our various debt instruments then in effect. Furthermore, our ability to refinance would depend upon the condition of the finance and credit markets. Our inability to generate sufficient cash flow to satisfy our debt obligations, or to refinance our obligations on commercially reasonable terms or on a timely basis, would materially affect our business, financial condition or results of operations.

In addition, we are dependent on the cash flow of and dividends and distributions to us from our subsidiaries in order to service our current indebtedness. Our subsidiaries are separate and distinct legal entities and have no obligation, contingent or otherwise, to pay any amounts due pursuant to any indebtedness of ours or to make any funds available therefor, except for those subsidiaries that have guaranteed our obligations under our outstanding indebtedness and that will guarantee our obligations under the notes. The ability of our subsidiaries to pay any dividends and distributions will be subject to, among other things, the terms of any debt instruments of our subsidiaries then in effect as well as applicable law. Our subsidiaries may not be able to generate cash flow sufficient to pay dividends or distributions to us that enable us to pay interest or principal on our existing indebtedness or the notes.

We may be unable to repay or repurchase the notes at maturity.

At maturity, the entire outstanding principal amount of the notes, together with accrued and unpaid interest, will become due and payable. We may not have the funds to fulfill these obligations or the ability to renegotiate these obligations. If upon the maturity date other arrangements prohibit us from repaying the notes, we could try to obtain waivers of such prohibitions from the lenders and holders under those arrangements, or we could attempt to refinance the borrowings that contain the restrictions. In these circumstances, if we were not able to obtain such waivers or refinance these borrowings, we would be unable to repay the notes.

The indenture governing the notes, as well as other agreements governing our debt, include provisions that may restrict our financial and business operations, but may not necessarily restrict our ability to take actions that may impair our ability to repay the notes.

The agreements governing our indebtedness, including our servicing advance facilities that relate to servicing loan portfolios, our warehouse facilities that relate to originating mortgage loans, the notes we issued to finance our purchase of a portfolio of mortgage servicing rights and the indenture that will govern the notes, contain negative covenants customary for such financings, such as limiting our ability to sell or dispose of assets, incur additional indebtedness or liens, make certain restricted payments, make certain investments, consummate mergers, consolidations or other business combinations or engage in other lines of business. These restrictions may interfere with our ability to engage in other necessary or desirable business activities, which could materially affect our business, financial condition or results of operations.

Our financing facilities also require us to comply with certain financial ratios and covenants, such as maximum leverage ratios, minimum tangible net worth, minimum liquidity and positive earnings covenants. In addition, availability under certain of our financing facilities is limited by borrowing base and minimum collateral conditions. Our ability to comply with these covenants depends on our financial condition and performance and also is subject to events outside our control. Asset write-downs, other non-cash charges and other one-time events also impact our ability to comply with these covenants. In addition, these restrictions may interfere with our ability to obtain financing or to engage in other necessary or desirable business activities, which may have a material effect on our operations. These covenants are subject to important exceptions and qualifications.

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Moreover, if we fail to comply with these covenants and are unable to obtain a waiver or amendment, an event of default would result.

Our financing facilities and other debt agreements, including the indenture governing the notes, also contain other events of default customary for such financings. In addition, as a servicer, we are required to observe and perform the covenants and obligations in the agreements under which we service loans. As a servicer, we also have obligations under Regulation AB under the Securities Act. Failure to service in accordance with these requirements may lead to an event of default under our credit facilities. We may not have sufficient liquidity to repay or refinance the notes or borrowings under our credit facilities if such amounts were accelerated upon an event of default. If we are unable to service our debt, this could materially affect our business, financial condition or results of operations.

If we default on our obligations to pay our other indebtedness, we may not be able to make payments on the notes.

Any default under the agreements covering our indebtedness that is not waived by the required lenders, and the remedies sought by the holders of such indebtedness, could make us unable to pay the principal, premium, if any, and interest on the notes and substantially decrease the market value of the notes. If we are unable to generate sufficient cash flow and are otherwise unable to obtain alternative financing necessary to meet required payments of principal, premium, if any, and interest on our indebtedness, or if we otherwise fail to comply with the various covenants, including financial and operating covenants, in the instruments governing our indebtedness, we would be in default under the terms of the agreements governing such indebtedness, which could also result in an event of default under other financing agreements. In the event of such default, the holders of such indebtedness could elect to declare all the funds borrowed thereunder to be due and payable, together with accrued and unpaid interest, or we could be forced to apply all available cash flows to repay such indebtedness, and, in any case, we could ultimately be forced into bankruptcy or liquidation.

The repayment of the notes will be effectively subordinated to substantially all of our existing and future secured debt and the existing and future secured debt of our subsidiaries.

The notes, and each guarantee of the notes, will be unsecured obligations. The notes, and any other unsecured debt securities issued by us, will be effectively junior in right of payment to all secured indebtedness. In the event of our bankruptcy, or the bankruptcy of our subsidiaries or special purpose vehicles, holders of any secured indebtedness of ours or of our subsidiaries will have claims that are prior to the claims of the holders of any debt securities issued by us with respect to the assets securing our other indebtedness. As of December 31, 2010, the aggregate carrying value of our and our subsidiaries’ secured indebtedness was approximately $1,345.1 million.

If we defaulted on our obligations under any of our secured debt, our secured lenders could proceed against the collateral granted to them to secure that indebtedness. If any secured indebtedness were to be accelerated, our assets may not be sufficient to repay in full that indebtedness and our other indebtedness, including the notes. In addition, upon any distribution of assets pursuant to any liquidation, insolvency, dissolution, reorganization or similar proceeding, the holders of secured indebtedness will be entitled to receive payment in full from the proceeds of the collateral securing our secured indebtedness before the holders of the notes will be entitled to receive any payment with respect thereto. As a result, the holders of the notes may recover proportionally less than holders of secured indebtedness.

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The notes and related subsidiary guarantees will effectively be subordinated to indebtedness of our existing and future non-guarantor subsidiaries.

Not all of our subsidiaries will guarantee the notes. The notes will be effectively subordinated to all indebtedness and other liabilities and commitments, including trade payables, of our existing and future subsidiaries that do not guarantee the notes. Any right of the holders of the notes to participate in the assets of a non-guarantor subsidiary upon any liquidation or reorganization of the subsidiary will be subject to the prior claims of the subsidiary’s creditors.

As of the date of this prospectus, Nationstar Home Equity Loan Trust 2009-A; Nationstar Home Equity Loan 2009-A REO LLC; Nationstar Residual, LLC; Nationstar Advance Funding II, LLC; Nationstar Mortgage Advance Receivables Trust 2009-ADV1; Nationstar Mortgage Advance Receivables Trust 2010-ADV1; Nationstar Funding LLC and Nationstar Advance Funding LLC are our non-guarantor subsidiaries. Non-guarantor subsidiaries held approximately 51.2% of our total assets as of December 31, 2010.

Unrestricted subsidiaries generally will not be subject to any of the covenants in the indenture and will not guarantee the notes, and we may not be able to rely on the cash flow or assets of those unrestricted subsidiaries to pay our indebtedness.

Subject to compliance with the restrictive covenants contained in the indenture governing the notes, we will be permitted to designate certain of our subsidiaries as unrestricted subsidiaries. If we designate a subsidiary guarantor as an unrestricted subsidiary for purposes of the indenture governing the notes, any guarantees of the notes by such subsidiary or any of its subsidiaries will be released under the indenture. As a result, the creditors of the unrestricted subsidiary and its subsidiaries will have a senior claim on the assets of such unrestricted subsidiary and its subsidiaries.

Unrestricted subsidiaries will generally not be subject to the covenants under the indenture governing the notes and will not guarantee the notes. Unrestricted subsidiaries may enter into financing arrangements that limit their ability to make loans or other payments to fund payments in respect of the notes. Accordingly, we may not be able to rely on the cash flow or assets of unrestricted subsidiaries to pay any of our indebtedness, including the notes.

As of the date of this prospectus there are no unrestricted subsidiaries, and we do not have any plans to designate any of our subsidiaries as unrestricted subsidiaries.

Your right to be repaid would be adversely affected if a court determined that any of our subsidiaries made any guarantee for inadequate consideration or with the intent to defraud creditors.

Under the federal bankruptcy laws and comparable provisions of state fraudulent transfer laws, any guarantee made by any of our subsidiaries could be voided, or claims under the guarantee made by any of our subsidiaries could be subordinated to all other obligations of any such subsidiary, if the subsidiary, at the time it incurred the obligations under the guarantee:

•  incurred the obligations with the intent to hinder, delay or defraud creditors; or

•  received less than reasonably equivalent value in exchange for incurring those obligations; and

•  was insolvent or rendered insolvent by reason of that incurrence;

•  was engaged in a business or transaction for which the subsidiary’s remaining assets constituted unreasonably small capital; or

•  intended to incur, or believed that it would incur, debts beyond its ability to pay those debts as they mature.

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A legal challenge to the obligations under any guarantee on fraudulent conveyance grounds could focus on any benefits received in exchange for the incurrence of those obligations. A guarantee could be subject to the claim that, since the guarantee was incurred for our benefit and only indirectly for the benefit of the guarantor, the obligations of the applicable guarantor were incurred for less than fair consideration. The liability of each guarantor under the indenture will be limited to the amount that will result in its guarantee not constituting a fraudulent conveyance, but a court may apply an alternative standard to determine the maximum liability of each guarantor. We believe that each of our subsidiaries making a guarantee will receive reasonably equivalent value for incurring the guarantee, but a court may disagree with our conclusion.

The measures of insolvency for purposes of the fraudulent transfer laws vary depending on the law applied in the proceeding to determine whether a fraudulent transfer has occurred. Generally, however, an entity would be considered insolvent if:

•  the sum of its debts, including contingent liabilities, is greater than the fair saleable value of all of its assets;

•  the present fair saleable value of its assets is less than the amount that would be required to pay its probable liabilities on its existing debts, including contingent liabilities, as they become absolute and mature; or

•  it cannot pay its debts as they become due.

The credit ratings assigned to the notes may not reflect all risks of an investment in the notes.

The credit ratings assigned to the notes reflect the rating agencies’ assessments of our ability to make payments on the notes when due. Consequently, actual or anticipated changes in these credit ratings will generally affect the market value of the notes. These credit ratings, however, may not reflect the potential impact of risks related to structure, market or other factors related to the value of the notes.

We may not have the ability to raise the funds necessary to finance the change of control offer required by the indenture governing the notes.

Upon the occurrence of a “change of control,” as defined in the indenture governing the notes, we must offer to buy back the notes at a price equal to 101% of the principal amount, together with any accrued and unpaid interest and special interest, if any, to the date of the repurchase. Our failure to purchase, or give notice of purchase of, the notes would be a default under the indenture governing the notes. See “Description of New Notes—Repurchase at the Option of Holders—Change of Control.”

If a change of control occurs, it is possible that we may not have sufficient assets at the time of the change of control to make the required repurchase of notes or to satisfy all obligations under our other debt instruments, including future debt instruments. In order to satisfy our obligations, we could seek to refinance our indebtedness or obtain a waiver from the other lenders or you as a holder of the notes. We may not be able to obtain a waiver or refinance our indebtedness on terms acceptable to us, if at all. Our failure to repurchase any notes submitted in a change of control offer could constitute an event of default under our other debt documents, even if the change of control offer itself would not cause a default under the indenture governing the notes.

The change of control provision in the indenture may not protect you in the event we consummate a highly leveraged transaction, reorganization, restructuring, merger or other similar transaction, unless such transaction constitutes a change of control under the indenture. Such a transaction may not involve a change in voting power or beneficial ownership or, even if it does, may

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not involve a change of the magnitude required under the definition of a change of control triggering event in the indenture to trigger our obligation to repurchase the notes.

There is no established trading market for the notes. If an actual trading market does not develop for the notes, you may not be able to resell the notes quickly, for the price that you paid or at all.

The notes are a new issue of securities and therefore there is no established trading market for the notes, and an active trading market may not develop. We do not intend to apply for the notes to be listed on any securities exchange or to arrange for any quotation on any automated dealer quotation systems. The initial purchasers have advised us that they intend to make a market in the notes, but they are not obligated to do so. The initial purchasers may discontinue any market making in the notes at any time, at their sole discretion. As a result, there might be very little liquidity of any trading market for the notes.

You may not be able to sell your notes at a particular time or at all, or the prices that you receive when you sell them may not be favorable. You may not be able to resell your notes at their fair market value. The liquidity of, and trading market for, the notes may also be adversely affected by, among other things:

•  prevailing interest rates;

•  our operating performance and financial condition;

•  the interest of securities dealers in making a market; and

•  the market for similar securities.

Historically, the market for non-investment grade debt has been subject to disruptions that have caused volatility in the prices of securities similar to the notes. It is possible that the market for the notes will be subject to disruptions. Any disruptions may have a negative effect on noteholders, regardless of our prospects and financial performance.

The Old Notes were issued with original issue discount for U.S. federal income tax purposes.

The Old Notes were issued with OID for U.S. federal income tax purposes because the stated principal amount of the notes exceeded their issue price by more than a de minimis amount.

U.S. holders will generally be required to include such OID in gross income on a constant yield to maturity basis in advance of the receipt of cash payment thereof and regardless of such holders’ method of accounting for U.S. federal income tax purposes. See “Certain United States Federal Income Tax Considerations.”

Risks Relating to the Exchange Offer

The consummation of the exchange offer may not occur.

We are not obligated to complete the exchange offer under certain circumstances. See “Description of the Exchange Offer—Conditions to the Exchange Offer.” Even if the exchange offer is completed, it may not be completed on the schedule described in this prospectus. Accordingly, holders participating in the exchange offer may have to wait longer than expected to receive their New Notes,

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during which time those holders of Old Notes will not be able to effect transfers of their Old Notes tendered in the exchange offer.

You may be required to deliver prospectuses and comply with other requirements in connection with any resale of the New Notes.

If you tender your Old Notes for the purpose of participating in a distribution of the New Notes, you will be required to comply with the registration and prospectus delivery requirements of the Securities Act in connection with any resale of the New Notes. In addition, if you are a broker-dealer that receives New Notes for your own account in exchange for Old Notes that you acquired as a result of market-making activities or any other trading activities, you will be required to acknowledge that you will deliver a prospectus in connection with any resale of such New Notes.

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CAUTIONARY STATEMENT REGARDING FORWARD-LOOKING STATEMENTS

This prospectus contains forward-looking statements within the meaning of the U.S. federal securities laws. Forward-looking statements include, without limitation, statements concerning plans, objectives, goals, projections, strategies, future events or performance, and underlying assumptions and other statements, which are not statements of historical facts. When used in this discussion, the words “anticipate,” “appears,” “foresee,” “intend,” “should,” “expect,” “estimate,” “project,” “plan,” “may,” “could,” “will,” “are likely” and similar expressions are intended to identify forward-looking statements. These statements involve predictions of our future financial condition, performance, plans and strategies, and are thus dependent on a number of factors including, without limitation, assumptions and data that may be imprecise or incorrect. Specific factors that may impact performance or other predictions of future actions have, in many but not all cases, been identified in connection with specific forward-looking statements. Also see “Risk Factors” included elsewhere in this prospectus regarding the additional factors that have impacted or may impact our performance and financial results. Forward-looking statements are subject to risks and uncertainties including, without limitation:

•  the continued deterioration of the residential mortgage market, increase in monthly payments on adjustable rate mortgage loans, adverse economic conditions, decrease in property values or increase in delinquencies and defaults;

•  our ability to compete successfully in the mortgage loan servicing and mortgage loan originations industry;

•  our ability to maintain the size of our servicing portfolio by successfully identifying attractive acquisition opportunities, including mortgage servicing rights, subservicing contracts, servicing platforms and origination platforms;

•  our ability to scale-up appropriately and integrate our acquisitions to realize the anticipated benefits of any such potential future acquisitions;

•  our ability to obtain sufficient capital to meet our financing requirements;

•  our ability to grow our loan origination volume and develop a distributed retail sales channel;

•  the termination of our servicing rights and subservicing contracts;

•  changes to federal, state and local laws and regulations concerning loan servicing, loan origination, loan modification or the licensing of entities that engage in these activities;

•  changes in accounting standards;

•  our ability to meet certain criteria or characteristics under the indentures governing our securitized pools of loans;

•  our ability to follow the specific guidelines of government-sponsored enterprises or a significant change in such guidelines;

•  delays in our ability to collect or be reimbursed for servicing advances;

•  changes to the Home Affordable Modification Program, the Make Home Affordable Plan or other similar government programs;

•  loss of our licenses;

•  changes in our business relationships with Fannie Mae, Freddie Mac, Ginnie Mae and others that facilitate the issuance of mortgage-backed securities;

•  changes to the nature of the guarantees of Fannie Mae and Freddie Mac and the market implications of such changes;

•  errors in our financial models or changes in assumptions;

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•  requirement to write down the value of certain assets;

•  changes in prevailing interest rates;

•  our ability to successfully mitigate our risks through hedging strategies;

•  changes in our servicer ratings;

•  the accuracy and completeness of information about borrowers and counterparties;

•  our ability to maintain our technology systems and our ability to adapt such systems for future operating environments;

•  failure of our internal security measures or breach of our privacy protections;

•  failure of our vendors to comply with servicing criteria;

•  the loss of the services of our senior managers;

•  changes to our income tax status;

•  failure to attract and retain a highly skilled workforce;

•  increase in legal proceedings and related costs;

•  changes in public opinion concerning mortgage originators or debt collectors;

•  conflicts of interest with Fortress and the holders of the notes; and

•  other risks described in the “Risk Factors” section of this prospectus beginning on page 17.

We caution you not to place undue reliance on these forward-looking statements that speak only as of the date they were made. We do not undertake any obligation to publicly release any revisions to these forward-looking statements to reflect events or circumstances after the date of this prospectus or to reflect the occurrence of unanticipated events.

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SELECTED HISTORICAL CONSOLIDATED FINANCIAL DATA

The following tables present selected consolidated financial information for our business. You should read these tables along with “Management’s Discussion and Analysis of Financial Condition and Results of Operations,” “Business” and our consolidated financial statements and the related notes included elsewhere in this prospectus.

We have not presented selected consolidated statement of operations and balance sheet data for periods prior to the Acquisition. The entity that we acquired—CHEC—was a consolidated subsidiary of Centex Financial Services (“CFS”), and we did not receive, separate audited or unaudited financials of CHEC in connection with the Acquisition. We only received consolidated financials of CFS. In 2009, CFS was subsequently acquired by a third party. We do not have, nor do we have the right to obtain, financial statements for CHEC prior to the date of the Acquisition. Therefore, because the information is not available to us, it cannot be created without unreasonable effort and expense. We also believe that financial information for the period from April 1, 2006 to July 10, 2006 does not contribute to an investor’s understanding of our historical financial performance and financial condition because, before the Acquisition, CHEC had historically operated as a subprime mortgage lender. After the Acquisition, in the third fiscal quarter of 2007, we transformed the business from a subprime mortgage lender to a mortgage servicer and conforming loan originator. As a result, financial information with respect to the business conducted before the Acquisition would not provide useful information to investors about trends in our financial condition and results of operation.

The selected consolidated statement of operations data for the years ended December 31, 2008, 2009 and 2010 and the selected consolidated balance sheet data as of December 31, 2009 and 2010 have been derived from our audited financial statements included elsewhere in this prospectus. The selected consolidated statement of operations data for the year ended December 31, 2007 and the selected consolidated balance sheet data as of December 31, 2008 have been derived from our audited financial statements that are not included in this prospectus. The selected consolidated statement of operations data for the period from July 11, 2006 to December 31, 2006 and the selected consolidated balance sheet data as of December 31, 2006, and 2007 have been derived from our unaudited financial statements, which are not included in this prospectus.

	July 11, 2006
	to December			Year Ended December 31,
	31, 2006			2007			2008			2009			2010
	(in thousands)
Statement of Operations Data:
Revenues:
Total fee income	$	14,161		$	46,301		$	74,007		$	100,218		$	184,084
Gain (loss) on mortgage loans held for sale		4,476			(94,673	)		(86,663	)		(21,349	)		77,344
Total revenues		18,637			(48,372	)		(12,656	)		78,869			261,428
Total expenses and impairments		98,837			259,222			147,777			142,367			220,976
Other income (expense):
Interest income		75,114			163,022			92,060			52,518			98,895
Interest expense		(55,172	)		(118,553	)		(65,548	)		(69,883	)		(116,163	)
Loss on interest rate swaps and caps		—			(21,353	)		(23,689	)		(14	)		(9,801	)
Fair value changes in ABS securitizations		—			—			—			—			(23,297	)
Total other income (expense)		19,942			23,116			2,823			(17,379	)		(50,366	)
Net income (loss)	$	(60,258	)	$	(284,478	)	$	(157,610	)	$	(80,877	)	$	(9,914	)

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	As of December 31,
	2006		2007		2008		2009		2010
	(in thousands)
Balance Sheet Data:
Cash and cash equivalents	$	10,335	$	41,251	$	9,357	$	41,645	$	21,223
Mortgage servicing rights		49,783		82,634		110,808		114,605		145,062
Total assets		2,145,007		1,303,221		1,122,001		1,280,185		1,947,181
Unsecured senior notes		—		—		—		—		244,061
Notes payable		1,966,368		967,307		810,041		771,857		709,758
Nonrecourse debt—Legacy Assets		—		—		—		177,675		138,662
ABS nonrecourse debt		—		—		—		—		496,692
Total liabilities		2,005,213		1,041,525		866,079		1,016,362		1,690,809
Total members’ equity		139,794		261,696		255,922		263,823		256,372

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RATIO OF EARNINGS TO FIXED CHARGES

The following table sets forth information regarding our ratio of earnings to fixed charges for each of the periods shown. For purposes of calculating this ratio, (i) earnings consist of income (loss) from continuing operations before provision (benefit) for income taxes and fixed charges and (ii) fixed charges consist of interest expense, which includes amortization of deferred finance charges, and imputed interest on our lease obligations. The interest component of rent was determined based on an estimate of a reasonable interest factor at the inception of the leases.

	July 11, 2006
	to December		Year Ended December 31,
	31, 2006		2007		2008		2009		2010
Ratio of earnings to fixed charges		(1)		(1)		(1)		(1)		(1)

(1) Earnings for the period from July 11, 2006 to December 31, 2006 and for the years ended December 31, 2007, 2008, 2009 and 2010 were inadequate to cover fixed charges. The coverage deficiencies were $60.3 million, $284.5 million, $157.6 million, $80.9 million and $9.9 million, respectively.

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DESCRIPTION OF THE EXCHANGE OFFER

Purpose of the Exchange Offer

On March 26, 2010, we issued $250,000,000 aggregate principal amount of Old Notes. In connection with that issuance, we entered into a Registration Rights Agreement on March 26, 2010. Pursuant to the Registration Rights Agreement, we agreed that we would use reasonable best efforts to:

•  file a registration statement (“Exchange Offer Registration Statement”) covering an offer to the Holders of Old Notes to exchange all Old Notes for New Notes not later than March 31, 2011;

•  have the Exchange Offer Registration Statement remain effective for 90 days after Expiration Date for use by broker-dealers who acquired the Old Notes directly from us;

•  commence the Exchange Offer as soon as reasonably practicable after the Exchange Offer Registration Statement is declared effective by the SEC; and

•  complete the registered exchange offer not later than 90 days after March 31, 2011.

Upon the effectiveness of the registration statement of which this prospectus is a part, we will offer the New Notes in exchange for the Old Notes. We filed a copy of the Registration Rights Agreement as an exhibit to the registration statement.

Resale of the New Notes

We are making the exchange offer in reliance on the position of the staff of the SEC as set forth in interpretive letters addressed to other parties in other transactions. For further information on the SEC’s position, see Exxon Capital Holdings Corporation, available May 13, 1988, Morgan Stanley & Co. Incorporated, available June 5, 1991 and Shearman & Sterling, available July 2, 1993, and other interpretive letters to similar effect. We have not sought our own interpretive letter, however, and we cannot assure you that the staff would make a similar determination with respect to the exchange offer as it has in interpretive letters to other parties. Based on these interpretations by the staff, we believe that the New Notes issued under the exchange offer may be offered for resale, resold or otherwise transferred by you, without further compliance with the registration and prospectus delivery provisions of the Securities Act, so long as you:

(1)   are acquiring the New Notes in the ordinary course of the business of yourself and any beneficial owner;

(2)	are not participating in, and do not intend to participate in, a distribution of the New Notes within the meaning of the Securities Act and have no arrangement or understanding with any person to participate in a distribution of the New Notes within the meaning of the Securities Act;
(3)	are not a broker-dealer who acquired the Old Notes directly from us; and
(4)	are not an “affiliate” of ours, within the meaning of Rule 405 of the Securities Act.

By tendering the Old Notes in exchange for New Notes, you will be required to represent to us that each of the above statements applies to you. If you are participating in or intend to participate in, a distribution of the New Notes, or have any arrangement or understanding with any person to participate in a distribution of the New Notes to be acquired in this exchange offer, you may be deemed to have received restricted securities and may not rely on the applicable interpretations of the staff of the SEC. If you are so deemed, you will have to comply with the registration and prospectus delivery requirements of the Securities Act in connection with any secondary resale transaction.

Each broker-dealer that receives New Notes for its own account in exchange for Old Notes, where the Old Notes were acquired by the broker-dealer as a result of market-making activities or

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other trading activities, must acknowledge that it will deliver a prospectus in connection with any resale of the New Notes. The letter of transmittal states that by so acknowledging and by delivering a prospectus, a broker-dealer will not be deemed to admit that it is an “underwriter” within the meaning of the Securities Act. A broker-dealer may use this prospectus, as it may be amended or supplemented from time to time, in connection with resales of New Notes received in exchange for Old Notes which the broker-dealer acquired as a result of market-making or other trading activities. See “Plan of Distribution.”

The exchange offer is not being made to, nor will we accept tenders for exchange from, holders of Old Notes in any jurisdiction in which the exchange offer or the acceptance of it would not be in compliance with the securities or blue sky laws of such jurisdiction.

Terms of the Exchange Offer

Upon the terms and subject to the conditions set forth in this prospectus and the letter of transmittal, we will accept any and all Old Notes validly tendered and not withdrawn prior to 5:00 p.m., New York City time, on the Expiration Date. We will issue $1,000 principal amount of New Notes in exchange for each $1,000 principal amount of Old Notes validly tendered and accepted pursuant to the exchange offer.

We will not pay any accrued and unpaid interest on the Old Notes that we acquire in the exchange offer. Instead, interest on the New Notes will accrue from the most recent date to which interest has been paid or, if no interest has been paid, from and including March 26, 2010, the date on which we issued the Old Notes.

Tendering holders of Old Notes must tender Old Notes in minimum denominations of $2,000, and integral multiples of $1,000 in excess thereof. New Notes will be issued in minimum denominations of $2,000 and integral multiples of $1,000 in excess thereof.

The terms of the New Notes are identical in all material respects to the terms of the Old Notes, except that:

(1)	we have registered the New Notes under the Securities Act and therefore these notes will not bear legends restricting their transfer; and
(2)	specified rights under the Registration Rights Agreement, including the provisions providing for payment of additional interest in specified circumstances relating to the exchange offer, will be eliminated for all the Notes.

The New Notes will evidence the same debt as the Old Notes. The New Notes will be issued under the same indenture and will be entitled to the same benefits under that indenture as the Old Notes being exchanged. As of the date of this prospectus, approximately $250,000,000 aggregate principal amount of the Old Notes are outstanding. Old Notes accepted for exchange will be retired and cancelled and not reissued.

Except as described under “Form, Book-Entry Procedures and Transfer,” we will issue the New Notes in the form of one or more global notes registered in the name of DTC or its nominee, and each beneficial owner’s interest in it will be transferable in book-entry form through DTC.

We will conduct the exchange offer in accordance with the applicable requirements of the Securities Act and the Exchange Act, and the rules and regulations of the SEC thereunder.

We will be considered to have accepted validly tendered Old Notes if and when we have given oral or written notice to that effect to the exchange agent. The exchange agent will act as agent for the tendering holders for the purposes of receiving the New Notes from us.

If we do not accept any tendered Old Notes for exchange because of an invalid tender, the occurrence of the other events described in this prospectus or otherwise, we will return these Old

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Notes, without expense, to the tendering holder as soon as practicable after the Expiration Date of the exchange offer.

Holders who tender Old Notes will not be required to pay brokerage commissions or fees or, subject to the instructions in the letter of transmittal, transfer taxes on exchange of Old Notes in connection with the exchange offer. We will pay all charges and expenses, other than certain applicable taxes in certain circumstances, in connection with the exchange offer. See “—Other Fees and Expenses” and “—Transfer Taxes.”

If we successfully complete the exchange offer, any Old Notes which holders do not tender or which we do not accept in the exchange offer will remain outstanding and continue to accrue interest. The holders of Old Notes after the exchange offer in general will not have further rights under the Registration Rights Agreement, including registration rights and any rights to additional interest. Holders wishing to transfer the Old Notes would have to rely on exemptions from the registration requirements of the Securities Act.

Expiration Date; Extensions; Amendments; Termination

For purposes of the exchange offer, the term “Expiration Date” means 5:00 p.m., New York City time, on          , 2011, subject to our right to extend that time and date in our sole discretion, in which case the Expiration Date means the latest time and date to which the exchange offer is extended.

We reserve the right, in our sole discretion, by giving oral or written notice to the exchange agent, to:

•  extend the exchange offer;

•  terminate the exchange offer if a condition to our obligation to exchange Old Notes for New Notes is not satisfied or waived on or prior to the Expiration Date; and

•  amend the exchange offer.

If the exchange offer is amended in a manner that we determine constitutes a material change, we will extend the exchange offer for a period of two to ten business days, depending upon the significance of the amendment and the manner of disclosure to the holders, if the exchange offer would otherwise have expired during that two to ten business day period.

We will notify holders of the Old Notes of any extension, amendment or termination of the exchange offer by press release or other public announcement. We will announce any extension of the Expiration Date no later than 9:00 a.m., New York City time, on the first business day after the previously scheduled Expiration Date. We have no other obligation to publish, advertise or otherwise communicate any information about any extension, amendment or termination.

Settlement Date

We will deliver the New Notes on the settlement date, which will be as soon as practicable after the Expiration Date of the exchange offer. We will not be obligated to deliver New Notes unless the exchange offer is consummated.

Conditions to the Exchange Offer

Notwithstanding any other provision of the exchange offer, we will not be required to accept for exchange, or to issue New Notes in exchange for, any Old Notes and may terminate or amend the exchange offer if at any time before the expiration of the exchange offer, we determine (i) that the exchange offer violates applicable law, any applicable interpretation of the staff of the SEC or any order of any governmental agency or court of competent jurisdiction; (ii) an action or proceeding shall have been instituted or threatened in any court or by any governmental agency which might materially

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impair our ability to proceed with the exchange offer or a material adverse development shall have occurred in any existing action or proceeding with respect to us; or (iii) all governmental approvals that we deem necessary for the consummation of the exchange offer have not been obtained.

The foregoing conditions are for our sole benefit and may be asserted by us regardless of the circumstances giving rise to any such condition or may be waived by us in whole or in part at any time and from time to time. The failure by us at any time to exercise any of the foregoing rights shall not be deemed a waiver of any of those rights and each of those rights shall be deemed an ongoing right which may be asserted at any time and from time to time. Any determination made by us concerning an event, development or circumstance described or referred to above will be conclusive and binding.

If any of the foregoing conditions are not satisfied, we may, at any time on or prior to the Expiration Date:

•  terminate the exchange offer and return all tendered Old Notes to the respective tendering holders;

•  modify, extend or otherwise amend the exchange offer and retain all tendered Old Notes until the Expiration Date, as extended, subject, however, to the withdrawal rights of holders; or

•  to the extent lawful, waive the unsatisfied conditions with respect to the exchange offer and accept all Old Notes tendered and not previously validly withdrawn.

In addition, we will not accept for exchange any Old Notes tendered, and no New Notes will be issued in exchange for those Old Notes, if at such time any stop order shall be threatened or in effect with respect to the registration statement of which this prospectus constitutes a part or with respect to the qualification of the indenture governing the New Notes under the Trust Indenture Act of 1939, as amended.

Effect of Tender

Any tender by a holder, and our subsequent acceptance of that tender, of Old Notes will constitute a binding agreement between that holder and us upon the terms and subject to the conditions of the exchange offer described in this prospectus and in the letter of transmittal. The acceptance of the exchange offer by a tendering holder of Old Notes will constitute the agreement by that holder to deliver good and marketable title to the tendered Old Notes, free and clear of any and all liens, restrictions, charges, pledges, security interests, encumbrances or rights of any kind of third parties.

Letter of Transmittal; Representations, Warranties and Covenants of Holders of Old Notes

Upon agreement to the terms of the letter of transmittal pursuant to an agent’s message, a holder, or the beneficial holder of Old Notes on behalf of which the holder has tendered, will, subject to that holder’s ability to withdraw its tender, and subject to the terms and conditions of the exchange offer generally, thereby:

(1)   irrevocably sell, assign and transfer to or upon our order or the order of our nominee all right, title and interest in and to, and any and all claims in respect of or arising or having arisen as a result of the holder’s status as a holder of, all Old Notes tendered thereby, such that thereafter the holder shall have no contractual or other rights or claims in law or equity against us or any fiduciary, trustee, fiscal agent or other person connected with the Old Notes arising under, from or in connection with those Old Notes;

(2)  waive any and all rights with respect to the Old Notes tendered thereby, including, without limitation, any existing or past defaults and their consequences in respect of those Old Notes; and

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(3)  release and discharge us and the trustee for the Old Notes from any and all claims the holder may have, now or in the future, arising out of or related to the Old Notes tendered thereby, including, without limitation, any claims that the holder is entitled to receive additional principal or interest payments with respect to the Old Notes tendered thereby, other than as expressly provided in this prospectus and in the letter of transmittal, or to participate in any redemption or defeasance of the Old Notes tendered thereby.

In addition, by tendering Old Notes in the exchange offer, each holder of Old Notes will represent, warrant and agree that:

(1)	it has received and reviewed this prospectus;
(2)	it is the beneficial owner (as defined below) of, or a duly authorized representative of one or more beneficial owners of, the Old Notes tendered thereby, and it has full power and authority to execute the letter of transmittal;
(3)	the Old Notes being tendered thereby were owned as of the date of tender, free and clear of any liens, charges, claims, encumbrances, interests and restrictions of any kind, and we will acquire good, indefeasible and unencumbered title to those Old Notes, free and clear of all liens, charges, claims, encumbrances, interests and restrictions of any kind, when we accept the same;
(4)	it will not sell, pledge, hypothecate or otherwise encumber or transfer any Old Notes tendered thereby from the date of the letter of transmittal, and any purported sale, pledge, hypothecation or other encumbrance or transfer will be void and of no effect;
(5)	in evaluating the exchange offer and in making its decision whether to participate in the exchange offer by tendering its Old Notes, it has made its own independent appraisal of the matters referred to in this prospectus and the letter of transmittal and in any related communications and it is not relying on any statement, representation or warranty, express or implied, made to it by us or the exchange agent, other than those contained in this prospectus, as amended or supplemented through the Expiration Date;
(6)	the execution and delivery of the letter of transmittal shall constitute an undertaking to execute any further documents and give any further assurances that may be required in connection with any of the foregoing, in each case on and subject to the terms and conditions described or referred to in this prospectus;
(7)	the agreement to the terms of the letter of transmittal pursuant to an agent’s message shall, subject to the terms and conditions of the exchange offer, constitute the irrevocable appointment of the exchange agent as its attorney and agent and an irrevocable instruction to that attorney and agent to complete and execute all or any forms of transfer and other documents at the discretion of that attorney and agent in relation to the Old Notes tendered thereby in favor of us or any other person or persons as we may direct and to deliver those forms of transfer and other documents in the attorney’s and agent’s discretion and the certificates and other documents of title relating to the registration of Old Notes and to execute all other documents and to do all other acts and things as may be in the opinion of that attorney or agent necessary or expedient for the purpose of, or in connection with, the acceptance of the exchange offer, and to vest in us or our nominees those Old Notes;
(8)	the terms and conditions of the exchange offer shall be deemed to be incorporated in, and form a part of, the letter of transmittal, which shall be read and construed accordingly;

(9)  it is acquiring the New Notes in the ordinary course of the business of the holder and any beneficial owner;

(10)  it is not participating in, and does not intend to participate in, a distribution of the New Notes within the meaning of the Securities Act and has no arrangement or understanding

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with any person to participate in a distribution of the New Notes within the meaning of the Securities Act;

(11)  it is not a broker-dealer who acquired the Old Notes directly from us; and

(12)  it is not an “affiliate” of ours, within the meaning of Rule 405 of the Securities Act.

The representations, warranties and agreements of a holder tendering Old Notes will be deemed to be repeated and reconfirmed on and as of the Expiration Date and the settlement date. For purposes of this prospectus, the “beneficial owner” of any Old Notes means any holder that exercises investment discretion with respect to those Old Notes.

Absence of Dissenters’ Rights

Holders of the Old Notes do not have any appraisal or dissenters’ rights in connection with the exchange offer.

Acceptance of Old Notes for Exchange and Delivery of New Notes

On the settlement date, New Notes to be issued in exchange for Old Notes in the exchange offer, if consummated, will be delivered in book-entry form.

We will be deemed to accept validly tendered Old Notes that have not been validly withdrawn as provided in this prospectus when, and if, we give oral or written notice of acceptance to the exchange agent. Subject to the terms and conditions of the exchange offer, delivery of the New Notes will be made by the exchange agent on the settlement date following receipt of that notice. The exchange agent will act as agent for tendering holders of Old Notes for the purpose of receiving Old Notes and transmitting New Notes as of the settlement date. If any tendered Old Notes are not accepted for any reason described in the terms and conditions of the exchange offer, such unaccepted Old Notes will be returned without expense to the tendering holders as promptly as practicable after the expiration or termination of the exchange offer.

Procedures for Tendering

To participate in the exchange offer, you must properly tender your Old Notes to the exchange agent as described below. We will only issue New Notes in exchange for Old Notes that you timely and properly tender. Therefore, you should allow sufficient time to ensure timely delivery of the Old Notes, and you should follow carefully the instructions on how to tender your Old Notes. It is your responsibility to properly tender your Old Notes. We have the right to waive any defects. However, we are not required to waive defects, and neither we, nor the exchange agent is required to notify you of defects in your tender.

If you have any questions or need help in exchanging your Old Notes, please contact the exchange agent at the address or telephone numbers set forth below.

All of the Old Notes were issued in book-entry form, and all of the Old Notes are currently represented by global certificates registered in the name of Cede & Co., the nominee of DTC. We have confirmed with DTC that the Old Notes may be tendered using DTC’s automatic tender offer program, or ATOP. The exchange agent will establish an account with DTC for purposes of the exchange offer promptly after the commencement of the exchange offer, and DTC participants may electronically transmit their acceptance of the exchange offer by causing DTC to transfer their Old Notes to the exchange agent using the ATOP procedures. In connection with the transfer, DTC will send an “agent’s message” to the exchange agent. The agent’s message will state that DTC has received instructions from the participant to tender Old Notes and that the participant agrees to be bound by the terms of the letter of transmittal.

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By using the ATOP procedures to exchange Old Notes, you will not be required to deliver a letter of transmittal to the exchange agent. However, you will be bound by its terms just as if you had signed it.

Determinations Under the Exchange Offer.  We will determine in our sole discretion all questions as to the validity, form, eligibility, time of receipt, acceptance of tendered Old Notes and withdrawal of tendered Old Notes. Our determination will be final and binding. We reserve the absolute right to reject any Old Notes not properly tendered or any Old Notes our acceptance of which would, in the opinion of our counsel, be unlawful. We also reserve the right to waive any defect, irregularities or conditions of tender as to particular Old Notes. Our interpretation of the terms and conditions of the exchange offer, including the instructions in the letter of transmittal, will be final and binding on all parties. Unless waived, all defects or irregularities in connection with tenders of Old Notes must be cured within such time as we shall determine. Although we intend to notify holders of defects or irregularities with respect to tenders of Old Notes, neither we, the exchange agent nor any other person will incur any liability for failure to give such notification. Tenders of Old Notes will not be deemed made until such defects or irregularities have been cured or waived. Any Old Notes received by the exchange agent that are not properly tendered and as to which the defects or irregularities have not been cured or waived will be returned to the tendering holder as soon as practicable after the Expiration Date of the exchange.

When We Will Issue New Notes.  In all cases, we will issue New Notes for Old Notes that we have accepted for exchange under the exchange offer only after the exchange agent receives, prior to 5:00 p.m., New York City time, on the Expiration Date:

•  a book-entry confirmation of such number of Old Notes into the exchange agent’s account at DTC; and

•  a properly transmitted agent’s message.

Return of Old Notes Not Accepted or Exchanged.  If we do not accept any tendered Old Notes for exchange or if Old Notes are submitted for a greater principal amount than the holder desires to exchange, the unaccepted or non-exchanged Old Notes will be returned without expense to their tendering holder. Such non-exchanged Old Notes will be credited to an account maintained with DTC. These actions will occur as promptly as practicable after the expiration or termination of the exchange offer.

Participating Broker-Dealers.  Each broker-dealer that receives New Notes for its own account in exchange for Old Notes, where those Old Notes were acquired by such broker-dealer as a result of market-making activities or other trading activities, must acknowledge that it will deliver a prospectus in connection with any resale of those New Notes. See “Plan of Distribution.”

Withdrawal of Tenders

Tenders of Old Notes may be withdrawn at any time prior to 5:00 p.m., New York City time, on the Expiration Date.

For a withdrawal to be effective, you must comply with the appropriate ATOP procedures. Any notice of withdrawal must specify the name and number of the account at DTC to be credited with withdrawn Old Notes and otherwise comply with the ATOP procedures.

We will determine all questions as to the validity, form, eligibility and time of receipt of a notice of withdrawal. Our determination shall be final and binding on all parties. We will deem any Old Notes so withdrawn not to have been validly tendered for exchange for purposes of the exchange offer.

Any Old Notes that have been tendered for exchange but that are not exchanged for any reason will be credited to an account maintained with DTC for the Old Notes. This return or crediting will take place as soon as practicable after withdrawal, rejection of tender, expiration or termination of the exchange offer. You may retender properly withdrawn Old Notes by following the procedures described

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under “—Procedures for Tendering” above at any time on or prior to the Expiration Date of the exchange offer.

Exchange Agent

Wells Fargo Bank, National Association has been appointed as the exchange agent for the exchange offer. All correspondence in connection with the exchange offer should be sent or delivered by each holder of Old Notes, or a beneficial owner’s commercial bank, broker, dealer, trust company or other nominee, to the exchange agent at:

By Regular Mail or Overnight Courier:

Wells Fargo Bank, National Association

Corporate Trust Operations

MAC N9303-121

Sixth & Marquette Avenue

Minneapolis, MN 55479

By facsimile: (612)-667-6282

For Information or Confirmation by Telephone: (800) 344-5128

Questions concerning tender procedures and requests for additional copies of this prospectus or the letter of transmittal should be directed to the exchange agent at the address, telephone numbers or fax number listed above. Holders of Old Notes may also contact their commercial bank, broker, dealer, trust company or other nominee for assistance concerning the exchange offer. We will pay the exchange agent reasonable and customary fees for its services and will reimburse it for its reasonable out-of-pocket expenses.

Announcements

We may make any announcement required pursuant to the terms of this prospectus or required by the Exchange Act or the rules promulgated thereunder through a reasonable press release or other public announcement in our sole discretion; provided, that, if any such announcement is made by issuing a press release to Business Wire, such announcement shall be reasonable and sufficient.

Other Fees and Expenses

We will bear the expenses of soliciting tenders of the Old Notes. The principal solicitation is being made by mail. Additional solicitations may, however, be made by e-mail, facsimile transmission, telephone or in person by the exchange agent as well as our officers and other employees and those of our affiliates.

We have not retained any dealer-manager in connection with this exchange offer and will not make any payments to broker-dealers or others soliciting acceptances of the exchange offer. However, we will pay the exchange agent reasonable and customary fees for its services and will reimburse it for its reasonable out-of-pocket expenses.

Tendering holders of Old Notes will not be required to pay any fee or commission to the exchange agent. If, however, a tendering holder handles the transaction through its commercial bank, broker, dealer, trust company or other institution, that holder may be required to pay brokerage fees or commissions.

Transfer Taxes

Holders who tender their Old Notes for exchange will not be obligated to pay any transfer taxes in connection with that tender or exchange, except that holders who instruct us to register New Notes in the name of, or request that Old Notes not tendered or not accepted in the exchange offer be

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returned to, a person other than the registered tendering holder will be responsible for the payment of any applicable transfer tax on those Old Notes.

Consequences of Failure to Exchange

Holders of Old Notes who do not exchange their Old Notes for New Notes under this exchange offer will remain subject to the restrictions on transfer applicable in the Old Notes (i) as set forth in the legend printed on the Old Notes as a consequence of the issuance of the Old Notes pursuant to exemptions from, or in transactions not subject to, the registration requirements of the Securities Act and applicable state securities laws and (ii) otherwise as set forth in the prospectus distributed in connection with the private offering of the Old Notes.

Any Old Notes not tendered by their holders in exchange for New Notes in this exchange offer will not retain any rights under the Registration Rights Agreement (except in certain limited circumstances). See “—Resale Registration Statement; Additional Interest.”

In general, you may not offer or sell the Old Notes unless they are registered under the Securities Act, or if the offer or sale is exempt from the registration requirements of the Securities Act and applicable state securities laws. We do not intend to register resales of the Old Notes under the Securities Act. Based on interpretations of the SEC staff, New Notes issued pursuant to this exchange offer may be offered for resale, resold or otherwise transferred by their holders (other than any such holder that is our “affiliate” within the meaning of Rule 405 under the Securities Act) without compliance with the registration and prospectus delivery provisions of the Securities Act, provided that the holders acquired the New Notes in the ordinary course of the business of the holder and any beneficial owner and the holders are not engaged in, have no arrangement with any person to participate in, and do not intend to engage in, any public distribution of the New Notes to be acquired in this exchange offer. Any holder who tenders in this exchange offer and is engaged in, has an arrangement with any person to participate in, or intends to engage in, any public distribution of the New Notes (i) may not rely on the applicable interpretations of the SEC and (ii) must comply with the registration and prospectus delivery requirements of the Securities Act in connection with a secondary resale transaction.

Resale Registration Statement; Additional Interest

Under the Registration Rights Agreement, we have agreed that if:

(1)	any change in law or applicable interpretations of the staff of the SEC do not permit us to effect the exchange offer;
(2)	for any other reason the Exchange Offer Registration Statement is not filed by March 31, 2011 or the exchange offer is not completed within 90 days after March 31, 2011;
(3)	any holder of the Notes notifies us that:

(a)   it is prohibited by law or SEC policy from participating in the exchange offer; or

(b)   it may not resell the New Notes acquired by it in the exchange offer to the public without delivering a prospectus and the prospectus contained in the Exchange Offer Registration Statement is not appropriate or available for such resales; or

(c)   it is a broker-dealer (“Participating Broker-Dealer”) receiving New Notes in the exchange offer and owns Notes acquired directly from us or an affiliate of ours;

then we will use our reasonable best efforts, at our cost, to (a) file as promptly as practicable a registration statement (the “Shelf Registration Statement”) covering resales of the Notes; (b) cause the Shelf Registration Statement to be declared effective under the Securities Act and (c) use our reasonable best efforts to keep the Shelf Registration Statement effective for a period of one year after the Expiration Date, or such earlier date on which (a) such Notes covered by the Shelf Registration

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Statement have been sold, or (b)(i) the Notes are freely transferable by holders that are not our affiliates in accordance with Rule 144 (or any similar provision then in force) under the Securities Act or otherwise where no conditions of Rule 144 are then applicable (other than the holding period requirement in paragraph (d)(1)(ii) of Rule 144 so long as such holding period requirement is satisfied), (ii) the restrictive legend has been removed from the Notes, and (iii) the Notes do not bear a restricted CUSIP number. We will, in the event a Shelf Registration Statement is filed, among other things, provide to each holder for whom such Shelf Registration Statement was filed copies of the prospectus which is a part of the Shelf Registration Statement, notify each such holder when the Shelf Registration Statement has become effective and take certain other actions as are required to permit unrestricted resales of the Notes. A holder selling Old Notes or New Notes pursuant to the Shelf Registration Statement generally would be required to be named as a selling security holder in the related prospectus and to deliver a prospectus to purchasers, and will be subject to certain of the civil liability provisions under the Securities Act in connection with such sales and will be bound by the provisions of the Registration Rights Agreement which are applicable to such holder (including certain indemnification obligations).

The Registration Rights Agreement further provides that in the event that either (i) the Exchange Offer is not completed prior to June 30, 2011, (ii) the Shelf Registration Statement, if required under Registration Rights Agreement, has not become effective on or prior to June 30, 2011 or (iii) the Shelf Registration Statement, if required, ceases to be effective or this prospectus ceases to be usable for more than 30 days (whether or not consecutive) in any 12-month period, the interest rate on the Old Notes will be increased by (x) 0.25% per annum for the first 90-day period immediately following and (y) an additional 0.25% per annum with respect to each subsequent 90 day period thereafter, in each case until the Exchange Offer is completed or the Shelf Registration Statement, if required, becomes effective or is no longer required or this prospectus becomes usable, up to a maximum increase of 0.50% per annum.

Other

Participation in this exchange offer is voluntary, and you should carefully consider whether to participate. You are urged to consult your financial and tax advisors in making your own decision as to what action to take.

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MANAGEMENT’S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION
AND RESULTS OF OPERATIONS

The following discussion and analysis of our financial condition and results of operations should be read together with our financial statements and related notes and other financial information appearing elsewhere in this prospectus. This discussion and analysis contains forward-looking statements that involve risk, uncertainties and assumptions. See “Cautionary Statement Regarding Forward-Looking Statements.” Our actual results could differ materially from those anticipated in the forward looking statements as a result of many factors, including those discussed in “Risk Factors” and elsewhere in this prospectus. Except where the context otherwise requires, the terms “we,” “us,” or “our” refer to the business of Nationstar Mortgage LLC and its consolidated subsidiaries.

General

Our Business

We are a leading mortgage company that services and originates residential mortgage loans. Our business primarily consists of two Operating Segments: residential mortgage loan servicing, or Servicing, and residential mortgage loan originations, or Originations.

We are one of the largest independent loan servicers in the United States. As of December 31, 2010, our servicing portfolio included over 389,000 loans with an aggregate unpaid principal balance of $64.2 billion. Our servicing portfolio consists of servicing rights acquired from or subservicing agreements entered into with various third parties as well as mortgage loans originated by our integrated origination platform. We are licensed as a residential mortgage loan servicer and/or a third party debt collector in all states that require such licensing.

We are one of the few high-touch servicers in the United States with a loan origination platform. During 2010, we originated $2.8 billion in aggregate unpaid principal balance of prime residential mortgage loans. We currently only originate prime agency and government conforming residential mortgage loans, and we are licensed to originate residential mortgage loans in 49 states and the District of Columbia. Our loan production is originated with the intent of selling to the secondary market.

We also have a legacy asset portfolio, which consists primarily of non-prime and nonconforming residential mortgage loans, most of which we originated from April to July 2007. In November 2009, we engaged in a transaction through which we term-financed our legacy assets with a non-recourse loan that requires no additional capital or equity contributions. Additionally, we consolidated certain securitization trusts where it was determined that we had both the power to direct the activities that most significantly impact the variable interest entities’ (VIE) economic performance and the obligation to absorb losses or the right to receive benefits that could potentially be significant to the VIE, pursuant to new consolidation accounting guidance related to VIEs adopted on January 1, 2010.

The analysis of our financial condition and results of operations as discussed herein is primarily focused on the combined results of our two Operating Segments: Servicing and Originations.

Managing Business Performance

Management is focused on three key initiatives to manage our Operating Segments: (i) effective management of our servicing portfolio; (ii) growing our servicing portfolio through the acquisition of servicing rights or subservicing contracts; and (iii) origination and sale or securitization of prime agency and government conforming residential mortgage loans and retention of mortgage servicing rights. We also focus on access to diverse and multiple liquidity sources to finance (i) our obligations to pay advances as required by our servicing agreements and (ii) our loan originations.

We service loans by purchasing the right to service the loans, which is referred to as a “mortgage servicing right,” from the owner of the mortgage loan or pool of mortgage loans, or

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retaining the mortgage servicing right related to the loans that we originate and sell. Additionally, we enter into subservicing contracts with primary servicers that own mortgage servicing rights, pursuant to which we agree to service the loan on behalf of the primary servicer for a fee. The aggregate unpaid principal balance of our servicing portfolio as of December 31, 2010, 2009 and 2008 was $64.2 billion, $33.7 billion and $21.3 billion, respectively.

Servicing fee income is primarily based on the aggregate unpaid principal balance of loans serviced and varies by loan type. Other factors that impact servicing fee income include delinquency rates, delinquency status and prepayment speeds.

Delinquency rates on the loans we service impact the contractual servicing and ancillary fees we receive, and the costs to service. Delinquent loans cost more to service than performing loans due to the additional resources and servicing advances required. We monitor our delinquency levels through our staffing models, our business plans and other macroeconomic factors.

Apart from the cost of financing our advances, the largest cost in our servicing organization is staffing cost, which is primarily impacted by delinquency levels and the size of our portfolio. Other operating costs in our Servicing Segment include technology, occupancy and general and administrative costs. Management continually monitors these costs to improve efficiency by streamlining workflows and implementing technology based solutions.

We intend to continue building our prime originations platform. Through our originations platform, we are able to create mortgage servicing assets at a reasonable cost and partially replenish our servicing portfolio organically.

Prevailing interest rates are one of the key factors that impact origination volume. Housing market trends also impact origination volume with a strong housing market leading to higher loan origination volume, and a weak housing market leading to lower loan origination volume. Management continually evaluates interest rate movements and trends to assess the impact on loan applications and volume, as well as their corresponding impact on revenue and costs.

In evaluating revenue per loan originated, management focuses on various revenue sources, including: loan origination points and fees; and overall gain or loss on the sale or securitization of the loan. These components are compared to established revenue targets and operating plans.

In addition to the cost of financing our originations, our Originations Segment operating costs include staffing costs, sales commissions, technology, rent and other general and administrative costs. Management continually monitors costs through comparisons to operating plans.

Market Considerations

Revenues from our Operating Segments primarily consist of (i) servicing fee income based generally on the size of our servicing portfolio and (ii) gain on mortgage loans held for sale based generally on the origination volume. Maintaining and growing our revenues depends on our ability to acquire additional mortgage servicing rights and to expand our originations platform.

Servicing

Current trends in the mortgage servicing industry include high delinquencies, a significant increase in loan modifications and the need for more loss mitigation and high-touch servicing expertise.

Overall, all segments of the residential mortgage sector, including prime and non-prime, have experienced increased delinquency levels and higher credit losses due to stress in the real estate market and economic environment. Residential loan delinquencies and related losses are at historical highs, prompting government-sponsored enterprises and other owners of mortgage loans to focus on home ownership preservation and superior credit performance.

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The increase in delinquencies has placed significant pressure on the operating capacity of servicers that are not staffed at appropriate levels for delinquent borrowers and also led owners of mortgage loans to search for servicers with experience in loss mitigation. This trend has led to increased demand for experienced high-touch servicers and provides us opportunities to acquire additional mortgage servicing rights.

However, we cannot predict how many, if any, mortgage servicing rights will be available for sale or subservicing opportunities will be available in the future; if we will be able to acquire mortgage servicing rights from third parties, including any transactions facilitated by government-sponsored enterprises; or whether these mortgage servicing rights will be available at acceptable prices or on acceptable terms.

Originations

Today’s U.S. residential loan originations sector primarily offers prime agency and government conforming mortgage loans. Non-prime and alternative lending programs and products represent only a small fraction of total originations. This has led to a consolidation in mortgage lenders in both the retail and wholesale channels and has resulted in less competition. We believe that the consolidation of the lending community has led to a market share opportunity for us.

Origination volume is impacted by changes in interest rates and the housing market. Depressed home prices and increased loan-to-value ratios may preclude many potential borrowers, including borrowers whose existing loans we service, from refinancing their existing loans. An increase in prevailing interest rates could decrease our origination volume through our Consumer Direct Retail originations channel, our largest originations channel by volume, because this channel focuses predominantly on refinancing existing mortgage loans.

In addition, there continue to be changes in legislation and licensing in an effort to simplify the consumer mortgage experience, which require technology changes and additional implementation costs for loan originators. We expect legislative changes will continue in the foreseeable future, which may increase our operating expenses.

Critical Accounting Policies

Various elements of our accounting policies, by their nature, are inherently subject to estimation techniques, valuation assumptions and other subjective assessments. In particular, we have identified two policies that, due to the judgment, estimates and assumptions inherent in those policies, are critical to an understanding of our consolidated financial statements. These policies relate to: (a) fair value measurements; and (b) sale of mortgage loans. We believe that the judgment, estimates and assumptions used in the preparation of our consolidated financial statements are appropriate given the factual circumstances at the time. However, given the sensitivity of our consolidated financial statements to these critical accounting policies, the use of other judgments, estimates and assumptions could result in material differences in our results of operations or financial condition. Management currently views its fair value measurements, which include the valuation of mortgage loans held for sale, the valuation of mortgage loans held for investment, subject to ABS nonrecourse debt, investment in debt securities-available-for sale, the valuation of mortgage servicing rights, the valuation of derivative instruments, the valuation of ABS nonrecourse debt and sale of mortgage loans to be our critical accounting policies.

Fair Value Measurements

Mortgage Loans Held for Sale

Through September 30, 2009, we recorded mortgage loans held for sale at the lower of amortized cost or fair value on an aggregate basis grouped by delinquency status. Effective October 1, 2009, we elected to measure newly originated prime residential mortgage loans held for sale at fair

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value, as permitted under current accounting guidance. We estimate fair value by evaluating a variety of market indicators including recent trades and outstanding commitments, calculated on an aggregate basis.

Mortgage Loans Held for Investment, subject to ABS nonrecourse debt

We determine the fair value on loans held for investment, subject to ABS nonrecourse debt using internally developed valuation models. These valuation models estimate the exit price we expect to receive in the loan’s principal market. Although we utilize and give priority to observable market inputs such as interest rates and market spreads within these models, we typically are required to utilize internal inputs, such as prepayment speeds, credit losses, and discount rates. These internal inputs require the use of our judgment and can have a significant impact on the determination of the loan’s fair value.

Investment in Debt Securities

Investment in debt securities consists of beneficial interests we retain in securitization transactions accounted for as a sale under current accounting guidance. These securities are classified as available-for-sale securities, and are therefore carried at their market value with the net unrealized gains or losses reported in the comprehensive income (loss) component of members’ equity. We base our valuation of debt securities on observable market prices when available; however, due to illiquidity in the markets, observable market prices were not available on these debt securities at December 31, 2010 and 2009. When observable market prices are not available, we base valuations on internally developed discounted cash flow models that use a market-based discount rate. The valuation considers recent market transactions, experience with similar securities, current business conditions and analysis of the underlying collateral, as available. In order to estimate cash flows, we utilize a variety of assumptions, including assumptions for prepayments, cumulative losses, and other variables.

We evaluate investment in debt securities for impairment each quarter, and investment in debt securities is considered to be impaired when the fair value of the investment is less than its cost. The impairment is separated into impairments related to credit losses, which are recorded in current period operations, and impairments related to all other factors, which are recorded in other comprehensive income/loss.

Mortgage Servicing Rights

We recognize mortgage servicing rights related to all existing residential mortgage loans transferred to a third party in a transfer that meets the requirements for sale accounting. Additionally, we may acquire the rights to service residential mortgage loans through the purchase of these rights from third parties. We apply fair value accounting to these mortgage servicing rights, with all changes in fair value recorded as a charge or credit to servicing fee income in the consolidated statement of operations. We estimate the fair value of our mortgage servicing rights using a process that combines the use of a discounted cash flow model and analysis of current market data to arrive at an estimate of fair value. The cash flow assumptions and prepayment assumptions used in the model are based on various factors, with the key assumptions being mortgage prepayment speeds and discount rates.

We use internal financial models that use, wherever possible, market participant data to value our mortgage servicing rights. These models are complex and use asset-specific collateral data and market inputs for interest and discount rates. In addition, the modeling requirements of mortgage servicing rights are complex because of the high number of variables that drive cash flows associated with mortgage servicing rights. Even if the general accuracy of our valuation models is validated, valuations are highly dependent upon the reasonableness of our assumptions and the predictability of the relationships that drive the results of the models. On a periodic basis, a portion of our mortgage servicing rights is reviewed by an outside valuation expert.

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Derivative Financial Instruments

We utilize certain derivative instruments in the ordinary course of our business to manage our exposure to changes in interest rates. These derivative instruments include forward sales of mortgage-backed securities, forward loan sale commitments and interest rate swaps and caps. We also issue interest rate lock commitments to borrowers in connection with single family mortgage loan originations. We recognize all derivative instruments on our consolidated statement of financial position at fair value. The estimated fair values of forward sales of mortgage-backed securities, forward sale commitments and interest rate swaps and caps are based on quoted market values and are recorded as other assets or derivative financial instruments liabilities in the consolidated balance sheet. The initial and subsequent changes in value on forward sales of mortgage-backed securities are a component of loss on mortgage loans held for sale in the consolidated statement of operations. The estimated fair values of interest rate lock commitments are based on quoted market values and are recorded in other assets in the consolidated balance sheet. The initial and subsequent changes in value of interest rate lock commitments are a component of gain on mortgage loans held for sale in the consolidated statement of operations.

ABS Nonrecourse Debt

Effective January 1, 2010, new accounting guidance related to VIEs eliminated the concept of a QSPE, and all existing SPEs are now subject to the new consolidation guidance. Upon adoption of this new accounting guidance, we identified certain securitization trusts where we, through our affiliates, continued to hold beneficial interests in these trusts. These retained beneficial interests obligate us to absorb losses of the VIE that could potentially be significant to the VIE or the right to receive benefits from the VIE that could potentially be significant. In addition, as Master Servicer on the related mortgage loans, we retain the power to direct the activities of the VIE that most significantly impact the economic performance of the VIE. When it is determined that we have both the power to direct the activities that most significantly impact the VIE’s economic performance and the obligation to absorb losses or the right to receive benefits that could potentially be significant to the VIE, the assets and liabilities of these VIEs are included in our consolidated financial statements. Upon consolidation of these VIEs, we derecognized all previously recognized beneficial interests obtained as part of the securitization, including any retained investment in debt securities, mortgage servicing rights, and any remaining residual interests. In addition, we recognized the securitized mortgage loans as mortgage loans held for investment, subject to ABS nonrecourse debt, and the related asset-backed certificates acquired by third parties as ABS nonrecourse debt on our consolidated balance sheet.

We estimate the fair value of ABS nonrecourse debt based on the present value of future expected discounted cash flows with the discount rate approximating current market value for similar financial instruments.

Sale of Mortgage Loans

Transfers of financial assets are accounted for as sales when control over the assets has been surrendered by us. Control over transferred assets is deemed to be surrendered when (1) the assets have been isolated from us, (2) the transferee has the right (free of conditions that constrain it from taking advantage of that right) to pledge or exchange the transferred assets, and (3) we do not maintain effective control over the transferred assets through either (a) an agreement that entitles and obligates us to repurchase or redeem them before their maturity or (b) the ability to unilaterally cause the holder to return specific assets. Loan securitizations structured as sales as well as whole loan sales are accounted for as sales of mortgage loans and the resulting gains or losses on such sales, net of any accrual for standard representations and warranties, are reported in operating results as a component of loss on mortgage loans held for sale in the consolidated statement of operations during the period in which the securitization closes or the sale occurs.

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Results of Operations

Consolidated Results

The following table summarizes our consolidated operating results for the periods indicated (in thousands):

	Year Ended December 31,
	2010			2009			2008
Revenues:
Total fee income	$	184,084		$	100,218		$	74,007
Gain (loss) on mortgage loans held for sale		77,344			(21,349	)		(86,663	)
Total revenues		261,428			78,869			(12,656	)
Total expenses and impairments		220,976			142,367			147,777
Other income (expense):
Interest income		98,895			52,518			92,060
Interest expense		(116,163	)		(69,883	)		(65,548	)
Loss on interest rate swaps and caps		(9,801	)		(14	)		(23,689	)
Fair value changes in ABS securitizations		(23,297	)		—			—
Total other income (expense)		(50,366	)		(17,379	)		2,823
Net loss	$	(9,914	)	$	(80,877	)	$	(157,610	)

We provide further discussion of our results of operations for each of our reportable segments in the “Segment Results” section below. Certain income and expenses not allocated to our reportable segments are presented in the Legacy Portfolio and Other as discussed in Note 22- Business Segment Reporting, in the accompanying Notes to Consolidated Financial Statements included in this prospectus.

Comparison of Consolidated Results for the years ended December 31, 2010 and 2009

Revenues increased $182.6 million from $78.9 million for the year ended December 31, 2009 to $261.4 million for the year ended December 31, 2010, primarily due to the significant increase in our total fee income and an increase in our gain (loss) on mortgage loans held for sale. The increase in our total fee income was primarily a result of (1) our higher average servicing portfolio balance of $38.7 billion for the year ended December 31, 2010, compared to $25.8 billion for the year ended December 31, 2009, and (2) an increase in portfolio level performance-based fees and fees earned for loss mitigation activities. The increase in the gain on loans held for sale was a result of the $1.3 billion, or 88.7%, increase in the amount of loans originated during 2010 as well as the elimination of lower of cost or market adjustments related to our legacy asset portfolio.

Expenses and impairments increased $78.6 million from $142.4 million for the year ended December 31, 2009 to $221.0 million for the year ended December 31, 2010, primarily due to the increase in compensation expenses related to increased staffing levels in order to accommodate our larger servicing portfolio and originations as well as other related increases in general and administrative expenses. Our 2010 operating results include an additional $12.1 million in share-based compensation expense from a revised compensation plan executed for certain members of our executive team. Additionally, expenses and impairments increased from the consolidation of certain VIEs from January 1, 2010, and from expenses associated with the settlement of certain claims.

Other expense increased $33.0 million from $17.4 million for the year ended December 31, 2009 to $50.4 million for the year ended December 31, 2010, primarily due to the effects of the consolidation of certain VIEs and the losses on our outstanding interest rate swap positions during 2010.

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Comparison of Consolidated Results for the years ended December 31, 2009 and 2008

Revenues increased $91.6 million from $(12.7) million for the year ended December 31, 2008 to $78.9 million for the year ended December 31, 2009, primarily due to (1) the increase in fee income as a result of the 57.7% increase in our servicing portfolio year over year and (2) the reduction in the loss on mortgage loans held for sale.

The decrease in loss was caused by the increase in our loans originated during 2009 compared to 2008 and the reduction in the lower of cost or market adjustments recorded in 2009 compared to 2008.

Expenses and impairments decreased $5.4 million from $147.8 million for the year ended December 31, 2008 to $142.4 million for the year ended December 31, 2009, primarily due to the reduction in the other-than-temporary impairments recognized on available for sale securities during 2009, partially offset by the increase in all other expense categories due to the increases in our loan originations and loan servicing portfolio.

Other income (expense) increased $20.2 million from $2.8 million for the year ended December 31, 2008 to $(17.4) million for the year ended December 31, 2009, primarily due to a decrease in interest income and an increase in interest expense as a result of larger advance balances caused by our increased servicing portfolio, offset by a reduction in loss on interest rate swaps and caps.

Segment Results

Our primary business strategy is to generate recurring, stable income from managing and growing our servicing portfolio and our originations. We operate through two business segments: Servicing and Originations, which we refer to collectively as our Operating Segments. We report the activity not related to either operating segment in the Legacy Portfolio and Other. The Legacy Portfolio and Other includes primarily all sub-prime mortgage loans (i) originated in the latter portion of 2006 and during 2007 or (ii) acquired from Centex Home Equity Company, LLC (CHEC), and VIEs which were consolidated pursuant to the January 1, 2010 adoption of new consolidation guidance related to VIEs.

The accounting policies of each reportable segment are the same as those of the consolidated financial statements except for (i) expenses for consolidated back-office operations and general overhead expenses such as executive administration and accounting and (ii) revenues generated on inter-segment services performed. Expenses are allocated to individual segments based on the estimated value of the services performed, including estimated utilization or square footage and corporate personnel, as well as the equity invested in each segment. Revenues generated or inter-segment services performed are valued based on similar services provided to external parties.

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Servicing Segment

The Servicing Segment provides loan servicing on our servicing portfolio, including the collection of principal and interest payments and the generation of ancillary fees related to the servicing of mortgage loans.

The following table summarizes our operating results from our Servicing Segment for the periods indicated (in thousands).

	Year Ended December 31,
	2010			2009			2008
Revenues:
Servicing fee income	$	175,569		$	91,266		$	69,235
Other fee income		7,273			8,867			5,366
Total fee income		182,842			100,133			74,601
Gain (loss) on mortgage loans held for sale		—			—			—
Total revenues		182,842			100,133			74,601
Expenses and impairments:
Salaries, wages, and benefits		78,269			56,726			41,755
General and administrative		24,664			10,669			9,878
Occupancy		4,350			3,502			3,404
Total expenses and impairments		107,283			70,897			55,037
Other income (expense):
Interest income		263			4,143			10,872
Interest expense		(51,791	)		(25,877	)		(15,718	)
Loss on interest rate swaps and caps		(9,801	)		—			—
Total other income (expense)		(61,329	)		(21,734	)		(4,846	)
Net income from Servicing Segment	$	14,230		$	7,502		$	14,718

Increase in aggregate unpaid principal balance of our servicing portfolio primarily governs the increase in revenues, expenses and other income (expense) of our Servicing Segment.

The table below provides detail of the characteristics and key performance metrics of our servicing portfolio as of or for the year ended.

	Year Ended December 31,
	2010			2009			2008
	(dollars in millions, except for average loan amount)
Unpaid principal balance (by investor):
Special Servicing	$	4,885		$	1,554		$	1,218
Government-sponsored enterprises		52,202			24,235			10,709
ABS		7,089			7,875			9,415
Total unpaid principal balance	$	64,176		$	33,664		$	21,342
Loan count—servicing		389,172			230,615			159,336
Average Servicing Portfolio	$	38,653		$	25,799		$	12,775
Average loan amount	$	164,904		$	145,977		$	133,943
Average coupon		5.74	%		6.76	%		7.49	%
Average FICO		631			644			588
60+ delinquent (% of loans)(1)		17.0	%		19.9	%		13.1	%
Total prepayment speed (12 month CPR)		13.3	%		16.3	%		16.2	%

(1) Loan delinquency is based on the current contractual due date of the loan. In the case of a completed loan modification, delinquency is based on the modified due date of the loan.

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Revenues

For the years ended December 31, 2010 and 2009

Total revenues were $182.8 million for the year ended December 31, 2010 compared to $100.1 million for the year ended December 31, 2009, an increase of $82.7 million, or 82.6%, primarily due to the net effect of the following:

•  Servicing fee income increased $84.3 million period over period primarily from:

(a)  Increase of $34.8 million due to higher average unpaid principal balance of $38.7 billion in 2010 compared to $25.8 billion in 2009. The increase in our servicing portfolio was primarily driven by an increase in average unpaid principal balance for loans serviced for government-sponsored enterprises and other subservicing contracts for third party investors of $31.2 billion in 2010 compared to $17.2 billion in 2009. This increase was partially offset by a decrease in average unpaid principal balance for our asset-backed securitizations portfolio, which decreased to $7.4 billion in 2010 compared to $8.7 billion in 2009.

(b)  Increase of $8.9 million due to increased loss mitigation and performance-based incentive fees earned from a government-sponsored enterprise.

(c)  Increase of $17.9 million due to higher fees earned from HAMP and from modification fees earned on non-HAMP modifications.

(d)  Increase of $21.7 million from change in fair value on mortgage servicing rights which was recognized in servicing fee income. The fair value of our mortgage servicing rights is impacted by expected future cash flows from our MSRs considering prepayment estimates, portfolio characteristics, delinquencies, interest rates and other economic factors. Generally, the value of MSRs increases when interest rates increase and decreases when interest rates decline due to the effect those changes in interest rates have on prepayment estimates. Other factors affecting the MSR value includes the estimated effects of loan modifications on expected cash flows. Such modifications tend to extend the expected life of the affected MSR and have the potential to produce additional revenue opportunities.

(e)  Increase of $1.0 million due to an increase in ancillary and late fees arising from growth in the servicing portfolio. Late fees are recognized as revenue at collection.

•  Other fee income decreased $1.6 million for the year ended December 31, 2010 due to lower lender-placed insurance commissions and lower REO sales commissions resulting from a decline in REO sales managed by our internal REO sales group.

For the years ended December 31, 2009 and 2008

Total revenues were $100.1 million for the year ended December 31, 2009 compared to $74.6 million for the year ended December 31, 2008, an increase of $25.5 million, or 34.2%, primarily due to the net effect of the following:

•  Servicing fee income increased $22.1 million year over year primarily from:

(a)  Increase of $20.8 million due to higher average unpaid principal balance of $25.8 billion in 2009 compared to $12.8 billion in 2008. The increase in our servicing portfolio was primarily driven by an increase in average unpaid principal balance for loans serviced for government-sponsored enterprises and other subservicing contracts for third party investors in 2009 compared to 2008. This increase was partially offset by a decrease in average unpaid principal balance for our private asset-backed securitizations portfolio, which decreased in 2009 compared to 2008.

(b)  Increase of $7.7 million due to increased loss mitigation and performance-based incentive fees earned from a government-sponsored enterprise.

(c)  Increase of $3.3 million due to higher modification fees earned from HAMP and from modification fees earned on non-HAMP modifications.

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(d)  Increase of $7.0 million due to increased collection of late fees, primarily due to higher average unpaid principal balance of our servicing portfolio. Late fees are recognized as revenue at collection.

(e)  Decrease of $16.2 million from change in fair value on mortgage servicing rights which was recognized in servicing fee income.

•  Other fee income increased $3.5 million for the year ended December 31, 2009 from higher lender-placed insurance commissions, which is primarily due to higher delinquency rates in 2009 compared to 2008.

Expenses and Impairments

For the years ended December 31, 2010 and 2009

Expenses and impairments were $107.3 million for the year ended December 31, 2010 compared to $70.9 million for the year ended December 31, 2009, an increase of $36.4 million, or 51.3%, primarily due to an increase of $21.6 million in salaries, wages and benefits expense resulting from an increase in headcount from 910 in 2009 to 1,178 in 2010 and $5.1 million in additional share-based compensation from a revised compensation plan for certain of our executives. Additionally, we recognized an increase of $12.1 million in general and administrative and occupancy expenses associated with increased headcount, growth in the servicing portfolio and increases in reserves for non-recoverable advances.

For the years ended December 31, 2009 and 2008

Expenses and impairments were $70.9 million for the year ended December 31, 2009 compared to $55.0 million for the year ended December 31, 2008, an increase of $15.9 million, or 28.9%, primarily due to the increase of $15.0 million in salaries, wages and benefits expense resulting from an increase in headcount from 570 in 2008 to 910 in 2009.

Other Income (Expense)

For the years ended December 31, 2010 and 2009

Total other income (expense) was $(61.3) million for the year ended December 31, 2010 compared to $(21.7) million for the year ended December 31, 2009, an increase in expense, net of income, of $39.6 million, or 182.5%, primarily due to the net effect of the following:

•  Interest income decreased $3.8 million due to lower average index rates received on custodial cash deposits associated with mortgage loans serviced combined with lower average outstanding custodial cash deposit balances.

•  Interest expense increased $25.9 million primarily due to higher average outstanding debt of $638.6 million in 2010 compared to $313.3 million in 2009, offset by lower interest rates due to declines in the base LIBOR and decreases in the overall index margin on outstanding servicer advance facilities. Additionally, in 2010, we have included the balances related to our outstanding corporate note and senior unsecured debt balances, and the related interest expense thereon, as a component of our Servicing Segment. As a result of the weakening housing market, we continued to carry approximately $368.3 million in residential mortgage loans that we were unable to securitize as mortgage loans held for sale on our balance sheet throughout most of 2009. During this time period, we allocated a portion of our outstanding corporate note balance to Legacy Portfolio and Other to account for the increased capacity and financing costs we incurred while these loans were retained on our balance sheet. For the year ended December 31, 2010, we recorded $21.7 million in interest expense related to our outstanding corporate and senior unsecured notes.

•  Loss on interest rate swaps and caps was $9.8 million for the year ended December 31, 2010, with no corresponding gain or loss recognized for the year ended December 31, 2009. The loss for the

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period was a result of a decline in fair value recognized during the period on outstanding interest rate swaps designed to economically hedge the interest rate risk associated with our 2009-ADV1 Servicer Advance Facility. This facility was not executed until the end of the fourth quarter of 2009, so we did not recognize any corresponding fair value adjustments during the year ended December 31, 2009.

For the years ended December 31, 2009 and 2008

Total other income (expense), which for the most part consisted of interest expense, was $(21.7) million for the year ended December 31, 2009 compared to $(4.8) million for the year ended December 31, 2008, an increase in expense, net of income, of $16.9 million, or 352.1%, primarily due to the net effect of the following:

•  Increase of $7.7 million from additional amortization of deferred financing costs resulting from refinancing or renewal of our advance financing facilities.

•  Increase of $6.7 million from decline in interest income earned on custodial cash deposits associated with mortgage loans serviced primarily due to lower average deposits and index rates.

•  Increase of $1.4 million from compensating interest due to increased average unpaid principal balance.

•  Increase of $1.1 million from higher average outstanding debt of $313.3 million in 2009 compared to $259.1 million in 2008, offset by lower interest rates due to declines in the base LIBOR.

Originations Segment

The Originations Segment involves the origination, packaging, and sale of government-sponsored enterprise mortgage loans into the secondary markets via whole loan sales or securitizations.

The following table summarizes our operating results from our Originations Segment for the periods indicated (in thousands).

	Year Ended December 31,
	2010			2009			2008
Revenues:
Servicing fee income	$	—		$	—		$	—
Other fee income		7,042			1,156			589
Total fee income		7,042			1,156			589
Gain on mortgage loans held for sale		77,498			54,437			21,985
Total revenues		85,540			55,593			22,574
Expenses and impairments:
Salaries, wages, and benefits		57,852			31,497			18,357
General and administrative		26,759			14,586			10,864
Occupancy		2,307			1,449			1,574
Total expenses and impairments		86,920			47,532			30,795
Other income (expense):
Interest income		11,848			4,261			1,920
Interest expense		(8,806	)		(3,438	)		(1,289	)
Total other income (expense)		3,042			823			631
Net income (loss) from Originations Segment	$	662		$	8,884		$	(7,590	)

Increase in origination volume primarily governs the increase in revenues, expenses and other income (expense) of our Originations Segment. The table below provides detail of the loan characteristics of loans originated for the periods presented.

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	Year Ended December 31,
	2010		2009		2008
Origination Volume (in millions):
Retail	$	1,608	$	1,093	$	538
Wholesale		1,183		38		4
Total Originations	$	2,791	$	1,479	$	542

Revenues

For the years ended December 31, 2010 and 2009

Total revenues were $85.5 million for the year ended December 31, 2010 compared to $55.6 million for the year ended December 31, 2009, an increase of $29.9 million, or 53.8%, primarily due to the net effect of the following:

•  Other fee income increased $5.8 million primarily due to our election to measure newly originated prime residential mortgage loans held for sale at fair value, effective October 1, 2009. Subsequent to this election, any collected points and fees related to originated mortgage loans held for sale are included in other fee income. Prior to this election, points and fees were recorded as deferred origination income and recognized over the life of the mortgage loan as an adjustment to our interest income yield or, when the related loan was sold to a third-party purchaser, included as a component of gain on mortgage loans held for sale.

•  Gain on mortgage loans held for sale increased $23.1 million primarily from:

(a)  Increase of $22.4 million from improved margins and larger volume of originations, which increased from $1.5 billion for the year ended December 31, 2009 to $2.8 billion in originations for the year December 31, 2010.

(b)  Increase of $21.6 million from capitalized mortgage servicing rights due to the larger volume of originations and subsequent retention of servicing rights.

(c)  Decrease of $0.7 million from change in unrealized gains/(losses) on derivative financial instruments. These include interest rate lock commitments and forward sales of mortgage-backed securities.

(d)  Decrease of $20.2 million from recognition of points and fees earned on mortgage loans held for sale for the year ended December 31, 2009. Effective October 1, 2009, all points and fees are recognized at origination upon the election to apply fair value accounting to newly-originated loans and are recognized as a component of other fee income.

For the years ended December 31, 2009 and 2008

Total revenues were $55.6 million for the year ended December 31, 2009 compared to $22.6 million for the year ended December 31, 2008, an increase of $33.0 million, or 146.0%, primarily due to the net effect of the following:

•  Gain on mortgage loans held for sale increased $32.4 million primarily from:

(a)  Increase of $24.8 million from larger volume of originations, which increased from $0.5 billion in 2008 to $1.5 billion in 2009.

(b)  Increase of $3.8 million from capitalized mortgage servicing rights due to larger volume of origination and subsequent retention of servicing rights.

(c)  Increase of $3.8 million from change in unrealized gains/(losses) on derivative financial instruments. These include interest rate lock commitments and forward sales of mortgage-backed securities.

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Expenses and Impairments

For the years ended December 31, 2010 and 2009

Expenses and impairments were $86.9 million for the year ended December 31, 2010 compared to $47.5 million for the year ended December 31, 2009, an increase of $39.4 million, or 82.9%, primarily due to the net effect of the following:

•  Increase of $26.4 million in salaries, wages and benefits expense from increase in headcount of 452 in 2009 to 688 in 2010 and increases in performance based compensation. Additionally, we recognized $3.9 million in share-based compensation expense from a revised compensation plan for certain of our executives.

•  Increase of $13.1 million in general and administrative and occupancy expense primarily due to increase in overhead expenses from the larger volume of originations in 2010 and expenses associated with the settlement of certain claims.

For the years ended December 31, 2009 and 2008

Expenses and impairments were $47.5 million for the year ended December 31, 2009 compared to $30.8 million for the year ended December 31, 2008, an increase of $16.7 million, or 54.2%, primarily due to the net effect of the following:

•  Increase of $13.1 million in salaries, wages and benefits expense from increase in headcount of 311 in 2008 to 452 in 2009 and increases in performance based compensation.

•  Increase of $3.7 million in general and administrative expense primarily due to increase in overhead expenses from larger volume of origination in 2009.

Other Income (Expense)

For the years ended December 31, 2010 and 2009

Total other income (expense) was $3.0 million for the year ended December 31, 2010 compared to $0.8 million for the year ended December 31, 2009, an increase in income, net of expense, of $2.2 million, or 275.0%, primarily due to the net effect of the following:

•  Interest income increased $7.5 million from interest earned from originated loans prior to sale or securitization. The increase is primarily due to the increase in the volume of originations. Loans are typically sold within 30 days of origination.

•  Interest expense increased $5.4 million primarily due to an increase in origination volume in 2010 and associated financing required to originate these loans combined with a slight increase in outstanding average days in warehouse on newly originated loans.

For the years ended December 31, 2009 and 2008

Total other income (expense) was $0.8 million for the year ended December 31, 2009 compared to $0.6 million for the year ended December 31, 2008, an increase in income, net of expense, of $0.2 million, or 33.3%, primarily due to the net effect of the following:

•  Interest income increased $2.4 million primarily due to interest earned from originated loans prior to sale or securitization. Loans are typically sold within 30 days of origination.

•  Interest expense increased $2.1 million primarily due to interest expense from warehouse facilities that finance the origination of loans.

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Legacy Portfolio and Other

Through December 2009, our legacy asset portfolio consisted primarily of non-prime and nonconforming residential mortgage loans that we primarily originated from April to July 2007. Revenues and expenses are primarily a result of mortgage loans transferred to securitization trusts that were structured as secured borrowings, resulting in carrying the securitized loans as mortgage loans held for investment on our consolidated balance sheets and recognizing the asset-backed certificates as nonrecourse debt. Prior to September 2009, these residential mortgage loans were classified as mortgage loans held for sale on our consolidated balance sheet and carried at the lower of cost or fair value and financed through a combination of our existing warehouse facilities and our corporate note. These loans were transferred on October 1, 2009, from mortgage loans held for sale to a held-for-investment classification at fair value on the transfer date. Subsequent to the transfer date, we completed the securitization of the mortgage loans, which was structured as a secured borrowing. This structure resulted in carrying the securitized loans as mortgages on our consolidated balance sheet and recognizing the asset-backed certificates acquired by third parties as nonrecourse debt.

Effective January 1, 2010, new accounting guidance eliminated the concept of a QSPE. Consequently, all existing securitization trusts are considered VIEs and are now subject to the new consolidation guidance. Upon consolidation of certain of these VIEs, we recognized the securitized mortgage loans related to these securitization trusts as mortgage loans held for investment, subject to ABS nonrecourse debt (see Note 3 to our consolidated financial statements). Additionally, we elected the fair value option provided for by ASC 825-10. Assets and liabilities related to these VIEs are included in Legacy Portfolio and Other in our segmented results.

The following table summarizes our operating results from Legacy Portfolio and Other for the periods indicated (in thousands).

	Year Ended December 31,
	2010			2009			2008
Revenues:
Servicing fee income	$	820		$	—		$	—
Other fee income		2,643			—			—
Total fee income		3,463			—			—
Gain (loss) on mortgage loans held for sale		—			(75,786	)		(108,648	)
Total revenues		3,463			(75,786	)		(108,648	)
Expenses and impairments:
Salaries, wages, and benefits		13,148			3,537			2,854
General and administrative		7,693			5,239			1,452
Loss on mortgage loans held for investment and foreclosed real estate		3,298			7,512			2,567
Occupancy		2,788			1,912			1,043
Loss on available-for-sale securities-other-than-temporary		—			6,809			55,212
Total expenses and impairments		26,927			25,009			63,128
Other income (expense):
Interest income		77,521			44,114			79,268
Interest expense		(55,566	)		(40,568	)		(48,541	)
Gain (loss) on interest rate swaps and caps		—			(14	)		(23,689	)
Fair value changes in ABS securitizations		(23,297	)		—			—
Total other income (expense)		(1,342	)		3,532			7,038
Net loss from Legacy Portfolio & Other	$	(24,806	)	$	(97,263	)	$	(164,738	)

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The table below provides detail of the characteristics of our Legacy Portfolio and other for the dates indicated (in thousand):

	Year Ended December 31,
	2010(1)		2009		2008
Legacy Portfolio and Other Performance:
Performing—UPB	$	1,037,201	$	345,516	$	627,368
Nonperforming (90+ Delinquency)—UPB		337,779		141,602		100,452
Real Estate Owned—Estimated Fair Value		27,337		10,262		21,822
Total Legacy Portfolio and Other—UPB	$	1,402,318	$	497,380	$	749,642

(1) Amounts include one previously off-balance sheet securitization which was consolidated upon adoption of ASC 810 related to consolidation of certain VIEs.

For the years ended December 31, 2010 and 2009

Total revenues were $3.5 million for the year ended December 31, 2010, compared to $(75.8) million for the year ended December 31, 2009. This increase was primarily a result of a change in classification on mortgage loans held for sale discussed above, with no gain on mortgage loans held for sale recorded for the year ended December 31, 2010, compared to a loss of $75.8 million recorded for the year ended December 31, 2009.

Expenses and impairments were $26.9 million for the year ended December 31, 2010 compared to $25.0 million for the year ended December 31, 2009, an increase of $1.9 million, or 7.6%, primarily due to an increase in headcount and allocated expenses for corporate support functions and executive oversight. Additionally, we recognized $3.9 million in share-based compensation expense from a revised compensation plan for certain of our executives. These expense increases were offset by the net impact of the adoption of new accounting guidance on the consolidation of certain securitization trusts which resulted in a $4.0 million reduction in charges from losses realized on mortgage loans held for investment and foreclosed real estate and a decrease of $6.8 million in other-than-temporary impairments recognized on our investment in debt securities-available-for-sale.

Total other income (expense) was $(1.3) million for the year ended December 31, 2010 compared to $3.5 million for the year ended December 31, 2009, a decrease of $4.8 million, or 137.1%. The decrease was primarily due to an increase in our net interest income, offset by fair value changes in our ABS securitizations. Interest income, net of interest expense, increased to $21.9 million for the year ended December 31, 2010 as compared to $3.5 million for the year ended December 31, 2009. The increase in interest income, net was due to the consolidation of certain securitization trusts upon the adoption of new accounting guidance related to VIEs. Fair value changes in ABS securitizations included a loss of $23.3 million for the year ended December 31, 2010, with no corresponding amount for the year ended December 31, 2009, due to the election of the fair value option on consolidated VIEs.

For the years ended December 31, 2009 and 2008

Total revenues were $(75.8) million for the year ended December 31, 2009, compared to $(108.6) million for the year ended December 31, 2008, an increase of $32.8 million, or 30.2%. This increase was a result of lower mark-to-market adjustments on our outstanding legacy portfolio. We accounted for the excess of cost over fair value of these loans as a valuation allowance with changes in the valuation allowance included in loss on mortgage loans held for sale. For the year ended December 31, 2009, the change in the outstanding valuation allowance resulted in net income of $8.8 million, compared to a net loss of $42.5 million for the year ended December 31, 2008. These amounts were partially offset by higher realized losses on existing portfolio rewrites and liquidations on our existing legacy portfolio and real estate owned of $80.3 million for the year ended December 31, 2009, compared to a loss of $56.3 million for the year ended December 31, 2008.

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Expenses and impairments were $25.0 million for the year ended December 31, 2009, compared to $63.1 million for the year ended December 31, 2008, a decrease of $38.1 million, or 60.4%, primarily due to a decrease of $48.4 million in other-than-temporary impairments recognized on our investment in debt securities-available-for-sale attributable to lower overall outstanding carrying balances on outstanding debt securities, offset by an increase in unallocated corporate expenses and an increase in losses realized on loans held for investment and foreclosed real estate.

The deterioration of the housing market and related illiquidity in the capital markets resulted in an overall decrease in the credit quality of the residential mortgage loans that collateralize our retained investment in debt securities. As a result of these weakening conditions, in 2008 we determined that we would not be able to fully recover all of our recorded investment in these related debt securities, and recorded an other-than-temporary impairment of $55.2 million, compared to $6.8 million in impairments for the year ended December 31, 2009. The decrease in our recognized impairments was primarily a result of our lower overall total outstanding investment in these debt securities.

During late 2008 and 2009, increased foreclosure activities resulted in an increase in real estate owned, coupled with the continuing deterioration of the housing market, our real estate owned losses increased. Our increased loss severities were also impacted by management initiatives enacted in 2009 to liquidate existing foreclosed real estate in advance of continued deterioration in certain housing markets.

We estimate the fair value of the real estate owned at the time that a loan is transferred to the real estate owned classification. Real estate owned is recorded at estimated fair value less costs to sell at the date of foreclosure. Fair value is estimated using the most recently obtained appraised value or broker price opinion, as applicable, adjusted, as necessary, to reflect expected price concessions based on historical experience. Upon foreclosure, we obtain a third party appraisal and a third party broker price opinion. Subsequently, we obtain updated broker price opinions every 90 days for our real estate owned. We review recent real estate owned sales activity on a quarterly basis to ensure that the resulting overall net sales proceeds received are consistent with our estimated fair value. Any subsequent declines in fair value are credited to a valuation allowance and charged to operations as incurred.

Total other income was $3.5 million for the year ended December 31, 2009 compared to $7.0 million for the year ended December 31, 2008, a decrease of $3.5 million, or 49.8%. The decrease was primarily due to a decrease in net interest income year over year of approximately $27.2 million, offset by a decrease in loss on interest rate swaps and caps. The decrease in interest income, net was attributable to an overall decrease in our total outstanding performing legacy portfolio assets to $345.5 million as of December 31, 2009, compared to $627.4 million as of December 31, 2008. In addition, our weighted average interest rates on our outstanding legacy portfolio assets decreased to 7.58% for the year ended December 31, 2009 compared to 9.11% for the year ended December 31, 2008. Loss on interest rate swaps and caps decreased to $0.0 million for the year ended December 31, 2009 as compared to $23.7 million for the year ended December 31, 2008. Prior to 2009, we entered into interest rate swap agreements to economically hedge the interest payments on the warehouse debt and securitization of our mortgage loans held for sale. The $23.7 million decrease in loss on interest rate swaps and caps was due to our unwinding of outstanding interest rate swap positions during 2008.

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Analysis of Items on Consolidated Balance Sheet

The following table presents our consolidated balance sheets as of December 31, 2010 and 2009 (in thousands).

	December 31,		December 31,
	2010		2009
Assets
Cash and cash equivalents	$	21,223	$	41,645
Restricted cash		91,125		52,795
Accounts receivable		439,071		509,974
Mortgage loans held for sale		371,160		203,131
Mortgage loans held for investment, subject to nonrecourse debt—Legacy Assets		266,840		301,910
Mortgage loans held for investment, subject to ABS nonrecourse debt		538,440		—
Investment in debt securities—available-for-sale		—		2,486
Receivables from affiliates		8,993		12,574
Mortgage servicing rights		145,062		114,605
Property and equipment, net		8,394		6,575
Real estate owned, net (includes $17,509 and $0, respectively, of real estate owned, subject to ABS nonrecourse debt)		27,337		10,262
Other assets		29,536		24,228
Total assets	$	1,947,181	$	1,280,185
Liabilities and members’ equity
Notes payable	$	709,758	$	771,857
Unsecured senior notes		244,061		—
Payables and accrued liabilities		75,054		66,830
Derivative financial instruments		7,801		—
Derivative financial instruments, subject to ABS nonrecourse debt		18,781		—
Nonrecourse debt—Legacy Assets		138,662		177,675
ABS nonrecourse debt		496,692		—
Total liabilities		1,690,809		1,016,362
Total members’ equity		256,372		263,823
Total liabilities and members’ equity	$	1,947,181	$	1,280,185

Comparison of Consolidated Balance Sheet Items—December 31, 2010 to December 31, 2009

Assets

Restricted cash consists of custodial accounts related to collections on certain mortgage loans and mortgage loan advances that have been pledged to debt counterparties under various Master Repurchase Agreements. Restricted cash was $91.1 million at December 31, 2010, an increase of $38.3 million from December 31, 2009, primarily a result of the increase in custodial deposits from mortgage loan advances. These custodial deposits are held in trust until they are remitted to the bond investors to pay down the asset-backed certificates.

Accounts receivable consists primarily of accrued interest receivable on mortgage loans and securitizations, collateral deposits on surety bonds, and advances made to nonconsolidated securitization trusts, as required under various servicing agreements related to delinquent loans, which are ultimately paid back to us from the securitization trusts. Accounts receivable was $439.1 million at December 31, 2010, a decrease of $70.9 million from December 31, 2009. The decrease in accounts receivable was primarily a result of decreases in outstanding delinquency and corporate and escrow advances of $57.7 million and $41.6 million, respectively. During the period, the GSEs began to repurchase loans from securitization trusts that we service for them that are 120 days or more past

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due. In conjunction with these repurchases, principal and interest advances that we had made as servicer for these loans were repaid. As such, our accounts receivable balance decreased significantly during the period as well as our corresponding borrowings under our MBS Advance Funding facility that we utilize to fund such advances.

Mortgage loans held for sale are carried at fair value, as permitted under ASC 825, Financial Instruments. We estimate fair value by evaluating a variety of market indicators including recent trades and outstanding commitments. Mortgage loans held for sale was $371.2 million at December 31, 2010, an increase of $168.1 million over December 31, 2009, a result of higher origination volume during the 2010 period.

Mortgage loans held for investment, subject to nonrecourse debt—legacy assets consist of nonconforming or subprime mortgage loans securitized which serve as collateral for the nonrecourse debt. These loans were transferred on October 1, 2009, from mortgage loans held for sale at fair value on the transfer date, as determined by the present value of expected future cash flows, with no valuation allowance recorded. Any decreases in expected cash flows subsequent to the transfer are recognized as a valuation allowance. Mortgage loans held for investment, subject to nonrecourse debt—legacy assets was $266.8 million at December 31, 2010, a decrease of $35.1 million from December 31, 2009, a result of principal collections and liquidations on the outstanding mortgage loans.

Mortgage loans held for investment, subject to ABS nonrecourse debt consist of mortgage loans that were recognized upon the adoption of new accounting guidance related to VIEs effective January 1, 2010. To more accurately represent the future economic performance of the securitization collateral and related debt balances, we elected the fair value option provided for by ASC 825-10 Financial Instruments-Overall. This option was applied to all eligible items within the VIE, including mortgage loans held for investment, subject to ABS nonrecourse debt, and the related ABS nonrecourse debt.

Investment in debt securities—available-for-sale consists of beneficial interests we retain in securitization transactions accounted for as a sale under the guidance of ASC 860. Effective January 1, 2010, new accounting guidance for VIEs eliminated the concept of a QSPE and all existing securitization trusts are considered VIEs and are now subject to the new consolidation guidance. Upon consolidation of these VIEs, Nationstar derecognized all previously recognized beneficial interests, including retained investment in debt securities, obtained as part of the securitization (see Note 3 to our consolidated financial statements).

Receivables from affiliates consist of periodic transactions with Nationstar Regular Holdings, Ltd., a subsidiary of FIF HE Holdings LLC. These transactions typically involve the monthly payment of principal and interest advances that are required to be remitted to securitization trusts as required under various Pooling and Servicing Agreements. These amounts are later repaid to us when principal and interest advances are recovered from the respective borrowers. Receivables from affiliates were $9.0 million at December 31, 2010, a decrease of $3.6 million from December 31, 2009, as a result of increased recoveries on outstanding principal and interest advances.

Mortgage servicing rights consist of servicing assets related to all existing residential mortgage loans transferred to a third party in a transfer that meets the requirements for sale accounting, or through the acquisition of the right to service residential mortgage loans that do not relate to our assets. Mortgage servicing rights were $145.1 million at December 31, 2010, an increase of $34.1 million over December 31, 2009. The increase was primarily a result of the capitalization of newly created mortgage servicing rights of $26.3 million, combined with the purchase of $17.8 million in mortgage servicing rights, offset by the de-recognition of previously recognized mortgage servicing rights on the consolidation of certain securitization trusts for the adoption of new accounting guidance related to VIEs of $7.6 million, and the change in fair value of mortgage servicing rights.

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Property and equipment, net increased by approximately $1.8 million, primarily as a result of expenditures related to newly opened retail branches and increased hardware acquisitions to support servicing expansion.

Real estate owned, net represents property we acquired as a result of foreclosures on delinquent mortgage loans. Real estate owned, net is recorded at estimated fair value, less costs to sell, at the date of foreclosure. Any subsequent operating activity and declines in value are charged to earnings. Real estate owned, net was $27.3 million at December 31, 2010, an increase of $17.0 million over December 31, 2009. This increase was primarily a result of the adoption of the new accounting guidance related to VIEs, resulting in the recognition of $17.5 million in real estate owned properties from a consolidated VIE.

Other assets consist of principally deferred financing costs, derivative financial instruments, and prepaid expenses. Other assets were $29.5 million at December 31, 2010, an increase of $5.3 million over December 31, 2009. This increase was primarily a result of an increase in deferred financing costs from our March 2010 offering and other higher prepaid expenses.

Liabilities and Members’ Equity

At December 31, 2010, total liabilities were $1.7 billion, a $0.7 billion increase from December 31, 2009. The increase in total liabilities was primarily a result of the adoption of new accounting guidance related to VIEs, resulting in the recognition of $0.5 billion in asset-backed certificates from a consolidated VIE combined with a March 2010 offering of Senior Unsecured Notes of $244 million.

At December 31, 2010, outstanding members’ equity was $256.4 million, a $7.5 million decrease from December 31, 2009. The decrease in members’ equity was primarily driven by an $9.9 million net loss for the year ended December 31, 2010, a cumulative effect adjustment from the adoption of new accounting guidance related to VIEs resulting in a cumulative effect decrease in our beginning members’ units of $8.1 million, offset by $9.5 million in share-based compensation (net of taxes) during the period and $1.1 million in the change in value of a cash flow hedge.

Recent Accounting Developments

On January 1, 2010, we adopted new Financial Accounting Standards Board (FASB) accounting guidance on transfers of financial assets and consolidation of VIEs. This new accounting guidance revises sale accounting criteria for transfers of financial assets, including elimination of the concept of and accounting for qualifying special purpose entities (QSPEs), and significantly changes the criteria for consolidation of a VIE. The adoption of this new accounting guidance resulted in the consolidation of certain VIEs that previously were QSPEs that were not recorded on our Consolidated Balance Sheet prior to January 1, 2010. We recorded an $8.1 million charge to members’ equity on January 1, 2010 for the cumulative effect of the adoption of this new accounting guidance, which resulted principally from the derecognition of the retained interests in the securitizations. Initial recording of these assets and liabilities on our Consolidated Balance Sheet had no impact at the date of adoption on consolidated results of operations.

Accounting Standards Update No. 2010-06, Fair Value Measurements and Disclosures (Topic 820): Improving Disclosures about Fair Value Measurements (Update No. 2010-06). Update No. 2010-06 requires additional disclosures about fair value measurements, including separate disclosures of significant transfers in and out of Level 1 and Level 2 fair value measurements and the reasons for the transfers. Additionally, the reconciliation for fair value measurements using significant unobservable inputs (Level 3) should present separately information about purchases, sales, issuances, and settlements. Update No. 2010-06 also clarifies previous disclosure requirements, including the requirement that entities provide disclosures about the valuation techniques and inputs used to measure fair value for both recurring and nonrecurring fair value measurements for both Level 2 and Level 3 measurements. The new disclosures and clarifications of existing disclosures required under

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Update No. 2010-06 is effective for interim and annual reporting periods beginning after December 15, 2009, and was adopted for the interim reporting period ending March 31, 2010, except for the disclosures about purchases, sales, issuances, and settlement in the roll forward of activity in Level 3 fair value measurements. Those disclosures are effective for fiscal years beginning after December 15, 2010, and for interim periods within those fiscal years.

Accounting Standards Update No. 2010-18, Effect of a Loan Modification When the Loan Is Part of a Pool That Is Accounted for as a Single Asset (Update No. 2010-18). Update No. 2010-18 clarifies the accounting treatment for modifications of loans that are accounted for within a pool under Subtopic 310-30, Receivables—Loans and Debt Securities Acquired with Deteriorated Credit Quality (Subtopic 310-30), requiring an entity to continue to include modified loans in the pool even if the modification of those loans would otherwise be considered a troubled debt restructuring. Loans accounted for individually under Subtopic 310-30 continue to be subject to the troubled debt restructuring accounting provisions within Subtopic 310-40, Receivables—Troubled Debt Restructurings by Creditors. The amendments in this update were effective for Nationstar for modifications of loans accounted for within pools under Subtopic 310-30 occurring in the first interim or annual period ending on or after July 15, 2010. The adoption of Update No. 2010-18 did not have a material impact on our financial condition, liquidity or results of operations.

Accounting Standards Update No. 2010-20, Disclosures about the Credit Quality of Financing Receivables and the Allowance for Credit Losses (Update No. 2010-20). Update No. 2010-20 is intended to provide users of financial statements with greater transparency regarding a company’s allowance for credit losses and the credit quality of its financing receivables. It is intended to provide additional information to assist financial statement users in assessing an entity’s credit risk exposures and evaluating the adequacy of its allowance for credit losses. The additional disclosure requirements for this amendment are effective for Nationstar for annual reporting periods ending on or after December 15, 2011. The adoption of Update No. 2010-20 will not have a material impact on Nationstar’s financial condition, liquidity or results of operations.

Liquidity and Capital Resources

Liquidity measures our ability to meet potential cash requirements, including the funding of servicing advances, paying operating expenses, origination of loans and repayment of borrowings. Our cash balance decreased from $41.6 million as of December 31, 2009 to $21.2 million as of December 31, 2010, primarily due to greater cash outflows from our financing activities to repay our outstanding debt facilities.

We shifted our strategy after 2007 to leverage our industry-leading servicing capabilities and capitalize on the opportunities to grow our origination platform has led to the strengthening of our liquidity position. As a part of our shift in strategy, we ceased originating non-prime loans in 2007, and new originations have been focused on loans that are eligible to be sold to government-sponsored enterprises. For the years ended December 31, 2010 and 2009, substantially all originated loans have either been sold or are pending sale. Additionally, we grew our servicing portfolio from $33.7 billion as of December 31, 2009 to $64.2 billion as of December 31, 2010.

As part of the normal course of our business, we borrow money to fund servicing advances and loan originations. The loans we originate are financed through several warehouse lines on a short-term basis. We typically hold the loans for approximately 30 days and then sell the loans or place them in government securitizations and repay the borrowings under the warehouse lines. We rely upon several counterparties to provide us with financing facilities to fund a portion of our servicing advances and to fund our loan originations on a short-term basis. Our ability to fund current operations depends upon our ability to secure these types of short-term financings on acceptable terms and to renew or replace the financings as they expire.

In March 2010, we completed the offering of $250 million of unsecured senior notes, which were issued with an issue discount of $7.0 million for net cash proceeds of $243.0 million, with a

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maturity date of April 2015. These unsecured senior notes pay interest biannually at an interest rate of 10.875%. Cash proceeds from this offering were used to pay down outstanding balances on our existing debt facilities.

At this time, we see no material negative trends that we believe would affect our access to long-term borrowings, short-term borrowings or bank credit lines sufficient to maintain our current operations, or would likely cause us to cease to be in compliance with any applicable covenants in our indebtedness or that would inhibit our ability to fund operations and capital commitments for the next 12 months.

Our primary sources of funds for liquidity include: (i) lines of credit and other secured borrowings; (ii) servicing fees and ancillary fees; (iii) payments received from sale or securitization of loans; and (iv) payments received from mortgage loans held for sale.

Our primary uses of funds for liquidity include: (i) funding of servicing advances; (ii) origination of loans; (iii) payment of interest expenses; (iv) payment of operating expenses; and (v) repayment of borrowings.

Our servicing agreements impose on us various rights and obligations that affect our liquidity. Among the most significant of these obligations is the requirement that we advance our own funds to meet contractual principal and interest payments for certain investors and to pay taxes, insurance, foreclosure costs and various other items that are required to preserve the assets being serviced. Delinquency rates and prepayment speed affect the size of servicing advance balances.

We intend to continue to seek opportunities to acquire loan servicing portfolios, originations platforms and/or businesses that engage in loan servicing and/or loan originations. We cannot predict the extent to which our liquidity and capital resources will be diminished by any such transactions. Additionally, we believe that a significant acquisition may require us to raise additional capital to facilitate such a transaction. We would likely finance acquisitions through a combination of corporate debt issuances, asset-backed acquisition financing and/or cash from operations.

Operating Activities

Our operating activities provided (used) ($101.7) million and ($83.6) million of cash flow for the years ended December 31, 2010 and 2009, respectively. The decrease of $18.1 million was primarily due to the net effect of the following:

•  Increase of $1,613.9 million attributable to increased proceeds received from sale of loans, offset by decrease in cash attributable to $1,311.1 million increase in origination volume.

•  Decrease in principal payments/prepayments received and other changes in mortgages loans held for sale of $439.9 million.

•  Increase of $130.4 million primarily due to increased delinquency advances to investors to cover scheduled payments of principal and interest that are required to be remitted to securitization trusts.

•  Increase of $71.0 million attributable to decrease in net loss period over period, primarily a result of increased revenues from our higher servicing portfolio and increased volume in loan originations.

Our operating activities provided (used) $(83.6) million and $40.2 million of cash flow for the years ended December 31, 2009 and 2008, respectively. The decrease in operating cash flow from 2008 to 2009 was primarily due to $934.6 million higher volume of originations in 2009, offset by $493.5 million increase from proceeds received from sale of loans and $268.9 million increase in principal payments received from loans.

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Investing Activities

Our investing activities provided (used) $101.2 million, $30.0 million and $(34.6) million of cash flow for the years ended December 31, 2010, 2009 and 2008, respectively. The increase in cash flows from investing activities from 2009 to 2010 was primarily a result of an increase in cash proceeds from sales of real estate owned and principal payments received and other changes on mortgage loans held for investment, subject to ABS nonrecourse debt. The increase in cash flow from investing activities from 2008 to 2009 was primarily due to the absence of interest rate swap settlements in 2009 compared to $51.6 million of settlements in 2008 and a $17.8 million decrease in cash used for the purchase of mortgage servicing rights, net of liabilities, offset by no principal payments received from debt securities in 2009 compared to $8.4 million in 2008.

Financing Activities

Our financing activities provided (used) $(20.0) million, $85.9 million and $(37.5) million of cash flow for the years ended December 31, 2010, 2009 and 2008, respectively. The increase in cash outflow from financing activities from 2009 to 2010 was primarily a result of repayment of ABS and Legacy Asset nonrecourse debt. We also did not receive any capital contributions from our existing members in 2010, compared to $20.7 million in capital contributions received in 2009. The increase in cash flow from financing activities from 2008 to 2009 was primarily due to the non-recourse debt, net issued in 2009 related to the secured financing of our legacy assets.

Contractual Obligations

The table below sets forth our contractual obligations, excluding our Legacy Asset Securitized Debt and ABS nonrecourse debt, as of December 31, 2010 (in thousands):

			2012		2014		After
	2011		to 2013		to 2015		2015		Total
Senior Unsecured Notes	$	—	$	—	$	250,000		—	$	250,000
Interest expense from Senior Unsecured Notes		27,188		54,375		33,985		—		115,548
MBS Advance Financing Facility		114,562		—		—		—		114,562
ABS Advance Financing Facility		236,808		—		—		—		236,808
MSR Notes		5,552		10,181		—		—		15,733
$300 Million Warehouse Facility		209,477				—		—		209,477
$100 Million Warehouse Facility		39,014		—		—		—		39,014
$75 Million Warehouse Facility		43,059		—		—		—		43,059
GSE ASAP+ Short-Term Financing Facility		51,105		—		—		—		51,105
Operating leases		7,015		13,299		7,972		1,243		29,529
	$	733,780	$	77,855	$	291,957	$	1,243	$	1,104,835

In addition to the above contractual obligations, we have also been involved with several securitizations of asset-backed securities, which were structured as secured borrowings. These structures resulted in us carrying the securitized loans as mortgages on our consolidated balance sheet and recognizing the asset-backed certificates acquired by third parties as nonrecourse debt. The timing of the principal payments on this nonrecourse debt is dependent on the payments received on the underlying mortgage loans and liquidation of real estate owned. The outstanding principal balance on our Nonrecourse Debt—Legacy Assets and ABS nonrecourse debt was $161.2 million and $1,037.9 million respectively, as of December 31, 2010.

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Summary of Other Indebtedness

Senior Unsecured Notes

In March 2010, we completed the offering of $250 million of unsecured senior notes, which were issued with an issue discount of $7.0 million for net cash proceeds of $243.0 million, with a maturity date of April 2015. These unsecured senior notes pay interest biannually at an interest rate of 10.875%.

The indenture for our unsecured senior notes contains various covenants and restrictions that will limit us and our restricted subsidiaries’ ability to incur additional indebtedness, pay dividends, make certain investments, create liens, designate subsidiaries as unrestricted subsidiaries, consolidate, merge or sell substantially all the assets, or enter into certain transactions with affiliates.

Consolidated EBITDA, as defined in the indenture governing the unsecured senior notes, is the key financial covenant measure that monitors our ability to undertake investing and financing functions, such as making investments/acquisitions, paying dividends, and incurring additional indebtedness.

The ratios included in the indenture for the unsecured senior notes are incurrence based compared to the customary ratio covenants that are often found in credit agreements that require a company to maintain a certain ratio.

The consolidated leverage ratio as defined in the indenture is equal to Corporate Indebtedness, as defined in the indenture, divided by Consolidated EBITDA, and limits the activities of the Company as discussed above, if the ratio is equal to or greater than 4.5.

Consolidated EBITDA is computed as follows (in thousands):

	Twelve Months Ended
	December 31, 2010
Net income (loss)	$	(9,914	)
Adjust for:
Impact from consolidation of securitization trusts(1)		(8,933	)
Interest expense from Corporate Indebtedness(2)		24,628
Depreciation and amortization		2,117
Change in fair value of mortgage servicing rights(3)		6,458
Exit costs		2,287
Share-based compensation		12,856
Fair value changes on interest rate swap		9,801
Ineffective portion of cash flow hedge		(930	)
(Gain) loss from asset sales and other than temporary impairment of assets		6,084
Amortization/write-off of deferred financing cost for debt obligations in existence prior to issuance of unsecured senior notes		15,944
Servicing resulting from transfers of financial assets		(26,253	)
Other		6
Consolidated EBITDA	$	34,151

(1) Represents impact to net income from the consolidation of certain securitization trusts. Net income, as defined in the Indenture, is based on generally accepted accounting principles in effect as of December 31, 2009, and does not include the impact of the consolidation of identified VIEs where we have both the power to direct the activities that most significantly impact the VIE’s economic performance and the obligation to absorb losses or the right to receive benefits that could potentially be significant to the VIE.

(2) Includes interest expense from the unsecured senior notes and an unsecured line of credit that was paid down with the proceeds from the unsecured senior notes.

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(3) Represents change in fair value of mortgage servicing rights after deconsolidation of the securitization trusts as discussed in note (1) above.

Servicing

Our Servicing Segment’s debt consists of our Senior Unsecured Notes, our MBS Advance Financing Facility, our ABS Advance Financing Facility and our MSR Notes. As of December 31, 2010, the two separate advance financing facilities had $625.0 million of committed capacity to fund the Servicing Segment. In addition, we had a $200 million advance facility that had not been drawn upon, and $15.7 million of notes outstanding that we had entered into to purchase a portfolio of mortgage servicing rights.

MBS Advance Financing Facility

Our MBS Advance Financing Facility is used to finance our obligations to pay advances as required by our servicing agreements. These agreements may require us to advance certain payments to the owners of the mortgage loans we service, including: principal and interest, or P&I advances, taxes and insurance, or T&I advances, or legal fees, maintenance and preservation costs, or corporate advances. See “Industry—Servicing Industry Overview.”

In September 2009, we entered into our MBS Advance Financing Facility with a government- sponsored enterprise which currently has a total facility size of $275.0 million. Our MBS Advance Financing Facility is secured by certain servicing advance receivables and is subject to margin calls in the event that the value of our collateral decreases. We draw on the facility periodically throughout the month, as necessary, to satisfy our advancing obligations under our servicing agreements, and we repay the facility when advances are recovered through liquidations, prepayments and reimbursement of advances from modifications.

Our MBS Advance Facility requires us to comply with various customary operating covenants and performance tests on the underlying receivables related to payment rates and minimum balance. The interest rate is based on LIBOR plus a margin of 2.50%. The maturity date of this facility is December 2011. As of December 31, 2010, we were in compliance with all covenants and performance tests under our MBS Advance Financing Facility and had an aggregate principal amount of $114.6 million outstanding.

ABS Advance Financing Facility

In November 2007, we entered into our ABS Advance Financing Facility with a financial services company. In December 2009, we entered into an amendment to our ABS Advance Financing Facility, which, as amended, has a total facility size of $350.0 million. The transaction was a securitization of the servicing advance receivables that entailed the issuance and sale of $174.0 million in term notes and $176.0 million in variable funding notes. Our ABS Advance Financing Facility is a non-recourse obligation that is secured by certain servicing advance receivables. We draw on the facility periodically throughout the month, as necessary, to satisfy our advancing obligations under our servicing agreements, and we repay the facility when advances are recovered through liquidations, prepayments and reimbursement of advances after modifications. The balance of the $174.0 million term notes stays constant, while the variable funding notes fluctuate with our financing needs.

Our ABS Advance Facility requires us to comply with various customary operating covenants and performance tests on the underlying receivables related to payment rates and minimum balance. The interest rate is based on LIBOR, subject to an interest rate swap, and had a weighted average cost of 4.82% during the year ended December 31, 2010. Upon an event of default, the notes issued by the servicing advance facilities may be declared immediately due and payable. The stated maturity date of this facility is December 2013, twenty-four months after the repayment date of December 2011. As of December 31, 2010, we were in compliance with all covenants and performance tests under our ABS Advance Financing Facility and had an aggregate principal amount of $236.8 million outstanding.

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In December 2010, we executed the 2010-ABS Advance Financing Facility with a financial institution. This facility has the capacity to purchase up to $200 million of advance receivables. This facility is a non-recourse obligation that will be secured by certain servicing advance receivables. The interest rate is based on LIBOR plus a margin of 3.00%. The maturity date of this facility with the financial institution is July 2011, which may be extended if we elect to pledge any additional advances to this facility. We have yet to draw on this facility as of December 31, 2010.

MSR Notes

In October 2009, we entered into our MSR Notes, with an aggregate principal amount of $22.2 million, to a government-sponsored enterprise to finance our acquisition of certain mortgage servicing rights. Our MSR Notes are secured by all of our rights, title and interest in the mortgage servicing rights that we acquired in the transaction.

Our MSR Notes require us to comply with various customary operating covenants and specific covenants including maintaining a disaster recovery plan, maintaining priority of the lender’s lien, and certain covenants related to the collateral and limitations on the creation of liens on the collateral or assigned servicing compensation. The interest rate is based on LIBOR plus a margin of 2.50%. The maturity date of our MSR Notes is October 2013. As of December 31, 2010, we had an aggregate principal amount of $15.7 million outstanding.

Originations

As of December 31, 2010 we maintained four separate financing facilities with $400 million of committed capacity to fund the Originations Segment: our $300 Million Warehouse Facility, our $100 Million Warehouse Facility, our $75 Million Warehouse Facility and our GSE ASAP+ Short-Term Financing Facility.

$300 Million Warehouse Facility

Our $300 Million Warehouse Facility is used to finance our loan originations on a short-term basis. In the ordinary course, we originate mortgage loans on a near-daily basis, and we use a combination of our four warehouse facilities and cash to fund the loans. We agree to transfer to our counterparty certain mortgage loans against the transfer of funds by the counterparty, with a simultaneous agreement by the counterparty to transfer the loans back to us at a date certain, or on demand by us, against the transfer of funds from us. We typically renegotiate our warehouse facilities on an annual basis. See “Industry—Industry Overview.”

In July 2006, we entered into our $300 Million Warehouse Facility with a financial services company. In January 2010, we amended our $300 Million Warehouse Facility, which, as amended, has a total facility size of $300.0 million. We sell our newly originated mortgage loans to our counterparty to finance the origination of our mortgage loans and typically repurchase the loan within 30 days of origination when we sell the loan to a government-sponsored enterprise or into a government securitization.

Our $300 Million Warehouse Facility requires us to comply with various customary operating covenants and specific covenants including maintaining a minimum tangible net worth of $150.0 million, limitations on transactions with affiliates, maintenance of liquidity of $20 million and the maintenance of additional funding through warehouse loans. The interest rate is based on LIBOR plus a margin of 2.00%, with a minimum interest rate of 4.00%. The termination date of this facility is February 2011. As of December 31, 2010, we were in compliance with all covenants and performance tests under our $300 Million Warehouse Facility and had an aggregate principal amount of $209.4 million outstanding.

In February 2011, we amended our $300 Million Warehouse Facility, which as amended, is set to expire in February 2012, has an interest rate based on LIBOR plus a margin of 3.25% and requires us to maintain a minimum tangible net worth of not less than $175 million.

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$100 Million Warehouse Facility

In October 2009, we entered into our $100 Million Warehouse Facility with a financial services company with a total facility size of $50.0 million. In October 2010, this facility was increased to $100.0 million. We sell our newly originated mortgage loans to our counterparty to finance the origination of our mortgage loans and typically repurchase the loan within 30 days of origination when we sell the loan to a government-sponsored enterprise or into a government securitization.

Our $100 Million Warehouse Facility requires us to comply with various customary operating covenants and specific covenants including maintaining additional warehouse facilities, restrictions on the assignment of purchased loans, limits on transactions with affiliates and certain financial covenants, including maintaining a minimum tangible net worth of $150.0 million. The interest rate is based on LIBOR plus a margin of 3.50%. The termination date of this facility is December 2011. As of December 31, 2010, we were in compliance with all covenants and performance tests under our $100 Million Warehouse Facility and had an aggregate principal amount of $39.0 million outstanding.

$75 Million Warehouse Facility

In February 2010, we entered into our $75 Million Warehouse Facility with a financial services company, with a total facility size of $50.0 million. In October 2010, this facility was increased to $75.0 million. We sell our newly originated mortgage loans to our counterparty to finance the origination of our mortgage loans and typically repurchase the mortgage loan within 30 days of origination when we sell the mortgage loan to a government- sponsored enterprise or into a government securitization.

Our $75 Million Warehouse Facility requires us to comply with various customary operating covenants and specific covenants including financial covenants regarding our liquidity ratio of liabilities and warehouse credit to net worth and operating income, maintenance of a minimum tangible net worth of $150.0 million, maintenance of additional warehouse facilities and limitations on entering into warehouse facilities with more favorable terms (with respect to the lender) than this facility without also applying those more favorable terms to this facility. The interest rate is based on LIBOR plus a margin of 3.25%. The termination date of this facility is October 2011. As of December 31, 2010, we were in compliance with all covenants and performance tests under this facility and had an aggregate principal amount of $43.1 million outstanding.

GSE ASAP+ Short-Term Financing Facility

During 2009, we began executing a series of As Soon As Pooled Plus, or ASAP+, agreements with a government-sponsored enterprise with a total commitment of $75.0 million. Pursuant to these agreements, we agree to transfer to the government-sponsored enterprise certain mortgage loans against the transfer of funds by the government-sponsored enterprise, with a simultaneous agreement by the counterparty to transfer the loans back to us at a date certain, or on demand by us, against the transfer of funds from us. The interest rate is based on LIBOR plus a margin of 1.50%. These agreements typically have a maturity of up to 45 days. As of December 31, 2010, we had an aggregate principal amount of $51.1 million outstanding.

Legacy Assets and Other

Legacy Asset Term-Funded Notes

In November 2009, we completed the securitization of approximately $222.4 million of mortgage assets and issued our Legacy Asset Term-Funded Notes. The interest rate is 7.50%, subject to an available funds cap. In conjunction with the securitization, we reclassified our legacy assets as “held for investment” on our consolidated balance sheet and recognize the Legacy Asset Term-Funded Notes as non-recourse debt. We pay the principal and interest on these notes using the cash flows from the underlying legacy assets, which serve as collateral for the debt. As of December 31, 2010, the

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aggregate unpaid principal balance of the legacy assets that secure our Legacy Asset Term-Funded Notes was $430.0 million. Monthly cash flows generated from the legacy assets are used to service the debt, which has a final legal maturity of October 2039. As of December 31, 2010, our Legacy Asset Term-Funded Notes had a par amount and carrying value, net of financing costs and unamortized discount of $161.2 million and $138.7 million, respectively.

ABS Nonrecourse Debt

Effective January 1, 2010, new accounting guidance eliminated the concept of a QSPE, and all existing securitization trusts are considered VIEs and are now subject to new consolidation guidance provided in ASC 810. Upon consolidation of these VIEs, Nationstar derecognized all previously recognized beneficial interests obtained as part of the securitization. In addition, Nationstar recognized the securitized mortgage loans as mortgage loans held for investment, subject to ABS nonrecourse debt, and the related asset-backed certificates acquired by third parties as ABS nonrecourse debt on Nationstar’s consolidated balance sheet. Additionally, Nationstar elected the fair value option provided for by ASC 825-10. The principal and interest on these notes are paid using the cash flows from the underlying mortgage loans, which serve as collateral for the debt. The interest rate paid on the outstanding securities is based on LIBOR plus a spread ranging from 0.13% to 2.00%, which is subject to an interest rate cap. The total outstanding principal balance on the underlying mortgage loans servicing as collateral for the debt was approximately $1,025.3 million at December 31, 2010. The timing of the principal payments on this ABS nonrecourse debt is dependent on the payments received on the underlying mortgage loans. The outstanding principal balance on the outstanding notes related to these consolidated securitization trusts was $1,037.9 million at December 31, 2010.

Variable Interest Entities

We have been the transferor in connection with a number of securitizations or asset-backed financing arrangements, from which we have continuing involvement with the underlying transferred financial assets. We aggregate these securitizations or asset-backed financing arrangements into two groups: 1) securitizations of residential mortgage loans and 2) transfers accounted for as secured borrowings.

Effective January 1, 2010, new accounting guidance related to VIEs eliminated the concept of a QSPE and all existing SPEs are now subject to the new consolidation guidance. Upon adoption of this new accounting guidance, we identified certain securitization trusts where we, through our affiliates, continued to hold beneficial interests in these trusts. These retained beneficial interests obligate us to absorb losses of the VIE that could potentially be significant to the VIE or the right to receive benefits from the VIE that could potentially be significant. In addition, as Master Servicer on the related mortgage loans, we retain the power to direct the activities of the VIE that most significantly impact the economic performance of the VIE. When it is determined that we have both the power to direct the activities that most significantly impact the VIE’s economic performance and the obligation to absorb losses or the right to receive benefits that could potentially be significant to the VIE, the assets and liabilities of these VIEs are included in our consolidated financial statements. Upon consolidation of these VIEs, we derecognized all previously recognized beneficial interests obtained as part of the securitization, including any retained investment in debt securities, mortgage servicing rights, and any remaining residual interests. In addition, we recognized the securitized mortgage loans as mortgage loans held for investment, subject to ABS nonrecourse debt, and the related asset-backed certificates acquired by third parties as ABS nonrecourse debt on our consolidated balance sheet.

We also maintained various agreements with SPEs, under which we transfer mortgage loans and/or advances on residential mortgage loans in exchange for cash. These SPEs issue debt supported by collections on the transferred mortgage loans and/or advances. These transfers do not qualify for sale treatment because we continue to retain control over the transferred assets. As a result, we account for these transfers as financings and continue to carry the transferred assets and recognize the related liabilities on our consolidated balance sheet. Collections on the mortgage loans and/or

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advances pledged to the SPEs are used to repay principal and interest and to pay the expenses of the entity. The holders of these beneficial interests issued by these SPEs do not have recourse to us and can only look to the assets of the SPEs themselves for satisfaction of the debt.

SPEs created for the purpose of issuing debt supported by collections on loans that have been transferred to it are considered VIEs. VIEs for which we are the primary beneficiary and have the power to direct the activities that directly impact the economic performance are consolidated into our consolidated financial statements.

A summary of the assets and liabilities of our transactions with VIEs included in our consolidated financial statements as of December 31, 2010 is presented in the following table (in thousands).

			Transfers
	Securitization		Accounted for as
	Trusts		Secured Borrowings		Total
Assets
Restricted cash	$	1,472	$	32,075	$	33,547
Accounts receivable		2,392		286,808		289,200
Mortgage loans held for investment, subject to nonrecourse debt		—		261,305		261,305
Mortgage loans held for investment, subject to ABS nonrecourse debt		538,440		—		538,440
Real estate owned		17,509		9,505		27,014
Total Assets	$	559,813	$	589,693	$	1,149,506
Liabilities
Notes payable	$	—	$	236,808	$	236,808
Payables and accrued liabilities		95		1,173		1,268
Outstanding servicer advances(1)		32,284		—		32,284
Derivative financial instruments		—		7,801		7,801
Derivative financial instruments, subject to ABS nonrecourse debt		18,781		—		18,781
Nonrecourse debt—Legacy Assets		—		138,662		138,662
ABS nonrecourse debt		497,289		—		497,289
Total Liabilities	$	548,449	$	384,444	$	932,893

(1) Outstanding servicer advances consists of principal and interest advances paid by Nationstar to cover scheduled payments and interest that have not been timely paid by borrowers. These outstanding servicer advances are eliminated upon the consolidation of the securitization trusts.

Off Balance Sheet Arrangements

A summary of the outstanding collateral and certificate balances for securitization trusts, including any retained beneficial interests and mortgage servicing rights, that were not consolidated by us for the years ending December 31, 2010 and 2009 is presented in the following table (in thousands).

	December 31,		December 31,
	2010(1)		2009(2)
Total collateral balance	$	4,038,978	$	3,240,879
Total certificate balance		4,026,844		3,262,995
Total beneficial interests held at fair value		—		2,486
Total mortgage servicing rights at fair value		26,419		20,505

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(1) Unconsolidated securitization trusts as of December 31, 2010 consist of VIE’s where we lack (i) the power to direct the activities that most significantly impact the VIE’s economic performance or (ii) the obligation to absorb losses or the right to receive benefits that could potentially be significant to the VIE.

(2) Unconsolidated securitization trusts as of December 31, 2009 consists of those qualifying for sale treatment under ASC 860.

Derivatives

We record all derivative transactions at fair value on our consolidated balance sheets. We use these derivatives primarily to manage our interest rate risk and price risk associated with interest rate lock commitments, which we refer to as IRLCs. We actively manage the risk profiles of our IRLCs and mortgage loans held for sale on a daily basis. To manage the price risk associated with IRLCs, we enter into forward sales of mortgage-backed securities in an amount equal to the portion of the IRLC we expected to close, assuming no change in interest rates.

In addition, to manage the interest rate risk associated with mortgage loans held for sale, we enter into forward sales of mortgage-backed securities to deliver mortgage loan inventory to investors.

We also entered into interest rate cap agreements to hedge the interest payments on our ABS Servicing Facility and our MBS Servicing Facility. These interest rate cap agreements generally require an upfront payment and receive cash flow only when a variable rate based on LIBOR exceeds a defined interest rate. As of December 31, 2010, these interest rate cap agreements were out of the money and, unless there is a significant change to LIBOR, we do not anticipate a material effect to our consolidated financial statements.

To hedge the aggregate risk of interest rate fluctuations with respect to our outstanding borrowings, we have entered into swap agreements whereby we receive floating rate payments in exchange for fixed rate payments, effectively converting our outstanding borrowings to fixed rate debt.

As part of our January 1, 2010 adoption of new accounting guidance related to VIEs, we were required to consolidate certain VIEs related to previous asset-backed securitizations that were treated as sales under GAAP. Accordingly, we recognized all assets and liabilities held by these securitization trusts in our consolidated balance sheet. As a form of credit enhancement to the senior noteholders, these securitization trusts contained embedded interest rate swap agreements to hedge the required interest payments on the underlying asset-backed certificates. These interest rate swap agreements generally require the securitization trust to pay a variable interest rate and receive a fixed interest rate based on LIBOR.

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GLOSSARY OF INDUSTRY TERMS

Adjustable Rate Mortgage.  A mortgage loan where the interest rate on the loan adjusts periodically based on a specified index and margin agreed to at the time the loan is originated.

Agency and Government Conforming Loan.  A mortgage loan that meets all requirements (loan type, maximum amount, loan-to-value ratio and credit quality) for purchase by Fannie Mae, Freddie Mac or FHA.

Compensating Interest.  Money paid to the owner of a mortgage loan or pool of mortgage loans on a monthly basis (typically by the servicer from its own funds) to compensate the owner of the mortgage loan for interest shortfalls caused by intra-month prepayments.

Consumer Direct Retail Origination.  A type of mortgage loan origination pursuant to which a lender markets refinancing and purchase money mortgage loans directly to selected consumers.

Conventional Mortgage Loans.  A mortgage loan that is not guaranteed or insured by the FHA, the VA or any other government agency. Although a conventional loan is not insured or guaranteed by the government, it can still follow the guidelines of government-sponsored enterprises.

Corporate Advance.  A servicing advance to pay costs and expenses incurred in foreclosing upon, preserving and selling real estate owned, including attorneys’ and other professional fees and expenses incurred in connection with foreclosure and liquidation or other legal proceedings arising in the course of servicing the mortgage loans.

Credit-Sensitive Loan.  A mortgage loan with certain characteristics such as low borrower credit quality, relaxed original underwriting standards and high loan-to-value ratio, which we believe indicates that the mortgage loan presents an elevated credit risk.

Delinquent Loan.  A mortgage loan that is 30 or more days past due from its scheduled due date.

Department of Veterans Affairs (VA).  The United States Department of Veterans Affairs is a cabinet-level department of the U.S. federal government, which guarantees certain home loans for qualified borrowers.

Distributed Retail Originations.  A type of mortgage loan origination pursuant to which a lender markets primarily purchase money mortgage loans directly to consumers from local branches.

Fannie Mae.  The Federal National Mortgage Association, a federally chartered association that buys mortgage loans from lenders and resells them as securities in the secondary mortgage market.

Federal Housing Administration (FHA).  The Federal Housing Administration is a U.S. federal government agency within the Department of Housing and Urban Development. It provides mortgage insurance on loans made by FHA-approved lenders in compliance with FHA guidelines throughout the United States.

Float Income.  Interest income earned by a servicer on (i) funds collected from borrowers during the period of time between receipt of the funds and the remittance of the funds to investors and (ii) funds collected from borrowers for the payment of taxes and insurance, where applicable.

Freddie Mac.  The Federal Home Loan Mortgage Corporation, a federally chartered corporation that buys mortgage loans from lenders and resells them as securities in the secondary mortgage market.

Ginnie Mae.  The Government National Mortgage Association, a wholly-owned U.S. federal government corporation that is an agency of the Department of Housing and Urban Development. The main focus of Ginnie Mae is to ensure liquidity for U.S. federal government-insured mortgages including those insured by the FHA. Ginnie Mae guarantees to investors who purchase mortgage- backed securities the timely payment of principal and interest. Ginnie Mae securities are the only mortgage-backed securities to carry the full faith and credit guarantee of the U.S. federal government.

Government-Sponsored Enterprise.  Financing corporations established by the United States Congress, including Fannie Mae, Freddie Mac and the Federal Home Loan Banks.

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High-Touch Servicing.  A servicing model that is designed to increase borrower repayment performance with a view towards home ownership preservation, and to decrease borrower delinquencies and defaults on mortgage portfolios. This model emphasizes a focus on loss mitigation and frequent interactions with borrowers—via telephone, mail, electronic communications and other personal contact methods.

Home Affordable Modification Program (HAMP).  A U.S. federal government program designed to help eligible homeowners avoid foreclosure through mortgage loan modifications. Participating servicers may be entitled to receive financial incentives in connection with loan modifications they enter into with eligible borrowers and subsequent “pay for success” fees to the extent that a borrower remains current in any agreed upon loan modification.

Independent Loan Servicer.  A loan servicer that is not affiliated with a depository institution.

Loan Modification.  Temporary or permanent modifications, including re-modifications, to the terms and conditions of a borrower’s original mortgage loan. Loan modifications are usually made to loans that are in default, or in imminent danger of defaulting.

Loan-to-Value Ratio (LTV).  The unpaid principal balance of a mortgage loan as a percentage of the total appraised value of the property that secures the loan. LTV is one of the key risk factors that originators assess when qualifying borrowers for a mortgage loan. A loan with a low LTV is seen as less of a credit risk than a loan with a high LTV. An LTV over 100% indicates that the unpaid principal balance of the mortgage loan exceeds the value of the property.

Loss Mitigation.  The range of servicing activities designed by a servicer to minimize the losses suffered by the owner of a mortgage loan in connection with a borrower default. Loss mitigation techniques include short-sales, deed-in-lieu of foreclosures and loan modifications, among other options.

Making Home Affordable Plan (MHA).  Also known as the President of the United States’ Homeowner Affordability and Stability Plan. A U.S. federal government program designed to help eligible homeowners avoid foreclosure and keep their homes by refinancing their existing mortgages. MHA loans are available to eligible homeowners with loan-to-value ratios of up to 125%.

Mortgage Servicing Right.  The right to service a loan or pool of loans and to receive a servicing fee. Mortgage servicing rights may be bought and sold, resulting in the transfer of loan servicing obligations.

Non-Conforming Mortgage Loan.  A mortgage loan that does not meet the standards of eligibility for purchase or securitization by Fannie Mae, Freddie Mac or Ginnie Mae.

Non-Recoverable Advance.  A servicing advance made by a servicer, which will not ultimately be recoverable by the servicer from funds received upon liquidation of the underlying property of the mortgage loan.

Origination.  The process through which a lender provides a mortgage loan to a borrower.

P&I Advance.  A servicing advance to cover scheduled payments of principal and interest that have not been timely paid by borrowers. P&I Advances serve to ensure the cash flows paid to holders of securities issued by the residential mortgage-backed securities trust.

Prepayment Speed.  The rate at which mortgage prepayments occur or are projected to occur. The statistic is calculated on an annualized basis and expressed as a percentage of the outstanding principal balance.

Primary Servicer.  The servicer that owns the right to service a mortgage loan or pool of mortgage loans. This differs from a subservicer, which has a contractual right with the primary servicer to service a mortgage loan or pool of mortgage loans in exchange for a subservicing fee.

Prime Mortgage Loan.  Generally, a high-quality mortgage loan that meets the underwriting standards set by Fannie Mae, Freddie Mac and Ginnie Mae and is eligible for purchase or securitization in the secondary mortgage market. Prime mortgage loans generally have lower default risk and are

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made to borrowers with good credit records and a monthly income at least three to four times greater than their monthly housing expenses (mortgage payments plus taxes and other debt payments). Mortgages not classified as prime mortgages are generally called either non-prime or Alt-A.

Real Estate Owned.  Property acquired by the servicer on behalf of the owner of a mortgage loan or pool of mortgage loans, usually through foreclosure or a deed-in-lieu of foreclosure on a defaulted loan. The servicer or a third party real estate management firm is responsible for selling the real estate owned. Net proceeds of the sale are returned to the owner of the related loan or loans. In most cases, the sale of real estate owned does not generate enough to pay off the balance of the loan underlying the real estate owned, causing a loss to the owner of the related mortgage loan.

Residential Mortgage-Backed Security.  A fixed income security backed by pools of residential mortgages.

Servicing.  The performance of contractually specified administrative functions with respect to a mortgage loan or pool of mortgage loans. Duties of a servicer typically include, among other things, collecting monthly payments, maintaining escrow accounts, providing periodic reports and managing insurance. A servicer is generally compensated with a specific fee outlined in the contract established prior to the commencement of the servicing activities.

Servicing Advance.  In the course of servicing loans, servicers are required to make servicing advances that are reimbursable from collections on the related mortgage loan. There are typically three types of servicing advances: P&I Advances, T&I Advances and Corporate Advances. Servicing advances are reimbursed to the servicer if and when the borrower makes a payment on the underlying mortgage loan or upon liquidation of the underlying mortgage loan. The types of servicing advances that a servicer must make are set forth in its servicing agreement with the owner of the mortgage loan or pool of mortgage loans.

Servicing Advance Facility.  A secured financing facility backed by a pool of mortgage servicing advance receivables made by a servicer to the owner of a mortgage loan or pool of mortgage loans.

Special Servicers.  Special servicers are responsible for enhancing recoveries on delinquent loans and real estate owned assets. Loans are transferred to a special servicer based on predetermined delinquency or other performance measures.

Subservicing.  Subservicing is the process of outsourcing the duties of the primary servicer to a third party servicer. The third party servicer performs the servicing responsibilities for a fee and is typically not responsible for making servicing advances.

T&I Advance.  A servicing advance to pay specified expenses associated with the preservation of a mortgaged property or the liquidation of defaulted mortgage loans, including but not limited to property taxes, insurance premiums or other property-related expenses that have not been timely paid by borrowers in order for the lien holder to maintain their interest in the property.

Unpaid Principal Balance.  The amount of principal outstanding on a mortgage loan or a pool of mortgage loans. Unpaid principal balance is used as a means of estimating future revenue stream for a servicer.

Warehouse Facility.  A type of facility used to finance mortgage loan originations. Pursuant to a warehouse facility, a loan originator typically agrees to transfer to a counterparty certain mortgage loans against the transfer of funds by the counterparty, with a simultaneous agreement by the counterparty to transfer the loans back to the originator at a date certain, or on demand, against the transfer of funds from the originator.

Wholesale Origination.  A type of mortgage loan origination pursuant to which a lender acquires refinancing and purchase money mortgage loans from third party mortgage brokers or correspondent lenders.

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INDUSTRY

We conduct our business in the residential mortgage industry in the United States. We participate in two distinct, but related, sectors of the mortgage industry: residential mortgage loan servicing and residential mortgage loan originations.

Servicing Industry Overview

According to Inside Mortgage Finance, there were $10.5 trillion in residential mortgage loans outstanding in the United States as of December 31, 2010, and each mortgage loan must be serviced by a loan servicer. Loan servicers normally earn a servicing fee of 25 to 50 basis points per annum on the unpaid principal balance of loans serviced, as well as associated ancillary fees, such as late fees. Consequently, a loan servicer can create value for both itself and the owner of the mortgage loan by increasing the number of borrowers that remain current in their repayment obligations. Owners may include a lender, investor or residential mortgage-backed securities trust, in the case of a securitized pool of mortgages.

Loan servicing primarily involves the calculation, collection and remittance of principal and interest payments, the administration of mortgage escrow accounts, the collection of insurance claims, the administration of foreclosure procedures, the management of real estate owned and the making of required advances.

In a weak economic and credit environment with elevated delinquencies and defaults, servicing becomes operationally more challenging and more capital intensive as servicers need to add and train staff to manage the increase in delinquent borrowers. In addition, servicers are generally required to make advances on delinquent mortgage loans for principal and interest payments, taxes, insurance, legal fees and property maintenance fees, all of which are typically recovered upon foreclosure or liquidation. According to the Mortgage Bankers Association, delinquent loans and foreclosures have increased from $0.6 trillion at December 2006 to $1.4 trillion at December 31, 2010. Furthermore, Fannie Mae estimates that as of December 31, 2010, it had $764 billion of assets within its own portfolio with characteristics that we believe make them credit-sensitive.

Mortgage Servicing Functions

Loan servicers play a key role in the residential mortgage market by providing loan servicing functions on behalf of the owners of mortgage loans including collecting the scheduled principal and interest payments, taxes and insurance, performing customer service functions and taking active steps to mitigate any potential losses associated with borrower delinquencies and defaults. Typically, a servicer is contractually obligated to service a mortgage loan in accordance with accepted servicing industry practices as well as applicable regulations and statutes. A servicer’s rights and obligations are governed by the pooling and servicing agreement for the underlying loans. A subservicer’s rights and obligations are governed by the subservicing agreement with the third party that owns the related mortgage servicing rights.

To the extent a borrower does not make a payment, servicers are generally required to make advances of principal and interest, taxes and insurance and legal fees until such time as the underlying property is liquidated or the servicer determines that additional advances will not be recoverable from future payments, proceeds or other collections on the mortgage loan. In the event of a foreclosure, servicers are entitled to reimbursement of advances from the sale proceeds of the related property and, typically, in the event of non-recoverable advances, from collections on other mortgage loans in the related residential mortgage-backed securities trusts they service.

Collection efforts attempt to maximize early contact with borrowers who are late or newly delinquent, with more focused attention on borrowers of lower credit quality. In addition, servicers are responsible for closely managing their collection calls and letter campaigns which are tailored to specific loan products.

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Loan Servicing Landscape

The majority of loan servicing in the United States is performed by the nation’s money center banks such as Bank of America, Wells Fargo, JPMorgan Chase and Citibank, which together service approximately 54% of all outstanding mortgage loans on one to four-family residences as of December 31, 2010. These bank-owned servicers mainly service prime, performing mortgages and are most effective at routine account management of portfolios with low delinquencies that require limited interaction with the borrowers. The traditional servicer model was constructed to process simple payments and minimize costs, and functioned well in environments characterized by low delinquencies and defaults. However, in the current environment of rising delinquencies, extensive foreclosures and elevated real estate owned activity, traditional servicers are experiencing higher operating costs, and their performance metrics are declining due to the elevated level of foreclosures and liquidation processes. According to CalculatedRisk, from 2007 through 2010, approximately 3.4 million homes were lost to foreclosure and as of September 30, 2010, more than 3.5 million mortgages were in foreclosure or 90+ days delinquent. Given this environment, there is a demonstrated need for high-touch servicers of credit-sensitive assets, resulting in significant growth opportunities for us and other independent high-touch loan servicers.

Servicer Compensation

Loan servicers primarily service loans on which they own the mortgage servicing right, which is referred to as primary servicing. Alternatively, loan servicers may enter into a subservicing agreement with the entity that owns the mortgage servicing right pursuant to which the servicer agrees to service the loan on the owner’s behalf. Loan servicers earn servicing fees pursuant to these mortgage servicing rights and subservicing contracts, and these fees represent the largest source of revenue from loan servicing operations. By purchasing the mortgage servicing right, the loan servicer is generally entitled to receive 25 to 50 basis points annually on the average unpaid principal balance of the loans serviced. Under subservicing arrangements, where the loan servicer does not pay for the mortgage servicing right and is not required to make advancing obligations, the servicer generally receives between 5 and 45 basis points annually on the unpaid principal balance. The servicing and subservicing fees are typically supplemented by incentive fees and ancillary fees. Incentive fees include modification initiation and success fees from the HAMP program and modification or collateral workout related incentives from various pool owners and GSEs. Ancillary fees include late fees, insufficient funds fees, convenience fees and interest income earned on loan payments that have been collected but have not yet been remitted to the owner of the mortgage loan, or float. Loan servicers have additional opportunities to provide value-added services to the owners of the loans they service. These value-added services can include obtaining broker price opinions for valuation of underlying properties, trustee services, real estate owned preservation services and other revenues related to real estate owned sales.

Advances

In the course of servicing delinquent loans, servicers are required to make advances that are reimbursable from collections on the related mortgage loan, or in the event of a non-recoverable advance, from collections on other mortgage loans in the related residential mortgage-backed securities trust.

There are generally three types of advances: P&I Advances, T&I Advances and Corporate Advances.

P&I Advances:  Advances to cover scheduled payments of principal and interest that have not been timely paid by borrowers. P&I Advances serve to smooth the cash flows paid to holders of securities issued by the residential mortgage-backed securities trust.

T&I Advances:  Advances to pay specified expenses associated with the preservation of a mortgaged property or the liquidation of defaulted mortgage loans, including, but not limited to, property taxes, insurance premiums or other property-related expenses that have not been timely paid by borrowers.

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Corporate Advances:  Advances to pay costs and expenses incurred in foreclosing upon, preserving and selling real estate owned, including attorneys’ and other professional fees and expenses incurred in connection with foreclosure and liquidation or other legal proceedings arising in the course of servicing mortgage loans.

A servicer may decide to stop making P&I Advances prior to liquidation of the mortgage loan if the servicer deems future P&I Advances to be non-recoverable. In this circumstance, T&I Advances and Corporate Advances will likely continue in order to preserve existing value of the mortgage loan and complete the foreclosure and real estate owned sale process.

Servicers of Fannie Mae MBS are reimbursed by Fannie Mae for their advances upon completion of the foreclosure sale at which point the mortgage loan is repurchased out of the MBS by Fannie Mae. Servicers of Fannie Mae MBS are not responsible for managing real estate owned. Conversely, servicers of non-agency MBS are obligated under the servicing agreement to make advances through liquidation of the related real estate owned.

Advances are a non-interest bearing asset. Non-bank servicers typically utilize securitizations (i.e., match funded liabilities) to finance their advances. The securitizations are generally non-recourse to the servicer, and the advances are financed at a discount to par accounting for the non-interest bearing nature of the asset. Advance rates for securitizations generally range between 70% to 85% depending upon the rating and structure.

Opportunities under HAMP

In response to the rising level of foreclosures, the United States Department of the Treasury announced the implementation of HAMP in February 2009, which is designed to keep borrowers in their homes. HAMP provides financial incentives to loan servicers and borrowers to successfully modify qualifying residential mortgages. Under the program, servicers receive an up-front fee of $1,000 for each completed modification and an additional $500 if the loan is current, but in risk of imminent default, at the time the borrower enters the HAMP trial period. Servicers also receive “Pay-for-Success” payments of as much as $1,000 each year for up to three years. These fees accrue monthly and are paid annually on the anniversary of the month in which the trial period plan was executed. The annual incentives are predicated on the borrower remaining in good standing (i.e., the borrower must not be more than 2 months delinquent at any time during the year).

Originations Industry Overview

According to Inside Mortgage Finance, total residential mortgage originations in the United States were $1.6 trillion in 2010, a decrease of 13% compared to 2009. Of the 2010 originations, approximately 87% were conforming mortgages guaranteed by government-sponsored enterprises, including Fannie Mae and Freddie Mac, or government agencies, such as the Federal Housing Administration and the Veterans’ Administration. From 2006 to 2010, the annual aggregate principal balance of newly originated mortgage loans that were either insured or guaranteed by government agencies or sold to government-sponsored enterprises or into government securitizations increased from $1.1 trillion to $1.4 trillion, or at a CAGR of 6%.

The United States residential mortgage market consists of a primary mortgage market that links borrowers and lenders and a secondary mortgage market that links lenders and investors. In the primary mortgage market, residential mortgage lenders such as mortgage banking companies, commercial banks, savings institutions, credit unions and other financial institutions originate or provide mortgages to borrowers. Lenders obtain the funds they lend to mortgage borrowers in a variety of ways, including by selling mortgages or mortgage-related securities into the secondary mortgage market. The secondary mortgage market consists of institutions engaged in buying and selling mortgages in the form of whole loans (i.e., mortgages that have not been securitized) and mortgage-related securities. Government- sponsored enterprises, such as Fannie Mae and Freddie Mac, and a government agency, Ginnie Mae, participate in the secondary mortgage market by purchasing

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mortgage loans and mortgage-related securities for investment and by issuing guaranteed mortgage-related securities.

Loan Origination Process

Residential mortgage loans are generally originated through either a direct retail lending network or a mortgage brokerage network.

A direct retail lending network consists of distributed retail branches which are individual branch locations and/or a centralized retail platform. A centralized retail platform is a telephone based platform with multiple loan officers in one location. Typical referral sources for a direct retail lending network include realtors, homebuilders, credit unions, banks, the Internet and refinances from existing servicing portfolios. In a direct lending retail network, the lender controls all loan origination processes, including: sourcing the borrower, taking the application and setting the interest rate, ordering the appraisal, underwriting and processing the loan and closing and funding the loan.

Loans sourced by mortgage brokers are funded by the lender and generally closed in the lender’s name. When originating loans through mortgage brokers, the mortgage broker’s role is to identify the applicant, assist in completing the loan application, gather necessary information and documents and serve as the liaison to the borrower through the lending process. The lender reviews and underwrites the application submitted by the mortgage broker, approves or denies the application, sets the interest rate and other terms of the loan and, upon acceptance by the borrower and satisfaction of all conditions required by the lender, funds the loan. Because mortgage brokers conduct their own marketing, employ their own personnel to complete the loan applications and maintain contact with the borrowers, mortgage brokers represent an efficient loan origination channel.

The length of time from the origination or purchase of a mortgage loan to its sale or securitization generally ranges from 10 to 60 days, depending on a variety of factors including loan volume, product type, interest rates and capital market conditions. An important source of capital for the residential mortgage industry is warehouse lending. These facilities provide funding to mortgage loan originators until the loans are sold to investors in the secondary mortgage loan market.

Types of Mortgage Loans

Mortgage loans generally fall into one of the following five categories: prime conforming mortgage loans, prime non-conforming mortgage loans, government mortgage loans, non-prime mortgage loans and prime second-lien mortgage loans.

Prime Conforming Mortgage Loans:  These are prime credit quality first-lien mortgage loans secured by single-family residences that meet or “conform” to the underwriting standards established by Fannie Mae or Freddie Mac for inclusion in their guaranteed mortgage securities programs.

Prime Non-Conforming Mortgage Loans:  These are prime credit quality first-lien mortgage loans secured by single-family residences that either (1) do not conform to the underwriting standards established by Fannie Mae or Freddie Mac, because they have original principal amounts exceeding Fannie Mae and Freddie Mac limits, which are commonly referred to as jumbo mortgage loans, or (2) have alternative documentation requirements and property or credit-related features (e.g., higher loan-to-value or debt-to-income ratios) but are otherwise considered prime credit quality due to other compensating factors.

Government Mortgage Loans:  These are first-lien mortgage loans secured by single-family residences that are insured by the Federal Housing Administration or guaranteed by the Department of Veterans Affairs and securitized into Ginnie Mae securities.

Non-prime Mortgage Loans:  These are first-lien and certain junior lien mortgage loans secured by single-family residences, made to individuals with credit profiles that do not qualify for a prime loan,

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have credit-related features that fall outside the parameters of traditional prime mortgage loans or have performance characteristics that otherwise expose us to comparatively higher risk of loss.

Prime Second-Lien Mortgage Loans:  These are open- and closed-end mortgage loans secured by a second or more junior lien on single-family residences, which include home equity mortgage loans.

Due to the significant stress in the residential mortgage industry experienced over the last few years, underwriting standards have improved. Some of these improvements include the elimination or significant reduction of mortgage affordability products such as no income verification loans, limited or no documentation loans, option adjustable rate mortgage loans, and non-owner occupied loans. Also, underwriting standards now include higher minimum credit scores and lower maximum loan-to-value ratios than were acceptable under past lending practices. These improvements in underwriting standards should lead to improved performance.

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BUSINESS

Overview

We are a leading residential mortgage company specializing in residential mortgage loan servicing and residential mortgage loan originations. Our business primarily consists of two Operating Segments: Servicing and Originations.

Loan Servicing

We are one of the largest independent loan servicers in the United States. Our servicing portfolio consists of mortgage servicing rights acquired from or subserviced for various third parties as well as loans we originate through our integrated origination platform. As of December 31, 2010, our servicing portfolio included over 389,000 loans with an aggregate unpaid principal balance of $64.2 billion. We service mortgage loans in all 50 states, and we are licensed as a residential mortgage loan servicer and/or a third party debt collector in all states that require such licensing. Our Servicing Segment produces recurring, fee-based revenues based upon contractually established servicing fees.

Servicing fees primarily consist of an amount based on the aggregate unpaid principal balance of the loans serviced and also include ancillary fees such as late fees and insufficient funds fees. In addition, we earn interest income on amounts deposited in collection accounts and amounts held in escrow to pay property taxes and insurance, which we refer to as float income. We also generate incentive fees from owners of the loans that we service for meeting certain loss-mitigation metrics and for arranging successful loss mitigation programs. Moreover, the U.S. federal government pays us incentive fees for loans that we successfully modify within the parameters of the Home Affordable Modification Program, or HAMP. In addition, we leverage our loan servicing business and customer base to provide several complementary services that generate fee-based revenues.

We use a flexible, high-touch servicing model that focuses on personal contact with borrowers and is designed to decrease borrower delinquencies and defaults on mortgages and to increase borrower repayment performance with a goal of home ownership preservation. Our operating culture emphasizes individual collector accountability for asset performance (what we refer to as credit loss ownership) and loss mitigation practices to improve asset performance and cash flow and to reduce credit losses. Our servicing model and operating culture have proven especially valuable in the current distressed residential market, and we have established an excellent track record servicing credit-sensitive loans.

We believe that our demonstrated performance in servicing loans for a government-sponsored enterprise facilitated our acquisitions of two significant mortgage servicing rights portfolios totaling approximately $25.0 billion since November 2008. These two portfolios were previously serviced by other servicers. These acquisitions helped us grow our servicing portfolio from $12.7 billion on December 31, 2007, to $64.2 billion on December 31, 2010, including approximately $25 billion in unpaid principal balance which we boarded in November and December 2010, when we entered into a subservicing agreement with a government-sponsored enterprise. We expect this relationship to generate additional portfolio servicing opportunities in the future.

Loan Originations

We are also one of the few high-touch servicers in the United States with a loan origination platform. We currently originate primarily prime agency and government conforming residential mortgage loans, and we are licensed to originate residential mortgage loans in 49 states. Our Originations Segment diversifies our offering of mortgage services and further stabilizes our revenue stream. In 2009, we originated $1.5 billion in aggregate principal balance entirely consisting of prime residential mortgage loans. During the year ended December 31, 2010, our originations totaled

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$2.8 billion in aggregate principal balance. We originate loans through our three loan origination channels:

•  Consumer Direct Retail Channel—through which we market refinancing and purchase money mortgage loans directly to selected consumers from our centralized call center;

•  Distributed Retail Channel—through which we market refinancing and purchase money mortgage loans directly to consumers from local branches; and

•  Wholesale Channel—through which we market our refinancing and purchase money mortgage loans to third party mortgage brokers.

We originate purchase money loans and refinance existing loans, including loans that we service. Our strategy is to mitigate the credit, market and interest rate risk from loan originations by either selling newly originated loans or placing them in government-sponsored enterprise or government securitizations. We typically sell new loans within 30 days of origination, and we do not expect to hold any of the loans that we currently originate on our balance sheet on a long-term basis. At the time of sale, we have the option to retain the mortgage servicing rights on loans we originate.

Our origination capability differentiates us from other non-bank, high-touch loan servicers without an integrated origination platform by:

•  providing us with an organic source of new loans to service as existing loans are repaid or otherwise liquidated as originated loans serviced by us typically generate higher returns than comparable mortgage servicing rights that we would acquire from a third party;

•  providing an attractive supplementation to our servicing loss mitigation strategies by allowing us to modify and refinance mortgage loans, including loans that we service;

•  creating a diversified source of revenue; and

•  building brand recognition.

Legacy Assets and Other

We also have a legacy asset portfolio, which consists primarily of non-prime and nonconforming residential mortgage loans, most of which we originated from April to July 2007. In November 2009, we term-financed our legacy assets with a non-recourse loan that requires no additional capital or equity contributions. In conjunction with the transaction, we reclassified our legacy assets to “held for investment” on our consolidated balance sheet, which allowed us to eliminate further mark-to-market accounting exposure on these assets. We continue to service these loans using our high-touch servicing model. Additionally, we consolidated certain securitization trusts where it was determined that we had both the power to direct the activities that most significantly impact the VIE’s economic performance and the obligation to absorb losses or the right to receive benefits that could potentially be significant to the VIE, pursuant to new consolidation accounting guidance related to VIEs adopted on January 1, 2010.

History and Operating Structure

We are a Delaware limited liability company. We were formed in 1994 in Denver, Colorado as Nova Credit Corporation, a Nevada corporation. In 1997, we moved our executive offices and primary operations to Dallas, Texas and, in the same year, we changed our name to Centex Credit Corporation. In 2001, Centex Credit Corporation was merged into Centex Home Equity Company, LLC, a Delaware limited liability company. In 2006, FIF HE Holdings, LLC, acquired all of our outstanding membership interests and we changed our name to Nationstar Mortgage, LLC. Nationstar Capital Corporation, a Delaware corporation, is our wholly-owned subsidiary formed solely for the purpose of being a corporate co-issuer of the notes.

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Competitive Strengths

We believe the following competitive strengths contribute to our market position and differentiate us from our competition.

Attractive Business Model with Strong Cash Flow

We have an attractive business model as one of the few high-touch servicers in the United States with an integrated loan origination platform.

Our Servicing Segment produces recurring, fee-based revenues based upon contractually established servicing fees, and we are exposed to minimal credit risk with respect to the mortgage loans that we service. We believe that we continue to demonstrate our ability to produce lower delinquency rates on the loans we service, including credit-sensitive loans, compared to our competitors, and we believe that we will continue to acquire mortgage servicing rights at attractive prices from mortgage investors or provide subservicing for third parties that value our servicing capabilities.

We believe that our Originations Segment differentiates us from other high-touch servicers without an origination platform by providing us with a more cost-effective alternative to purchasing new mortgage servicing rights as the unpaid principal balance of our existing servicing portfolio decreases over time; diversifying and stabilizing our revenue in a variety of interest rate environments; and building brand recognition.

We generate significant cash flow for debt service as a result of the profitability of our Operating Segments. We believe that our focus on asset performance and operational efficiency has enabled us to strengthen our relationships with the government-sponsored enterprises and other third parties and has allowed us to grow our earnings from our Operating Segments.

Substantial Liquidity and Access to Multiple Capital and Funding Sources

We maintain substantial levels of funding and liquidity through multiple capital and funding sources for our Operating Segments. We have access to multiple funding sources, and we believe that our liquidity sources are sufficient to meet our immediate and future needs. These sources include servicing advance lines to finance our Servicing Segment, warehouse lines to finance our Originations Segment and loans from government-sponsored enterprises to facilitate the acquisition of mortgage servicing rights. As of December 31, 2010, we had a total of $706.0 million of unused capacity under our existing servicing advance facilities and origination warehouse lines. We believe that our strong relationships with liquidity providers and our continued ability to access sufficient capital during the recent economic downturn demonstrate the depth of our liquidity and access to capital. See “Management’s Discussion and Analysis of Financial Condition and Results of Operations—Liquidity and Capital Resources” and “Management’s Discussion and Analysis of Financial Condition and Results of Operations—Contractual Obligations.”

Servicing Platform with Loss Mitigation Focus

We believe that, by focusing on personal contact with borrowers, our high-touch servicing approach reduces credit losses and maximizes cash collections for credit-sensitive loans. This highly flexible model allows for customization to meet individual borrower requirements, and is further differentiated by providing personal contact at critical borrower touch points, including via telephone, mail, electronic communications and other personal contact methods. Our approach facilitates strong relationships with borrowers and greater employee accountability for desired performance. We believe that our servicing expertise and focus on optimal outcomes reduces credit impairments and losses to loan investors. We believe that this model presents continued opportunities for growth.

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Scalable Platform and Established Track Record

Establishing a servicing platform requires significant initial capital investments, infrastructure, licensing and expertise to properly service credit-sensitive loans, which creates substantial barriers to entry. We operate a highly scalable platform, with the capacity to add up to a total of approximately $15 billion of unpaid principal balance to our servicing operations within 90 to 120 days with minimal incremental fixed costs. We can service these additional accounts with our existing infrastructure, real estate and technology platform.

Additionally, we have used our high-touch servicing model and our mix of proprietary and commercially available technology solutions to establish a track record of superior performance in servicing credit-sensitive loans. The unpaid principal balance of the loans we serviced increased 406% from December 31, 2007 to December 31, 2010, primarily through acquiring mortgage servicing rights and entering into subservicing agreements. We believe these acquisitions and agreements can be attributed to our established track record in servicing credit-sensitive residential mortgage loans, and we believe that our track record, together with our scalable platform, positions us well relative to our competitors to acquire similar portfolios in the future.

Culture of Credit Loss Ownership and Accountability

Since our inception, our operating culture has emphasized superior operational and financial performance, credit loss ownership (our term for individual collector accountability for asset performance), employee development and customer relations. We establish financial and operational goals across all levels of the organization and compensation for all of our employees is based upon achieving the desired results. As a result, we have a streamlined organizational structure that allows us to react to business needs and changes in an expeditious manner. We hire recent college graduates and teach them our business through a systematic training program. We primarily develop existing employees for management positions. We strongly endorse promotion from within and routinely identify and place senior level staff in our Manager in Training program as a developmental tool to prepare them for supervisory positions. Supervisors typically then rotate through progressively more complex management assignments to improve both their technical and managerial proficiency.

We believe that our culture of credit loss ownership and accountability has enabled us to outperform the industry. As of December 15, 2010, according to Loan Performance.com, our 60 or more day delinquency rate for our legacy assets (as a percentage of original balance) was approximately 12% while the delinquency rate for the ABX 07-2 Mortgage Index was approximately 24%.

Stable and Seasoned Management Team

Our senior management team is comprised of experienced mortgage industry executives with an average of approximately 25 years in the industry and a track record of generating financial and operational improvements. Several members of our management team have held senior positions at other residential mortgage companies. In addition, our senior management team has remained in place through multiple business cycles and has a demonstrated ability to adapt to changing market conditions. We believe that the experience of our senior management team and its management philosophy are significant contributors to improving the operating performance of our Company.

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Our Strategy

Our primary goal is to increase the value of our loans and our clients’ loans by reducing delinquencies and credit losses. This goal is achieved through our culture, processes and expertise. We plan to grow our revenue and operating cash flow by employing the following business strategies:

Capitalizing on Industry Opportunities

We believe we are well positioned to benefit from the current trends in the residential mortgage industry. The disruption in the mortgage industry has resulted in limited access to funding and capital, lower than anticipated performance of residential portfolios and a strong demand for high-touch servicing. We believe that competitors with significant residential exposure or limited access to capital have shifted their operations to selling residential real estate assets, including mortgage servicing rights. This allows existing strong servicers the opportunity to acquire or subservice additional portfolios at attractive valuations. Additionally, due to a variety of economic factors, residential loan delinquencies and related losses are at historical highs prompting government-sponsored enterprises and other owners of residential mortgage loans to focus on home ownership preservation and servicing for superior credit performance. The heightened focus in these areas has led to a strong demand for high-touch servicers by these owners. Also, we believe that many of the largest loan servicers—who are experiencing unprecedented levels of delinquencies and losses—do not have sufficient internal capacity to perform high-touch servicing in their own portfolios and, as a result, may look to independent high-touch servicers to assist them in servicing their portfolios. As a result, we believe that there will continue to be strong demand for experienced high-touch servicers with a proven ability to improve loan performance. We also believe that there will be significant opportunities to continue to acquire mortgage servicing rights at attractive prices.

Maintaining and Growing Our Steady Fee-Based Servicing Portfolio

Our servicing business produces recurring, fee-based revenues based upon contractually established servicing fees. We intend to continue to utilize our established and scalable servicing platform to grow our servicing operations organically and through acquisitions. We believe that we will continue to benefit from our strong relationship with government-sponsored enterprises and other third party investors, which we believe will enable us to acquire additional servicing rights at attractive prices and subservicing contracts in order to grow our business. Additionally, we have invested in our loan administration and customer service servicing divisions to accommodate the increased scale and size of our portfolio, which allows us to service newly originated prime mortgage loans at attractive return levels in a variety of operating and economic environments.

Continuing To Expand Our Originations Platform

Our Originations Segment diversifies our offering of mortgage services and further stabilizes our revenue stream by providing us with a natural hedge against fluctuations in prevailing interest rates. We have a diversified, multi-channel strategy to continue to build our prime originations platform in order to organically replace servicing run-off. Through our origination platform, we are also able to create loan servicing assets at valuation levels below where our servicing competitors can purchase comparable mortgage servicing rights. Also, we can recapture loan payoffs in our existing servicing portfolio by providing origination services to our existing borrowers.

We believe that there are significant opportunities to originate loans for servicers and other financial institutions lacking origination capacity, and we intend to capitalize on these opportunities by expanding our retail channels. Our expansion efforts will focus primarily on purchase money lending, which is a stable origination source through various interest rate cycles. Unlike certain competitors who are required to utilize third party intermediaries in transactions with the government-sponsored enterprises and Ginnie Mae, we are a direct lender with the capability to sell loans directly to the government-

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sponsored enterprises and to securitize loans directly with Ginnie Mae. We believe that this capability allows us to control the credit quality of the loans we originate, thereby reducing our repurchase risk.

Engaging in Opportunistic Acquisitions and New Business Opportunities

There are numerous banks, insurance companies and other financial entities that have significant exposure to the residential mortgage sector. Our management, together with our dedicated servicing and origination relationship teams and our sponsor, Fortress Investment Group LLC, or Fortress, have extensive business and corporate expertise, receive numerous requests to review potential acquisition opportunities and continually conduct due diligence to identify potential opportunistic acquisitions. We are currently seeking out opportunities and believe there will continue to be significant opportunities to take advantage of the dislocation in the residential mortgage sector and acquire assets at attractive valuations. We intend to opportunistically grow our business through acquiring mortgage servicing rights, subservicing rights, servicing platforms and originations platforms. We may purchase assets and/or platforms of significant size. We believe there are several assets and platforms currently for sale in our industry and we are currently in the process of pursuing a number of such opportunities.

Our Operations

We are a leading residential mortgage company specializing in residential mortgage loan servicing and prime residential mortgage loan originations. Our business primarily consists of two Operating Segments: Servicing and Originations.

Servicing

We are one of the largest independent loan servicers in the United States. As of December 31, 2010, our servicing portfolio included over 389,000 loans with an aggregate unpaid principal balance of $64.2 billion. The servicing portfolio consists of loans originated by our integrated origination platform as well as mortgage servicing rights either acquired or subserviced from various third parties. We service these loans using a high-touch servicing model designed to increase borrower repayment performance and home ownership preservation and decrease borrower delinquencies and defaults. The unpaid principal balance of the loans we serviced increased 406% from December 31, 2007 to December 31, 2010, primarily through acquiring mortgage servicing rights and entering into subservicing agreements. As set forth in the chart below, revenues from our Servicing Segment were $74.6 million, $100.1 million and $182.8 million for 2008, 2009 and 2010.

	Year Ended December 31,
	2008		2009		2010
Servicing Portfolio (dollars in millions):
Unpaid principal balance (by investor):
Special Servicing	$	1,218	$	1,554	$	4,893
Government-sponsored enterprises		10,709		24,235		48,861
ABS		9,415		7,875		10,422
Total unpaid principal balance	$	21,342	$	33,664	$	64,176
Summary Financial Data (dollars in thousands):
Total revenue	$	74,601	$	100,133	$	182,842
Net income (loss)		14,718		7,502		14,230

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Key performance metrics for our servicing portfolio are shown in the chart below:

	December 31,
	2008			2009			2010
	(dollars in millions, except for average loan amount)
Loan count—servicing		159,336			230,615			389,172
Ending unpaid principal balance	$	21,342		$	33,664		$	64,176
Average unpaid principal balance	$	12,775		$	25,799		$	38,653
Average loan amount	$	133,943		$	145,977		$	164,904
Average coupon		7.49	%		6.76	%		5.74	%
Average FICO		588			644			631
60+ DQ (% of loans)		13.1	%		19.9	%		17.0	%
Total prepayment speed (12 month CPR)		16.2	%		16.3	%		13.3	%

Our Servicing Model

Our servicing business produces recurring, fee-based revenues based upon contractually established servicing fees. Servicing fees are primarily based on the aggregate unpaid principal balance of the loans serviced and the payment structure varies by loan source and type. For loans that we do not originate, the services we provide and the fees we receive vary depending on our agreement with the owner of the mortgage loan or the primary servicer, as the case may be. These include differences in rate of servicing fees as a percentage of unpaid principal balance and in the structure of advances. For a more detailed description of advances, see “Industry—Servicing Industry Overview.”

Our operating culture emphasizes credit loss ownership and loss mitigation practices to improve asset performance and cash flow and to reduce credit losses. We seek to ensure that each loan that we service is paid in accordance with its terms. In circumstances where the borrower is, or is at risk of becoming, delinquent or in default, we employ both industry standard and proprietary strategies to work proactively with borrowers in an effort to bring borrowers current in their payments, avoiding foreclosure and keeping borrowers in their homes. We refer to this frequent interaction with borrowers—via phone, Internet, mailings, and personal contact methods—as high-touch loan servicing. Our servicing model and operating culture have proven especially valuable in the current high- delinquency environment.

To ensure a customer-centric focus, we have separate account resolution and foreclosure prevention groups for each type of owner of mortgage loans for whom we service. We maintain centralized loan administration and default management groups, which provide services to all customers.

We are dedicated to a culture of customer service and credit ownership for our servicing employees. We hire recent college graduates and train them in the mortgage servicing business by systematically rotating them through a variety of our business teams. Our new employees initially work on performing loans and loans that are less than 30 days past due. After gaining experience in this environment, we train our employees in the more challenging 60 and 90 day delinquent categories, where we particularly emphasize a culture of ownership and accountability.

To select the best resolution option for a delinquent loan, we perform a structured analysis of all options using information provided by the borrower as well as external data. We use recent broker price opinions, automated valuation models and other methods to value the property. We then determine the option with the best expected outcome for the owner of the mortgage loan. In the current environment, loan modifications often provide a better outcome for owners of mortgage loans than foreclosure. We believe that our high-touch servicing model is more effective in keeping borrowers in their homes and avoiding foreclosure. This is a win-win situation for both the owners of mortgage loans and the borrowers that we serve. We conducted over 41,000 loan modifications in 2010 as compared to over 29,000 in 2009. The majority of loans modified were delinquent, although we modified some performing loans proactively under the American Securitization Forum guidelines.

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The most common term modified is the interest rate, while some modifications also involve the forbearance or rescheduling of delinquent principal and interest. Of the loans we modified in 2010, we modified over 12,000 mortgage loans pursuant to the MHA. Under the MHA, we receive an annual financial incentive for up to four years, provided certain conditions are met. At the same time, we forego uncollected late fees incurred in the year of modification for each qualifying loan modification.

The government-sponsored enterprises act as a source of liquidity for the secondary mortgage market and contract with various independent servicers to service their mortgage loan portfolio. In transactions with government-sponsored enterprises, we are required to follow specific guidelines that impact the way we service and originate mortgage loans including:

•  our staffing levels and other servicing practices;

•  the servicing and ancillary fees that we may charge;

•  our modification standards and procedures; and

•  the amount of advances reimbursable.

During December 2009, Nationstar entered into a strategic relationship with a government-sponsored enterprise, which contemplates, among other things, significant mortgage servicing rights and subservicing transfers to Nationstar upon terms to be determined. Under this arrangement, if certain delivery thresholds have been met, the government-sponsored enterprise may require Nationstar to establish an operating division or newly created subsidiary with separate, dedicated employees within a specified timeline to service such mortgage servicing rights and subservicing. After a specified time period, the government-sponsored enterprise may purchase the subsidiary at an agreed upon price.

Our Servicing Portfolio

Our servicing portfolio consists of mortgage servicing rights that we retain from loans that we originate; mortgage servicing rights that we acquire from third party investors, including in transactions facilitated by government-sponsored enterprises, such as Fannie Mae and Freddie Mac; and mortgage servicing rights that we manage through subservicing contracts with third party investors. Our loan servicing operations are located in Lewisville, Texas.

The charts below illustrate the composition of our servicing portfolio by investor and product type as of December 31, 2010.

The loans that we service have typically been securitized—meaning that the originator of the loan has pooled the loan together with multiple other loans and then sold securities to third party investors that are secured by loans in the securitization pool. We typically service loans that have been securitized pursuant to one of two arrangements. We primarily service loans by purchasing the right to service the loans, which is referred to as a “mortgage servicing right,” from the owner of the loan, or

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retaining the mortgage servicing right related to the loans that we originate. Alternatively, we may enter into a subservicing agreement with the entity that owns the mortgage servicing right pursuant to which we agree to service the loan on behalf of the primary servicer. We earn servicing fees pursuant to these servicing and subservicing contracts, and these fees represent the largest source of revenue from our loan servicing operations. In the majority of cases, we purchase the mortgage servicing rights, which generally entitle us to receive 25 to 50 basis points annually on the average unpaid principal balance of the loans serviced, with a weighted average across our servicing portfolio of approximately 35 basis points. Under subservicing arrangements, where we do not pay for the mortgage servicing rights and are not required to make advancing obligations, we generally receive between 5 and 45 basis points annually on the unpaid principal balance. The servicing and subservicing fees are supplemented by related income, including late fees, insufficient funds fees, fees from borrowers who pay by telephone and interest income earned on funds held in escrow to pay taxes and insurance and loan payments that we have collected but have not yet remitted to the owner of the loan.

As set forth in the chart below, our servicing portfolio is diversified with respect to geography. As of December 31, 2010, 66.2% of the aggregate unpaid principal balance of the loans we service were secured by properties located in the ten largest states by population. Therefore, we are not as susceptible to local and regional real estate price fluctuations as servicers whose portfolios are more concentrated in a single state or region.

Key Drivers of Revenue

Three key factors drive the amount of revenue we generate from our Servicing operations: aggregate unpaid principal balance, delinquency rates and prepayment speed.

Aggregate Unpaid Principal Balance:  Aggregate unpaid principal balance is a key revenue driver. As noted earlier, servicing fees are usually earned as a percentage of unpaid principal balance, and growth in the unpaid principal balance of a portfolio means growth in servicing fees. Additionally, a larger servicing portfolio generates increased ancillary fees and leads to larger custodial balances that generate greater float income. A larger servicing portfolio also drives increases in expenses. We will also incur additional interest expense to finance the servicing advances as the size of our portfolio increases. Servicers of government-sponsored enterprises collect servicing fees only on performing loans while servicers of non-government-sponsored enterprise residential mortgage-backed securities, are entitled to servicing fees on both performing loans and delinquent loans. The servicing fee relating

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to delinquent loans is accrued and paid from liquidation proceeds ahead of the reimbursement of advances.

Delinquency Rates:  Delinquency rates also have a significant impact on our results of operations. Delinquent loans are more expensive to service than performing loans because our cost of servicing is higher and, although credit losses are generally not a concern for our financial results, our advances to investors increase, which results in higher financing costs. Performing loans include those loans that are current or have been delinquent for less than 30 days in accordance with their original terms and those loans on which borrowers are making scheduled payments under loan modifications, forbearance plans or bankruptcy plans. We consider all other loans to be delinquent.

When borrowers are delinquent, the amount of funds that we are required to advance to the owners of the loans on behalf of the borrowers increases. While the collectability of advances is generally not an issue, we do incur significant costs to finance those advances. We intend to utilize both securitization and revolving credit facilities to finance our advances. As a result, increased delinquencies result in increased interest expense.

The cost of servicing delinquent loans is higher than the cost of servicing performing loans primarily because the loss mitigation techniques that we employ to keep borrowers in their homes are more costly than the techniques used in handling a performing loan. When loans are performing, we have limited interaction with the borrowers, and relatively low-cost customer service personnel conduct most of the interaction. Once a loan becomes delinquent, however, we must employ our loss mitigation capabilities to work with the borrower to return the loan to performing status. These procedures involve increased contact with the borrower and the development of forbearance plans, loan modifications or other techniques by highly skilled consultants with higher compensation. On those occasions when loans go into foreclosure, we incur additional costs related to coordinating the work of local attorneys to represent us in the foreclosure process. Finally, when we foreclose on loans, we employ specialists to service the real estate and manage the sale of those properties on behalf of our investors. A significant increase in delinquencies would cause us to increase our activities in these areas resulting in increased operating expenses.

Prepayment Speed:  A significant driver of our business is prepayment speed, which is the measurement of how quickly unpaid principal balance is reduced. Items reducing unpaid principal balance include normal monthly principal payments, refinancings, voluntary property sales and involuntary property sales such as foreclosures or short sales. Prepayment speed impacts future servicing fees, amortization of servicing rights, float income, interest expense on advances and compensating interest expense. When prepayment speed increases, our servicing fees decrease faster than projected due to the shortened life of a portfolio. The converse is true when prepayment speed decreases.

Prepayment speed affects our float income. Decreased prepayment speed typically leads to our holding lower float balances before remitting payoff collections to the investor and lower float income due to a lower invested balance. Lower prepayments have been associated with higher delinquency rates, higher advance balances and interest expense.

Servicing Organization

The servicing organization is comprised of four primary functional areas as detailed below.

Loan Administration:  The loan administration area includes the customer service, payment processing, loan accounting, escrow, taxes and insurance and document administration groups. The customer service group is primarily responsible for handling borrower inquiries including date of last payment, date of next payment due, arranging for a payment, refinance assistance and standard escrow and balance questions. In December 2010, the customer service group managed over 110,000 calls and service inquiries. The payment processing group is responsible for posting borrower payments and managing any payment-related issues. The majority of the borrower payments are

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posted electronically via our lock-box operation, Western Union, ACH or web-based payments. The loan accounting group manages the payoff of loans. The escrow, taxes and insurance group manage all escrow balances and the external vendors we utilize for property insurance and tax tracking. The document administration group manages the lien release process upon the payoff of a loan and the tracking of loan documents for new originations.

Account Resolution:  The account resolution group is responsible for early stage collections (borrowers who are 1 to 59 days delinquent). For accounts where payments are past due but not yet delinquent (less than 30 days past due), we use a behavioral scoring methodology to prioritize our borrower calling efforts. The key drivers of behavioral score are payment pattern behavior (i.e., if the borrower historically has made their payment on the 5th of each month and that pattern changes more attention will be paid to the borrower) and updated credit scores. For accounts 31 to 59 days delinquent, collectors are assigned individual accounts and are charged with making contact with the delinquent borrower to understand the reason for delinquency and attempt to collect a payment or work on an alternative solution. In the account resolution group, we use a combination of predictive dialer technology and account level assignments to contact the borrowers. The primary objective of this group is to reduce delinquency levels.

Foreclosure Prevention:  The foreclosure prevention group, commonly referred to in the industry as loss mitigation, is responsible for late stage collections (borrowers who are 60 or more days delinquent). The primary focus of this group is reducing delinquency levels. All accounts in this group are assigned to individual collectors loss mitigators. The primary role of the collector loss mitigator is to contact the borrower and understand the reasons for the borrower’s delinquency and the borrower’s desire and ability to stay in their house. The foreclosure prevention group performs most of our government and other loan modifications.

Default Management:  The default management area includes the foreclosure, bankruptcy, real estate owned and claims processing groups. The foreclosure group manages accounts involved in the foreclosure process. In the late stage delinquency status, we will initiate foreclosure proceedings in accordance with state foreclosure timelines. Accounts in the foreclosure group are assigned to foreclosure specialists based on a state-specific assignment. The primary focus of the foreclosure group is to perform the foreclosure process in accordance with the state timelines. Any account which has filed bankruptcy is assigned to a bankruptcy specialist who will administer the bankruptcy plain proceedings in accordance with applicable law and in conjunction with an outsourcing firm. The real estate owned group manages properties within the servicing portfolio that have completed the foreclosure process. We use both internal and external resources to manage the disposition of the real estate owned properties. The primary goal of the real estate owned team is to dispose of the property within an acceptable timeframe at the lowest possible loss.

Originations

We are one of the few high-touch servicers in the United States with a loan origination platform. We are licensed to originate residential mortgage loans in 49 states and have obtained all required federal approvals to originate FHA and conventional loans. We currently only originate prime agency and government conforming residential mortgage loans, which we either sell servicing released to other secondary market participants, which we refer to as conduits, or securitize through the issuance of Fannie Mae, Freddie Mac or Ginnie Mae bonds. As such, we minimize any credit or interest rate risk by not retaining loans on our balance sheet for more than approximately 30 days beyond funding. As set forth in the chart below, revenues from our Originations Segment were $22.6 million, $55.6 million and $85.5 million for 2008, 2009 and 2010, respectively. The significant decrease in origination volume from 2007 to 2008 resulted from our decision to move from the non-prime market in the latter portion of 2007 to the prime agency and government conforming residential mortgage market. Origination volumes in 2009 and 2010 increased significantly as we expanded our prime market footprint.

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	Year Ended December 31,
	2008			2009		2010
Origination Volume ($ in millions):
Retail	$	538		$	1,093	$	1,608
Wholesale		4			386		1,184
Total Originations	$	542		$	1,479	$	2,792
Summary Financial Data ($ in thousands):
Total revenue	$	22,574		$	55,593	$	85,540
Net income (loss)		(7,590	)		8,884		662

Our Originations Platform

We originate loans through our three loan origination channels: Consumer Direct Retail, Distributed Retail and Wholesale. Our largest channel is our Consumer Direct Retail channel which operates as a centralized call center. Our second largest channel, the Wholesale channel, involves brokers sourcing borrowers for us. Our smallest and newest channel is our Distributed Retail channel, which includes traditional retail branches with loan officers who source loans primarily from realtors and builders. We currently have twelve retail locations in Texas, Alabama and Tennessee and, while it is our newest channel, we believe the Distributed Retail channel represents a significant growth opportunity for us. Our multi-channel origination strategy enables us to diversify our originations without becoming overly reliant on any single segment of the mortgage loan market.

We originate purchase money loans and refinance existing loans, including those that we service. Our strategy is to mitigate the credit, market and interest rate risk from loan originations by either selling newly originated loans or placing them in government-sponsored enterprise or government securitizations. We typically sell new loans within 30 days of origination, and we do not expect to hold any of the loans that we currently originate on our balance sheet on a long-term basis. At the time of sale, we have the option to retain the mortgage servicing rights on loans we originate.

Our origination capability differentiates us from other non-bank, high-touch loan servicers without an integrated origination platform by:

•  providing us with an organic source of new loans to service as existing loans are repaid or otherwise liquidated—originated loans serviced by us generate higher returns than comparable mortgage servicing rights that we would acquire from a third party;

•  providing an attractive complement to servicing by allowing us to modify and refinance mortgage loans, including loans that we service;

•  creating a diversified source of revenue that we believe will remain stable in a variety of interest rate environments; and

•  building brand recognition.

Originations Organization

Each of our loan origination channels has dedicated operations, support and fulfillment functions (processing, underwriting, closing and shipping) which are primarily performed at our offices in Lewisville, Texas. As part of our efforts to manage credit risk and enhance operating efficiencies, the underwriting, closing, funding and shipping for all of our originations channels are managed centrally. Centralizing these functions is designed to enable us to control loan quality, loan processing times, cost and, ultimately, borrower satisfaction. Additionally, to maintain independence from the sales

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organization, we have the underwriting function report directly to the Chief Financial Officer. Our three mortgage loan originations channels are discussed in more detail below:

Retail Originations—Consumer Direct

In the year ended December 31, 2010, our largest originations channel was our Consumer Direct Retail channel. We employ a single centralized call center strategy leveraging multiple potential borrower lead sources. In our Consumer Direct Retail channel, each sales team typically consists of between 10 and 12 mortgage professionals managed by a sales leader. Three to four sales leaders report to a senior vice president responsible for the specific lead source.

Our primary divisions within our Consumer Direct Retail channel include Renewal, New Customer Acquisition, Centralized Purchase and Strategic Alliances. Each division specializes in meeting the needs of their specific target borrowers. This strategy provides a flexible organizational structure capable of shifting to new opportunities quickly. The four divisions of our Consumer Direct Retail channel are as follows:

Renewal:  Focuses on retaining current borrowers in our servicing portfolio and utilizes an integrated approach with our Servicing Segment to capture borrowers who either qualify to refinance their current mortgage or who take action indicating they may be paying off their loan. The Renewal teams receive leads for borrowers from telemarketing, live transfers and scheduled callbacks from Customer Service and website programs.

New Customer Acquisition:  Focuses on generating new mortgage business from prospective borrowers. We use credit bureau modeling to identify borrowers who are likely to be in the market for and likely to qualify to refinance their existing mortgage loan. Marketing channels include telemarketing, direct marketing, Internet lead aggregators, credit bureau triggers such as mortgage inquiries and website programs.

Purchase:  Focuses on meeting the purchase needs of borrowers through a centralized sales force that focus on real estate owned financing programs, relocation lending and business to business and a decentralized sales force located in real estate offices in various states. All fulfillment operations are done through a centralized group. Our marketing channels include both consumer and business strategies such as e-mail or newsletter campaigns, flyers, websites and other direct marketing programs.

Strategic Alliances (Partner Plus):  Focuses on serving the needs of strategic and joint marketing partners who, in many cases, do not have the originations capabilities to provide refinancing for their own portfolios. Currently, we are providing origination services to several servicers without origination capability. In many instances, these alliances involve providing certain incentives for the borrower to refinance (e.g., payment of closing fees). These programs typically begin with a direct mail announcement of the partnership followed by direct marketing campaigns to increase borrower responses.

Wholesale Originations

In the year ended December 31, 2010, our Wholesale channel was our second largest originations channel. The primary business strategy of the Wholesale channel is to acquire high-quality servicing at a reduced price through a network of non-exclusive relationships with various approved mortgage companies and mortgage brokers. The Wholesale channel is comprised of seven sales regions throughout the United States, each staffed with a regional sales manager, and three centralized sales regions that operate out of our offices in Lewisville, Texas. Each region generally has 8-12 account executives whose primary responsibility is to source and service mortgage brokers. We provide a variety of conforming prime mortgage loans to our brokers to allow them to better service their borrowers.

Mortgage brokers identify applicants, help them complete a loan application, gather required information and documents, and act as our liaison with the borrower during the lending process. We review and underwrite an application submitted by a broker, accept or reject the application, determine

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the range of interest rates and other loan terms, and fund the loan upon acceptance by the borrower and satisfaction of all conditions to the loan. By relying on brokers to market our products and assist the borrower throughout the loan application process, we can increase loan volume through our Wholesale channel with proportionately lower increases in overhead costs compared with the costs of increasing loan volume in loan originations through our retail channels.

New brokers are sourced through our account executives, industry trade shows forums and our website. The broker approval process is critical to maintaining a high quality network of brokers. Brokers must meet various requirements and must complete the broker application package, provide evidence of appropriate state licenses, articles of incorporation, financial statements, resumes of key personnel and other information as needed. The Wholesale operations team reviews all submitted materials to determine whether the broker should be approved. The broker application is reviewed and investigated by our quality control and risk management department before final approval is provided. The process is designed to ensure that borrowers we acquire through our Wholesale channel are working with reputable and legitimate mortgage brokers.

Our ongoing investment in technology has allowed us to provide our broker network with the ability to obtain instantaneous online loan decisions, product options and corresponding pricing. We believe that the utility and convenience of online loan decisions and product options are a value-added service that has and will continue to solidify our business relationships. In addition, our website provides our brokers with loan status reports, product guidelines, loan pricing, interest rate locks and other added features. We expect to continue to adapt web-based technologies to enhance our one-on-one relationships with our brokers.

Retail Originations—Distributed Retail

The Distributed Retail channel is our newest origination channel. The primary strategy within the Distributed Retail channel is to expand our purchase money mortgage loan capability. Purchase money mortgage loans involve the purchase of a property. We believe that having a purchase mortgage strategy is an integral part of growing our originations platform. In order to pursue this strategy, we believe it is necessary to establish retail branches to develop relationships with traditional business partners such as realtors and builders. Distributed Retail strategies focused on purchase money mortgage loan volume and higher overall credit quality volume and are less susceptible to changing interest rate environments.

The Distributed Retail channel aims to promote sales growth without compromising credit quality primarily through the use of centralized underwriting and through the decentralized processing and closing (maintained at the originating branch). Mortgage professionals develop relationships with local realtors and builders in their respective markets. Realtors and builders then refer their borrowers to us to facilitate the home purchase. Marketing primarily supports these business-to-business relationships with emails, flyers, open houses, trade show support and other direct marketing efforts.

We currently have twelve retail locations in Texas, Alabama and Tennessee. We plan to continue to seek attractive opportunities to open new branches. Each branch is expected to have ten to twelve mortgage professionals, one to two loan processing specialists and a branch manager.

Technology

In the vast majority of cases, our key, critical systems are hosted, managed and maintained by our in-house Information Technology team. Our key systems consist of a combination of vendor developed applications as well as internally developed proprietary systems. On our most critical vendor developed applications (OPUS, XpressQual, TMO, LSAMS and FORTRACS) we maintain license rights to the source code to enable in-house customization of these systems to meet our business needs in a time effective manner.

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Servicing

For our Servicing Segment, our system of record is LSAMS, which we use for all loan accounting functions, claims functions and supports our Customer Service functions. Our early stage account collection efforts are focused and prioritized through the use of ESP, our proprietary early delinquency score model, used to identify higher risk accounts. Our collections and loss mitigation efforts are supported by Remedy, a proprietary default management system which, along with our proprietary Net Present Value engine and our proprietary Property Valuation Management system, enables our loan resolution personnel to guide our borrowers to the optimal economic workout alternative based on the unique factors of each borrower’s situation. For our foreclosure and bankruptcy processes, we use the FORTRACS system, which integrates with the Lendstar system to enable online communications and case tracking with our attorney network. For properties whereby we complete foreclosure and take them into real estate owned status, we utilize the web-based real estate owned management system REOTrans to manage the marketing and disposition of our owned real estate. To support our Investor Reporting functions, we use a combination of systems that include LSAMS and Lewtan ABS, a vendor hosted system. We also have a website, www.NationstarMtg.com, that is a fully automated system to apply and process mortgage loan applications and that our existing borrowers can access to receive information on their account.

Originations

The critical systems that support our loan origination activities include:

•  MLS (Marketing Lead System), our proprietary marketing lead system which routes, tracks and delivers leads to our loan officers, who we refer to as our mortgage professionals;

•  OPUS, a web-based point-of-sale system that provides product eligibility and pricing to our retail sales force;

•  TMO, our loan origination system used for loan processing, underwriting and closing;

•  XpressQual, a web-based point-of-sale system that provides product eligibility and pricing to our wholesale brokers and allows them to submit loans to us online;

•  www.NationstarBroker com, our website for wholesale brokers to receive information on our products and services;

•  CLASS, our proprietary system used to manage our sales relationships and licensing of our wholesale brokers;

•  ODE, a rules-based pricing and eligibility engine that is integrated with OPUS, XpressQual and TMO;

•  High Cost Fee Engine, our proprietary compliance fee engine that enforces both federal and local high cost and fee limits throughout the loan originations process; and

•  CLT (Compliance License Tracker), our proprietary system that maintains and tracks all mortgage professionals locational licensing to ensure that leads and applications are only processed by properly licensed mortgage professionals.

For our Retail origination channels, the loan origination process starts when a lead is imported (or accepted) into our Marketing Lead System (MLS), a propriety system that our mortgage professionals use to manage the initial borrower contact process. Once a mortgage professional has made contact with a potential borrower, the mortgage professional moves the lead into OPUS, our web-based point-of-sale system. Here, our mortgage professionals capture the necessary loan application information, obtain credit reports to determine full product eligibility and establish pricing to facilitate the sales process. Once our mortgage professionals have helped our borrowers determine

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the program and pricing that meets their needs, the loan application is transferred into TMO, our loan origination system where we complete the loan process, underwrite the loan, prepare the closing documents and complete the loan process.

For our Wholesale origination channel, we provide our brokers a web-based point of sale system, XpressQual, to use to access product eligibility and pricing and to submit loans online. We also use TMO in this channel for the processing, underwriting and closing functions. Through XpressQual, our brokers have access to a web-based portal where they can upload their loan applications to determine product eligibility and loan pricing. Once they select a program and price, the broker is able to submit the file to us for processing as well as lock the rate using XpressQual. As in our retail origination channels, once submitted for processing, the file is transferred into TMO to verify the application information, clear conditions, underwrite and close the loan. Supporting OPUS, XpressQual and TMO, we also utilize a vendor developed rules-based pricing and eligibility engine called ODE as well as a proprietary compliance fee engine that enforces high cost and fee limits throughout the entire originations process. There is also a Compliance License Tracker system that maintains and tracks all mortgage professional and location level licensing. All systems are fully integrated and share information to ensure complete, up-to-date and accurate information for reporting purposes.

To protect our business in the event of disaster, we have implemented a disaster recovery data facility in a co-location in Irving, Texas where we maintain near real-time replication of all critical servicing systems and data.

Employees

As of December 31, 2010, we had a total of 1,954 employees, all of which are based in the United States. None of our employees are members of any labor union or subject to any collective bargaining agreement and we have never experienced any business interruption as a result of any labor dispute. Our employees are allocated among our business functions as follows:

•  60% are in Servicing;

•  35% are in Originations;

•  5% are in support functions, including Human Resources, Accounting and other corporate functions.

In our Servicing Segment, we hire recent college graduates and teach them our high-touch servicing model. Our loan servicers and debt collectors follow a training program in which they first service performing loans and slightly delinquent loans. As they gain experience, they service more delinquent loans and assume increased personal responsibility for servicing a certain set of loans and contacting certain borrowers.

In our Originations Segment, we hire experienced prime mortgage originators and provide them with training to acclimate them to Nationstar, as well as compliance and regulatory training.

Regulation

Our business is subject to extensive federal, state and local regulation. Our loan origination, loan servicing and debt collection operations are primarily regulated at the state level by state licensing authorities and administrative agencies. Because we do business in all fifty states and the District of Columbia, we, along with certain of our employees who engage in regulated activities, must apply for licensing as a mortgage banker lender, loan servicer and/or debt collector, pursuant to applicable state law. These state licensing requirements typically require an application process, processing fees, background checks and administrative review. Our servicing operations center in Lewisville, Texas is licensed (or maintains an appropriate statutory exemption) to service mortgage loans in all fifty states

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and the District of Columbia. Our retail loan origination branch is licensed to originate loans in at least the states in which it operates, and our direct origination branch is licensed to originate loans in 49 states and the District of Columbia. From time to time, we receive requests from states and other agencies for records, documents and information regarding our policies, procedures and practices regarding our loan origination, loan servicing and debt collection business activities, and undergo periodic examinations by state regulatory agencies. We incur significant ongoing costs to comply with these licensing requirements.

While the U.S. federal government does not primarily regulate loan originations, the federal Secure and Fair Enforcement for Mortgage Licensing Act of 2008, or the SAFE Act, requires all states to enact laws that require all United States sales representatives to be individually licensed or registered if they intend to offer mortgage loan products. These licensing requirements include enrollment in the Nationwide Mortgage Licensing System, application to state regulators for individual licenses, a minimum of 20 hours of pre-licensing education, an annual minimum of eight hours of continuing education and the successful completion of both national and state exams.

In addition to licensing requirements, we must comply with a number of federal consumer protection laws, including, among others:

•  the Gramm-Leach-Bliley Act, which requires us to maintain privacy with respect to certain consumer data in our possession and to periodically communicate with consumers on privacy matters;

•  the Fair Debt Collection Practices Act, which regulates the timing and content of debt collection communications;

•  the Truth in Lending Act and Regulation Z thereunder, which require certain disclosures to the mortgagors regarding the terms of the mortgage loans;

•  the Fair Credit Reporting Act, which regulates the use and reporting of information related to the credit history of consumers;

•  the Equal Credit Opportunity Act and Regulation B thereunder, which prohibit discrimination on the basis of age, race and certain other characteristics, in the extension of credit;

•  the Homeowners Protection Act, which requires the cancellation of mortgage insurance once certain equity levels are reached;

•  the Home Mortgage Disclosure Act and Regulation C thereunder, which require financial institutions to report certain public loan data;

•  the Fair Housing Act, which prohibits discrimination in housing on the basis of race, sex, national origin, and certain other characteristics; and

•  Regulation AB under the Securities Act, which requires certain registration, disclosure and reporting for mortgage-backed securities.

We must also comply with applicable state and local consumer protection laws, which may impose more comprehensive and costly restrictions than the regulations listed above. In a response to the decline in the housing market and the increase in foreclosures, many local governments have extended the time period necessary prior to initiating foreclosure proceedings, which prevent a servicer or trustee, as applicable, from exercising any remedies they might have in respect of liquidating a severely delinquent mortgage loan in a timely manner.

On May 28, 2009, we voluntarily entered into an agreement to actively participate as a loan servicer in HAMP, which enables eligible borrowers to avoid foreclosure through a more affordable and sustainable loan modification made in accordance with HAMP guidelines, procedures, directives and

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requirements. Loan modifications pursuant to HAMP may include a rescheduling of payments or a reduction in the applicable interest rates and, in some cases, a reduction in the principal amount due. Under HAMP, subject to a program participation cap, we, as a servicer, will receive an initial incentive payment of up to $1,500 for each loan modified in accordance with HAMP subject to the condition that the borrower successfully completes a trial modification period. In addition, provided that a HAMP modification does not become 90 days or more delinquent, we will receive an incentive of up to $1,000. As of December 31, 2010, 14,184 loans with an unpaid principal balance of $3.1 billion after modification had been modified through HAMP.

Competition

In our Servicing Segment, we compete with large financial institutions and with other independent servicers. Our ability to differentiate ourselves from other loan servicers through our high- touch servicing model and culture of credit largely determines our competitive position within the mortgage loan servicing industry.

In our Originations Segment, we compete with large financial institutions and local and regional mortgage bankers and lenders. Our ability to differentiate the value of our financial products primarily through our mortgage loan offerings, rates, fees and customer service determines our competitive position within the mortgage loan origination industry. The placement of mortgage loans is greatly influenced by traditional business partners such as realtors and builders. As a result, our ability to secure relationships with traditional business partners will influence our ability to grow our purchase line.

Seasonality

Our Originations Segment is subject to seasonal fluctuations, and activity tends to diminish somewhat in the winter months of December, January and February, when home sales volume and loan origination volume are at their lowest. This typically causes seasonal fluctuations in our Originations Segment’s revenue. Our Servicing segment is not subject to seasonality.

Intellectual Property

We use a variety of methods, such as trademarks, patents, copyrights and trade secrets, to protect our intellectual property. We also place appropriate restrictions on our proprietary information to control access and prevent unauthorized disclosures.

Properties

Our principal executive headquarters is located in Lewisville, Texas. At our main campus in Lewisville, Texas, we lease two buildings containing an aggregate of approximately 201,000 square feet of general office space, pursuant to two leases, both of which are currently due to expire in the first half of 2014. In addition to serving as our principal executive headquarters, our main Lewisville campus houses a portion of our servicing operations and all of our Consumer Direct Retail origination platform. We also own a parcel of undeveloped land at our campus location which can be used for future expansion.

We lease an additional 40,897 square feet of space in Lewisville, Texas, which is currently due to expire in December, 2011. This building houses our wholesale loan origination platform and some administrative support functions. We also lease 83,467 square feet at another location in Lewisville, Texas, which is currently due to expire in April 2016. We intend to use this additional space to meet the needs of our growing servicing operation.

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Consistent with our plans to open new branches in our Distributed Retail channel, we have completed leases on our regional management office in Montgomery, Alabama as well as branch office leases in Alabama, Tennessee and Texas. As of December 31, 2010, we had 17 Distributed Retail branch leases. Our typical Distributed Retail branch office is between 2,500 and 4,000 square feet with lease terms of three years or less.

To meet various state local presence regulations, we maintain leases on four small (150 square feet) executive suite offices in Pennsylvania, New Jersey, Nevada and Missouri.

We also have one lease (80,000 square feet) on property located in Parsippany, New Jersey which we no longer utilize and which is being actively marketed for disposal.

Legal Proceedings

We are routinely involved in legal proceedings concerning matters that arise in the ordinary course of our business. Although the outcome of these proceedings cannot be predicted with certainty, management does not currently expect any of the proceedings pending against us, individually or in the aggregate, to have a material effect on our business, financial condition or results of operations.

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CHANGES IN AND DISAGREEMENTS WITH ACCOUNTANTS ON ACCOUNTING OR FINANCIAL DISCLOSURE

None.

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QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK

We are exposed to a variety of market risks which include interest rate risk, consumer credit risk and counterparty credit risk.

Interest Rate Risk

Changes in interest rates affect our operations primarily as follows:

Servicing Segment

•  an increase in interest rates would increase our costs of servicing our outstanding debt, including our ability to finance servicing advances;

•  a decrease (increase) in interest rates would generally increase (decrease) prepayment rates and may require us to report a decrease (increase) in the value of our mortgage servicing rights;

•  a change in prevailing interest rates could impact our earnings from our custodial deposit accounts; and

•  an increase in interest rates could generate an increase in delinquency, default and foreclosure rates resulting in an increase in both operating expenses and interest expense and could cause a reduction in the value of our assets.

Originations Segment

•  a substantial and sustained increase in prevailing interest rates could adversely affect our loan origination volume because refinancing an existing loan would be less attractive and qualifying for a loan may be more difficult; and

•  an increase in interest rates would increase our costs of servicing our outstanding debt, including our ability to finance loan originations;

We actively manage the risk profiles of interest rate lock commitments or IRLCs and mortgage loans held for sale on a daily basis and enter into forward sales of mortgage backed securities in an amount equal to the portion of the IRLC expected to close, assuming no change in mortgage interest rates. In addition, to manage the interest rate risk associated with mortgage loans held for sale, we enter into forward sales of mortgage backed securities to deliver mortgage loan inventory to investors.

Consumer Credit Risk

We sell our loans on a non-recourse basis. We also provide representations and warranties to purchasers and insurers of the loans sold that typically are in place for the life of the loan. In the event of a breach of these representations and warranties, we may be required to repurchase a mortgage loan or indemnify the purchaser, and any subsequent loss on the mortgage loan may be borne by us. If there is no breach of a representation and warranty provision, we have no obligation to repurchase the loan or indemnify the investor against loss. The outstanding unpaid principal balance of loans sold by us represents the maximum potential exposure related to representation and warranty provisions.

We maintain a reserve for losses on loans repurchased or indemnified as a result of breaches of representations and warranties on our sold loans. Our estimate is based on our most recent data regarding loan repurchases and indemnity payments, actual credit losses on repurchased loans, recovery history, among other factors. Our assumptions are affected by factors both internal and external in nature. Internal factors include, among other things, level of loan sales, as well as to whom the loans are sold, the expectation of credit loss on repurchases and indemnifications, our success rate at appealing repurchase demands and our ability to recover any losses from third parties. External factors that may affect our estimate includes, among other things, the overall economic condition in the housing market, the economic condition of borrowers, the political environment at investor

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agencies and the overall U.S. and world economy. Many of the factors are beyond our control and may lead to judgments that are susceptible to change.

Counterparty Credit Risk

We are exposed to counterparty credit risk in the event of non-performance by counterparties to various agreements. We monitor the credit ratings of our counterparties and do not anticipate losses due to counterparty non-performance.

Sensitivity Analysis

We assess our market risk based on changes in interest rates utilizing a sensitivity analysis. The sensitivity analysis measures the potential impact on fair values based on hypothetical changes (increases and decreases) in interest rates.

We use a duration-based model in determining the impact of interest rate shifts on our loan portfolio, certain other interest-bearing liabilities measured at fair value and interest rate derivatives portfolios. The primary assumption used in these models is that an increase or decrease in the benchmark interest rate produces a parallel shift in the yield curve across all maturities.

We utilize a discounted cash flow analysis to determine the fair value of mortgage servicing rights and the impact of parallel interest rate shifts on mortgage servicing rights. The primary assumptions in this model are prepayment speeds, market discount rates and cost to service. However, this analysis ignores the impact of interest rate changes on certain material variables, such as the benefit or detriment on the value of future loan originations, non-parallel shifts in the spread relationships between mortgage-backed securities, swaps and U.S. Department of the Treasury rates and changes in primary and secondary mortgage market spreads. For mortgage loans, interest rate lock commitments and forward delivery commitments on mortgage-backed securities, we rely on a model in determining the impact of interest rate shifts. In addition, for interest rate lock commitments, the borrower’s propensity to close their mortgage loans under the commitment is used as a primary assumption.

Our total market risk is influenced by a wide variety of factors including market volatility and the liquidity of the markets. There are certain limitations inherent in the sensitivity analysis presented, including the necessity to conduct the analysis based on a single point in time and the inability to include the complex market reactions that normally would arise from the market shifts modeled.

We used December 31, 2010 market rates on our instruments to perform the sensitivity analysis. The estimates are based on the market risk sensitive portfolios described in the preceding paragraphs and assume instantaneous, parallel shifts in interest rate yield curves. These sensitivities are hypothetical and presented for illustrative purposes only. Changes in fair value based on variations in assumptions generally cannot be extrapolated because the relationship of the change in fair value may not be linear.

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The following table summarizes the estimated change in the fair value of our assets and liabilities sensitive to interest rates as of December 31, 2010 given hypothetical instantaneous parallel shifts in the yield curve:

	Change in Fair Value
	Down			Up
	25 bps			25 bps
	(in thousands)
Increase (decrease) in assets
Mortgage loans held for sale		$4,142			$(4,303	)
Mortgage loans held for investment, subject to ABS nonrecourse debt		(596	)		809
Mortgage servicing rights		(2,636	)		2,809
Other assets (derivatives)
IRLCs		1,694			(2,163	)
Forward MBS trades		(6,278	)		6,569
Total change in assets		(3,674	)		3,720
Increase (decrease) in liabilities
Derivative financial instruments
Interest rate swaps and caps		$1,521			$(1,367	)
Derivative financial instruments, subject to ABS nonrecourse debt		1,030			(1,030	)
ABS nonrecourse debt		(1,484	)		1,698
Total change in liabilities		1,067			(699	)
Total, net change		$(4,741	)		$4,420

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MANAGEMENT, BOARD OF MANAGERS AND BOARD OF DIRECTORS

Executive Officers

The following table sets forth the name, age and position of our current executive officers.

Name	Age		Position
Anthony H. Barone		53	President, Chief Executive Officer and Manager
Jay Bray		44	Executive Vice President and Chief Financial Officer
Robert Appel		49	Executive Vice President of Servicing
Amar Patel		39	Executive Vice President of Portfolio Investments
Douglas Krueger		42	Executive Vice President of Capital Markets
Anne E. Sutherland		50	Executive Vice President and General Counsel
Steven L. Hess		54	Executive Vice President of Marketing
Mark O’Brien		58	Executive Vice President of Organizational Development

Board of Managers

The Board of Managers of Nationstar LLC consists of two managers. Our ability to expand our Board of Managers is subject to complying with applicable notice, background check and other state licensing requirements. No board committees have been designated at this time. Managers hold office until a successor is elected and qualifies or until the Manager’s death, resignation or removal. The following table sets forth the name, age and position of the current managers of Nationstar Mortgage LLC.

Name	Age		Position
Anthony H. Barone		53	President, Chief Executive Officer and Manager
Peter Smith		43	Manager

Board of Directors

The Board of Directors of Nationstar Capital Corporation consists of two directors. No board committees have been designated at this time. Directors hold office until a successor is elected and qualifies or until the Director’s death, resignation or removal. The following table sets forth the name, age and position of the current directors of Nationstar Capital Corporation.

Name	Age		Position
Anthony H. Barone		53	President, Chief Executive Officer and Director
Jay Bray		44	Executive Vice President, Chief Financial Officer and Director

Anthony H. Barone is the President, Chief Executive Officer of Nationstar Mortgage LLC and has served in this capacity since joining Nationstar in 1997. Mr. Barone is Manager of Nationstar Mortgage LLC and has served as Manager since 2006. Mr. Barone is also President, Chief Executive Officer and Director of Nationstar Capital Corporation and has served in this capacity since 2010. Mr. Barone has over 30 years of experience in the mortgage industry. From 1980 to 1989, Mr. Barone held management positions in loan servicing, originations, secondary marketing and credit administration at General Electric Capital Corporation. From 1990 to 1997, Mr. Barone served as Executive Vice President of Ford Consumer Finance, a former mortgage lending and servicing subsidiary of Ford Motor Credit Corporation. Mr. Barone holds a B.A. in Economics from the University of Connecticut.

Jay Bray is the Executive Vice President and Chief Financial Officer of Nationstar Mortgage LLC and has served in this capacity since joining Nationstar in 2000. Mr. Bray is also Executive Vice President, Chief Financial Officer and Director of Nationstar Capital Corporation and has served in this capacity since 2010. Mr. Bray has over 22 years of experience in the mortgage servicing and origination industry. From 1988 to 1994, Mr. Bray served as an Audit Manager with Arthur Andersen in Atlanta, Georgia. From 1994 to 2000, Mr. Bray held a variety of leadership roles at Bank of America and predecessor entities, where he managed the Asset Backed Securitization process for mortgage related

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products, developed and implemented a secondary execution strategy and profitability plan and managed investment banking relationships, secondary marketing operations and investor relations. Additionally, Mr. Bray led the portfolio acquisition, pricing and modeling group. Mr. Bray holds a B.A.A. in Accounting from Auburn University and is a Certified Public Accountant in the State of Georgia.

Robert Appel is the Executive Vice President of Servicing of Nationstar Mortgage LLC and has served in this capacity since joining Nationstar in February 2008. Mr. Appel has over 20 years of experience in the mortgage industry and 5 years of public accounting experience. From 1985 to 1990, he served as an audit manager with Ernst and Young LLP. From 1990 to 1992, he held a position as Vice President of Control for Tyler Cabot Mortgage Securities Fund, a NYSE listed bond fund. From 1992 to 1999, Mr. Appel held a position at Capstead Mortgage where he started a master servicing organization and later became Senior Vice President of Default Management for Capstead’s primary servicer. From 1999 to 2003, he was Managing Director of GMAC’s Master Servicing operation. From 2003 to 2005, Mr. Appel was Chief Executive Officer of GMAC’s United Kingdom mortgage lending business. From 2005 to 2008, he served as Servicing Manager of GMAC’s $100 billion non-prime residential servicing platform. Mr. Appel holds a B.S., cum laude, in Business Control Systems from the University of North Texas and is a Certified Public Accountant and Certified Financial Planner in the State of Texas and is a former member of the Freddie Mac Default Advisory Group.

Amar Patel is the Executive Vice President of Portfolio Investments of Nationstar Mortgage LLC and has served in this capacity since joining Nationstar in June 2006. Mr. Patel has over 17 years of experience in the mortgage industry. From 1993 to 2006, Mr. Patel held various management roles at Capstead Mortgage Corporation, last serving as Senior Vice President of Asset and Liability Management. Mr. Patel holds a B.B.A. in Finance and Mathematics from Baylor University and an M.B.A. from Southern Methodist University.

Douglas Krueger is the Executive Vice President of Capital Markets and has served in this capacity since joining Nationstar in 2009. Mr. Krueger has over 20 years of experience in the mortgage industry. For five years, Mr. Krueger held various senior leadership roles with CitiMortgage managing the secondary marketing and master servicing areas. Mr. Krueger also served as Senior Vice President with Principal Residential Mortgage for thirteen years. Mr. Krueger holds a B.B.A. from the University of Iowa and has earned the Chartered Financial Analyst (CFA) designation.

Anne E. Sutherland is the Executive Vice President and General Counsel of Nationstar Mortgage LLC and has served in this capacity since joining Nationstar in 1997. Ms. Sutherland has over 24 years of legal experience in the mortgage banking and consumer finance industry. From 1986 to 1988, Ms. Sutherland served as Staff Attorney for the Oklahoma Bankers Association. From January 1988 until its dissolution in July 1989, Ms. Sutherland served as Counsel for Wells Fargo Credit Corporation. From 1989 to 1994, Ms. Sutherland was the Assistant General Counsel for Ford Consumer Finance Company. From 1994 to 1997, Ms. Sutherland served as Vice President, Division Counsel and Secretary of ContiMortgage Corporation, a subsidiary of ContiFinancial. Ms. Sutherland holds a B.B.A. in Finance and a J.D. from the University of Oklahoma.

Steven L. Hess is the Executive Vice President of Marketing of Nationstar Mortgage LLC and has served in this capacity since joining Nationstar in 1997. Mr. Hess has over 30 years experience in the financial services industry. He assumed his current role as the Executive Vice President, Marketing for Nationstar in 2001. From 1980 to 1989, Mr. Hess held various management roles in marketing, loan servicing and credit administration. From 1989 to 1997, he served as Senior Vice President of Corporate Marketing for Ford Consumer Finance Company, a former subsidiary of Ford Motor Credit that is now part of Citigroup. He also served in a subsequent assignment as Senior Vice President and Product Manager of Card Services and was responsible for managing the P&L and marketing for an $800 million co-brand Visa portfolio issued in partnership with Amoco Oil Company and Unocal 76. Mr. Hess holds a B.S. in Marketing and Advertising from the University of Colorado.

Mark O’Brien is the Executive Vice President of Organizational Development of Nationstar Mortgage LLC and has served in this capacity since joining Nationstar in 2002. Mr. O’Brien has over

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35 years of experience in the financial services industry. From 1974 to 1983, Mr. O’Brien held various management roles in consumer finance and human resources at GE Capital Corporation. From 1984 to 1989, he served as Vice President of Human Resources for PSFS Bank, a subsidiary of Meritor Financial Group. From 1990 to 1997, Mr. O’Brien served as Senior Vice President of Human Resources for Fleet Mortgage Group, during which time loan origination volume and the loan servicing portfolio doubled in size. From 1997 to 2002, he served as Executive Vice President of Human Resources for North America Mortgage Company, the mortgage banking subsidiary of Dime Savings Bank of New York. Mr. O’Brien holds a B.B.A. in Management from Xavier University and is a member of the Association of Financial Services and recently served as Chair of the Human Resources Subcommittee of the Mortgage Bankers Association.

Peter Smith is a Manager of Nationstar Mortgage LLC and a Managing Director of Fortress Investment Group in the asset management area. Mr. Smith has served as Manager of Nationstar Mortgage LLC since 2006. Mr. Smith joined Fortress in May 1998. From 1991 to 1996, Mr. Smith was a Vice President at CRIIMI MAE Inc. From 1996 to 1998, Mr. Smith held positions at UBS and BlackRock. Mr. Smith holds a B.B.A. in Finance from Radford University and an M.B.A. in Finance from George Washington University.

Family Relationships

There are no family relationships between any of our executive officers or directors.

Director Independence

Nationstar Mortgage LLC and Nationstar Capital Corporation are privately owned. As a result, we are not required to have independent directors.

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COMPENSATION DISCUSSION & ANALYSIS

This Compensation Discussion and Analysis is designed to provide an understanding of the compensation program for our CEO, Anthony H. Barone, our CFO, Jay Bray, our Executive Vice President of Servicing, Robert L. Appel, our Executive Vice President, Amar Patel, and, our Executive Vice President, Capital Markets, Douglas Krueger (collectively, our named executive officers or “NEOs”), with respect to our 2010 fiscal year.

Compensation Philosophy and Objectives

Our primary executive compensation goals are to attract, motivate and retain the most talented and dedicated executives and to align annual and long-term incentives while enhancing unitholder value. To achieve these goals we maintain compensation plans that:

•  Deliver a mix of fixed and at-risk compensation, including through the grants of restricted units and restricted preferred units.

•  Through dividend equivalents on grants of restricted units and restricted preferred units, tie a portion of the overall compensation of executive officers to the dividends we pay to our unitholders.

•  Encourage the achievement of our short- and long-term goals on both the individual and company levels.

Process for Setting Executive Officer Compensation

Peter Smith, the designated manager (the “Manager”) of FIF HE Holdings LLC, the sole member of the Company (our “Parent”), and its unitholders evaluate our performance, including the achievement of key investment and capital raising goals, and the individual performance of each named executive officer, with a goal of setting overall compensation at levels that our Parent and its unitholders believe are appropriate.

During 2010, in connection with new grants of restricted units and restricted preferred units, we amended the employment agreements with Messrs. Barone, Bray, Appel, and Patel, further described below. The amendments were minor and were intended to bring the agreements in line with customary practice in our industry. We believe that the employment agreements and these amendments benefit the Company and its unitholders by providing these individuals with a degree of comfort during the contract term about their employment so that they may focus on managing the business.

Participation of Management. Our NEOs are not directly responsible for determining our CEO’s compensation, although they regularly provide information to our Parent and its unitholders that is relevant to its evaluation of the NEOs’ compensation (for instance, in terms of our performance against established compensation goals and otherwise). By contrast, the CEO plays a more active role in determining the compensation of the other NEOs, who are his subordinates. He regularly advises our Parent and its unitholders of his own evaluation of their job performance and offers for consideration his own recommendations for their compensation levels. Final compensation decisions are executed by the Manager.

Compensation Consultant. We have not retained a compensation consultant to review our policies and procedures with respect to executive compensation, although the Company or Parent may elect in the future to retain a compensation consultant if they determine that doing so would assist it in implementing and maintaining compensation plans.

Risk considerations. In developing and reviewing the executive incentive programs, our Parent and unitholders consider the business risks inherent in program designs to ensure they do not induce executives to take unacceptable levels of business risk for the purpose of increasing their incentive plan awards. Our Parent and unitholders believe that the mix of compensation components used in the

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determination of our NEOs’ compensation reflects the performance of our Company and the performance of the individual employee and does not encourage our NEOs to take unreasonable risks relating to the business. Our NEOs’ ownership interest in the Company aligns our NEOs’ interests with our long-term performance and discourages excessive risk taking.

Elements of Compensation

Our executive compensation consists of the elements set forth below. Determinations regarding any one element of compensation affect determinations regarding each other element of compensation, because the goal of our Parent and unitholders is to set overall compensation at an appropriate level. Our Parent and unitholders take into account in this regard the extent to which different compensation elements are at-risk. Accordingly, for example, the amount of salary paid to a named executive officer is considered by our Parent and unitholders in determining the amount of any cash bonus or restricted unit or restricted preferred unit award, but the relationship among the elements is not formulaic because of the need to balance the likelihood that the at-risk components of compensation will actually be paid at any particular level. We further base overall compensation packages of our executive officers on their experience, current market conditions, business trends, and overall Company performance. As a result, the total compensation of our NEOs in 2010 consisted of the following elements: (1) base salary, (2) non-equity incentive plan awards, (3) equity awards, and (4) participation in employee benefit plans.

Base Salary

We utilize base salary as a building block of our compensation program. Base salaries for our NEOs are established based upon the scope of their responsibilities and what is necessary to recruit and retain skilled executives. We believe that our executives’ base salaries are comparable with salaries paid to executives at companies of a similar size and with a similar performance to us. Base salaries are reviewed annually in accordance with the named executive officer’s annual performance evaluation and increased from time to time in view of each named executive officer’s individual responsibilities, individual and company performance, and experience. Base salaries may not be reduced without the NEO’s approval.

Our named executive officers have entered into employment agreements with the Company that set a minimum salary upon execution of the agreement. These base salaries are intended to complement the at-risk components of the Company’s compensation program by assuring that our NEOs will receive an appropriate minimum level of compensation.

Annual Bonus Plans

Annual bonus incentives keyed to short-term objectives form an important part of our compensation program. The bonus plans are designed to provide incentives to achieve certain financial goals of the Company, as well as personal objectives.

The Incentive Plan for Messrs. Barone, Bray, Appel and Patel. Messrs. Barone, Bray, Appel, and Patel participate in our Annual Incentive Compensation Plan (the “Incentive Plan”). The Incentive Plan provides for payment of annual cash incentive bonuses from a pool equal to 5% of the Company’s Operating Cash Flow. Operating Cash Flow is generally equal to Adjusted EBITDA from the Operating segments less Servicing resulting from transfers of financial assets. In calculating Operating Cash Flow, non-cash components affecting Adjusted EBITDA both positively and negatively, if any, are excluded. This measure of Operating Cash Flow is intended to represent the Company’s cash revenues less all fully allocated cash and accrued expenses. Tying bonus payments to Operating Cash Flow puts a significant portion of these executives’ salary at risk and ties their compensation to our operational and financial results. The Incentive Plan is maintained at FIF HE Holdings LLC and is administered by the Manager. Our Parent chose the Company’s Operating Cash Flow as an incentive metric believing that it reflects the efficiency with which our management team manage the Company on a short- and long-term basis.

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Our Parent may not decrease the amount of the bonus pool. Each fiscal year, the Manager determines each named executive officer’s allocable portion of the bonus pool for that fiscal year, provided, however, that the Manager may not reduce any executive’s allocable percentage to less than 75% of the executive’s percentage for the prior fiscal year. To receive the actual award, the named executive officer must be employed by the Company (and not have given notice of intent to resign) on the last day of the fiscal year to which the bonus relates.

Annual Incentive Program for Mr. Krueger. Mr. Krueger participates in our annual cash incentive program, which includes Company and individual performance measures. These measures are established at the beginning of the fiscal year by the Company’s Board of Managers. Mr. Krueger’s key objectives for 2010 were Operating Cash Flow (40% weight factor in final payout), secondary marketing profit/loss (30% weight) and other deliverables (30% weight). In 2010, Mr. Krueger’s other deliverables were associated with managing hedging risks, execution of loan sales, Government Sponsored Enterprise and investor relations and frequency of repurchase requests. At year end, the Board of Managers rates the results for each key objective on a scale of one to five. The rating is multiplied by the weight of each key objective to result in a weighted score, with five being the highest possible score. The weighted score is converted into a percentage and multiplied by Mr. Krueger’s bonus opportunity to result in the annual cash incentive awarded. Mr. Krueger’s maximum bonus opportunity pursuant to his employment agreement, discussed below, is set at 150% of annual base salary. In 2010, the Company’s and Mr. Krueger’s performance were rated by the Board of Managers as exceeding target in all three key objectives resulting in an above target annual cash incentive. The annual cash incentive is generally paid in a single installment in the first quarter following completion of the plan year, the amount of which is determined by our Board of Managers. Mr. Krueger must be employed by the Company on December 31 of the award year and not have given notice of termination by the time that the award is paid to receive the bonus. As a condition of participation in the annual incentive plan, Mr. Krueger is subject to a non-solicitation covenant.

The following are our NEO’s target bonus percentages for 2010:

	Allocable		Target Bonus
	Percentage of the		As Percent Of
Name	Bonus Pool		Salary
Anthony H. Barone		35.6%		N/A
Jay Bray		31.7%		N/A
Robert L. Appel		17.2%		N/A
Amar Patel		15.5%		N/A
Douglas Krueger		N/A		90.0%

Long-Term Incentive Plans

Equity Incentive Plan. Long-term incentives in the form of grants of units and preferred units to our NEOs are intended to promote sustained high performance. In 2010, Messrs. Barone, Bray, Appel, and Patel received grants of Series 1 and Series 2 Class A units of FIF HE Holdings LLC. The units vest over three years. In determining the 2010 grants to each of Messrs. Barone, Bray, Appel, and Patel, to achieve the desired ownership percentage for each executive, prior vested awards of Class A units and Class A units previously purchased by each executive were taken into account. The executives are entitled to share in any dividend distribution with respect to the Class A units whether or not they have

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vested. Following termination of employment, the Company will have certain repurchase rights as set forth in the applicable unit award agreement and the Limited Liability Company Agreement of FIF HE Holdings LLC.

The Company also granted each of Messrs. Barone, Bray, Appel, and Patel restricted preferred stock units (“RSUs”) relating to Series 1 Class C Preferred units and Series 1 Class D Preferred units. Each RSU represents the right to receive one Class C unit or Class D unit, as applicable, upon vesting and settlement of the RSU. If the Company pays a dividend to Class C or Class D unitholders (other than with respect to any pre-2010 preferred yield), then the executive will be entitled to receive a proportionate payment based on the number of RSUs he holds, whether or not they have vested.

Our equity plans provide for accelerated vesting of a portion of the unvested awards where the employment of any of our NEOs is terminated without “cause” (other than within six months after a change in control), by the NEO for “good reason” or upon death or disability, subject to the named executive officer executing a general release of claims in favor of the Company. If the employment of any of our NEOs is terminated without cause, subject to the named executive officer executing a general release of claims in favor of the Company, all unvested units and RSUs will vest. We believe that such a provision benefits the Company and its unitholders by giving the executives some protection so they may make decisions about the Company and any potential transaction free from concerns about the impact to their unvested equity awards. On any other termination of employment, all unvested units and RSUs will be forfeited.

Long-Term Incentive Plan. Mr. Krueger participates in a long-term incentive plan which is designed to reward company and individual performance and serve as a retention device. Awards are determined at the conclusion of the plan year (calendar) based upon the Company’s overall financial performance and Mr. Krueger’s contribution to those results. Awards are approved by our Board of Managers with an award date of December 31 of the year just concluded. The award is generally subject to a three year cliff vesting requirement from the date of the award, which provides an important retention incentive as the executive must remain employed by the Company to receive the bonus. The bonus ordinarily is paid in a single installment in the first quarter of the third year following grant. Mr. Krueger must be employed by the Company on the date of payout to receive the award.

Severance Benefits

We have entered into employment agreements with our NEOs that provide severance benefits to such officers in the circumstances described in greater detail below in the section entitled “Employment Agreements.” We believe that these severance benefits are essential elements of our executive compensation and assist us in recruiting and retaining talented executives.

Other Compensation Components

All of our executive officers are eligible to participate in our employee benefit plans, including medical, dental, life insurance and 401(k) plans. These plans are available to all employees and do not discriminate in favor of our named executive officers. In addition, we reimburse Mr. Barone and Mr. Bray the cost of life insurance premiums pursuant to our Executive Life Program. We do not view perquisites as a significant element of our comprehensive compensation structure; however, we believe some perquisites are necessary for the Company to attract and retain superior management talent for the benefit of all unitholders. The value of these benefits to the NEOs is set forth in the Summary Compensation Table under the column “All Other Compensation” and detail about each benefit is set forth in a table following the Summary Compensation Table.

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Summary Compensation Table

The following table sets forth the annual compensation for the Principal Executive Officer, the Principal Financial Officer, and the three other most highly compensated executive officers (referred to as the named executive officers or “NEOs”) serving at the end of fiscal year 2010.

										Non-Stock
								Stock		Incentive Plan			All Other
			Salary		Bonus			Awards		Compensation			Compensation			Total
Name	Year		($)		($)			($)(1)		($)			($)			($)
Anthony H. Barone		2010		424,350		—			9,584,458		907,862	(2)		16,116	(3)		10,932,786
		2009		424,350		—			—		706,872	(4)		16,116	(3)		1,147,338
Jay Bray		2010		320,000		—			9,918,148		809,434	(2)		11,048	(5)		11,058,630
		2009		289,800		—			—		630,235	(4)		11,069	(6)		931,104
Robert L. Appel		2010		275,000		—			6,467,985		439,288	(2)		5,500	(7)		7,187,746
		2009		274,999		—			—		342,035	(4)		5,500	(7)		622,534
Amar Patel		2010		255,000		—			4,147,863		395,415	(2)		6,231	(7)		4,804,509
		2009		255,000		—			—		307,875	(4)		6,231	(7)		569,106
Douglas Krueger		2010		250,000		—			—		425,000	(8)		3,125	(7)		678,125
		2009		215,064		50,000	(9)		—		450,000	(10)		41,239	(11)		706,303

(1) Represents the aggregate grant date fair value, as computed in accordance with FASB ASC Topic 718, excluding the effect of estimated forfeitures during the applicable vesting periods, of units and RSUs granted to the NEOs. Information with respect to vesting of these awards is disclosed in the Grant of Plan Based Awards table and the accompanying notes.

(2) These amounts will be paid in the first quarter of fiscal year 2011, but represent awards with respect to the Company’s and individual performance in fiscal year 2010.

(3) Represents payment of a life insurance premium equal to $9,216 and a $6,900 contribution to Mr. Barone’s 401(k) account.

(4) These amounts were paid in the first quarter of fiscal 2010, but represent awards with respect to the Company’s and individual performance in fiscal year 2009.

(5) Represents payment of a life insurance premium equal to $5,998 and a $5,050 contribution to Mr. Bray’s 401(k) account.

(6) Represents payment of a life insurance premium equal to $5,998 and a $5,071 contribution to Mr. Bray’s 401(k) account.

(7) Represents a contribution to the named executive officer’s 401(k) account.

(8) Of this amount, $300,000 will be paid in the first quarter of fiscal year 2011, although it represents an award with respect to the Company’s and Mr. Krueger’s individual performance in fiscal year 2010, as described in Annual Incentive Program for Mr. Krueger. The remaining $125,000 is pursuant to the Long-Term Incentive Plan, described above, and is subject to three-year time-based cliff vesting; this amount will become vested on December 31, 2013 as long as Mr. Krueger remains employed with the Company.

(9) Represents a sign-on bonus Mr. Krueger received pursuant to his employment agreement when he joined the Company.

(10) Of this amount, $225,000 was paid in the first quarter of fiscal year 2010, although it represents an award with respect to the Company’s and Mr. Krueger’s individual performance in fiscal year 2009, as described in Annual Incentive Program for Mr. Krueger. The remaining $225,000 is pursuant to the Long-Term Incentive Plan, described above, and is subject to three-year time-based cliff vesting; this amount will become vested on December 31, 2012 as long as Mr. Krueger remains employed with the Company.

(11) Represents payment of a relocation expenses equal to $39,469 and a $1,770 contribution to Mr. Krueger’s 401(k) account.

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Grants of Plan-Based Awards

The following table sets forth, for each of the Executive Officers, the grants of awards under any plan during the fiscal year ended December 31, 2010.

				Estimated
				Future
				Payouts
				Under
				Non-Equity
				Incentive Plan			All Other Stock Awards:						Grant Date Fair Value of
				Awards			Number of Units (#)						Equity Awards ($)
Name	Grant Date			Target ($)			1A		2A		C&D		1A		2A		C&D
Anthony H. Barone		9/17/2010(1	)		907,862			136,993		25,607		2,494,500		6,752,295		22,088		2,810,075
Jay Bray		9/17/2010(2	)		809,434			153,212		28,637		2,078,750		7,551,718		24,701		2,341,729
Robert L. Appel		9/17/2010(3	)		439,288			102,384		19,137		1,247,250		5,046,440		16,507		1,405,038
Amar Patel		9/17/2010(4	)		395,415			64,937		12,137		831,500		3,200,702		10,469		936,692
Douglas Krueger					125,000	(5)

(1)	This award is subject to vesting. With respect to the Series 1 Class A, the award vested with respect to 481 Series 1 Class A units on September 17, 2010, and will vest with respect to 68,256 Series 1 Class A units on each of June 30, 2011 and 2012. With respect to the Series 2 Class A, the award vested with respect to 91 Series 2 Class A units on September 17, 2010, and will vest with respect to 12,758 on each of June 30, 2011 and 2012. With respect to the Series 1 Class C and D preferred units, the award vests in equal tranches with respect to 831,500 units on each of September 17, 2010, June 30, 2011 and June 30, 2012.
(2)	This award is subject to vesting. With respect to the Series 1 Class A, the award vested with respect to 39,452 Series 1 Class A units on September 17, 2010, and will vest with respect to 56,880 Series 1 Class A units on each of June 30, 2011 and 2012. With respect to the Series 2 Class A, the award vested with respect to 7,373 Series 2 Class A units on September 17, 2010, and will vest with respect to 10,631 on June 30, 2011 and with respect to 10,633 on June 30, 2012. With respect to the Series 1 Class C and D preferred units, the award vests in equal tranches with respect to 692,916 units on September 17, 2010 and 692,917 units on each of June 30, 2011 and June 30, 2012.
(3)	This award is subject to vesting. With respect to the Series 1 Class A, the award vests in equal tranches with respect to 34,128 units on each of September 17, 2010, June 30, 2011 and June 30, 2012. With respect to the Series 2 Class A, the award vests in equal tranches with respect to 6,379 units on each of September 17, 2010, June 30, 2011 and June 30, 2012. With respect to the Series 1 Class C and D preferred units, the award vests in equal tranches with respect to 415,750 units on each of September 17, 2010, June 30, 2011 and June 30, 2012.
(4)	This award is subject to vesting. With respect to the Series 1 Class A, the award vested with respect to 19,433 Series 1 Class A units on September 17, 2010, and will vest with respect to 22,752 Series 1 Class A units on each of June 30, 2011 and 2012. With respect to the Series 2 Class A, the award vested with respect to 3,631 Series 2 Class A units on September 17, 2010, and will vest with respect to 4,252 on June 30, 2011 and 4,254 on June 30, 2012. With respect to the Series 1 Class C and D preferred units, the award vests in equal tranches with respect to 277,166 units on September 17, 2010 and 277,167 units on each of June 30, 2011 and June 30, 2012.
(5)	This bonus under the Long-Term Incentive Plan, described above, is subject to three-year time-based cliff vesting, which will become vested on December 31, 2013 as long as Mr. Krueger remains employed with the Company.

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Outstanding Equity Awards at Fiscal Year End

The following table sets forth, for each of the Executive Officers, the outstanding equity awards as of the end of the fiscal year ended December 31, 2010.

	Stock Awards
	Number of Units That Have						Market Value of Units That Have
	Not Vested (#)						Not Vested ($)
Name	1A		2A		C&D		1A		2A		C&D
Anthony H. Barone(1)		136,512		25,516		1,663,000		6,715,749		22,009		1,886,089
Jay Bray(2)		113,760		21,264		1,385,834		5,596,458		18,342		1,571,741
Robert L. Appel(3)		68,256		12,758		831,500		3,357,875		11,005		943,045
Amar Patel(4)		45,504		8,506		554,334		2,238,583		7,337		628,696
Douglas Krueger		—		—		—		—		—		—

(1)	This award is subject to vesting. With respect to the Series 1 Class A, the award will vest with respect to 68,256 Series 1 Class A units on each of June 30, 2011 and 2012. With respect to the Series 2 Class A, the award will vest with respect to 12,758 on each of June 30, 2011 and 2012. With respect to the Series 1 Class C and D preferred units, the award vests in equal tranches with respect to 831,500 units on each of June 30, 2011 and 2012.
(2)	This award is subject to vesting. With respect to the Series 1 Class A, the award will vest with respect to 56,880 Series 1 Class A units on each of June 30, 2011 and 2012. With respect to the Series 2 Class A, the award will vest with respect to 10,631 on June 30, 2011 and with respect to 10,633 on June 30, 2012. With respect to the Series 1 Class C and D preferred units, the award vests in equal tranches with respect to 692,917 units on each of June 30, 2011 and 2012.
(3)	This award is subject to vesting. With respect to the Series 1 Class A, the award vests in equal tranches with respect to 34,128 units on each of June 30, 2011 and 2012. With respect to the Series 2 Class A, the award vests in equal tranches with respect to 6,379 units on each of June 30, 2011 and 2012. With respect to the Series 1 Class C and D preferred units, the award vests in equal tranches with respect to 415,750 units on each of June 30, 2011 and 2012.
(4)	This award is subject to vesting. With respect to the Series 1 Class A, the award will vest with respect to 22,752 Series 1 Class A units on each of June 30, 2011 and 2012. With respect to the Series 2 Class A, the award will vest with respect to 4,252 on June 30, 2011 and 4,254 on June 30, 2012. With respect to the Series 1 Class C and D preferred units, the award vests in equal tranches with respect to 277,167 units on each of June 30, 2011 and 2012.

Stock Vested

The following table sets forth, for each of the Executive Officers, information with respect to the exercise of stock options, SARs and similar instruments and vesting of other equity-based awards during the fiscal year ended December 31, 2010.

	Stock Awards
	Number of Shares
	Acquired on Vesting (#)						Value Realized on Vesting ($)
Name	1A		2A		C&D		1A		2A		C&D
Anthony H. Barone		19,845		3,710		831,500		1,021,205		3,386		936,692
Jay Bray		44,432		8,304		692,916		2,201,098		7,210		780,576
Robert L. Appel		34,128		6,379		415,750		1,682,147		5,502		468,346
Amar Patel		19,433		3,631		277,166		957,840		3,132		312,230
Douglas Krueger		—		—		—		—		—		—

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Employment Agreements

The Company has entered into employment agreements with all of our named executive officers.

Employment Agreements of Messrs. Barone and Bray

Mr. Barone and the Company entered into an amended and restated employment agreement pursuant to which Mr. Barone agreed to serve as our Chief Executive Officer on September 17, 2010. Mr. Bray and the Company entered into an amended and restated employment agreement pursuant to which Mr. Bray agreed to serve as our Chief Financial Officer on September 17, 2010. The employment agreements expire on July 10, 2011. Pursuant to the employment agreements, upon a termination for any reason or no reason, Messrs. Barone and Bray are bound by non-competition, non-solicitation, confidentiality and non-disparagement covenants. These covenants survive the expiration of Messrs. Barone’s and Bray’s employment agreements.

The employment agreements provide, among other things, for payments to the executive following certain terminations of employment. If Mr Barone’s employment or Mr. Bray’s employment is terminated by the Company without “cause” or is terminated by him for “good reason,” subject to his execution of a release of claims, he would be entitled to (1) 18 months of continued base salary, (2) an amount equal to 150% of the average of his annual cash bonus for the three most recently completed fiscal years and (3) continued coverage under the Company’s medical plan until the earlier of (a) the time he becomes eligible for coverage from a new employer and (b) 12 months following the date of termination. If Mr. Barone’s or Mr. Bray’s employment terminates due to his resignation, subject to his execution of a release of claims, he will be entitled to (1) six months of continued base salary and (2) 50% of the average of his annual cash bonus for the three most recently completed fiscal years. Following July 10, 2011, absent an earlier termination of their employment agreements, Mr. Barone and Mr. Bray will continue as employees at-will and will not be entitled to any severance payments under their respective employment agreements upon any subsequent termination.

Employment Agreement of Mr. Appel

Mr. Appel and the Company entered into an amended employment agreement pursuant to which Mr. Appel agreed to serve as our Executive Vice President, Servicing on September 17, 2010. The initial term of the employment agreement ends on February 3, 2011 and will be automatically renewed for two additional periods of one year commencing on each of February 4, 2011 and February 4, 2012 unless either party gives the other notice of intent not to renew by no later than January 4, 2011 and January 4, 2012, respectively. Failure by the Company to renew Mr. Appel’s term of employment on February 4, 2011 and February 4, 2012, would entitle Mr. Appel to terminate his employment for “good reason” and receive the severance payments described below. Pursuant to the employment agreement, upon a termination for any reason or no reason, Mr. Appel is bound by non-competition, non-solicitation, confidentiality and non-disparagement covenants. These covenants survive the expiration of Mr. Appel’s employment agreement.

The employment agreement provides for a one-time cash retention bonus if Mr. Appel is employed by the Company on February 4, 2013 (and has not given notice of his intent to resign). If Mr. Appel’s employment is terminated by the Company without “cause” or is terminated by Mr. Appel for “good reason”, subject to his execution of a release of claims, he would be entitled to (1) an amount equal to (a) 12 months of base salary plus (b) a lump sum severance payment, (2) a prorated portion of the annual cash incentive bonus for the year of termination, (3) if such termination occurs prior to February 4, 2013, the retention bonus, and (4) continued coverage under the Company’s medical plan until the earlier of (a) the time Mr. Appel becomes eligible for coverage from a new employer and (b) 12 months following the date of termination. Following February 3, 2013, absent an earlier termination of his employment agreement, Mr. Appel will continue as an employee at-will and will not be entitled to any severance payments under his employment agreement upon any subsequent termination.

123

Employment Agreement of Mr. Patel

Mr. Patel and the Company entered into an amended and restated employment agreement pursuant to which Mr. Patel agreed to serve as our Executive Vice President on September 17, 2010. The employment agreement expires on June 1, 2011. Pursuant to the employment agreement, upon a termination for any reason or no reason, Mr. Patel is bound by non-competition, non-solicitation, confidentiality and non-disparagement covenants. These covenants survive the termination of Mr. Patel’s employment agreement.

If Mr. Patel’s employment is terminated by the Company without “cause” or is terminated by Mr. Patel for “good reason,” subject to Mr. Patel’s execution of a release of claims, he would be entitled to (1) six months of continued base salary, (2) an amount equal to 50% of his annual cash bonus paid to him for the most recently completed fiscal year and (3) continued coverage under the Company’s medical plan until the earlier of (a) the time he becomes eligible for coverage from a new employer and (b) six months following the date of termination. Following June 1, 2011, absent an earlier termination of his employment agreement, Mr. Patel will continue as an employee at-will and will not be entitled to any severance payments under his employment agreement upon any subsequent termination.

Employment Agreement of Mr. Krueger

Mr. Krueger and the Company entered into an employment agreement pursuant to which Mr. Krueger agreed to serve as our Executive Vice President, Capital Markets on February 19, 2009. Pursuant to its terms, the agreement will expire on February 18, 2011. Mr. Krueger is bound by non-competition, non-solicitation, confidentiality and non-disparagement covenants. These covenants survive the termination of Mr. Krueger’s employment agreement.

If Mr. Krueger’s employment is terminated by the Company without “cause” or is terminated by Mr. Krueger for “good reason,” subject to Mr. Krueger’s execution of a release of claims, he would be entitled to (1) accrued benefits, (ii) an amount equal to Mr. Krueger’s unpaid base salary and guaranteed bonus through February 18, 2011 and (2) continued coverage under the Company’s medical plan until the earlier of (a) the time he becomes eligible for coverage from a new employer and (b) six months following the date of termination.

Potential Payments Upon Termination or Change in Control

									After
							Termination without		Change in
							Cause Other than		Control,
							After A Change in		Termination
					Voluntary		Control or for Good		without
	Death(1)		Disability(1)		Termination		Reason(1)		Cause(2)
	($)		($)		($)		($)		($)
Anthony H. Barone		4,311,924		4,311,924		564,630		6,015,435		10,327,358
Jay Bray		3,593,269		3,593,269		483,278		5,052,723		8,645,995
Robert L. Appel		2,155,962		2,155,962		0		3,454,870		5,610,833
Amar Patel		1,437,307		1,437,307		0		1,767,324		3,204,634
Douglas Krueger		0		0		0		33,656		33,656

(1) Pursuant to the equity grant agreements granting each of Messrs. Barone, Bray, Appel and Patel Series 1 Class A units, Series 2 Class A units, and RSUs with respect to Series 1 Class C and D preferred units, in the event the named executive officer’s employment terminates as a result of the named executive officer’s death, disability or voluntary resignation for good reason or as a result of the Company terminating the named executive officer’s employment without cause other than in connection with a change in control, an additional tranche of any outstanding and unvested equity awards will become vested.

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(2) Pursuant to the equity grant agreements granting each of Messrs. Barone, Bray, Appel and Patel Series 1 Class A units, Series 2 Class A units, and RSUs with respect to Series 1 Class C and D preferred units, in the event the named executive officer’s employment terminates as a result the Company terminating the named executive officer’s employment without cause within 6 months following a change in control, all of the named executive officer’s outstanding and unvested equity awards will become vested.

Manager Compensation

The Nationstar Board of Managers is comprised of managers elected by our unitholders. We currently have two members on the Board of Managers: Peter Smith and Anthony Barone. Mr. Barone receives no payments in addition to what has been described as a result of his service on the Board of Managers. Mr. Smith is an employee of our sponsor and we pay him no additional compensation for his service on the Company’s Board of Managers.

The Nationstar Capital Corporation Board of Directors is comprised of directors elected by the stockholders of Nationstar Capital Corporation. We currently have two members on the Board of Directors: Anthony Barone and Jay Bray. Mr. Barone and Mr. Bray receive no payments in addition to what has been described as a result of their service on the Board of Directors.

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CERTAIN RELATIONSHIPS AND RELATED PARTY TRANSACTIONS

Under SEC rules, a related person is an officer, director, nominee for director or beneficial holder of more than 5% of any class of our voting securities since the beginning of the last fiscal year or an immediate family member of any of the foregoing. Our Board of Managers is primarily responsible for developing and implementing processes and controls to obtain information from our directors, executive officers and significant stockholders regarding related-person transactions and then determining, based on the facts and circumstances, whether we or a related person has a direct or indirect material interest in these transactions. We currently do not have a standalone written policy for evaluating related party transactions. Our officers and managers use an established process to review, approve and ratify transactions with related parties. When considering potential transactions involving a related party that may require board approval, our officers notify our board of managers of the proposed transaction, provide a brief background of the transaction and schedule a meeting with the board of managers to review the matter. At such meetings, our Chief Executive Officer, Chief Financial Officer and other members of management, as appropriate, provide information to the board of managers regarding the proposed transaction, after which the board of managers and management discuss the transaction and the implications of engaging a related party as opposed to an unrelated third party. If the board of managers (or specified managers as required by applicable legal requirements) determines that the transaction is in our best interests, it will vote to approve entering into the transaction with the applicable related party. Other than compensation agreements and other arrangements which are described under “Compensation Discussion and Analysis” and the transactions described below, since January 1, 2009, there has not been, and there is not currently proposed, any transaction or series of similar transactions to which we were or will be a party in which the amount involved exceeded or will exceed $120,000 and in which any related person had or will have a direct or indirect material interest.

We currently serve as the loan servicer for two securitized loan portfolios managed by Newcastle Investment Corp., which is managed by an affiliate of Fortress, for which we receive a monthly net servicing fee equal to 0.5% per annum on the unpaid principal balance of the portfolios. For the years ended December 31, 2009 and December 31, 2010, we received servicing fees of $7.4 million and $6.3 million, respectively. The outstanding unpaid principal balance as of December 31, 2010, was $1.2 billion.

We currently serve as the loan sub-servicer for three loan portfolios managed by FCDB FF1 LLC, FCDB 8020 REO LLC, FCDB FF1 2008-1 Trust, FCDB UB 8020 Residential LLC and FCDB GMPL 2008-1 Trust, which is managed by an affiliate of Fortress, for which we receive a monthly per loan sub-servicing fee and other performance incentive fees subject to our agreement with them. For the years ended December 31, 2009 and December 31, 2010, we received $1.0 million and $0.6 million of sub-servicing fees, respectively. The outstanding unpaid principal balance as of December 31, 2010, was $121.1 million.

In September 2010, we entered into a marketing agreement with American General Home Equity, Inc. (“Amgen”), American General Financial Services of Arkansas, Inc. (“Amgen Arkansas”) and MorEquity, Inc. (“MorEquity” and together with Amgen and Amgen Arkansas, the “Amgen Entities”), each of which are indirectly owned by investment funds managed by affiliates of Fortress Investment Group LLC. Pursuant to this agreement, we market our mortgage origination products to customers of the Amgen Entities, and are compensated by the origination fees of loans that we refinance. For the year ended December 31, 2010, we recognized revenue of $0.4 million. The marketing agreement has an initial term of six months. Additionally, in January, 2011, we entered into three agreements to act as the loan sub-servicer for the Amgen Entities for a whole loan portfolio and two securitized loan portfolios totaling $4.5 billion for which we receive a monthly per loan sub-servicing fee and other performance incentive fees subject to our agreement with the Amgen Entities. We have not yet received any servicing fees from this arrangement.

126

SECURITY OWNERSHIP OF CERTAIN BENEFICIAL OWNERS AND MANAGEMENT

As of February 28, 2011, Nationstar Mortgage LLC is the sole shareholder of Nationstar Capital Corporation, owning 100% of its outstanding capital stock. As of December 31, 2010, FIF HE Holdings, LLC (“Holdings”), a holding company, is the sole member of Nationstar Mortgage LLC, owning 100% of its outstanding membership interests. The following table sets forth information as of December 31, 2010 regarding the beneficial ownership of Holdings’ issued and outstanding Series 1 units by:

•  each person or group who is known by us to own beneficially more than 5% of Holdings’ issued and outstanding Series 1 Class A units;

•  each of our directors;

•  each of our named executive officers; and

•  all of our directors and executive officers as a group.

For further information regarding material transactions between us and certain of our stockholders, see “Certain Relationships and Related Party Transactions.”

Beneficial ownership for the purposes of the following table is determined in accordance with the rules and regulations of the SEC. These rules generally provide that a person is the beneficial owner of securities if such person has or shares the power to vote or direct the voting of securities, or to dispose or direct the disposition of securities or has the right to acquire such powers within 60 days. The information does not necessarily indicate beneficial ownership for any other purpose. Except as disclosed in the footnotes to this table and subject to applicable community property laws, we believe that each beneficial owner identified in the table possesses sole voting and investment power over all Series 1 units shown as beneficially owned by the beneficial owner. For purposes of the calculations in the table below, the number of Series 1 units deemed outstanding includes Series 1 units issuable upon exercise of options held by the respective person which may be exercised within 60 days after January 31, 2011. For purposes of calculating each person’s percentage ownership, Series 1 units issuable pursuant to options exercisable within 60 days after December 31, 2010 are included as outstanding and beneficially owned for that person or group, but are not deemed outstanding for the purposes of computing the percentage ownership of any other person. Unless otherwise indicated in the table or footnotes below, the address for each beneficial owner is c/o Nationstar Mortgage LLC, 350 Highland Drive, Lewisville, Texas 75067.

Holdings has four types of issued and outstanding Series 1 units. Series 1 Class A units have voting rights. Series 1 Class B preferred units, Series 1 Class C preferred units and Series 1 Class D units do not have voting rights. The percentage of beneficial ownership of our Series 1 units is based on 13,076,679 Series 1 Class A units, 1,000 Series 1 Class B preferred units, 82,214,532 Series 1 Class C preferred units and 83,309,399 Series 1 Class D preferred units issued and outstanding as of January 31, 2011. The percentage of beneficial ownership of our Series 1 Class A units is based on 13,076,679 Series 1 Class A units issued and outstanding as of December 31, 2010.

	Number of		Percentage of
Name of Beneficial Owner	Series 1 Units(2)		Series 1 Units(2)
Executive Officers and Directors
Peter Smith		0		*
Anthony H. Barone		601,784		*
Jay Bray		491,722		*
Robert Appel		292,420		*
Amar Patel		196,107		*
Douglas Krueger		0		*
All executive officers, managers and directors as a group (6 persons)		1,582,033		0.9%

127

	Number of		Percentage of
	Series 1 Class A		Series 1 Class A
Name of Beneficial Owner	Units(2)		Units(2)
5% Interest holders
Fortress Fund III Funds(1)		6,434,408		49.2%
Fortress Fund IV Funds(1)		6,434,411		49.2%

*	Less than 1%
(1)	Fortress Fund III Funds represent Fortress Investment Fund III LP, Fortress Investment Fund III (Fund B) LP, Fortress Investment Fund III (Fund C) LP, Fortress Investment Fund III (Fund D) L.P., Fortress Investment Fund III (Fund E) L.P., FIF III B HE BLKR LLC, and FIF III C HE BLKR LLC. Fortress Fund IV Funds represent Fortress Investment Fund IV (Fund A) L.P., Fortress Investment Fund IV (Fund B) L.P., Fortress Investment Fund IV (Fund C) L.P., Fortress Investment Fund IV (Fund D) L.P., Fortress Investment Fund IV (Fund E) L.P., Fortress Investment Fund IV (Fund F) L.P. and Fortress Investment Fund IV (Fund G) L.P., FIF IV B HE BLKR LLC and FIF IV CFG HE BLKR LLC. Fortress Fund III GP LLC is the general partner of each of the Fortress Fund III Funds. The sole managing member of Fortress Fund III GP LLC is Fortress Investment Fund GP (Holdings) LLC. The sole managing member of Fortress Investment Fund III GP (Holdings) LLC is Fortress Operating Entity I LP (“FOE I”). FIG Corp. is the general partner of FOE I, and FIG Corp. is wholly owned by Fortress Investment Group LLC. Fortress Fund IV GP L.P. is the general partner of each of the Fortress Fund IV Funds. Fortress Fund IV GP Holdings Ltd. is the general partner of Fortress Fund IV GP L.P. Fortress Fund IV GP Holdings Ltd. is wholly owned by FOE I. FIG Corp. is the general partner of FOE I. FIG Corp. is wholly owned by Fortress Investment Group LLC. By virtue of his ownership interest in Fortress Investment Group LLC and certain of its affiliates, as well as his role in advising certain investment funds, Wesley R. Edens may be deemed to be the natural person that has sole or shared voting and investment control over the shares listed as beneficially owned by Holdings. Mr. Edens disclaims beneficial ownership of such shares. The address of all persons listed above is c/o Fortress Investment Group LLC, 1345 Avenue of the Americas, 46th Floor, New York, New York 10105.
(2)	Holdings issues its equity interests in two series, each of which relate to certain specified assets of the LLC: Series 1 units, which relate to all the issued and outstanding membership interests in Nationstar Mortgage LLC; and Series 2 units, which relate to equity interests in a separate entity, which is neither a subsidiary of Nationstar Mortgage LLC nor a guarantor of the Notes. Certain executive compensation arrangements include equity grants of the Series 2 units of Holdings. See “Compensation Discussion and Analysis.”

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DESCRIPTION OF THE NEW NOTES

We issued the Old Notes and issue the New Notes under an indenture, or the “Indenture,”, dated as of March 26, 2010, among Nationstar Mortgage LLC (the “Company”), Nationstar Capital Corporation, (the “ Co-Issuer” and Wells Fargo Bank, National Association, as Trustee (the “Trustee”). The following is a summary of the material provisions of the Indenture and the Registration Rights Agreement. We urge you to read the Indenture, including the form and terms of the notes, and the Registration Rights Agreement because they define your rights as a holder of notes. The terms of the notes include those stated in the Indenture and those made part of the Indenture by reference to the Trust Indenture Act of 1939, as amended, or the “TIA.” You may request a copy of the Indenture at our address as shown under “—Additional Information” below. You can find definitions of certain capitalized terms used in this section under “—Certain Definitions.” For purposes of this section, references to the “Company” or “our” include only Nationstar Mortgage LLC and not its Subsidiaries. The term “Issuers” refers collectively to the Nationstar Mortgage LLC and Nationstar Capital Corporation.

The Issuers will issue $250.0 million aggregate principal amount of the New Notes due 2015 in fully registered form in denominations of $2,000 and integral multiples of $1,000 in excess of $2,000. The Trustee will initially act as the paying agent, or the “Paying Agent,” and the registrar, or the “Registrar,” for the New Notes. The Company may change any Paying Agent and Registrar without notice to holders of the New Notes, or the “Holders.” The Company will pay principal (and premium, if any) on the New Notes at the Trustee’s corporate trust office in New York, New York. At the Company’s option, interest and Additional Interest, if any, may be paid at the Trustee’s corporate trust office or by check mailed to the registered address of Holders.

Brief Description of the Notes and the Note Guarantees

The New Notes:

•  will be general unsecured obligations of the Issuers;

•  will be pari passu in right of payment with all existing and any future senior Indebtedness of the Issuers;

•  will be effectively junior in right of payment to all existing and future senior secured Indebtedness of the Issuers to the extent of the assets securing such Indebtedness;

•  will be senior in right of payment to all existing and future subordinated Indebtedness of the Issuers;

•  will be subject to registration with the SEC pursuant to the Registration Rights Agreement;

•  will be unconditionally guaranteed on a senior unsecured basis by the Guarantors; and

•  will be effectively junior to any existing and future liabilities of our non-Guarantor subsidiaries.

We have not issued other debt securities, except for the Old Notes, which will be pari passu in right of payment with the New Notes. We have not issued and do not plan to issue any securities which will materially limit or qualify the rights of holders of the Old Notes and the New Notes.

Without limitation on the generality of the foregoing, the notes will be effectively subordinated to secured Indebtedness of the Company—including, without limitation, all Indebtedness under the Existing Facilities, Permitted Servicing Advance Facility Indebtedness, Permitted Warehouse Indebtedness, Permitted MSR Indebtedness, Permitted Residual Indebtedness and Securitization Indebtedness. In the event of the Company’s bankruptcy, liquidation, reorganization or other winding up, the Company’s assets that secure such secured Indebtedness will be available to pay obligations on the notes only after all Indebtedness under such secured Indebtedness has been repaid in full from such assets.

The notes will be guaranteed by all of the Company’s existing and future Domestic Subsidiaries other than our future Excluded Restricted Subsidiaries, our existing and future Securitization Entities,

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our future Warehouse Facility Trusts, our future MSR Facility Trusts and other than any Domestic Subsidiaries designated as Unrestricted Subsidiaries in the future. As of the Issue Date, Nationstar Home Equity Loan Trust 2009-A, Nationstar Home Equity Loan 2009-A REO LLC, Nationstar Mortgage Advance Receivables Trust 2009-ADVI, Nationstar Residual, LLC, Nationstar Funding LLC and Nationstar Advance Funding LLC are our Securitization Entities which will not guarantee the notes.

Each guarantee of the notes:

•  will be a general unsecured obligation of the Guarantor;

•  will be pari passu in right of payment with all existing and future senior Indebtedness of that Guarantor;

•  will be effectively junior in right of payment to all existing and future senior secured Indebtedness of that Guarantor to the extent of the assets securing such Indebtedness; and

•  will be senior in right of payment to all existing and future subordinated Indebtedness of that Guarantor.

Without limitation on the generality of the foregoing, the guarantee of the notes will be effectively subordinated to secured Indebtedness of the Guarantor—including, without limitation, all Indebtedness under the Existing Facilities, Permitted Servicing Advance Facility Indebtedness, Permitted Warehouse Indebtedness, Permitted MSR Indebtedness, Permitted Residual Indebtedness, Securitization Indebtedness and any secured guarantee of the Indebtedness of the Company. In the event of a Guarantor’s bankruptcy, liquidation, reorganization or other winding up or similar proceeding, the Guarantor’s assets that secure such secured Indebtedness of the Guarantor will be available to pay obligations on its note guarantee only after all Indebtedness under such secured Indebtedness has been repaid in full from such assets.

As of the date of the Indenture, all of our Subsidiaries will be “Restricted Subsidiaries.” However, under the circumstances described below under the caption “—Certain Covenants—Designation of Restricted and Unrestricted Subsidiaries,” we will be permitted to designate Subsidiaries as “Unrestricted Subsidiaries.” Our Unrestricted Subsidiaries will not be subject to many of the restrictive covenants in the Indenture. Our Unrestricted Subsidiaries will not guarantee the notes.

Transfer and Exchange

A Holder may transfer or exchange notes in accordance with the Indenture. The registrar and the Trustee may require a Holder to furnish appropriate endorsements and transfer documents in connection with a transfer of Notes. Holders will be required to pay all taxes due on transfer. The Issuers will not be required to transfer or exchange any notes selected for redemption or tendered (and not withdrawn) for repurchase in connection with a Change of Control Offer or an Asset Sale Offer. Also, the Issuers will not be required to transfer or exchange any note for a period of 15 days before the mailing of a notice of redemption of notes to be redeemed. The registered Holder of a note will be treated as the owner of the note for all purposes.

Principal, Maturity and Interest

The notes are initially being offered up to the principal amount of $250.0 million. The Issuers may, without the consent of the Holders, increase the principal amount of the notes in the future on the same terms and conditions and with the same CUSIP number as the notes being offered hereby. Any offering of additional notes is subject to the covenant described below under the caption “Certain Covenants—Limitation on Incurrence of Indebtedness and Issuance of Preferred Stock.” The notes offered hereby and any additional notes subsequently issued under the Indenture will be treated as a single class for all purposes under the Indenture.

The notes will mature on April 1, 2015. Interest on the notes will accrue at the rate of 10.875% per annum and will be payable semiannually in cash on each April 1 and October 1, commencing on

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October 1, 2010, to the persons who are registered Holders at the close of business on the March 15 and September 15 immediately preceding the applicable interest payment date. Interest on the notes will accrue from the most recent date to which interest has been paid or, if no interest has been paid, from and including March 26, 2010.

The notes will not be entitled to the benefit of any mandatory sinking fund.

Additional Interest may accrue on the notes in certain circumstances pursuant to the Registration Rights Agreement. See “Exchange Offer; Registration Rights.”

Note Guarantees

The notes will be guaranteed by each of the Company’s current and future Domestic Subsidiaries, other than our future Excluded Restricted Subsidiaries, Securitization Entities, Warehouse Facility Trusts, MSR Facility Trusts and future Unrestricted Subsidiaries. These Note Guarantees will be joint and several obligations of the Guarantors. The obligations of each Guarantor under its Note Guarantee will be limited as necessary to prevent that Note Guarantee from constituting a fraudulent conveyance under applicable law. This provision may not, however, be effective to protect a Note Guarantee from being voided under fraudulent transfer law, or may reduce the applicable Guarantor’s obligation to an amount that effectively makes its Note Guarantee worthless. If a Note Guarantee was rendered voidable, it could be subordinated by a court to all other indebtedness (including guarantees and other contingent liabilities) of the Guarantor, and, depending on the amount of such indebtedness, a Guarantor’s liability on its Note Guarantee could be reduced to zero. See “Risk Factors—Your right to be repaid would be adversely affected if a court determined that any of our subsidiaries made any guarantee for inadequate consideration or with the intent to defraud creditors.”

A Guarantor may not sell or otherwise dispose of all or substantially all of its assets to, or consolidate with or merge with or into (whether or not such Guarantor is the surviving Person) another Person, other than the Issuers or another Guarantor, unless:

(1)	except in the case of a merger entered into solely for the purpose of reincorporating a Guarantor in another jurisdiction, immediately after giving effect to that transaction, no Default or Event of Default shall have occurred and be continuing; and
(2)	either:

(a)	the Person acquiring the property in any such sale or disposition or the Person formed by or surviving any such consolidation or merger (if not the Guarantor) assumes all the obligations of that Guarantor under the Indenture, its Note Guarantee and the Registration Rights Agreement pursuant to a supplemental indenture satisfactory to the trustee; or
(b)	the Net Proceeds of such sale or other disposition are either (i) applied in accordance with the applicable provisions of the Indenture or (ii) not required to be applied in accordance with any provision of the Indenture.

The Note Guarantee of a Guarantor will be automatically and unconditionally released:

(1)	in connection with any sale, transfer or other disposition of all or substantially all of the assets of that Guarantor (including by way of merger or consolidation) to a Person that is not (either before or after giving effect to such transaction) the Company or a Restricted Subsidiary of the Company, if the sale or other disposition does not violate the “Asset Sale” provisions of the Indenture;
(2)	in connection with any sale, transfer or other disposition of all of the Capital Stock of that Guarantor (including by way of merger or consolidation) to a Person that is not (either before or after giving effect to such transaction) the Company or a Restricted Subsidiary of the Company, if the sale or other disposition does not violate the “Asset Sale” provisions of the Indenture;

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(3)	if the Company designates any Restricted Subsidiary that is a Guarantor to be an Unrestricted Subsidiary in accordance with the applicable provisions of the Indenture; or
(4)	upon legal defeasance or satisfaction and discharge of the Indenture as provided below under the captions “—Legal Defeasance and Covenant Defeasance” and “—Satisfaction and Discharge.”

Redemption

Optional Redemption.  At any time prior to April 1, 2013, the Issuers may on any one or more occasions redeem all or a part of the notes, upon not less than 30 nor more than 60 days’ notice, at a redemption price equal to 100.0% of the principal amount of the notes redeemed plus the Applicable Premium, plus accrued and unpaid interest and Additional Interest, if any, on the notes redeemed, to the applicable date of redemption (subject to the rights of Holders of notes on the relevant regular record date to receive interest due on the relevant interest payment date that is on or prior to the applicable date of redemption).

On or after April 1, 2013, the Issuers may on any one or more occasions redeem all or a part of the notes, upon not less than 30 nor more than 60 days’ notice, at the redemption prices (expressed as percentages of principal amount) set forth below, plus accrued and unpaid interest and Additional Interest, if any, on the notes redeemed, to the applicable date of redemption, if redeemed during the twelve month period beginning on April 1 of the years indicated below, subject to the rights of Holders of notes on the relevant regular record date to receive interest due on the relevant interest payment date that is on or prior to the applicable date of redemption:

Year	Percentage
2013		105.438	%
2014 and thereafter		100.000	%

“Applicable Premium” means, with respect to any note on any applicable redemption date, the greater of (i) 1.0% of the then outstanding principal amount of such note and (ii) the excess of:

(1)

the present value at such redemption date of the sum of (i) the redemption price of such note at April 1, 2013 (such redemption price being set forth in the table appearing above under “—Optional Redemption”) plus (ii) all required interest payments due on such note through April 1, 2013 (excluding accrued but unpaid interest), such present value to be computed using a discount rate equal to the Treasury Rate as of such redemption date plus 50 basis points; over

(2)

the then outstanding principal amount of such note.

“Treasury Rate” means, as determined by the Issuers, as of the applicable redemption date, the yield to maturity as of such redemption date of constant maturity United States Treasury securities (as compiled and published in the most recent Federal Reserve Statistical Release H. 15 (519) that has become publicly available at least two business days prior to such redemption date (or, if such statistical release is no longer published, any publicly available source of similar market data)) most nearly equal to the period from such redemption date to April 1, 2013; provided, however, that if no published maturity exactly corresponds with such date, then the Treasury Rate shall be interpolated or extrapolated on a straight-line basis from the arithmetic mean of the yields for the next shortest and next longest published maturities; provided further, however, that if the period from such redemption date to April 1, 2013, is less than one year, the weekly average yield on actually traded United States Treasury securities adjusted to a constant maturity of one year will be used.

Optional Redemption Upon Equity Offerings.  At any time, or from time to time, on or prior to April 1, 2013, the Issuers may, at their option, use the net cash proceeds of one or more Equity Offerings (as defined below) to redeem up to 35.0% of the principal amount of all notes issued at a redemption price equal to 110.875% of the principal amount of the notes redeemed plus accrued and

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unpaid interest and Additional Interest, if any, to the date of redemption (subject to the rights of Holders of notes on the relevant regular record date to receive interest due on the relevant interest payment date that is on or prior to the applicable date of redemption); provided that:

1.	at least 65.0% of the principal amount of all notes issued under the Indenture remains outstanding immediately after any such redemption; and
2.	the Issuers makes such redemption not more than 90 days after the consummation of any such Equity Offering.

“Equity Offering” means a sale either (1) of Equity Interests of the Company (other than Disqualified Capital Stock and other than to a Subsidiary of the Company) by the Company or (2) of Equity Interests of a direct or indirect parent entity of the Company (other than to the Company or a Subsidiary of the Company) to the extent that the net proceeds therefrom are contributed to the common equity capital of the Company.

Notice of any redemption upon any Equity Offering may be given prior to the completion thereof, and any such redemption or notice may, at the Issuers’ discretion, be subject to one or more conditions precedent.

In addition to the Issuers’ rights to redeem notes as set forth above, the Issuers may at any time and from time to time purchase notes in open-market transactions, tender offers or otherwise.

Selection and Notice of Redemption

In the event that the Issuers choose to redeem less than all of the notes, selection of the notes for redemption will be made by the Trustee either:

1.	in compliance with the requirements of the principal national securities exchange, if any, on which the notes are listed; or
2.	on a pro rata basis, by lot or by such method as the Trustee shall deem fair and appropriate.

No notes of a principal amount of $2,000 or less shall be redeemed in part. If a partial redemption is made with the proceeds of an Equity Offering, the Trustee will select the notes only on a pro rata basis or on as nearly a pro rata basis as is practicable (subject to DTC procedures). Notice of redemption will be mailed by first-class mail at least 30 but not more than 60 days before the redemption date to each Holder of notes to be redeemed at its registered address. On and after the redemption date, interest will cease to accrue on notes or portions thereof called for redemption as long as the Issuers have deposited with the Paying Agent funds in satisfaction of the applicable redemption price.

Repurchase of Notes upon a Change of Control Triggering Event

Upon the occurrence of a Change of Control, each Holder will have the right to require that the Issuers purchase all or a portion of such Holder’s notes pursuant to the offer described below (the “Change of Control Offer”), at a purchase price equal to 101.0% of the principal amount of the notes redeemed plus accrued and unpaid interest and Additional Interest, if any, to the date of purchase (subject to the rights of Holders of notes on the relevant regular record date to receive interest due on the relevant interest payment date that is on or prior to the applicable date of redemption).

Within 30 days following the date upon which a Change of Control occurs, the Issuers must send, by first class mail, a notice to each Holder, with a copy to the Trustee or otherwise in accordance with the procedures of DTC, which notice shall govern the terms of the Change of Control Offer. Such notice shall state, among other things, the purchase date, which must be no earlier than 30 days no later than 60 days from the date such notice is mailed, other than as may be required by law (the “Change of Control Payment Date”). Holders electing to have a note purchased pursuant to a Change of Control Offer will be required to surrender the note, with the form entitled “Option of Holder to Elect

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Purchase” on the reverse of the note completed, to the Paying Agent at the address specified in the notice prior to the close of business on the third business day prior to the Change of Control Payment Date. Holders will be entitled to withdraw their tendered notes and their election to require the Issuers to purchase such notes; provided that the Paying Agent receives, not later than the close of business on the last day of the offer period, a facsimile transmission or letter setting forth the name of the Holder of the notes, the principal amount of the notes tendered for purchase, and a statement that such Holder is withdrawing his tendered notes and his election to have such notes purchased.

The Issuers will not be required to make a Change of Control Offer upon a Change of Control if (1) a third party makes the Change of Control Offer in the manner, at the times and otherwise in compliance with the requirements set forth in the Indenture applicable to a Change of Control Offer made by the Issuers and purchases all notes properly tendered and not withdrawn under the Change of Control Offer, or (2) notice of redemption has been given pursuant to the Indenture as described above under the caption “—Optional Redemption,” unless and until there is a default in payment of the applicable redemption price.

If a Change of Control Offer is made, we cannot assure you that the Issuers will have available funds sufficient to pay the Change of Control purchase price for all the notes that might be delivered by Holders seeking to accept the Change of Control Offer. In the event the Issuers are required to purchase notes pursuant to a Change of Control Offer, the Issuers expect that they would seek third-party financing to the extent they do not have available funds to meet their purchase obligations. However, we cannot assure you that the Issuers would be able to obtain such financing. See “Risk Factors—We may not have the ability to raise the funds necessary to finance the change of control offer required by the indenture governing the notes.”

The Company’s other existing and future senior Indebtedness may prohibit events that would constitute a Change of Control. If the Company were to experience a change of control that triggers a default under such other senior Indebtedness, the Company could seek a waiver of such default or seek to refinance such other senior Indebtedness. In the event that the Company does not obtain such a waiver or refinance such senior Indebtedness, such default could result in amounts outstanding under such other senior Indebtedness to be declared due and payable. In addition, the exercise by the Holders of notes of their right to require the Issuers to repurchase the notes could cause a default under such other senior Indebtedness, even if the occurrence of the Change of Control itself does not, due to the financial effect of such repurchases on the Issuers.

Neither the Board of Directors of the Company nor the Trustee may waive the covenant relating to a Holder’s right to redemption upon a Change of Control; such provisions may only be waived or modified with the written consent of the holders of a majority in principal amount of the notes.

Restrictions in the Indenture described herein on the ability of the Company and its Restricted Subsidiaries to incur additional Indebtedness, to grant liens on its property and to make Restricted Payments (as defined below) may also make more difficult or discourage a takeover of the Company, whether favored or opposed by the management of the Company. Consummation of any such transaction in certain circumstances may require redemption or repurchase of the notes, and we cannot assure you that the Company or the acquiring party will have sufficient financial resources to effect such redemption or repurchase. Such restrictions and the restrictions on transactions with Affiliates may, in certain circumstances, make more difficult or discourage any leveraged buyout of the Company or any of its Subsidiaries by the management of the Company. While such restrictions cover a wide variety of arrangements that have traditionally been used to effect highly leveraged transactions, the Indenture may not afford the Holders protection in all circumstances from the adverse aspects of a highly leveraged transaction, reorganization, restructuring, merger or similar transaction.

The definition of Change of Control includes a phrase relating to the direct or indirect sale, lease, transfer, conveyance or other disposition of “all or substantially all” of the properties or assets of the Company and its Subsidiaries taken as a whole. Although there is a limited body of case law interpreting the phrase “substantially all,” there is no precise established definition of the phrase under

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applicable law. Accordingly, the ability of a Holder of notes to require the Company to repurchase its notes as a result of a sale, lease, transfer, conveyance or other disposition of less than all of the assets of the Company and its Subsidiaries taken as a whole to another Person or group may be uncertain.

The Issuers will comply with the requirements of Rule 14e-1 under the Exchange Act and any other securities laws and regulations thereunder to the extent such laws and regulations are applicable in connection with the repurchase of notes pursuant to a Change of Control Offer. To the extent that the provisions of any securities laws or regulations conflict with the “Change of Control” provisions of the Indenture, the Issuers will comply with the applicable securities laws and regulations and will not be deemed to have breached its obligations under the “Change of Control” provisions of the Indenture by virtue thereof.

Asset Sales

The Company will not, and will not permit any of its Restricted Subsidiaries to, consummate an Asset Sale, other than a Required Asset Sale or any Legacy Loan Portfolio Sale unless:

(1)	the Company (or the Restricted Subsidiary, as the case may be) receives consideration at the time of the Asset Sale at least equal to the Fair Market Value of the assets or Equity Interests issued or sold or otherwise disposed of; and
(2)	at least 75.0% of the consideration received in the Asset Sale by the Company or such Restricted Subsidiary is in the form of cash or Cash Equivalents. For purposes of this provision, each of the following will be deemed to be cash:

(a)	any liabilities, as shown on the Company’s or such Restricted Subsidiary’s most recent consolidated balance sheet, of the Company or any Restricted Subsidiary (other than contingent liabilities and liabilities that are by their terms subordinated to the notes or any Note Guarantee) that are assumed by the transferee of any such assets (or a third party on behalf of such transferee) pursuant to a customary innovation or other agreement that releases the Company or such Restricted Subsidiary from further liability;
(b)	any securities, notes or other obligations or assets received by the Company or any such Restricted Subsidiary from such transferee that are converted by the Company or such Restricted Subsidiary into cash within 180 days of the receipt thereof, to the extent of the cash received in that conversion; and
(c)	any Designated Noncash Consideration received by the Company or any of its Restricted Subsidiaries in such Asset Sale having an aggregate Fair Market Value, taken together with all other Designated Noncash Consideration received pursuant to this clause (c) that is at that time outstanding, not to exceed the greater of (x) $25.0 million and (y) 2.5% of Total Assets, at the time of the receipt of such Designated Noncash Consideration (with the Fair Market Value of each item of Designated Noncash Consideration being measured at the time received and without giving effect to subsequent changes in value).

Within 365 days after the receipt of any Net Proceeds from an Asset Sale, including a Required Asset Sale or a Legacy Loan Portfolio Sale, the Issuers (or the applicable Restricted Subsidiary, as the case may be) may apply such Net Proceeds at its option, in any combination of the following:

(1)  to prepay or repay Secured Debt or Indebtedness of any Restricted Subsidiary of the Company that is not a Guarantor, and, if the Indebtedness repaid is revolving credit Indebtedness, to correspondingly reduce commitments with respect thereto; provided, however, that, except in the case of Net Proceeds from a Legacy Loan Portfolio Sale, Net Proceeds, may not be applied to the prepayment or repayment of Non-Recourse Indebtedness, Indebtedness under Existing Facilities or Permitted Funding Indebtedness,

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other than Non-Recourse Indebtedness, Indebtedness under Existing Facilities or Permitted Funding Indebtedness secured by a Lien on the asset or assets that were subject to such Asset Sale;

(2)	to prepay or repay Pari Passu Debt permitted to be incurred pursuant to the Indenture to the extent required by the terms thereof, and, in the case of Pari Passu Debt under revolving credit facilities or other similar Indebtedness, to correspondingly reduce commitments with respect thereto;
(3)	to make one or more offers to the holders of the notes (and, at the option of the Company, the holders of Pari Passu Debt) to purchase notes (and such other Pari Passu Debt) pursuant to and subject to the conditions applicable to Asset Sale Offers described below;
(4)	to acquire all or substantially all of the assets of, or any Capital Stock of, another Permitted Business, if, after giving effect to any such acquisition of Capital Stock, the Permitted Business is or becomes a Restricted Subsidiary of the Company; or
(5)	to acquire other assets (including, without limitation, MSRs and Securitization Assets) that are used or useful in a Permitted Business.

Pending the final application of any Net Proceeds, the Company may temporarily reduce revolving credit borrowings and/or borrowings under Permitted Funding Indebtedness or otherwise invest the Net Proceeds in any manner that is not prohibited by the Indenture.

Any Net Proceeds from Asset Sales that are not applied or invested as provided in the second paragraph of this covenant will constitute “Excess Proceeds.” When the aggregate amount of Excess Proceeds exceeds $25.0 million, within thirty days thereof, the Issuers will make an Asset Sale Offer to all holders of notes and all holders of Pari Passu Debt containing provisions similar to those set forth in the Indenture with respect to offers to purchase or redeem with the proceeds of sales of assets to purchase the maximum principal amount of notes and such Pari Passu Debt that may be purchased out of the Excess Proceeds. The offer price in any Asset Sale Offer will be equal to 100.0% of the principal amount (or, in the case of any other Pari Passu Debt offered at a significant original issue discount, 100.0% of the accreted value thereof, if permitted by the relevant indenture or other agreement governing such Pari Passu Debt) plus accrued and unpaid interest and Additional Interest, if any, to the date of purchase, and will be payable in cash. If any Excess Proceeds remain after consummation of an Asset Sale Offer, the Company may use those Excess Proceeds for any purpose not otherwise prohibited by the Indenture. If the aggregate principal amount of notes and Pari Passu Debt tendered into such Asset Sale Offer exceeds the amount of Excess Proceeds, the trustee will select the notes and such Pari Passu Debt to be purchased on a pro rata basis. Upon completion of each Asset Sale Offer, the amount of Excess Proceeds will be reset at zero.

The Issuers will comply with the requirements of Rule 14e-1 under the Exchange Act and any other securities laws and regulations thereunder to the extent those laws and regulations are applicable in connection with each repurchase of notes pursuant to an Asset Sale Offer. To the extent that the provisions of any securities laws or regulations conflict with the Asset Sale provisions of the Indenture, the Issuers will comply with the applicable securities laws and regulations and will not be deemed to have breached its obligations under the Asset Sale provisions of the Indenture by virtue of such compliance.

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Certain Covenants

Covenant Suspension

During any period of time that the notes are rated Investment Grade and no Default or Event of Default has occurred and is then continuing, the Company and its Restricted Subsidiaries will not be subject to the following covenants:

•  “Repurchase at the Option of Holders—Asset Sales;”

•  “—Certain Covenants—Limitation on Incurrence of Indebtedness and Issuance of Preferred Stock;”

•  “—Certain Covenants—Limitation on Restricted Payments;”

•  “—Certain Covenants—Limitation on Dividend and Other Payment Restrictions Affecting Restricted Subsidiaries;”

•  clause (2) of the covenant described under “—Certain Covenants—Merger, Consolidation and Sale of Assets;”

•  “—Certain Covenants—Limitation on Transactions with Affiliates;”

•  “—Certain Covenants—Limitation on Guarantees by Restricted Subsidiaries;” and

•  “—Certain Covenants—Conduct of Business”

(collectively, the “Suspended Covenants”). In the event that the Company and its Restricted Subsidiaries are not subject to the Suspended Covenants for any period of time as a result of the preceding sentence and, subsequently, one or both of the Rating Agencies, as applicable, withdraws its ratings or downgrades the ratings assigned to the notes such that the notes are not rated Investment Grade, then the Company and its Restricted Subsidiaries will thereafter again be subject to the Suspended Covenants, it being understood that no actions taken by (or omissions of) the Company or any of its Restricted Subsidiaries during the suspension period shall constitute a Default or an Event of Default under the Suspended Covenants. Furthermore, after the time of reinstatement of the Suspended Covenants upon such withdrawal or downgrade, calculations with respect to Restricted Payments will be made in accordance with the terms of the covenant described below under “—Certain Covenants—Limitation on Restricted Payments” as though such covenant had been in effect during the entire period of time from the Issue Date.

There can be no assurance that the notes will ever achieve or maintain Investment Grade Ratings.

Limitation on Incurrence of Indebtedness and Issuance of Preferred Stock.  The Company will not, and will not permit any of its Restricted Subsidiaries to, directly or indirectly, create, incur, assume, guarantee, become liable, contingently or otherwise, with respect to, or otherwise become responsible for payment of (collectively, “incur”) any Indebtedness (including, without limitation, Acquired Indebtedness) and the Company will not permit any of its Restricted Subsidiaries to issue any shares of Preferred Stock, in each case other than Permitted Indebtedness.

Notwithstanding the foregoing, if no Default or Event of Default shall have occurred and be continuing at the time of or as a consequence of the incurrence of any such Indebtedness, the Company or any of its Restricted Subsidiaries may incur Indebtedness (including, without limitation, Acquired Indebtedness), and the Company’s Restricted Subsidiaries may issue Preferred Stock, in each case if on the date of the incurrence of such Indebtedness or Preferred Stock, after giving effect to the incurrence thereof and the use of proceeds thereof:

1.	the Corporate Indebtedness to Tangible Net Worth Ratio of the Company is less than 1.1 to 1.0; and
2.	the Consolidated Leverage Ratio of the Company is less than 4.5 to 1.0.

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In connection with any incurrence of Indebtedness pursuant to the second paragraph of this covenant incurred prior to the consummation of the exchange offer contemplated by the Registration Rights Agreement, the Issuers are required to provide an officers’ certificate to the Trustee on or prior to the incurrence of such Indebtedness showing in reasonable detail the calculation of the Corporate Indebtedness to Tangible Net Worth Ratio and the Consolidated Leverage Ratio of the Company and the Company shall use its commercially reasonable efforts to deliver to the Trustee, together with such certificate, a covenant compliance certificate from the Company’s independent auditors attesting to the accuracy of such calculations.

Limitation on Restricted Payments.  The Company will not, and will not cause or permit any of its Restricted Subsidiaries to, directly or indirectly:

1.	declare or pay any dividend or make any distribution (other than dividends or distributions payable in Qualified Capital Stock of the Company) on or in respect of shares of the Company’s Capital Stock to holders of such Capital Stock;
2.	purchase, redeem or otherwise acquire or retire for value any Capital Stock of the Company or any warrants, rights or options to purchase or acquire shares of any class of such Capital Stock (other than in exchange for Qualified Capital Stock of the Company);
3.	make any principal payment on, purchase, defease, redeem, prepay, decrease or otherwise acquire or retire for value, prior to any scheduled final maturity, scheduled repayment or scheduled sinking fund payment, any Indebtedness (other than Indebtedness owed by the Company or any Restricted Subsidiary of the Company to another Restricted Subsidiary of the Company or the Company) of the Company or any Restricted Subsidiary that is subordinate or junior in right of payment to the notes; or
4.	make any Restricted Investment

if at the time of such action (each such payments and other actions set forth in these clauses (1) through (4) above being collectively referred to as, a “Restricted Payment”) or immediately after giving effect thereto,

(i)	a Default or an Event of Default shall have occurred and be continuing; or
(ii)	immediately after giving effect thereto on a pro forma basis, the Company is not able to incur at least $1.00 of additional Indebtedness pursuant to the second paragraph of the covenant described above under the caption “—Limitation on the Incurrence of Indebtedness and Issuance of Preferred Stock;” or
(iii)	the aggregate amount of Restricted Payments (including such proposed Restricted Payment) made subsequent to the Issue Date (the amount expended for such purposes, if other than in cash, being the Fair Market Value of such property) shall exceed the sum of:

(a)

50.0% of the Consolidated Net Income of the Company for the period (taken as one accounting period) from the beginning of the fiscal quarter in which the Issue Date occurs to the end of the Company’s most recently ended fiscal quarter for which internal financial statements are available at the time of such Restricted Payment (or, if such Consolidated Net Income for such period is a deficit, less 100.0% of such deficit); plus

(b)

100.0% of the aggregate net cash proceeds and the Fair Market Value of marketable securities or other property received by the Company from any Person since the Issue Date including:

(i)  any contribution to its common equity capital or from the issue or sale of Equity Interests of the Company (other than Disqualified Capital Stock and Excluded Contributions);

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(ii)  the issuance or sale of convertible or exchangeable Disqualified Capital Stock or convertible or exchangeable debt securities of the Company that have been converted into or exchanged for such Equity Interests (other than Equity Interests (or Disqualified Capital Stock or debt securities) sold to a Subsidiary of the Company); plus

(c)	to the extent that any Restricted Investment that was made after the Issue Date is sold for cash or otherwise liquidated or repaid for cash, the lesser of (i) the cash return of capital with respect to such Restricted Investment (less the cost of disposition, if any) and (ii) the initial amount of such Restricted Investment; plus
(d)	to the extent that any Unrestricted Subsidiary of the Company is designated as a Restricted Subsidiary of the Company after the Issue Date, the Fair Market Value of the Company’s Investment in such Subsidiary as of the date on which such Subsidiary was originally designated as an Unrestricted Subsidiary after the Issue Date.

The foregoing provisions will not prohibit:

1.	the payment of any dividend or the consummation of any irrevocable redemption within 60 days after the date of declaration of such dividend or notice of such redemption if the dividend or payment of the redemption price, as the case may be, would have been permitted on the date of declaration or notice under the Indenture;
2.	the making of any Restricted Payment, either (i) solely in exchange for shares of Qualified Capital Stock of the Company, (ii) through the application of net proceeds of a substantially concurrent sale for cash (other than to a Subsidiary of the Company) of shares of Qualified Capital Stock of the Company or (iii) through the application of a substantially concurrent cash capital contribution received by the Company from its shareholders (which capital contribution (to the extent so used) shall be excluded from the calculation of amounts under clause (iii)(b) of the immediately preceding paragraph);
3.	the purchase, repurchase, redemption, defeasance or other acquisition or retirement for value of Indebtedness of the Company or any Restricted Subsidiary (including the acquisition of any shares of Disqualified Capital Stock of the Company) that is unsecured or contractually subordinated to the notes or to any Note Guarantee by exchange for, or out of the net cash proceeds from a substantially concurrent incurrence of Refinancing Indebtedness; provided, however, that such purchase, repurchase, redemption, defeasance or other acquisition or retirement for value shall be excluded in the calculation of the amount of Restricted Payments;
4.	so long as no Default or Event of Default shall have occurred and be continuing, the repurchase, retirement or other acquisition or retirement for value by the Company of Common Stock (or options, warrants or other rights to acquire Common Stock) of the Company (or payments to any direct or indirect parent company of the Company to permit distributions to repurchase common equity (or options, warrants or other rights to acquire common equity) thereof) of such direct or indirect parent company) from any future, current or former officer, director, manager or employee (or any spouses, successors, executors, administrators, heirs or legatees of any of the foregoing) of the Company, any direct or indirect parent company of the Company, or any of its Subsidiaries or their authorized representatives, in an aggregate amount not to exceed $2.5 million in any calendar year plus (i) the aggregate net cash proceeds received by the Company after the Issue Date from the issuance of such Equity Interests to, or the exercise of options to purchase such Equity Interests by, any current or former director, officer or employee of the Company or any Restricted Subsidiary of the Company (provided that the amount of such net cash proceeds received by the Company and utilized pursuant to this clause (4)(i) for any such repurchase, redemption, acquisition or retirement will be excluded from clause

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(iii)(b) of the preceding paragraph) and (ii) the proceeds of “key-man” life insurance policies that are used to make such redemptions or repurchases; provided that amounts available pursuant to this clause (4) to be utilized for Restricted Payments during any twelve-month period may be carried forward and utilized in the next succeeding twelvemonth period and provided, further, that the cancellation of Indebtedness owing to the Company from any future, current or former officer, director, manager or employee (or any spouses, successors, executors, administrators, heirs or legatees of any of the foregoing) of the Company or any of its Restricted Subsidiaries in connection with any repurchase of Capital Stock of such entities (or warrants or options or rights to acquire such Capital Stock) will not be deemed to constitute a Restricted Payment under the Indenture;

5.

(a) the repurchase of Equity Interests deemed to occur upon the exercise of stock options or warrants to the extent such Equity Interests represent a portion of the exercise price of those stock options or warrants and (b) repurchases of Equity Interests or options to purchase Equity Interests deemed to occur in connection with the exercise of stock options to the extent necessary to pay applicable withholding taxes;

6.

the declaration and payment of dividends by the Company to, or the making of loans to, its direct parent company in amounts required for the Company’s direct or indirect parent companies to pay, without duplication as to amounts of:

(a)	franchise taxes and other fees, taxes and expenses required to maintain the corporate existence of the Company and its direct and indirect parent entities (including a corporation organized to hold interests in the Company in connection with the public issuance of shares) plus $250,000 per year;
(b)	federal, state, and local income taxes on a consolidated or combined tax group of which the direct or indirect parent is the common parent, to the extent such income taxes are attributable to the income of the Company and its Restricted Subsidiaries and not directly payable by the Company or its Restricted Subsidiaries and, to the extent of the amount actually received from any of the Company’s Unrestricted Subsidiaries, in amounts required to pay such taxes to the extent attributable to the income of such Unrestricted Subsidiaries of the Company; provided that (i) in determining such taxes, the effect thereon of any net operating loss carryforwards or other carryforwards or tax attributes, such as alternative minimum tax carryforwards, shall be taken into account, (ii) if there is an adjustment in the amount of Taxable Income for any periods, an appropriate positive or negative adjustment shall be made to the amount of distributions or loans permitted pursuant to this Section 6(b), and if the adjustment is negative, then the permitted distribution on loan for succeeding periods shall be reduced (without duplication of reductions due to clause 6(b)(i) hereof) to take into account such negative amount until such negative amount is reduced to zero, (iii) any distribution or loan in respect of such taxes other than amounts relating to estimated payments shall be computed by a nationally recognized accounting firm and (iv) in no event will such dividends and loans exceed the amounts that the Company and its Restricted and/or Unrestricted Subsidiaries (as applicable) would have paid a stand-alone group;
(c)	so long as the Company is treated for income tax purposes as a disregarded entity or a partnership, distributions to equity holders or partners of the Company in an amount not to exceed the Tax Amount for such period; provided that a distribution of the Tax Amount shall be made no earlier than 10 days prior to the due date of the tax payable by equityholders or partners of the Company to which such Tax Amount relates;
(d)	customary salary, bonus and other benefits payable to officers and employees of any direct or indirect parent of the Company to the extent such salaries, bonuses and other

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benefits are attributable to the ownership or operations of the Company and its Restricted Subsidiaries; and

(e)  general corporate overhead expenses of any direct or indirect parent company of the Company to the extent such expenses are attributable to the ownership or operation of the Company and its Restricted Subsidiaries;

7.	so long as no Default or Event of Default shall have occurred and be continuing, the declaration and payment of regularly scheduled or accrued dividends to holders of any class or series of Disqualified Capital Stock of the Company or any Restricted Subsidiary of the Company issued on or after the Issue Date in accordance with the second paragraph of the covenant described above under the caption “—Limitation on the Incurrence of Indebtedness and Issuance of Preferred Stock”;
8.	the payment of any dividend (or, in the case of any partnership or limited liability company, any similar distribution) by a Restricted Subsidiary of the Company to the holders of its Equity Interests on a pro rata basis;
9.	any repricing or issuance of employee stock options or the adoption of bonus arrangements, in each case in connection with the issuance of the notes, and payments pursuant to such arrangements;
10.	Restricted Payments that are made with Excluded Contributions;
11.	Restricted Payments made with Net Cash Proceeds from Asset Sales remaining after application thereof as required by the “Asset Sale” provisions of the Indenture (including after the making by the Issuers of any Asset Sale Offer required to be made by the Issuers pursuant to such covenant and the purchase of all notes tendered therein);
12.	upon occurrence of a Change of Control and within 60 days after the completion of the Change of Control Offer pursuant to the “Change of Control” provisions of the Indenture (including the purchase of all notes tendered), any purchase or redemption of Obligations of the Company that are subordinate or junior in right of payment to the notes required pursuant to the terms thereof as a result of such Change of Control at a purchase or redemption price not to exceed 101.0% of the outstanding principal amount thereof, plus accrued and unpaid interest thereon, if any; provided, however, that (A) at the time of such purchase or redemption, no Default or Event of Default shall have occurred and be continuing (or would result therefrom) and (B) such purchase or redemption is not made, directly or indirectly, from the proceeds of (or made in anticipation of) any issuance of Indebtedness by the Company or any Restricted Subsidiary of the Company; and
13.	Restricted Payments in an amount not to exceed $17.5 million.

In determining the aggregate amount of Restricted Payments made subsequent to the Issue Date in accordance with clause (iii) above, amounts expended pursuant to clauses (1), (4), (7) and (13) shall be included in such calculation.

Limitation on Dividend and Other Payment Restrictions Affecting Restricted Subsidiaries.  The Company will not, and will not cause or permit any of its Restricted Subsidiaries to, directly or indirectly, create or otherwise cause or permit to exist or become effective any consensual encumbrance or consensual restriction on the ability of any Restricted Subsidiary of the Company to:

1.	pay dividends or make any other distributions on or in respect of its Capital Stock to the Company or any of its Restricted Subsidiaries;
2.	make loans or advances or to pay any Indebtedness or other obligation owed to the Company or any Restricted Subsidiary of the Company; or

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3.  transfer any of its property or assets to the Company or any other Restricted Subsidiary of the Company, except, with respect to clauses (1), (2) and (3), for such encumbrances or restrictions existing under or by reason of:

(a)	applicable law, rule, regulation or order;
(b)	the Indenture and the notes;
(c)	customary non-assignment provisions of any contract or any lease of any Restricted Subsidiary of the Company;
(d)	any instrument governing Acquired Indebtedness, which encumbrance or restriction is not applicable to any Person, or the properties or assets of any Person, other than the Person or the properties or assets of the Person so acquired;
(e)	the Existing Facilities as each exists on the Issue Date and any amendments, modifications, restatements, renewals, increases, supplements, refundings, replacements or refinancings thereof; provided that any restrictions imposed pursuant to any such amendment, modification, restatement, renewal, increase, supplement, refunding, replacement or refinancing are ordinary and customary with respect to facilities similar to the Existing Facilities (under the relevant circumstances) and will not materially affect the Company’s ability to make anticipated principal and interest payments on the notes (as determined in good faith by the Board of Directors of the Company);
(f)	agreements existing on the Issue Date to the extent and in the manner such agreements are in effect on the Issue Date;
(g)	restrictions on the transfer of assets (other than cash) held in a Restricted Subsidiary of the Company imposed under any agreement governing Indebtedness incurred in accordance with the Indenture;
(h)	provisions in agreements evidencing Permitted Funding Indebtedness that impose restrictions on the collateral securing such Indebtedness;
(i)	restrictions on the transfer of assets subject to any Lien permitted under the Indenture imposed by the holder of such Lien;
(j)	restrictions imposed by any agreement to sell assets or Capital Stock permitted under the Indenture to any Person pending the closing of such sale;
(k)	any agreement or instrument governing Capital Stock of any Person that is acquired;
(l)	the requirements of any Securitization, Warehouse Facility or MSR Facility that are exclusively applicable to any Securitization Entity, Warehouse Facility Trust, MSR Facility Trust or special purpose Subsidiary of the Company formed in connection therewith;
(m)	customary provisions in joint venture and other similar agreements relating solely to such joint venture;
(n)	customary provisions in leases, licenses and other agreements entered into in the ordinary course of business;
(o)	restrictions on cash or other deposits or net worth imposed by customers under contracts entered into in the ordinary course of business;
(p)	other Indebtedness, Disqualified Capital Stock or Preferred Stock of Foreign Subsidiaries of the Company permitted to be incurred subsequent to the Issue Date pursuant to the provisions of the covenant described under “—Limitation on the Incurrence of Indebtedness and Issuance of Preferred Stock” that impose restrictions solely on the Foreign Subsidiaries party thereto; provided that the restrictions will not materially

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affect the ability of the Issuers to pay the principal, interest and premium and Additional Interest, if any, on the Notes, as determined in good faith by the Company; and

(q)  any encumbrances or restrictions imposed by any amendments, modifications, restatements, renewals, increases, supplements, refundings, replacements or refinancings of the contracts, instruments or obligations referred to in clauses (b) through (d), (f) through (n) above; provided that such amendments, modifications, restatements, renewals, increases, supplements, refundings, replacements or refinancings are, in the good faith judgment of the Company’s Board of Directors whose judgment shall be conclusively binding, not materially more restrictive with respect to such dividend and other payment restrictions, taken as a whole, than those contained in the dividend or other payment restrictions prior to such amendment, modification, restatement, renewal, increase, supplement, refunding, replacement or refinancing.

Limitation on Liens.  The Company will not, and will not cause or permit any of its Restricted Subsidiaries to, directly or indirectly, create, incur, assume or permit or suffer to exist any Liens of any kind on the assets of the Company or its Restricted Subsidiaries securing Indebtedness of the Company or its Restricted Subsidiaries unless:

1.	in the case of Liens securing Indebtedness of the Company that is expressly subordinate or junior in right of payment to the notes, the notes are secured by a Lien on such property, assets or proceeds that is senior in priority to such Liens; and
2.	in all other cases, the notes are equally and ratably secured except for:

(a)	Liens existing as of the Issue Date to the extent and in the manner such Liens are in effect on the Issue Date;
(b)	Liens securing the notes and the Note Guarantees;
(c)	Liens securing Non-Recourse Indebtedness;
(d)	Liens securing Permitted Funding Indebtedness so long as any such Lien shall encumber only (i) the assets acquired or originated with the proceeds of such Indebtedness, assets that consist of Servicing Advances, MSRs, loans, mortgage related securities and other mortgage related receivables, REO Assets, Residual Assets and other similar assets subject to and pledged to secure such Indebtedness and (ii) any intangible contract rights and proceeds of, and other, related documents, records and assets directly related to the assets set forth in clause (i);
(e)	Liens securing Refinancing Indebtedness that is incurred to Refinance any Indebtedness that has been secured by a Lien permitted under the Indenture and that has been incurred in accordance with the provisions of the Indenture; provided, however, that such Liens: (i) are no less favorable to the Holders than the Liens in respect of the Indebtedness being Refinanced; and (ii) do not extend to or cover any property or assets of the Company or its Restricted Subsidiaries not securing the Indebtedness so Refinanced (or property of the same type and value); and
(f)	Permitted Liens.

Notwithstanding the foregoing, the Company will not, and will not cause or permit any of its Restricted Subsidiaries to, directly or indirectly, create, incur, assume or permit or suffer to exist any Liens on any MSR Assets or on the Capital Stock of any MSR Subsidiaries owned by the Company or its Restricted Subsidiaries securing Indebtedness of the Company or its Restricted Subsidiaries (other than (x) Liens on MSR Assets owned on the Issue Date securing Indebtedness at any one time outstanding not to exceed $25.0 million or (y) Liens pursuant to clauses (1), (5), (6) (provided such

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Liens are in existence at the time such assets or property is acquired and were not incurred in contemplation thereof), (14), (19) and (34) of the definition of Permitted Liens) unless all payments due under the Indenture and the notes are secured on an equal and ratable basis with the obligations so secured until such time as such obligations are no longer secured by a Lien.

Limitation on Sale and Leaseback Transactions.  The Company will not, and will not permit any of its Restricted Subsidiaries to, enter into any sale and leaseback transaction; provided that the Company and any Restricted Subsidiary of the Company may enter into a sale and leaseback transaction if:

(1)	the Company or that Restricted Subsidiary, as applicable, could have (a) incurred Indebtedness in an amount equal to the Attributable Debt relating to such sale and leaseback transaction pursuant to the covenant described above under the caption “—Limitation on Incurrence of Indebtedness and Issuance of Preferred Stock” and (b) incurred a Lien to secure such Indebtedness pursuant to the covenant described above under the caption “—Limitation on Liens;”
(2)	the consideration of that sale and leaseback transaction is at least equal to the Fair Market Value of the property that is the subject of that sale and leaseback transaction; and
(3)	the transfer of assets in that sale and leaseback transaction is permitted by, and the Company applies the proceeds of such transaction in compliance with, the covenant described above under the caption “—Repurchase at the Option of Holders—Asset Sales.”

Merger, Consolidation and Sale of Assets.  (A) Neither Issuer, in a single transaction or series of related transactions, may consolidate or merge with or into any Person, or sell, assign, transfer, lease, convey or otherwise dispose of all or substantially all such Issuer’s assets, to any Person and (B) the Company will not, in a single transaction or series of related transactions, consolidate or merge with or into any Person, or sell, assign, transfer, lease, convey or otherwise dispose of (or cause or permit any Subsidiary of the Company to sell, assign, transfer, lease, convey or otherwise dispose of) all or substantially all of the Company’s assets (determined on a consolidated basis for the Company and the Company’s Restricted Subsidiaries) whether as an entirety or substantially as an entirety to any Person unless:

(1)  either:

(a)

the Company, or such Issuer, as the case may be, shall be the surviving or continuing entity; or

(b)

the Person (if other than the Company or such Issuer, as the case may be) formed by such consolidation or into which the Company or such Issuer, as the case may be, is merged or the Person which acquires by sale, assignment, transfer, lease, conveyance or other disposition the properties and assets of the Company or such Issuer, as the case may be, and of the Company’s Subsidiaries substantially as an entirety (the “Surviving Entity”):

(i)

shall be a Person organized and validly existing under the laws of the United States or any State thereof or the District of Columbia; provided that in the case where the Surviving Entity is not a corporation, a co-obligor of the notes is a corporation; and

(ii)

shall expressly assume, by supplemental indenture (in form and substance reasonably satisfactory to the Trustee), executed and delivered to the Trustee, the due and punctual payment of the principal of, and premium, if any, and interest on all of the notes and the performance of every covenant of the notes, the Indenture and the Registration Rights Agreement on the part of the Company or such Issuer, as the case may be, to be performed or observed;

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(2)	immediately after giving effect to such transaction and the assumption contemplated by clause (1)(b)(ii) above (including giving effect to any Indebtedness and Acquired Indebtedness incurred or anticipated to be incurred in connection with or in respect of such transaction), the Company, such Issuer, or such Surviving Entity, as the case may be, shall either (x) be able to incur at least $1.00 of additional Indebtedness pursuant to the second paragraph of the covenant described above under the caption “—Limitation on Incurrence of Indebtedness and Issuance of Preferred Stock” or (y) have a pro forma Consolidated Leverage Ratio and a pro forma Corporate Indebtedness to Tangible Net Worth Ratio that would not be more than the actual Consolidated Leverage Ratio and Corporate Indebtedness to Tangible Net Worth Ratio of the Company, as applicable, immediately prior to such transaction;
(3)	immediately before and immediately after giving effect to such transaction and the assumption contemplated by clause (1)(b)(ii) above (including, without limitation, giving effect to any Indebtedness and Acquired Indebtedness incurred or anticipated to be incurred and any Lien granted in connection with or in respect of the transaction), no Default or Event of Default shall have occurred or be continuing; and
(4)	the Company, such Issuer or the Surviving Entity shall have delivered to the Trustee an officers’ certificate and an opinion of counsel, each stating that such consolidation, merger, sale, assignment, transfer, lease, conveyance or other disposition and, if a supplemental indenture is required in connection with such transaction, such supplemental indenture comply with the applicable provisions of the Indenture and that all conditions precedent in the Indenture relating to such transaction have been satisfied.

For purposes of the foregoing, the transfer (by lease, assignment, sale or otherwise, in a single transaction or series of transactions) of all or substantially all of the properties or assets of one or more Restricted Subsidiaries of the Company the Capital Stock of which constitutes all or substantially all of the properties and assets of the Company, shall be deemed to be the transfer of all or substantially all of the properties and assets of the Company.

The Indenture provides that upon any consolidation, combination or merger or any transfer of all or substantially all of the assets of the Company or such Issuer, as the case may be, in accordance with the foregoing, in which the Company or such Issuer, as the case may be, is not the continuing entity, the successor Person formed by such consolidation or into which the Company or such Issuer, as the case may be, is merged or to which such conveyance, lease or transfer is made shall succeed to, and be substituted for, and may exercise every right and power of, the Company or such Issuer, as the case may be, under the Indenture and the notes with the same effect as if such surviving entity had been named as such.

This “Merger, Consolidation and Sale of Assets” covenant will not apply to:

(1)	a merger of the Company or such Issuer, as the case may be, with an Affiliate solely for the purpose of reorganizing the Company in another jurisdiction or converting the Company into a corporation;
(2)	any consolidation or merger, or any sale, assignment, transfer, conveyance, lease or other disposition of assets between or among the Company and its Restricted Subsidiaries; or
(3)	any Required Asset Sale or Legacy Loan Portfolio Sale that complies with the covenant described above under the caption “—Repurchase at the Option of Holders—Asset Sales.”

Limitation on Transactions with Affiliates.  The Company will not, and will not permit any of its Restricted Subsidiaries to, directly or indirectly, enter into or permit to exist any transaction or series of related transactions (including, without limitation, the purchase, sale, lease or exchange of any property or the rendering of any service) with, or for the benefit of, any of its Affiliates (each an “Affiliate Transaction”), involving aggregate payment of consideration in excess of $5.0 million other

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than: (1) Affiliate Transactions permitted as described below; and (2) Affiliate Transactions on terms that are no less favorable than those that might reasonably have been obtained in a comparable transaction at such time on an arm’s-length basis from a Person that is not an Affiliate of the Company or such Subsidiary.

All Affiliate Transactions (and each series of related Affiliate Transactions which are similar or part of a common plan) involving aggregate payments or other property with a Fair Market Value in excess of $7.5 million shall be approved by the Board of Directors of the Company or such Subsidiary, as the case may be, such approval to be evidenced by a Board Resolution stating that such Board of Directors has determined that such transaction complies with the foregoing provisions.

The restrictions set forth in the first and second paragraphs of this covenant shall not apply to:

1.	any employment or consulting agreement, employee benefit plan, officer or director indemnification agreement or any similar arrangement entered into by the Company or any of its Restricted Subsidiaries in the ordinary course of business or approved in good faith by the Board of Directors of the Company and payments pursuant thereto and the issuance of Equity Interests of the Company (other than Disqualified Capital Stock) to directors and employees pursuant to stock option or stock ownership plans;
2.	transactions between or among the Company and any of its Restricted Subsidiaries or between or among such Restricted Subsidiaries;
3.	transactions between the Company or one of its Restricted Subsidiaries and any Person in which the Company or one of its Restricted Subsidiaries has made an Investment in the ordinary course of business and such Person is an Affiliate solely because of such Investment;
4.	transactions between the Company or one of its Restricted Subsidiaries and any Person in which the Company or one of its Restricted Subsidiaries holds an interest as a joint venture partner and such Person is an Affiliate solely because of such interest;
5.	any agreement as in effect as of the Issue Date or any amendment thereto or any transactions or payments contemplated thereby (including pursuant to any amendment thereto) in any replacement agreement thereto so long as any such amendment or replacement agreement is not more disadvantageous to the Holders in any material respect than the original agreement as in effect on the Issue Date (as determined by the Board of Directors of the Company in good faith);
6.	Restricted Payments permitted by the Indenture;
7.	sales of Qualified Capital Stock and capital contributions to the Company from one or more holders of its Capital Stock;
8.	the existence of, or the performance by the Company or any of its Restricted Subsidiaries of its obligations under the terms of, any stockholders’ agreement (including any registration rights agreement or purchase agreement related thereto) to which it is a party as of the Issue Date and any similar agreements which it may enter into thereafter; provided, however, that the existence of, or the performance by the Company or any of its Restricted Subsidiaries of obligations under any future amendment to any such existing agreement or under any similar agreement entered into after the Issue Date shall only be permitted by this clause (8) to the extent that the terms of any such amendment or new agreement, taken as a whole, are not disadvantageous to the Holders of the Notes in any material respect (as determined by the Board of Directors of the Company in good faith);
9.	transactions in which the Company or any Restricted Subsidiary of the Company, as the case may be, receives an opinion from a nationally recognized investment banking, appraisal or accounting firm that such Affiliate Transaction is either fair, from a financial

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standpoint, to the Company or such Restricted Subsidiary or is on terms not materially less favorable than those that might reasonably have been obtained in a comparable transaction at such time on an arm’s length basis from a Person that is not an Affiliate of the Company;

10.	(i) the provision of mortgage servicing and similar services to Affiliates in the ordinary course of business and otherwise not prohibited by the Indenture that are fair to the Company and its Restricted Subsidiaries (as determined by the Company in good faith) or are on terms at least as favorable as might reasonably have been obtained at such time from an unaffiliated party (as determined by the Company in good faith) and (ii) transactions with customers, clients, suppliers, contractors, joint venture partners or purchasers or sellers of goods or services that are Affiliates, in each case in the ordinary course of business and otherwise in compliance with the terms of the Indenture that are fair to the Company and its Restricted Subsidiaries, in the reasonable determination of the Board of Directors of the Company or the senior management thereof, or are on terms at least as favorable as might reasonably have been obtained at such time from an unaffiliated party;
11.	payments or loans (or cancellation of loans) to employees of the Company, any of its direct or indirect parent entities or any Restricted Subsidiary of the Company (as determined by the Board of Directors of the Company in good faith);
12.	Guarantees by the Sponsor or any direct and indirect parent of the Company for Obligations of the Company and its Restricted Subsidiaries; and
13.	investments by the Sponsor in securities of the Company or any Restricted Subsidiary of the Company so long as the investment is being offered generally to other investors on the same or more favorable terms or the securities are acquired in market transactions.

Limitation on Guarantees by Restricted Subsidiaries.  The Company will not permit any Domestic Restricted Subsidiary, other than (i) an Excluded Restricted Subsidiary or (ii) an MSR Facility Trust, a Securitization Entity or a Warehouse Facility Trust, directly or indirectly, by way of the pledge of any intercompany note or otherwise, to assume, guarantee or in any other manner become liable with respect to any Indebtedness of the Company of the type described in clauses (1) and (2) of the definition of “Indebtedness” (other than Permitted Funding Indebtedness to the extent such Domestic Restricted Subsidiary is a guarantor thereunder), unless, in any such case:

1.

such Restricted Subsidiary within 30 days executes and delivers a supplemental indenture to the Indenture, providing a guarantee (“Guarantee”) of payment of the notes by such Subsidiary; and

2.

if such assumption, guarantee or other liability of such Restricted Subsidiary is provided in respect of Indebtedness that is expressly subordinated to the notes, the guarantee or other instrument provided by such Restricted Subsidiary in respect of such subordinated Indebtedness shall be subordinated to the Guarantee pursuant to subordination provisions no less favorable to the Holders of the notes than those contained in the Indenture.

Notwithstanding the foregoing, any such Guarantee by a Restricted Subsidiary of the Company of the notes shall provide by its terms that it shall be automatically and unconditionally released and discharged, without any further action required on the part of the Trustee or any Holder, upon:

1.	the unconditional release of such Restricted Subsidiary from its liability in respect of the Indebtedness in connection with which such Guarantee was executed and delivered pursuant to the preceding paragraph; or
2.	sale or other disposition (by merger or otherwise) to any Person that is not a Restricted Subsidiary of the Company of all of the Company’s Capital Stock in, or all or substantially all of the assets of, such Restricted Subsidiary; provided that: (a) such sale or disposition of such Capital Stock or assets is otherwise in compliance with the terms of the Indenture;

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and (b) such assumption, guarantee or other liability of such Restricted Subsidiary has been released by the holders of the other Indebtedness so guaranteed.

Designation of Restricted and Unrestricted Subsidiaries.  The Board of Directors of the Company may designate any Restricted Subsidiary of the Company to be an Unrestricted Subsidiary if that designation would not cause a Default or Event of Default. If a Restricted Subsidiary of the Company is designated as an Unrestricted Subsidiary, the aggregate Fair Market Value of all outstanding Investments owned by the Company and its Restricted Subsidiaries in the Subsidiary designated as Unrestricted will be deemed to be an Investment made as of the time of the designation and will reduce the amount available for Restricted Payments under the covenant described above under the caption “—Limitation on Restricted Payments” or under one or more clauses of the definition of Permitted Investments, as determined by the Company. That designation will only be permitted if the Investment would be permitted at that time and if the Restricted Subsidiary otherwise meets the definition of an Unrestricted Subsidiary.

Any designation of a Subsidiary of the Company as an Unrestricted Subsidiary will be evidenced to the trustee by filing with the trustee a certified copy of a resolution of the Board of Directors of the Company giving effect to such designation and an officers’ certificate certifying that such designation complied with the preceding conditions and was permitted by the covenant described above under the caption “—Limitation on Restricted Payments.” The Board of Directors of the Company may at any time designate any Unrestricted Subsidiary to be a Restricted Subsidiary of the Company; provided that such designation will be deemed to be an incurrence of Indebtedness by a Restricted Subsidiary of the Company of any outstanding Indebtedness of such Unrestricted Subsidiary and such designation will only be permitted if (1) such Indebtedness is permitted under the covenant described under the caption “—Limitation on Incurrence of Indebtedness and Issuance of Preferred Stock,” calculated on a pro forma basis as if such designation had occurred at the beginning of the four-quarter reference period; and (2) no Default or Event of Default would occur and be continuing following such designation.

Conduct of Business.  The Company will not, and will not permit any of its Restricted Subsidiaries to, engage in any business other than Permitted Businesses, except to such extent as would not be material to the Company and its Restricted Subsidiaries taken as a whole.

Restrictions on Activities of Nationstar Capital Corporation.  Nationstar Capital Corporation may not hold any assets, become liable for any obligations or engage in any business activities; provided that Nationstar Capital Corporation may be a co-obligor of (i) the notes and (ii) any other Indebtedness incurred by the Company pursuant to the covenant described above under ‘‘—Limitation on Incurrence of Incurrence of Indebtedness and Issuance of Preferred Stock,” and in each case may engage in any activities directly related or necessary in connection therewith.

Reports to Holders.  Following consummation of the exchange offer contemplated by the Registration Rights Agreement, whether or not required by the rules and regulations of the SEC, so long as any notes are outstanding, the Company will furnish to the Holders of notes or cause the Trustee to furnish to the Holders of notes within the time periods specified in the SEC’s rules and regulations:

(1)	all quarterly and annual reports that would be required to be filed with the SEC on Forms 10-Q and 10-K if the Company were required to file such reports; and
(2)	all current reports that would be required to be filed with the SEC on Form 8-K if the Company were required to file such reports.

The availability of the foregoing materials on the SEC’s EDGAR service (or its successor) shall be deemed to satisfy the Company’s delivery obligation.

All such reports will be prepared in all material respects in accordance with all of the rules and regulations applicable to such reports. Each annual report on Form 10-K will include a report on the

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Company’s consolidated financial statements by the Company’s certified independent accountants, and each Form 10-Q and 10-K will include a “Management’s Discussion and Analysis of Financial Condition and Results of Operations” that describes the financial condition and results of operations of the Company and its consolidated Subsidiaries. In addition, following the consummation of the exchange offer contemplated by the Registration Rights Agreement, the Company will file a copy of each of the reports referred to in clauses (1) and (2) above with the SEC for public availability within the time periods specified in the rules and regulations applicable to such reports (unless the SEC will not accept such filing).

Notwithstanding the foregoing, such requirements shall be deemed satisfied prior to the consummation of the exchange offer contemplated by the Registration Rights Agreement by (1) the filing with the SEC of the exchange offer registration statement and any amendments thereto, with such financial information that satisfies Regulation S-X under the Securities Act, subject to exceptions consistent with the presentation of financial information in this prospectus, to the extent filed within the time specified above, or (2) by posting on its website or providing to the Trustee within 15 days of the time periods after the Company would have been required to file annual and interim reports with the SEC (which for the first quarterly report required to be posted or provided after the Issue Date shall be 60 days after the end of the applicable fiscal quarter), the financial information (including a “Management’s Discussion and Analysis of Financial Condition and Results of Operations” section) that would be required to be included in such reports, subject to exceptions consistent with the presentation of financial information in this prospectus.

Prior to the consummation of the exchange offer contemplated by the Registration Rights Agreement, the Company will disclose in the financial information posted on its website or provided to the Trustee (1) the amount of the Company’s Consolidated Net Income for the applicable quarter or year, and (2) the amount of the Company’s Consolidated EBITDA for the most-recently ended four full fiscal quarters. After the consummation of the exchange offer contemplated by the Registration Rights Agreement, the Company may disclose such amounts of Consolidated Net Income and Consolidated EBITDA (a) by posting on its website, (b) by delivering to the Trustee, or (c) by furnishing on Form 8-K.

In the event that any direct or indirect parent of the Company becomes a Guarantor of the notes, the Indenture will permit the Company to satisfy its obligations in this covenant with respect to financial information relating to the Company by furnishing financial information relating to such parent; provided that such reporting is accompanied by consolidating information that explains in reasonable detail the differences between the information relating to such parent and any of its Subsidiaries other than Company and its Subsidiaries, on the one hand, and the information related to the Company, the Note Guarantors and the other Subsidiaries of the Company on a standalone basis on the other hand.

If, at any time after consummation of the exchange offer contemplated by the Registration Rights Agreement, the Company is no longer subject to the periodic reporting requirements of the Exchange Act for any reason, the Company will nevertheless continue filing the reports specified in the preceding paragraphs of this covenant with the SEC within the time periods specified above unless the SEC will not accept such a filing. The Company will not take any action for the purpose of causing the SEC not to accept any such filings. If, notwithstanding the foregoing, the SEC will not accept the Company’s filings for any reason, the Company will post the reports referred to in the preceding paragraphs on a website within the time periods that would apply if the Company were required to file those reports with the SEC.

If, at any time, the Company has designated any of its Subsidiaries as Unrestricted Subsidiaries, then any “Management’s Discussion and Analysis of Financial Condition and Results of Operations,” or other comparable section, shall provide an analysis and discussion of the material differences with respect to the financial condition and results of operations of the Company and its Restricted Subsidiaries as compared to the Company and its Subsidiaries (including such Unrestricted Subsidiaries).

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In addition, the Company agrees that, for so long as any notes remain outstanding, it will furnish to the Holders and to securities analysts and prospective investors, upon their request, the information required to be delivered pursuant to Rule 144A(d)(4) under the Securities Act.

Notwithstanding anything to the contrary in this Description of New Notes, the Company will not be deemed to have failed to comply with any of its obligations described below under clause (3) of the caption under “—Events of Default” until 30 days after the date on which any report hereunder is due.

Events of Default

The following events are defined in the Indenture as “Events of Default”:

1.	the failure to pay interest, or Additional Interest, if any, on any notes when the same becomes due and payable and the default continues for a period of 30 days;
2.	the failure to pay the principal on any notes, when such principal becomes due and payable, at maturity, upon redemption or otherwise (including the failure to make a payment to purchase notes tendered pursuant to a Change of Control Offer);
3.	a default in the observance or performance of any other covenant or agreement contained in the Indenture and such default continues for a period of 60 days after the Company receives written notice specifying the default (and demanding that such default be remedied) from the Trustee or the Holders of at least 25.0% of the then outstanding principal amount of all notes issued under the Indenture;
4.	the failure to pay at final maturity (giving effect to any applicable grace periods and any extensions thereof) the principal amount of any Indebtedness (other than Non-Recourse Indebtedness) of the Company or any Restricted Subsidiary of the Company, or the acceleration of the final stated maturity of any such Indebtedness (which acceleration is not rescinded, annulled or otherwise cured within 20 days of receipt by the Company or such Restricted Subsidiary of notice of any such acceleration) if the aggregate principal amount of such Indebtedness, together with the principal amount of any other such Indebtedness in default for failure to pay principal at final maturity or which has been accelerated, aggregates $25.0 million or more at any time;
5.	one or more judgments in an aggregate amount in excess of $25.0 million shall have been rendered against the Company or any of its Restricted Subsidiaries and such judgments remain undischarged, unpaid or unstayed for a period of 60 days after such judgment or judgments become final and non-appealable (other than any judgments as to which, and only to the extent, a reputable insurance company has acknowledged coverage of such judgments in writing);
6.	certain events of bankruptcy or insolvency affecting the Company or any of its Significant Subsidiaries; or
7.	the Guarantee of any Significant Subsidiary of the Company shall for any reason cease to be in full force and effect or be declared null and void or any responsible officer of any Guarantor that is a Significant Subsidiary of the Company, as the case may be, denies that it has any further liability under its Guarantee or gives notice to such effect, other than by reason of the termination of the Indenture or the release of any such Guarantee in accordance with the Indenture.

If an Event of Default (other than an Event of Default specified in clause (6) above with respect to the Company) shall occur and be continuing, the Trustee or the Holders of at least 25.0% in principal amount of the then outstanding notes issued under the Indenture may declare the principal of and accrued interest on all the notes issued under the Indenture to be due and payable by notice in writing to the Company and the Trustee specifying the respective Event of Default and that it is a

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“notice of acceleration,” or the “Acceleration Notice,” and the same shall become immediately due and payable.

If an Event of Default specified in clause (6) above with respect to the Company occurs and is continuing, then all unpaid principal of, and premium, if any, and accrued and unpaid interest on all of the then outstanding notes issued under the Indenture shall ipso facto become and be immediately due and payable without any declaration or other act on the part of the Trustee or any Holder.

The Indenture provides that, at any time after a declaration of acceleration with respect to the notes as described in the preceding paragraph, the Holders of a majority in principal amount of all notes issued under the Indenture may rescind and cancel such declaration and its consequences:

1.	if the rescission would not conflict with any judgment or decree;
2.	if all existing Events of Default have been cured or waived except nonpayment of principal or interest that has become due solely because of the acceleration;
3.	to the extent the payment of such interest is lawful, interest on overdue installments of interest and overdue principal, which has become due otherwise than by such declaration of acceleration, has been paid;
4.	if the Company has paid the Trustee (including its agents and counsel) its reasonable compensation and reimbursed the Trustee for its expenses, disbursements and advances; and
5.	in the event of the cure or waiver of an Event of Default of the type described in clause (6) of the description above of Events of Default, the Trustee shall have received an officers’ certificate and an opinion of counsel that such Event of Default has been cured or waived.

No such rescission shall affect any subsequent Default or impair any right consequent thereto.

The Holders of a majority in aggregate principal amount of the then outstanding notes issued under the Indenture may waive any existing Default or Event of Default under the Indenture, and its consequences, except a default in the payment of the principal of or interest (including Additional Interest, if any) on any notes.

Holders of the notes may not enforce the Indenture or the notes except as provided in the Indenture and under the TIA. Subject to the provisions of the Indenture relating to the duties of the Trustee, the Trustee is under no obligation to exercise any of its rights or powers under the Indenture at the request, order or direction of any of the Holders, unless such Holders have offered to the Trustee indemnity satisfactory to it. Subject to all provisions of the Indenture and applicable law, the Holders of a majority in principal amount of the then outstanding notes issued under the Indenture have the right to direct the time, method and place of conducting any proceeding for any remedy available to the Trustee or exercising any trust or power conferred on the Trustee.

Under the Indenture, the Issuers are required to provide an officers’ certificate to the Trustee within five Business Days of any Default or Event of Default (provided that such officers shall provide such certification at least annually whether or not they know of any Default or Event of Default) that has occurred and is continuing and, if applicable, describe such Default or Event of Default and the status thereof.

No Personal Liability of Directors, Officers, Employees and Stockholders

No director, officer, employee, incorporator or stockholder of the Issuers or any Guarantors shall have any liability for any obligation of the Issuers or any Guarantors, respectively, under the notes, the Note Guarantees and the Indenture or for any claim based on, in respect of, or by reason of such obligations or their creation; provided that the foregoing shall not limit any Guarantor’s obligations under its Note Guarantee. Each Holder by accepting a note waives and releases all such liability. The waiver and release are part of the consideration for issuance of the notes. Such waiver may not be

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effective to waive liabilities under the Federal securities laws and it is the view of the SEC that such a waiver is against public policy.

Legal Defeasance and Covenant Defeasance

The Issuers may, at their option and at any time, elect to have their obligations discharged with respect to the notes (“Legal Defeasance”). Such Legal Defeasance means that the Issuers shall be deemed to have paid and discharged the entire indebtedness represented by the notes, except for:

1.	the rights of Holders to receive payments in respect of the principal of, premium, if any, and interest (including Additional Interest, if any) on the notes when such payments are due;
2.	the Issuers’ obligations with respect to the notes concerning issuing temporary notes, registration of notes, mutilated, destroyed, lost or stolen notes and the maintenance of an office or agency for payments;
3.	the rights, powers, trusts, duties and immunities of the Trustee and the Issuers’ obligations in connection therewith; and
4.	the Legal Defeasance provisions of the Indenture.

In addition, the Issuers may, at their option and at any time, elect to have the obligations of the Issuers released with respect to certain covenants that are described in the Indenture (“Covenant Defeasance”) and thereafter any omission to comply with such obligations shall not constitute a Default or Event of Default with respect to the notes. In the event Covenant Defeasance occurs, certain events (not including, bankruptcy, receivership, reorganization, rehabilitation and insolvency events) described under “Events of Default” will no longer constitute an Event of Default with respect to the notes.

In order to exercise either Legal Defeasance or Covenant Defeasance:

1.

on the Issuers must irrevocably deposit with the Trustee, in trust, for the benefit of the Holders cash in Dollars, non-callable U.S. government obligations, or a combination thereof, in such amounts as will be sufficient, in the opinion of a nationally recognized firm of independent public accountants, to pay the principal of, premium, if any, and interest (including Additional Interest, if any) on the notes on the stated date for payment thereof or on the applicable redemption date, as the case may be, and any other amounts owing under the Indenture (in the case of an optional redemption date prior to electing to exercise either Legal Defeasance or Covenant Defeasance, the Issuers have delivered to the Trustee an irrevocable notice to redeem all of the outstanding notes on such redemption date);

2.

in the case of Legal Defeasance, the Issuers shall have delivered to the Trustee an opinion of counsel in the United States reasonably acceptable to the Trustee confirming that, subject to customary assumptions and exclusions:

(a)

the Issuers have received from, or there has been published by, the Internal Revenue Service a ruling; or

(b)

since the date of the Indenture, there has been a change in the applicable federal income tax law, in either case to the effect that, and based thereon such opinion of counsel shall confirm that, subject to customary assumptions and exclusions, the Holders will not recognize income, gain or loss for U.S. federal income tax purposes as a result of such Legal Defeasance and will be subject to U.S. federal income tax on the same amounts, in the same manner and at the same times as would have been the case if such Legal Defeasance had not occurred;

3.  in the case of Covenant Defeasance, the Issuers shall have delivered to the Trustee an opinion of counsel in the United States reasonably acceptable to the Trustee confirming that, subject to customary assumptions and exclusions, the Holders will not recognize

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income, gain or loss for federal income tax purposes as a result of such Covenant Defeasance and will be subject to federal income tax on the same amounts, in the same manner and at the same times as would have been the case if such Covenant Defeasance had not occurred;

4.	no Default or Event of Default shall have occurred and be continuing on the date of such deposit (other than Default or Event of Default resulting from the borrowing of funds to be applied to such deposit (and the incurrence of Liens associated with any such borrowings));
5.	such Legal Defeasance or Covenant Defeasance shall not result in a breach or violation of, or constitute a default under the Indenture or any other material agreement or instrument to which the Company or any of its Restricted Subsidiaries is a party or by which the Company or any of its Restricted Subsidiaries is bound;
6.	the Issuers shall have delivered to the Trustee an officers’ certificate stating that the deposit was not made by the Issuers with the intent of preferring the Holders over any other creditors of the Issuers or with the intent of defeating, hindering, delaying or defrauding any other creditors of the Issuers or others; and
7.	the Issuers shall have delivered to the Trustee an officers’ certificate and an opinion of counsel, each stating that all conditions precedent provided for or relating to the Legal Defeasance or the Covenant Defeasance have been complied with.

Notwithstanding the foregoing, the opinion of counsel required by clause 2 above with respect to a Legal Defeasance need not be delivered if all notes not theretofore delivered to the Trustee for cancellation (x) have become due and payable or (y) will become due and payable on the maturity date within one year under arrangements satisfactory to the Trustee for the giving of notice of redemption by the Trustee in the name, and at the expense, of the Issuers.

Satisfaction and Discharge

The Indenture will be discharged and will cease to be of further effect (except as to surviving rights or registration of transfer or exchange of the notes, as expressly provided for in the Indenture) as to all notes when:

1.  either:

(a)

all the notes theretofore authenticated and delivered (except lost, stolen or destroyed notes that have been replaced or paid and notes for whose payment money has theretofore been deposited in trust or segregated and held in trust by the Issuers and thereafter repaid to the Issuers or discharged from such trust) have been delivered to the Trustee for cancellation; or

(b)

all notes not theretofore delivered to the Trustee for cancellation have become due and payable, will become due and payable within one year or are to be called for redemption within one year under irrevocable arrangements satisfactory to the trustee for the giving of notice of redemption by the trustee in the name and at the expense of the Issuers, and the Issuers have irrevocably deposited or caused to be deposited with the Trustee funds in an amount sufficient to pay and discharge the entire Indebtedness on the notes not theretofore delivered to the Trustee for cancellation, for principal of, premium, if any, and interest on (including Additional Interest, if any) the notes to the date of deposit together with irrevocable instructions from the Issuers directing the Trustee to apply such funds to the payment thereof at maturity or redemption, as the case may be;

2.  the Issuers have paid all other sums payable under the Indenture by the Issuers; and

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3.  the Issuers have delivered to the Trustee an officers’ certificate and an opinion of counsel stating that all conditions precedent under the Indenture relating to the satisfaction and discharge of the Indenture have been complied with.

Modification of the Indenture

From time to time, the Issuers and the Trustee, without the consent of the Holders, may amend the Indenture to:

1.	cure any mistakes, ambiguities, defects or inconsistencies;
2.	provide for uncertificated notes in addition to or in place of certificated notes or to alter the provisions of the Indenture relating to the form of the notes (including the related definitions) in a manner that does not materially adversely affect any Holder;
3.	provide for the assumption of the Issuers’ or a Guarantor’s obligations to the Holders of the notes by a successor to the Company or a Guarantor pursuant to the “Merger, Consolidation and Sale of Assets” covenant;
4.	make any change that would provide any additional rights or benefits to the Holders of the notes or that does not materially adversely affect the legal rights under the Indenture of any Holder of the notes or to add covenants for the benefit of the Holders or to surrender any right or power conferred upon the Issuers or any Guarantor;
5.	comply with requirements of the SEC in order to effect or maintain the qualification of the Indenture under the TIA;
6.	provide for the issuance of notes issued after the Issue Date in accordance with the limitations set forth in this Indenture;
7.	allow any Guarantor to execute a supplemental indenture and/or a Guarantee with respect to the notes or to effect the release of any Guarantor from any of its obligations under its Note Guarantee or the Indenture (to the extent permitted by the Indenture);
8.	secure the notes;
9.	provide for the issuance of exchange notes or private exchange notes; or
10.	conform the text of the Indenture, the Guarantees or the notes to any provision of this “Description of the New Notes” to the extent that such provision in this “Description of the New Notes” was intended to be a verbatim recitation of a provision of the Indenture, the Guarantees or the notes.

The consent of the Holders is not necessary under the Indenture to approve the particular form of any proposed amendment. It is sufficient if such consent approves the substance of the proposed amendment.

In formulating its opinion on such matters, the Trustee will be entitled to conclusively rely, and shall be fully protected in acting upon, such evidence as it deems appropriate, including, without limitation, solely on an opinion of counsel. Other modifications and amendments of the Indenture may be made with the consent of the Holders of a majority in principal amount of the then outstanding notes issued under the Indenture, except that, without the consent of each Holder affected thereby, no amendment may:

1.	reduce the amount of notes whose Holders must consent to an amendment;
2.	reduce the rate of or change or have the effect of changing the time for payment of interest, including defaulted interest, on any notes;

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3.	reduce the principal of or change or have the effect of changing the fixed maturity of any notes, or change the date on which any notes may be subject to redemption or reduce the redemption price therefor;
4.	make any notes payable in money other than that stated in the notes;
5.	make any change in provisions of the Indenture protecting the right of each Holder to receive payment of principal of and interest on such note on or after the due date thereof or to bring suit to enforce such payment, or permitting Holders of a majority in principal amount of notes issued under the Indenture to waive Defaults or Events of Default;
6.	waive a Default or Event of Default in the payment of principal of, or interest or premium, or Additional Interest, if any, on the notes (except a rescission of acceleration of the notes by the holders of at least a majority in aggregate principal amount of the notes and a waiver of the payment default that resulted from such acceleration);
7.	after the Issuers’ obligation to purchase notes arises thereunder, amend, change or modify in any material respect the obligation of the Issuers to make and consummate a Change of Control Offer in the event of a Change of Control or modify any of the provisions or definitions with respect thereto; or
8.	modify or change any provision of the Indenture or the related definitions affecting the ranking of the notes in a manner which adversely affects the Holders.

Governing Law

The Indenture provides that it and the notes will be governed by, and construed in accordance with, the laws of the State of New York but without giving effect to applicable principles of conflicts of law to the extent that the application of the law of another jurisdiction would be required thereby.

The Trustee

The Indenture provides that, except during the occurrence and continuance of an Event of Default, the Trustee will perform only such duties as are specifically set forth in the Indenture. During the existence of an Event of Default, the Trustee will exercise such rights and powers vested in it by the Indenture, and use the same degree of care and skill in its exercise as a prudent person would exercise or use under the circumstances in the conduct of his own affairs.

The Indenture and the provisions of the TIA contain certain limitations on the rights of the Trustee, should it become a creditor of the Issuers, to obtain payments of claims in certain cases or to realize on certain property received in respect of any such claim as security or otherwise. Subject to the TIA, the Trustee will be permitted to engage in other transactions; provided that if the Trustee acquires any conflicting interest as described in the TIA, it must eliminate such conflict or resign.

Additional Information

Anyone who receives this prospectus may obtain a copy of the Indenture without charge by writing to Nationstar Mortgage LLC, 350 Highland Drive, Lewisville, Texas 75067, Attention: Chief Financial Officer.

Certain Definitions

Set forth below is a summary of certain of the defined terms used in the Indenture. Reference is made to the Indenture for the full definition of all such terms, as well as any other terms used herein for which no definition is provided.

“Acquired Indebtedness” means Indebtedness of a Person or any of its Subsidiaries existing at the time such Person becomes a Subsidiary of the Company or at the time it merges or consolidates

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with the Company or any of its Subsidiaries or assumed in connection with the acquisition of assets from such Person and in each case whether or not incurred by such Person in connection with, or in anticipation or contemplation of, such Person becoming a Subsidiary of the Company or such acquisition, merger or consolidation.

“Additional Interest” means the additional interest that may accrue on the notes under the circumstances described under the caption “Exchange Offer; Registration Rights.”

“Affiliate” means, with respect to any specified Person, any other Person who directly or indirectly through one or more intermediaries controls, or is controlled by, or is under common control with, such specified Person. The term “control” means the possession, directly or indirectly, of the power to direct or cause the direction of the management and policies of a Person, whether through the ownership of voting securities, by contract or otherwise; and the terms “controlling” and “controlled” have meanings correlative of the foregoing.

“Asset Acquisition” means: (1) an Investment by the Company or any Restricted Subsidiary of the Company in any other Person pursuant to which such Person shall become a Restricted Subsidiary of the Company or any Restricted Subsidiary of the Company, or shall be merged with or into the Company or any Restricted Subsidiary of the Company; or (2) the acquisition by the Company or any Restricted Subsidiary of the Company of the assets of any Person (other than a Restricted Subsidiary of the Company) other than in the ordinary course of business.

“Asset Sale” means:

(1)

the sale, lease (other than operating leases entered in the ordinary course of business), conveyance or other disposition of any assets or rights; provided that the sale, lease (other than operating leases entered in the ordinary course of business), conveyance or other disposition of all or substantially all of the assets of the Company and its Subsidiaries taken as a whole, other than any Required Asset Sale or a Legacy Loan Portfolio Sale, will be governed by the provisions of the Indenture described above under the caption “—Repurchase at the Option of Holders—Change of Control” and/or the provisions described above under the caption “—Certain Covenants—Merger, Consolidation and Sale of Assets” and not by the provisions of the Asset Sale covenant; and

(2)

the issuance or sale of Equity Interests in any of the Company’s Restricted Subsidiaries.

Notwithstanding the foregoing, none of the following items will be deemed to be an Asset Sale:

(1)	any single transaction or series of related transactions that involves assets having a Fair Market Value of less than $5.0 million;
(2)	a transfer of assets between or among the Company and any Restricted Subsidiary of the Company;
(3)	an issuance of Equity Interests by a Restricted Subsidiary of the Company to the Company or to another Restricted Subsidiary of the Company;
(4)	the sale of advances, loans, customer receivables, mortgage related securities or other assets in the ordinary course of business, the sale of accounts receivable or other assets that by their terms convert into cash in the ordinary course of business and any sale of MSRs in connection with the origination of the associated mortgage loan in the ordinary course of business;
(5)	the sale or other disposition of cash or Cash Equivalents or Investment Grade Securities;
(6)	disposition of Investments or other assets and disposition or compromise of receivables, in each case, in connection with the workout, compromise, settlement or collection thereof or exercise of remedies with respect thereto, in the ordinary course of business or in bankruptcy, foreclosure or similar proceedings, including foreclosure, repossession and

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disposition of REO Assets and other collateral for loans serviced and/or originated by the Company or any of its Subsidiaries;

(7)	the modification of any loans owned or serviced by the Company or any of its Restricted Subsidiaries in the ordinary course of business;
(8)	a Restricted Payment that does not violate the covenant described above under the caption “—Certain Covenants—Limitation on Restricted Payments” or a Permitted Investment;
(9)	disposals or replacements of damaged, worn out or obsolete equipment or other assets no longer used or useful in the business of the Company and its Restricted Subsidiaries, in each case the ordinary course of business;
(10)	assets sold pursuant to the terms of Permitted Funding Indebtedness;
(11)	a sale (in one or more transactions) of Securitization Assets or Residual Interests in the ordinary course of business;
(12)	sales, transfers or contributions of Securitization Assets to Securitization Entities, Warehouse Facility Trusts and MSR Facility Trusts in connection with Securitizations in the ordinary course of business;
(13)	a sale or other disposition of Equity Interests of an Unrestricted Subsidiary;
(14)	the creation of a Lien (but not the sale or other disposition of the property subject to such Lien) permitted by the covenant described above under the caption “—Certain Covenants—Limitation on Liens;” and
(15)	transactions pursuant to repurchase agreements entered into in the ordinary course of business.

“Asset Sale Offer” has the meaning assigned to that term in the Indenture.

“Attributable Debt” in respect of a sale and leaseback transaction means, as of the time of determination, the present value (discounted at the interest rate per annum implicit in the lease involved in such sale and leaseback transaction, as determined in good faith by the Company) of the obligation of the lessee thereunder for rental payments (excluding, however, any amounts required to be paid by such lessee, whether or not designated as rent or additional rent, on account of maintenance and repairs, insurance, taxes, assessments, water rates or similar charges or any amounts required to be paid by such lessee thereunder contingent upon the amount of sales or similar contingent amounts) during the remaining term of such lease (including any period for which such lease has been extended or may, at the option of the lessor, be extended); provided, however, that if such sale and leaseback transaction results in a Capital Lease Obligation, the amount of Indebtedness represented thereby will be determined in accordance with the definition of Capital Lease Obligation. In the case of any lease which is terminable by the lessee upon the payment of a penalty, such rental payments shall also include the amount of such penalty, but no rental payments shall be considered as required to be paid under such lease subsequent to the first date upon which it may be so terminated.

“Board of Directors” means, as to any Person, the Board of Directors, or similar governing body, of such Person or any duly authorized committee thereof.

“Board Resolution” means, with respect to any Person, a copy of a resolution certified by the Secretary or an Assistant Secretary of such Person to have been duly adopted by the Board of Directors of such Person and to be in full force and effect on the date of such certification, and delivered to the Trustee.

“Business Day” means each day that is not a Saturday, a Sunday or a day on which commercial banking institutions are not required to be open in the State of New York or the place of payment.

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“Capital Stock” means:

1.	with respect to any Person that is a corporation, any and all shares, interests, participations or other equivalents (however designated and whether or not voting) of corporate stock, including each class of Common Stock and Preferred Stock of such Person; or
2.	with respect to any Person that is not a corporation, any and all partnership, membership or other equity interests (whether general or limited) of such Person.

“Capitalized Lease Obligation” means, as to any Person, the obligations of such Person under a lease that are required to be classified and accounted for as capital lease obligations under GAAP and, for purposes of this definition, the amount of such obligations at any date shall be the capitalized amount of such obligations at such date, determined in accordance with GAAP.

“Cash Equivalents” means:

1.	Dollars;
2.	in the case of any Foreign Subsidiary of the Company that is a Restricted Subsidiary of the Company, such local currencies held by such Foreign Subsidiary of the Company from time to time in the ordinary course of business;
3.	securities or any evidence of indebtedness issued or directly and fully guaranteed or insured by the United States government or any agency or instrumentality of the United States government (provided that the full faith and credit of the United States is pledged in support of those securities or such evidence of indebtedness);
4.	marketable direct obligations issued by any state of the United States of America or any political subdivision of any such state or any public instrumentality thereof maturing within one year from the date of acquisition thereof and, at the time of acquisition, having one of the three highest ratings obtainable from either S&P or Moody’s;
5.	certificates of deposit with maturities of twelve months or less from the date of acquisition, bankers’ acceptances with maturities not exceeding twelve months and overnight bank deposits with any domestic commercial bank having capital and surplus in excess of $500.0 million and a Thomson Bank Watch Rating of “B” or better;
6.	repurchase obligations with a term of not more than 30 days for underlying securities of the types described in clauses (3) and (5) above entered into with any financial institution meeting the qualifications specified in clause (5) above;
7.	commercial paper having one of the two highest ratings obtainable from Moody’s Investors Service, Inc. or Standard & Poor’s Rating Services and in each case maturing within twelve months after the date of acquisition; and
8.	money market funds at least 90.0% of the assets of which constitute Cash Equivalents of the kinds described in clauses (1) through (7) of this definition.

In the case of Investments by any Foreign Subsidiary of the Company that is a Restricted Subsidiary of the Company, Cash Equivalents shall also include (a) investments of the type and maturity described in clauses (1) through (8) above of foreign obligors, which Investments or obligors (or the parents of such obligors) have ratings described in such clauses or equivalent ratings from comparable foreign rating agencies and (b) local currencies and other short-term investments utilized by foreign Subsidiaries that are Restricted Subsidiaries in accordance with normal investment practices for cash management in investments analogous to the foregoing investments in clauses (1) through (8) and in this paragraph.

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“Change of Control” means the occurrence of any of the following:

1.

the sale, lease or transfer, in one or a series of related transactions, of all or substantially all of the assets of the Company and its Subsidiaries, taken as a whole, other than any Required Asset Sales or Legacy Loan Portfolio Sale, to any Person other than a Permitted Holder; or

2.

the Company becomes aware of (by way of a report or any other filing pursuant to Section 13(d) of the Exchange Act, proxy, vote, written notice or otherwise) the acquisition by any Person or group (within the meaning of Section 13(d)(3) or Section 14(d)(2) of the Exchange Act, or any successor provision), including any group acting for the purpose of acquiring, holding or disposing of securities (within the meaning of Rule 13d-5(b)(1) under the Exchange Act), other than one or more Permitted Holders, in a single transaction or in a related series of transactions, by way of merger, consolidation or other business combination or purchase of beneficial ownership (within the meaning of Rule 13d-3 under the Exchange Act, or any successor provision) of 50.0% or more of the total voting power of the Voting Stock of the Company or any of its direct or indirect parent companies; provided that for purposes of calculating the “beneficial ownership” of any group, any Voting Stock of which any Permitted Holder is the “beneficial owner” shall not be included in determining the amount of Voting Stock “beneficially owned” by such group.

“Co-Issuer” means Nationstar Capital Corporation, a Delaware corporation.

“Common Stock” of any Person means any and all shares, interests or other participations in, and other equivalents (however designated and whether voting or non-voting) of such Person’s common stock, whether outstanding on the Issue Date or issued after the Issue Date, and includes, without limitation, all series and classes of such common stock.

“Consolidated EBITDA” means, with respect to any Person, for any period, the sum (without duplication) of:

1.	Consolidated Net Income; and
2.	to the extent Consolidated Net Income has been reduced thereby:

(a)	Consolidated Taxes;
(b)	Consolidated Interest Expense (excluding Consolidated Interest Expense on Indebtedness incurred under clauses (2), (5), (6), (10), (11), (12), (15) and (27) of the definition of Permitted Indebtedness);
(c)	depreciation, amortization (including amortization of intangibles but excluding amortization of prepaid cash expenses that were paid in a prior period) and other non-cash expenses (including charges related to the writeoff of goodwill or intangibles as a result of impairment, but excluding any such non-cash expense to the extent that it represents an accrual of or reserve for cash expenses in any future period or amortization of a prepaid cash expense that was paid in a prior period), all as determined on a consolidated basis for such Person and its Restricted Subsidiaries in accordance with GAAP;
(d)	(1) customary fees and expenses of the Company and its Restricted Subsidiaries payable in connection with (i) the issuance of the notes and (ii) the initial public offering of the Company’s Common Stock or the Common Stock of any of its direct or indirect parent companies after the Issue Date, (2) costs associated with exit and disposal activities incurred in connection with a restructuring as defined in ASC 420-10 (provided that such charges relating to the Company’s restructuring program initiated in 2007 (as described in this prospectus) may not exceed $2.5 million in the aggregate

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in any Four Quarter Period) and (3) any amortization or write-off of debt issuance costs for Indebtedness incurred prior to the Issue Date;

(e)	any amortization or write-off of debt issuance costs payable in connection with Corporate Indebtedness incurred concurrent with and after the Issue Date;
(f)	recovery of other-than-temporary loss on available-for-sale securities recognized through members’ (or shareholders’) equity;
(g)	all other unusual or non-recurring items of loss or expense as approved by the Board of Directors of the Company acting reasonably and in good faith; and
(h)	the amount of any expense related to minority interests; and, 3 decreased by (without duplication):

(a)	non-cash gains pursuant to clause (2) above increasing Consolidated Net Income of such Person for such period, excluding any gains that represent the reversal of any accrual of, or cash reserve for, anticipated cash charges in any prior period (other than such cash charges that have been added back to Consolidated Net Income in calculating Consolidated EBITDA in accordance with this definition);
(b)	all other unusual or non-recurring gains or revenue as approved by the Board of Directors of the Company acting reasonably and in good faith;
(c)	all interest income to the extent a matching interest expense has been added back to clause (2) above; and
(d)	fair market value of MSRs capitalized by the Company and its Restricted Subsidiaries;

all as determined on a consolidated basis for such Person and its Restricted Subsidiaries in accordance with GAAP.

“Consolidated Interest Expense” means, with respect to any Person for any period, the sum of, without duplication:

1.	the aggregate of the interest expense on Indebtedness of such Person and its Restricted Subsidiaries for such period determined on a consolidated basis in accordance with GAAP, including without limitation: (a) any amortization of debt discount; (b) the net costs under Permitted Hedging Transactions; (c) all capitalized interest; and (d) the interest portion of any deferred payment obligation;
2.	to the extent not already included in clause (1), the interest component of Capitalized Lease Obligations paid, accrued and/or scheduled to be paid or accrued by such Person and its Restricted Subsidiaries during such period as determined on a consolidated basis in accordance with GAAP;
3.	the imputed interest with respect to Attributable Debt created after the Issue Date; and
4.	the product of (a) all dividends, whether paid or accrued and whether or not in cash, on any series of Disqualified Capital of such Person or preferred stock of any of its Restricted Subsidiaries, other than dividends on Equity Interests payable solely in Equity Interests of the Company (other than Disqualified Capital Stock) or to the Company or a Restricted Subsidiary of the Company, times (b) a fraction, the numerator of which is one and the denominator of which is one minus the then current combined federal, state and local statutory tax rate of such Person, expressed as a decimal, in each case, determined on a consolidated basis in accordance with GAAP.

“Consolidated Leverage Ratio” means, with respect to any Person, as of any date, the ratio of (i) Corporate Indebtedness to (ii) the Consolidated EBITDA of such Person for the most recently ended

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four full fiscal quarters (the “Four Quarter Period”) for which internal financial statements are available ending prior to the date of the transaction giving rise to the need to calculate the Consolidated Leverage Ratio (the “Transaction Date”).

In addition to and without limitation of the foregoing, for purposes of this definition, “Corporate Indebtedness” and “Consolidated EBITDA” shall be calculated after giving effect on a pro forma basis for the period of such calculation to:

1.

the incurrence or repayment of any Indebtedness of such Person or any of its Restricted Subsidiaries (and the application of the proceeds thereof) giving rise to the need to make such calculation and any incurrence or repayment of other Indebtedness (and the application of the proceeds thereof), other than the incurrence or repayment of Indebtedness in the ordinary course of business for working capital purposes pursuant to working capital facilities, occurring during the Four Quarter Period or at any time subsequent to the last day of the Four Quarter Period and on or prior to the Transaction Date, as if such incurrence or repayment, as the case may be (and the application of the proceeds thereof), occurred on the first day of the Four Quarter Period; and

2.

any asset sales or other dispositions or any asset originations, asset purchases, Investments and Asset Acquisitions (including, without limitation, any Asset Acquisition giving rise to the need to make such calculation as a result of such Person or one of its Subsidiaries (including any Person who becomes a Restricted Subsidiary as a result of the Asset Acquisition) incurring, assuming or otherwise being liable for Indebtedness that is Acquired Indebtedness and also including any Consolidated EBITDA (including any pro forma expense and cost reductions) attributable to the assets which are originated or purchased, the Investments that are made and the assets that are the subject of the Asset Acquisition or asset sale or other disposition during the Four Quarter Period) occurring during the Four Quarter Period or at any time subsequent to the last day of the Four Quarter Period and on or prior to the Transaction Date, as if such asset sale or other disposition or asset origination, asset purchase, Investment or Asset Acquisition (including the incurrence, assumption or liability for any such Acquired Indebtedness) occurred on the first day of the Four Quarter Period. If such Person or any of its Restricted Subsidiaries directly or indirectly guarantees Indebtedness of a third Person, the preceding sentence shall give effect to the incurrence of such guaranteed Indebtedness as if such Person or any Restricted Subsidiary of such Person had directly incurred or otherwise assumed such guaranteed Indebtedness.

The pro forma calculations shall be made by a responsible accounting officer of the Company in good faith based on the information reasonably available to it at the time of such calculation. The foregoing calculations, pursuant to the transactions listed above in clauses (1) and (2), shall be required to comply with the requirements for pro forma financial statements in accordance with Regulation S-X promulgated under the Securities Act or any other regulation or policy of the SEC related thereto.

“Consolidated Net Income” means, with respect to any Person, for any period, the aggregate net income (or loss) of such Person and its Restricted Subsidiaries before the payment of dividends on Preferred Stock for such period on a consolidated basis, determined in accordance with GAAP; provided that there shall be excluded therefrom:

1.	after-tax gains and losses from asset sales or abandonments or reserves relating thereto;
2.	after-tax items classified as extraordinary gains or losses and direct impairment charges or the reversal of such charges on the Person’s assets;
3.	the net income (but not loss) of any Restricted Subsidiary of the referent Person to the extent that the declaration of dividends or similar distributions by that Subsidiary of that income is restricted by a contract, operation of law or otherwise, except for such restrictions permitted by clauses (g) and (h) of the “Limitation on Dividend and Other

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Payment Restrictions Affecting Restricted Subsidiaries” covenant, whether such permitted restrictions exist on the Issue Date or are created thereafter, except to the extent (in the case of net income) of cash dividends or distributions paid to the referent Person, or to a Wholly Owned Restricted Subsidiary of the referent Person (other than a Restricted Subsidiary also subject to such restrictions), by such other Person;

4.  the net income or loss of any other Person, other than a Restricted Subsidiary of the referent Person, except:

(a)	to the extent (in the case of net income) of cash dividends or distributions paid to the referent Person, or to a Wholly Owned Restricted Subsidiary of the referent Person (other than a Restricted Subsidiary described in clause (3) above), by such other Person; or
(b)	that the referent Person’s share of any net income or loss of such other Person under the equity method of accounting for Affiliates shall not be excluded;

5.	any restoration to income of any contingency reserve of an extraordinary, nonrecurring or unusual nature, except to the extent that provision for such reserve was made out of Consolidated Net Income accrued at any time following the Issue Date;
6.	income or loss attributable to discontinued operations (including, without limitation, operations disposed of during such period whether or not such operations were classified as discontinued);
7.	in the case of a successor to the referent Person by consolidation or merger or as a transferee of the referent Person’s assets, any earnings of the successor corporation prior to such consolidation, merger or transfer of assets;
8.	any valuation allowance for mortgage loans held-for-investment and/or any change in fair value of mortgage loans held for sale and corresponding debt in relation to securitized loans in accordance with GAAP that require no additional capital or equity contributions to the Company;
9.	change in fair value of MSRs or the amortization of MSRs pursuant to such Person’s accounting policy; and
10.	an amount equal to all distributions during such period pursuant to clause (6)(c) of the second paragraph of the covenant described above under the caption “—Limitation on Restricted Payments.”

“Consolidated Tangible Net Worth” means, with respect to any Person, the excess of such Person’s total assets over its total liabilities determined on a consolidated basis in accordance with GAAP, excluding (1) goodwill, (2) other intangibles and (3) cumulative impact from Issue Date of any valuation allowance for mortgage loans held-for-investment and/or any change in fair value of mortgage loans held for sale and corresponding debt in relation to securitized loans in accordance with GAAP that require no additional capital or equity contributions to the Company, in each case as of the end of the last completed fiscal quarter ending on or prior to the date of the transaction giving rise to the need to calculate Consolidated Tangible Net Worth.

“Consolidated Taxes” means, with respect to any Person for any period, (1) all income taxes and foreign withholding taxes and taxes based on capital and commercial activity (or similar taxes) of such Person and its Restricted Subsidiaries paid or accrued in accordance with GAAP for such period and (2) all distributions pursuant to clause (6)(c) of the second paragraph of the covenant described above under the caption “—Limitation on Restricted Payments.”

“Corporate Indebtedness” means, with respect to any Person, the aggregate consolidated amount of Indebtedness of such Person and its Restricted Subsidiaries then outstanding that would be shown on a consolidated balance sheet of such Person and its Restricted Subsidiaries (excluding, for

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the purpose of this definition, Indebtedness incurred under clauses (2), (5), (6), (10), (11), (12), (15) and (27) of the definition of Permitted Indebtedness).

“Corporate Indebtedness to Tangible Net Worth Ratio” means, with respect to any Person, as of any date, the ratio of (i) the aggregate amount of Corporate Indebtedness outstanding as of such date to (ii) the Consolidated Tangible Net Worth, with such pro forma adjustments for transactions consummated on or prior to or simultaneously with the date of the calculation as are appropriate and consistent with the pro forma adjustment provisions set forth in the definition of Consolidated Leverage Ratio.

“Credit Enhancement Agreements” means, collectively, any documents, instruments, guarantees or agreements entered into by the Company, any of its Restricted Subsidiaries, or any Securitization Entity for the purpose of providing credit support (that is reasonably customary as determined by Company senior management) with respect to any Permitted Funding Indebtedness or Permitted Securitization Indebtedness.

“Currency Agreement” means, with respect to any specified Person, any foreign exchange contract, currency swap agreement, futures contracts, options on futures contracts or other similar agreement or arrangement designed to protect such Person or any its Restricted Subsidiary against fluctuations in currency values.

“Default” means an event or condition the occurrence of which is, or with the lapse of time or the giving of notice or both would be, an Event of Default.

“Designated Noncash Consideration” means the Fair Market Value of any noncash consideration received by the Company or one of its Restricted Subsidiaries in connection with an Asset Sale that is designated as Designated Noncash Consideration pursuant to an officers’ certificate executed by the principal financial officer of the Company or such Restricted Subsidiary at the time of such Asset Sale less the amount of Cash Equivalents received in connection with a subsequent sale of or collection on such Designated Noncash Consideration.

“Disqualified Capital Stock” means that portion of any Capital Stock that, by its terms (or by the terms of any security into which it is convertible or for which it is exchangeable at the option of the holder thereof), or upon the happening of any event (other than an event which would constitute a Change of Control), matures or is mandatorily redeemable, pursuant to a sinking fund obligation or otherwise, or is redeemable at the sole option of the holder thereof (except, in each case, upon the occurrence of a Change of Control) on or prior to the final maturity date of the notes.

“Dollar” or “$” means the lawful money of the United States of America.

“Domestic Subsidiary” means, with respect to any Person, any Restricted Subsidiary of such Person other than a Foreign Subsidiary.

“Equity Interests” means Capital Stock and all warrants, options or other rights to acquire Capital Stock (but excluding any debt security that is convertible into, or exchangeable for, Capital Stock).

“Exchange Act” means the Securities Exchange Act of 1934, as amended, or any successor statute or statutes thereto.

“Excluded Contributions” means net cash proceeds or marketable securities received by the Company from contributions to its common equity capital designated as Excluded Contributions pursuant to an officers’ certificate on the date such capital contributions are made.

“Excluded Restricted Subsidiary” means any newly acquired or created Subsidiary of the Company that is designated as a Restricted Subsidiary but prohibited, in the reasonable judgment of the Company, from guaranteeing the notes by any applicable law, regulation or contractual restriction existing at the time such Subsidiary becomes a Restricted Subsidiary and which, in the case of any such contractual restriction, in the good faith opinion of the management of the Company, cannot be

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removed through commercially reasonable efforts. As of the Issue Date, there are no Excluded Restricted Subsidiaries.

“Existing Facilities” means, collectively, the Existing Servicing Advance Facilities, the Existing Warehouse Facilities and the Existing MSR Facilities.

“Existing MSR Facilities” means the MSR Notes together with the related documents thereto (including, without limitation, any security documents), in each case as such agreements may be amended (including any amendment and restatement thereof), supplemented or otherwise modified from time to time, including any agreement extending the maturity of, increasing the interest rate or fees applicable thereto, refinancing, replacing or otherwise restructuring (including adding Subsidiaries of the Company as additional borrowers or guarantors thereunder) all or any portion of the Indebtedness under such agreement or any successor or replacement agreement and whether by the same or any other agent, lender or group of lenders.

“Existing Servicing Advance Facilities” means: (1) the $375.0 million Agreement with respect to MBS Loan Buyout Financing Option and the Further Amended and Restated Servicer Advance Early Reimbursement Mechanics Addendum, dated as of January 13, 2010, by and among the Company and the lender identified therein, (2) the $350.0 million Third Amended and Restated Note Purchase Agreement, dated as of December 29, 2009, by and among the Company and the noteholders identified therein and (3) the MSR Notes, in each case, together with the related documents thereto (including, without limitation, any security documents), in each case as such agreements may be amended (including any amendment and restatement thereof), supplemented or otherwise modified from time to time, including any agreement extending the maturity of, increasing the interest rate or fees applicable thereto, refinancing, replacing or otherwise restructuring (including adding Subsidiaries of the Company as additional borrowers or guarantors thereunder) all or any portion of the Indebtedness under such agreement or any successor or replacement agreement and whether by the same or any other agent, lender or group of lenders.

“Existing Warehouse Facilities” mean: (1) the $300.0 million Master Repurchase Agreement, dated as of January 27, 2010, by and among the Company and the lender identified therein, (2) the $50.0 million Master Repurchase Agreement, dated as of October 7, 2009, by and among the Company and the lender identified therein, (3) the $50.0 million Master Repurchase Agreement, dated as February 24, 2010, by and among the Company and the lender identified therein and (4) the $50.0 million As Soon As Pooled Plus Agreements, by and among the Company and the lender identified therein; in each case, together with the related documents thereto (including, without limitation, any security documents), in each case as such agreements may be amended (including any amendment and restatement thereof), supplemented or otherwise modified from time to time, including any agreement extending the maturity of, increasing the interest rate or fees applicable thereto, refinancing, replacing or otherwise restructuring (including adding Subsidiaries of the Company as additional borrowers or guarantors thereunder) all or any portion of the Indebtedness under such agreement or any successor or replacement agreement and whether by the same or any other agent, lender or group of lenders.

“Fair Market Value” means, with respect to any asset or property, the price which could be negotiated in an arm’s-length, free market transaction, for cash, between a willing seller and a willing and able buyer, neither of whom is under undue pressure or compulsion to complete the transaction. Fair market value shall be determined by the senior management of the Company or any Restricted Subsidiary of the Company, as applicable, when the fair market value of any asset other than cash is estimated in good faith to be below $5.0 million, and by the Board of Directors of the Company acting reasonably and in good faith and, if the fair market value exceeds $10.0 million, shall be evidenced by a Board Resolution of the Board of Directors of the Company delivered to the Trustee.

“Foreign Subsidiary” means, with respect to any Person, any Restricted Subsidiary of such Person that is not organized or existing under the laws of the United States, any state thereof or the District of Columbia.

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“Foreign Subsidiary Total Assets” means the total assets of the Foreign Subsidiaries of the Company, as determined in accordance with GAAP in good faith by the Company without intercompany eliminations.

“GAAP” means generally accepted accounting principles set forth in the opinions and pronouncements of the Financial Accounting Standards Board Accounting Standards Codification or in such other statements by such other entity as may be approved by a significant segment of the accounting profession of the United States, which are in effect as of December 31, 2009.

“Guarantee” means a guarantee (other than by endorsement of negotiable instruments for collection in the ordinary course of business), direct or indirect, in any manner including, without limitation, by way of a pledge of assets or through letters of credit or reimbursement agreements in respect thereof, of all or any part of any Indebtedness (whether arising by virtue of partnership arrangements, or by agreements to keep-well, to purchase assets, goods, securities or services, to take or pay or to maintain financial statement conditions or otherwise).

“Guarantor” means each of:

(1)

Nationstar Equity Corporation, Centex Land Vista Ridge Lewisville III General Partner, LLC, Centex Land Vista Ridge Lewisville III, L.P., Nationstar Industrial Loan Company, Nationstar Industrial Loan Corporation, Harwood Insurance Services, LLC, Harwood Service Company of Georgia, LLC, Harwood Service Company of New Jersey, LLC, Harwood Service Company LLC, Homeselect Settlement Solutions, LLC, Nationstar 2009 Equity Corporation; and

(2)

any other Subsidiary of the Company that executes a Note Guarantee in accordance with the provisions of the Indenture,

and their respective successors and assigns, in each case, until the Note Guarantee of such Person has been released in accordance with the provisions of the Indenture; provided that any Excluded Restricted Subsidiary, any Securitization Entities, any Warehouse Facility Trusts and any MSR Facility Trusts shall not be deemed to be Guarantors.

“Holder” means the Person in whose name the note is registered on the registrar’s book.

“Indebtedness” means with respect to any Person, without duplication:

1.	all Obligations of such Person for borrowed money;
2.	all Obligations of such Person evidenced by bonds, debentures, notes or other similar instruments;
3.	all Capitalized Lease Obligations of such Person;
4.	all Obligations of such Person issued or assumed as the deferred purchase price of property, all conditional sale obligations and all Obligations under any title retention agreement (but excluding trade accounts payable and other accrued liabilities arising in the ordinary course of business that are not overdue by 90 days or more or are being contested in good faith by appropriate proceedings promptly instituted and diligently conducted);
5.	all Obligations for the reimbursement of any obligor on any letter of credit, banker’s acceptance or similar credit transaction;
6.	guarantees and other contingent obligations in respect of Indebtedness referred to in clauses (1) through (5) above and clauses (8) or (9) below;
7.	Obligations of any other Person of the type referred to in clauses (1) through (6) above and clause (9) below which are secured by any lien on any property or asset of such Person, the amount of such Obligation being deemed to be the lesser of the Fair Market Value of such property or asset and the amount of the Obligation so secured;
8.	all Obligations under currency agreements and interest swap agreements of such Person;

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9.	all Attributable Debt of such Person; and
10.	all Disqualified Capital Stock issued by such Person with the amount of Indebtedness represented by such Disqualified Capital Stock being equal to the greater of its voluntary or involuntary liquidation preference and its maximum fixed repurchase price, but excluding accrued dividends, if any.

For purposes hereof, the “maximum fixed repurchase price” of any Disqualified Capital Stock which does not have a fixed repurchase price shall be calculated in accordance with the terms of such Disqualified Capital Stock as if such Disqualified Capital Stock were purchased on any date on which Indebtedness shall be required to be determined pursuant to the Indenture, and if such price is based upon, or measured by, the Fair Market Value of such Disqualified Capital Stock, such Fair Market Value shall be determined reasonably and in good faith by the Board of Directors of the issuer of such Disqualified Capital Stock.

The amount of any Indebtedness outstanding as of any date shall be:

(1)	the accreted value thereof, in the case of any Indebtedness issued at a discount to par;
(2)	with respect to any Obligations under currency agreements and interest swap agreements, the net amount payable if such agreements terminated at that time due to default by such Person;
(3)	in respect of Indebtedness of another Person secured by a Lien on the assets of the specified Person, the lesser of:

(a)	the Fair Market Value of such assets at the date of determination; and
(b)	the amount of the Indebtedness of the other Person; or

(4)  except as provided above, the principal amount or liquidation preference thereof, in the case of any other Indebtedness.

“Investment” means, with respect to any Person, any direct or indirect loan or other extension of credit (including, without limitation, a guarantee), advance or capital contribution to (by means of any transfer of cash or other property to others or any payment for property or services for the account or use of others), or any purchase or acquisition by such Person of any Capital Stock, bonds, notes, debentures or other securities or evidences or Indebtedness issued by, any Person that are required by GAAP to be classified on the balance sheet (excluding the footnotes) of such Person in the same manner as the other investments included in this definition to the extent such transactions involve the transfer of cash or other property. “Investment” shall exclude (x) accounts receivable, extensions of trade credit or advances by the Company and its Restricted Subsidiaries on commercially reasonable terms in accordance with the Company’s or its Restricted Subsidiaries’ normal trade practices, as the case may be, (y) deposits made in the ordinary course of business and customary deposits into reserve accounts related to Securitizations and (z) commission, travel and similar advances to officers, directors, managers and employees, in each case, made in the ordinary course of business.

“Investment Grade” means a rating of the notes by both S&P and Moody’s, each such rating being one of such agency’s four highest generic rating categories that signifies investment grade (i.e. BBB- (or the equivalent) or higher by S&P and Baa3 (or the equivalent) or higher by Moody’s); provided that, in each case, such ratings are publicly available; provided, further, that in the event Moody’s or S&P is no longer in existence for purposes of determining whether the notes are rated “Investment Grade,” such organization may be replaced by a nationally recognized statistical rating organization (as defined in Rule 436 under the Securities Act) designated by the Company, notice of which shall be given to the Trustee.

“Investment Grade Securities” means marketable securities of a Person (other than the Company or its Restricted Subsidiaries, an Affiliate of joint venture of the Company or any Restricted Subsidiary), acquired by the Company or any of its Restricted Subsidiaries in the ordinary course of business that

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are rated, at the time of acquisition, BBB- (or the equivalent) or higher by S&P and Baa3 (or the equivalent) or higher by Moody’s.

“Issue Date” means the date on which the notes are originally issued.

“Issuers” means the Company and the Co-Issuer.

“Legacy Loan Portfolio Sale” means the sale, lease, conveyance or other disposition, in one or more transactions of all or a portion of the residential mortgage loans subject to the Note Purchase Agreement, dated as of October 30, 2009 by and among the Company and the representatives of the initial purchasers party thereto.

“Lien” means any lien, mortgage, deed of trust, pledge, security interest, charge or encumbrance of any kind (including any conditional sale or other title retention agreement, any lease in the nature thereof and any agreement to give any security interest); provided that in no event shall an operating lease be deemed to constitute a Lien.

“Moody’s” means Moody’s Investors Service, Inc., a subsidiary of Moody’s Corporation, and its successors.

“MSR” means mortgage servicing rights entitling the holder to service mortgage loans.

“MSR Assets” means MSRs other than (i) MSRs on loans originated by the Company or its Restricted Subsidiaries for so long as such MSRs are financed in the normal course of the origination of such loans and (ii) MSRs subject to existing Liens on the Issue Date securing Existing MSR Facilities.

“MSR Facility” means any financing arrangement of any kind, including, but not limited to, financing arrangements in the form of repurchase facilities, loan agreements, note issuance facilities and commercial paper facilities (excluding in all cases, Securitizations), with a financial institution or other lender or purchaser exclusively to finance or refinance the purchase, origination, pooling or funding by the Company or a Restricted Subsidiary of the Company of MSRs originated, purchased, or owned by the Company or any Restricted Subsidiary of the Company in the ordinary course of business.

“MSR Facility Trust” means any Person (whether or not a Restricted Subsidiary of the Company) established for the purpose of issuing notes or other securities in connection with an MSR Facility, which (i) notes and securities are backed by specified MSRs purchased by such Person from the Company or any other Restricted Subsidiary, or (ii) notes and securities are backed by specified mortgage loans purchased by such Person from the Company or any other Restricted Subsidiary.

“MSR Indebtedness” means Indebtedness in connection with a MSR Facility; the amount of any particular MSR Indebtedness as of any date of determination shall be calculated in accordance with GAAP.

“MSR Loans” means loans outstanding under the MSR Notes that are, in accordance with the terms thereof, secured by the pledge of an MSR.

“MSR Notes” means the $22.2 million Senior Secured Credit Agreement, dated as of October 1, 2009, by and among the Company and the lender identified therein.

“MSR Subsidiary” means any Restricted Subsidiary of the Company that owns MSR Assets that have a Fair Market Value in excess of $5.0 million.

“Net Proceeds” means the aggregate cash proceeds received by the Company or any of its Restricted Subsidiaries in respect of any Asset Sale (including, without limitation, any cash received upon the sale or other disposition of any non-cash consideration received in any Asset Sale), net of the direct costs relating to such Asset Sale, including, without limitation, legal, accounting and investment banking fees, and sales commissions, and any relocation expenses incurred as a result of the Asset Sale, taxes paid or payable as a result of the Asset Sale, in each case, after taking into account any available tax credits or deductions and any tax sharing arrangements, distributions to minority interest

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holders in Restricted Subsidiaries as a result of such Asset Sale and amounts required to be applied to the repayment of Indebtedness secured by a Lien on the asset or assets that were the subject of such Asset Sale and any reserve for adjustment in respect of the sale price of such asset or assets established in accordance with GAAP.

“Non-Recourse Indebtedness” means, with respect to any specified Person, Indebtedness that is:

1.	specifically advanced to finance the acquisition of investment assets and secured only by the assets to which such Indebtedness relates without recourse to such Person or any of its Restricted Subsidiaries (other than subject to such customary carve-out matters for which such Person or its Restricted Subsidiaries acts as a guarantor in connection with such Indebtedness, such as fraud, misappropriation, breach of representation and warranty and misapplication, unless, until and for so long as a claim for payment or performance has been made thereunder (which has not been satisfied) at which time the obligations with respect to any such customary carve-out shall not be considered Non-Recourse Indebtedness, to the extent that such claim is a liability of such Person for GAAP purposes);
2.	advanced to (i) such Person or its Restricted Subsidiaries that holds investment assets or (ii) any of such Person’s Subsidiaries or group of such Person’s Subsidiaries formed for the sole purpose of acquiring or holding investment assets, in each case, against which a loan is obtained that is made without recourse to, and with no cross-collateralization against, such Person’s or any of such Person’s Restricted Subsidiaries’ other assets (other than: (A) cross-colateralization against assets which serve as collateral for other Non-Recourse Indebtedness; and (B) subject to such customary carve-out matters for which such Person or its Restricted Subsidiaries acts as a guarantor in connection with such Indebtedness, such as fraud, misappropriation, breach of representation and warranty and misapplication, unless, until and for so long as a claim for payment or performance has been made thereunder (which has not been satisfied) at which time the obligations with respect to any such customary carve-out shall not be considered Non-Recourse Indebtedness, to the extent that such claim is a liability of such Person for GAAP purposes) and upon complete or partial liquidation of which the loan must be correspondingly completely or partially repaid, as the case may be; or
3.	specifically advanced to finance the acquisition of real property and secured by only the real property to which such Indebtedness relates without recourse to such Person or any of its Restricted Subsidiaries (other than subject to such customary carve-out matters for which such Person or any of its Restricted Subsidiaries acts as a guarantor in connection with such Indebtedness, such as fraud, misappropriation, breach of representation and warranty and misapplication, unless, until and for so long as a claim for payment or performance has been made thereunder (which has not been satisfied) at which time the obligations with respect to any such customary carve-out shall not be considered Non-Recourse Indebtedness, to the extent that such claim is a liability of such Person for GAAP purposes)

provided that, notwithstanding the foregoing, to the extent that any Non-Recourse Indebtedness is made with recourse to other assets of a Person or its Restricted Subsidiaries, only that portion of such Non-Recourse Indebtedness that is recourse to such other assets or Restricted Subsidiaries shall be deemed not to be Non-Recourse Indebtedness.

“Note Guarantee” means the Guarantee by each Guarantor of the Company’s obligations under the Indenture and the notes, executed pursuant to the provisions of the Indenture.

“Obligations” means all obligations for principal, premium, interest, penalties, fees, indemnification, reimbursements, damages and other liabilities payable under the documentation governing any Indebtedness.

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“Pari Passu Debt” means Indebtedness of the Company or a Restricted Subsidiary that is senior or pari passu in right of payment with the notes. For the purposes of this definition, no Indebtedness will be considered to be senior or junior by virtue of being secured on a first or junior priority basis.

“Permitted Business” means businesses associated with the purchase and origination of mortgage loans or interests related thereto, and the purchase, management, collection and sale of mortgage servicing rights or complementary assets and businesses that are reasonably related, ancillary or complementary thereto or reasonable developments or extensions thereof.

“Permitted Funding Indebtedness” means (i) any Permitted Servicing Advance Facility Indebtedness, (ii) any Permitted Warehouse Indebtedness, (iii) any Permitted Residual Indebtedness, (iv) any Permitted MSR Indebtedness, (v) any facility that combines any Indebtedness under clauses (i), (ii), (iii) or (iv) and (vi) any Refinancing of the Indebtedness under clauses (i), (ii), (iii), (iv) or (v) and advanced to the Company or any of its Restricted Subsidiaries based upon, and secured by, Servicing Advances, mortgage related securities, loans, MSRs, consumer receivables, REO Assets or Residual Interests existing on the Issue Date or created or acquired thereafter, provided, however that the excess (determined as of the most recent date for which internal financial statements are available), if any, of (x) the amount of any Indebtedness incurred in accordance with this clause (vi) for which the holder thereof has contractual recourse to the Company or its Restricted Subsidiaries to satisfy claims with respect thereto over (y) the aggregate (without duplication of amounts) Realizable Value of the assets that secure such Indebtedness shall not be Permitted Funding Indebtedness (but shall not be deemed to be a new incurrence of Indebtedness subject to the provisions in the covenant described above under the caption “—Limitation on Incurrence of Indebtedness and Issuance of Preferred Stock” except with respect to, and solely to the extent of, any such excess that exists upon the initial incurrence of such Indebtedness incurred under this clause (vi) which excess shall be entitled to be incurred pursuant to any other provision under the covenant described above under the caption “—Limitation on Incurrence of Indebtedness and Issuance of Preferred Stock”). The amount of any Permitted Funding Indebtedness shall be determined in accordance with the definition of “Indebtedness.”

“Permitted Hedging Transactions” means entering into instruments and contracts and making margin calls thereon by the Company or any of its Restricted Subsidiaries in reasonable relation to a Permitted Business that are entered into for bona fide hedging purposes and not for speculative purposes (as determined in good faith by the Board of Directors or senior management of the Company or such Restricted Subsidiary) and shall include, without limitation, interest rate swaps, caps, floors, collars, forward hedge and TBA contracts or mortgage sale contracts and similar instruments, “interest only” mortgage derivative assets or other mortgage derivative products, future contracts and options on futures contracts on the Eurodollar, Federal Funds, Treasury bills and Treasury rates and similar financial instruments.

“Permitted Holders” means Sponsor and its Affiliates and members of management of the Company and its Subsidiaries.

“Permitted Indebtedness” means, without duplication, each of the following:

1.	Indebtedness under the notes issued in this offering and exchange notes issued in exchange for such notes pursuant to the Registration Rights Agreement and exchange notes issued in exchange for any additional notes issued under the Indenture and the Note Guarantees;
2.	Indebtedness incurred pursuant to the Existing Facilities in an aggregate principal amount at any time outstanding not to exceed the maximum amount available under each Existing Facility as in effect on the Issue Date reduced by any required permanent repayments (which are accompanied by a corresponding permanent commitment reduction) thereunder;
3.	Indebtedness of the Company or any Guarantor under the Working Capital Facility in an aggregate principal amount at any one time outstanding (with letters of credit being

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deemed to have a principal amount equal to the maximum potential liability of the Company and its Restricted Subsidiaries thereunder) in an amount not to exceed $35.0 million;

4.	other Indebtedness of the Company and its Restricted Subsidiaries outstanding on the Issue Date (other than Indebtedness described in clauses (1) and (2) above);
5.	Permitted Hedging Transactions;
6.	Indebtedness under Currency Agreements; provided that in the case of Currency Agreements which relate to Indebtedness, such Currency Agreements do not increase the Indebtedness of the Company and its Subsidiaries outstanding other than as a result of fluctuations in foreign currency exchange rates or by reason of fees, indemnities and compensation payable thereunder;
7.	Indebtedness owed to and held by the Company or a Restricted Subsidiary, provided, however, that (a) any subsequent issuance or transfer of any Capital Stock which results in any such Restricted Subsidiary ceasing to be a Restricted Subsidiary of the Company or any transfer of such Indebtedness (other than to the Company or a Restricted Subsidiary of the Company) shall be deemed, in each case, to constitute the incurrence of such Indebtedness by the obligor thereon and (b) if the Company is the obligor on such Indebtedness, such Indebtedness is expressly subordinated to the prior payment in full in cash of all obligations with respect to the notes;
8.	Indebtedness of the Company or any Guarantor to a Restricted Subsidiary of the Company for so long as such Indebtedness is held by a Wholly Owned Restricted Subsidiary of the Company, in each case subject to no Lien; provided that: (a) any Indebtedness of the Company or any Guarantor to any Restricted Subsidiary of the Company that is not a Guarantor is unsecured and subordinated in right of payment, pursuant to a written agreement, to the Company’s obligations under the Indenture and the notes; and (b) if as of any date any Person other than a Restricted Subsidiary of the Company owns or holds, directly or indirectly, any such Indebtedness or any Person holds a Lien in respect of such Indebtedness, such date shall be deemed the incurrence of Indebtedness not constituting Permitted Indebtedness by the Company;
9.	[reserved];
10.	Indebtedness of the Company or any of its Subsidiaries represented by letters of credit for the account of the Company or such Subsidiary, as the case may be, in order to provide security for workers’ compensation claims, payment obligations in connection with self-insurance or similar requirements in the ordinary course of business;
11.	Permitted Funding Indebtedness;
12.	Permitted Securitization Indebtedness and Indebtedness under Credit Enhancement Agreements;
13.	Refinancing Indebtedness;
14.	(A) any guarantee by the Company or a Guarantor of Indebtedness or other obligations of any Restricted Subsidiary of the Company (other than Non-Recourse Indebtedness) so long as the incurrence of such Indebtedness incurred by such Restricted Subsidiary of the Company is permitted under the terms of the Indenture, or (B) any guarantee by a Restricted Subsidiary of Indebtedness of the Company (other than Non-Recourse Indebtedness); provided that such guarantee is incurred in accordance with the covenant described below under “—Limitation on Guarantees by Restricted Subsidiaries”;
15.	Non-Recourse Indebtedness;

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16.  Indebtedness incurred by the Company or any of the Guarantors in connection with the acquisition of a Permitted Business; provided that on the date of the incurrence of such Indebtedness, after giving effect to the incurrence thereof and the use of proceeds therefrom, either

(a)	the Company would be permitted to incur at least $1.00 of additional Indebtedness pursuant to the second paragraph of the covenant described above under the caption “—Limitation on Incurrence of Indebtedness and Issuance of Preferred Stock;” or
(b)	the Consolidated Leverage Ratio and the Corporate Indebtedness to Tangible Net Worth Ratio of the Company would not be more than the Consolidated Leverage Ratio and the Corporate Indebtedness to Tangible Net Worth Ratio of the Company, as applicable, immediately prior to the incurrence of such Indebtedness;

17.	Indebtedness (including Capitalized Lease Obligations) incurred to finance the development, construction, purchase, lease, repairs, maintenance or improvement of assets (including MSRs and related Servicing Advances) by the Company or any Restricted Subsidiary, provided that the Liens securing such Indebtedness may not extend to any other property owned by the Company or any of its Restricted Subsidiaries at the time the Lien is incurred and the Indebtedness secured by the Lien may not be incurred more than 180 days after the latter of the acquisition or completion of the construction of the property subject to the Lien, provided, further that the amount of such Indebtedness does not exceed the Fair Market Value of the assets purchased or constructed with the proceeds of such Indebtedness;
18.	Indebtedness arising from agreements of the Company or any of its Restricted Subsidiaries providing for indemnification, adjustment of purchase price, amounts or similar obligations, in each case, incurred or assumed in connection with the disposition of any business, assets or a Subsidiary, other than guarantees of Indebtedness incurred by any Person acquiring all or any portion of such business, assets or a Subsidiary for the purpose of financing such acquisition; provided that such Indebtedness is not reflected on the balance sheet of the Company or any Restricted Subsidiary of the Company (contingent obligations referred to in a footnote to financial statements and not otherwise reflected on the balance sheet will not be deemed to be reflected on such balance sheet for purposes of this clause (18));
19.	Indebtedness consisting of Indebtedness from the repurchase, retirement or other acquisition or retirement for value by the Company of Common Stock (or options, warrants or other rights to acquire Common Stock) of the Company (or payments to any direct or indirect parent company of the Company to permit distributions to repurchase common equity (or options, warrants or other rights to acquire common equity) thereof) from any future, current or former officer, director, manager or employee (or any spouses, successors, executors, administrators, heirs or legatees of any of the foregoing) of the Company, any direct or indirect parent company of the Company, or any of its Subsidiaries or their authorized representatives to the extent described in clause (4) of the second paragraph under “—Limitation on Restricted Payments;”
20.	Indebtedness in respect of overdraft protections and otherwise in connection with customary deposit accounts maintained by the Company or any Restricted Subsidiary with banks and other financial institutions as part of its ordinary cash management program;
21.	the incurrence of Indebtedness by a Foreign Subsidiary in an amount not to exceed at any one time outstanding, together with any other Indebtedness incurred under this clause (21), 5.0% of Foreign Subsidiary Total Assets;
22.	shares of Preferred Stock of a Restricted Subsidiary of the Company issued to the Company or another Restricted Subsidiary; provided that any subsequent issuance or transfer of any

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Capital Stock or any other event which results in any such Restricted Subsidiary ceasing to be a Restricted Subsidiary or any other subsequent transfer of any such share of Preferred Stock (except to the Company or another Restricted Subsidiary) shall be deemed in each case to be an issuance of such shares or Preferred Stock not permitted by this clause (22);

23.	Indebtedness of the Company and its Restricted Subsidiary consisting of the financing of insurance premiums in the ordinary course of business;
24.	Obligations in respect of performance, bid, surety bonds and completion guarantees provided by the Company and its Restricted Subsidiaries in the ordinary course of business;
25.	[reserved];
26.	to the extent otherwise constituting Indebtedness, obligations arising from agreements providing for indemnification, adjustment of purchase price or similar obligations, in each case, incurred or assumed in connection with the disposition of Residual Interests or other loans and other mortgage-related receivables purchased or originated by the Company or any of its Restricted Subsidiaries arising in the ordinary course of business;
27.	Guarantees by the Company and its Restricted Subsidiaries of Indebtedness that is otherwise Permitted Indebtedness;
28.	Indebtedness or Disqualified Capital Stock of the Company and Indebtedness, Disqualified Capital Stock or Preferred Stock of any of the Company’s Restricted Subsidiaries in an aggregate principal amount or liquidation preference up to 100.0% of the net cash proceeds received by the Company since immediately after the Issue Date from the issue or sale of Equity Interests of the Company or cash contributed to the capital of the Company (in each case, other than proceeds of Disqualified Capital Stock or sales of Equity Interests to the Company or any of its Subsidiaries) to the extent that such net cash proceeds or cash have not been applied to the covenant “—Limitation on Restricted Payments”; provided, however, that the aggregate amount of Indebtedness, Disqualified Stock and Preferred Stock incurred by Restricted Subsidiaries (other than Guarantors) pursuant to this clause (28) may not exceed $15.0 million in the aggregate at any one time outstanding;
29.	Indebtedness arising out of or to fund purchases of all remaining outstanding asset-backed securities of any Securitization Entity for the purpose of relieving the Company or a Subsidiary of the Company of the administrative expense of servicing such Securitization Entity;
30.	Indebtedness, Disqualified Stock or Preferred Stock of a Restricted Subsidiary incurred to finance or assumed in connection with an acquisition in a principal amount not to exceed $10.0 million in the aggregate at any one time outstanding together with all other Indebtedness, Disqualified Stock and/or Preferred Stock issued under this clause (30);
31.	Guarantees by the Company and the Restricted Subsidiaries of the Company to owners of servicing rights in the ordinary course of business; and
32.	additional Indebtedness of the Company and its Subsidiaries in an aggregate principal amount not to exceed $12.5 million at any one time outstanding.

For purposes of determining compliance with the “—Limitation on Incurrence of Indebtedness and Issuance of Preferred Stock” covenant, in the event that an item of Indebtedness meets the criteria of more than one of the categories of Permitted Indebtedness described in clauses (1) through (32) above or is entitled to be incurred pursuant to the second paragraph of such covenant, the Company shall, in its sole discretion, classify (or later reclassify) such item of Indebtedness in any manner that complies with this covenant. Accrual of interest, accretion or amortization of original issue discount, the payment of interest on any Indebtedness in the form of additional Indebtedness with the same terms, and the payment of dividends on Disqualified Capital Stock in the form of additional

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shares of the same class of Disqualified Capital Stock will not be deemed to be an incurrence of Indebtedness or an issuance of Disqualified Capital Stock for purposes of the ‘‘—Limitation on Incurrence of Indebtedness and Issuance of Preferred Stock” covenant.

“Permitted Investments” means:

1.	any Investment in the Company or in a Restricted Subsidiary;
2.	any Investment in cash or Cash Equivalents;
3.	any Investment by the Company or any Restricted Subsidiary of the Company in a Person, if as a result of such Investment (i) such Person becomes a Restricted Subsidiary of the Company that is engaged in a Permitted Business or (ii) such Person is merged, consolidated or amalgamated with or into, or transfers or conveys substantially all of its assets to, or is liquidated into, the Company or a Restricted Subsidiary of the Company;
4.	Investments by the Company or any Restricted Subsidiary in Securitization Entities, Warehouse Facility Trusts, MSR Facility Trusts, Investments in mortgage related securities or charge-off receivables in the ordinary course of business;
5.	Investments arising out of purchases of all remaining outstanding asset-backed securities of any Securitization Entity for the purpose of relieving the Company or a Subsidiary of the Company of the administrative expense of servicing such Securitization Entity;
6.	Investments in MSRs;
7.	Investments in Residual Interests in connection with any Securitization, Warehouse Facility or MSR Facility;
8.	Investments by the Company or any Restricted Subsidiary in the form of loans extended to non-Affiliate borrowers in connection with any loan origination business of the Company or such Restricted Subsidiary in the ordinary course of business;
9.	any Restricted Investment made as a result of the receipt of securities or other assets of non-cash consideration from an Asset Sale that was made pursuant to and in compliance with the covenant described above under the caption “—Repurchase at the Option of Holders—Asset Sales,” or any other disposition of assets not constituting an Asset Sale;
10.	Investments made solely in exchange for the issuance of Equity Interests (other than Disqualified Capital Stock) of the Company, or any of its direct or indirect parent entities, or any Unrestricted Subsidiary;
11.	any Investments received in compromise or resolution of (A) obligations of trade creditors or customers that were incurred in the ordinary course of business of the Company or any of its Restricted Subsidiaries, including pursuant to any plan of reorganization or similar arrangement upon the bankruptcy or insolvency of any trade creditor or customer; or (B) litigation, arbitration or other disputes with Persons who are not Affiliates;
12.	Investments in connection with Permitted Hedging Transactions;
13.	repurchases of the notes;
14.	Investments in and making of Servicing Advances, residential or commercial mortgage loans and Securitization Assets (whether or not made in conjunction with the acquisition of MSRs);
15.	guarantees of Indebtedness permitted under the covenant described in “—Certain covenants—Limitation on Incurrence of Indebtedness and Issuance of Preferred Stock”;
16.	any transaction to the extent it constitutes an investment that is permitted and made in accordance with the provisions of the third paragraph of the covenant described under

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“—Limitation on Transactions with Affiliates” (except transactions described in clauses (6) and (9) of such paragraph);

17.	Investments consisting of purchases and acquisitions of inventory, supplies, material or equipment or the licensing or contribution of intellectual property pursuant to joint marketing arrangements with other Persons;
18.	endorsements for collection or deposit in the ordinary course of business;
19.	any Investment existing on the Issue Date or made pursuant to binding commitments in effect on the Issue Date or an Investment consisting of any extension, modification or renewal of any Investment existing on the Issue Date; provided that the amount of any such Investment may only be increased pursuant to this clause (19) to the extent required by the terms of such Investment as in existence on the Issue Date;
20.	any Investment by the Company or any Restricted Subsidiary of the Company in any Person where such Investment was acquired by the Company or any Restricted Subsidiary of the Company (a) in exchange for any other Investment or accounts receivable held by the Company or any such Restricted Subsidiary in connection with or as a result of a bankruptcy, workout, reorganization or recapitalization of the issuer of such other Investment or accounts receivable or (b) as a result of a foreclosure by the Company or any Restricted Subsidiary of the Company with respect to any secured Investment or other transfer of title with respect to any secured Investment in default;
21.	any Investment by the Company or any Restricted Subsidiary of the Company in a joint venture not to exceed the greater of (x) $5.0 million and (y) 1.0% of Total Assets; and
22.	other Investments having an aggregate Fair Market Value, taken together with all other Investments made pursuant to this clause (22) that are at that time outstanding (without giving effect to the sale of an Unrestricted Subsidiary to the extent the proceeds of such sale do not consist of cash and/or marketable securities), not to exceed the greater of (x) $30.0 million and (y) 1.0% of Total Assets at the time of such Investment (with the Fair Market Value of each Investment being measured at the time made and without giving effect to subsequent changes in value).

“Permitted Liens” means the following types of Liens:

1.	Liens for taxes, assessments or governmental charges or claims either: (a) not delinquent for a period of more than 30 days; or (b) contested in good faith by appropriate proceedings and as to which the Company or its Subsidiaries shall have set aside on its books such reserves as may be required pursuant to GAAP;
2.	statutory Liens of landlords and Liens of carriers, warehousemen, mechanics, suppliers, materialmen, repairmen and other Liens imposed by law incurred in the ordinary course of business for sums not yet delinquent or being contested in good faith, if such reserve or other appropriate provision, if any, as shall be required by GAAP shall have been made in respect thereof;
3.	Liens incurred or deposits made in the ordinary course of business in connection with workers’ compensation laws, unemployment insurance laws or similar legislation and other types of social security or obtaining of insurance, including any Lien securing letters of credit issued in the ordinary course of business consistent with past practice in connection therewith, or to secure the performance of tenders, statutory obligations, surety and appeal bonds, bids, leases, government contracts, performance and return-of-money bonds and other similar obligations (exclusive of obligations for the payment of borrowed money);
4.	Liens existing on the Issue Date;

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5.	Liens on assets, property or shares of stock of a Person at the time such Person becomes a Restricted Subsidiary; provided, however, that such Liens are not created or incurred in connection with, or in contemplation of, such other Person becoming such a Restricted Subsidiary; provided, further, however, that such Liens may not extend to any other property owned by the Company or any Restricted Subsidiary;
6.	Liens on assets or property at the time the Company or a Restricted Subsidiary acquired the assets or property or within 360 days of such acquisition, including any acquisition by means of a merger, amalgamation or consolidation with or into the Company or any Restricted Subsidiary; provided that the Liens may not extend to any other property owned by the Company or any Restricted Subsidiary (other than assets and property affixed or appurtenant thereto); provided, further that the aggregate amount of obligations secured thereby does not exceed $15.0 million at any time outstanding and no such Lien may secure obligations in an amount that exceeds the Fair Market Value of the assets or property acquired as of the date of acquisition;
7.	Liens securing Indebtedness or other obligations of a Restricted Subsidiary of the Company owing to the Company or another Restricted Subsidiary of the Company;
8.	leases, subleases, licenses or sublicenses granted to others which do not materially interfere with the ordinary conduct of the business of the Company or any of its Restricted Subsidiaries;
9.	Liens arising from Uniform Commercial Code financing statement filings regarding operating leases entered into by the Company and its Restricted Subsidiaries in the ordinary course of business;
10.	Liens securing Indebtedness permitted to be incurred under the Working Capital Facility, including any letter of credit facility relating thereto, that was permitted to be Incurred pursuant to clause (3) of the definition of Permitted Indebtedness;
11.	Liens in favor of the Issuers or any Guarantor;
12.	Liens on the Equity Interests of any Unrestricted Subsidiary securing Non-Recourse Indebtedness of such Unrestricted Subsidiary;
13.	grants of software and other technology licenses in the ordinary course of business;
14.	Liens to secure any refinancing, refunding, extension, renewal or replacement (or successive refinancing, refundings, extensions, renewals or replacements) as a whole, or in part, of any Indebtedness secured by any Lien referred to in clauses (4), (5), (6), (28) and (34) of this definition; provided, however, that (x) such new Lien shall be limited to all or part of the same property that secured the original Lien (plus improvements on such property), and (y) the Indebtedness secured by such Lien at such time is not increased to any amount greater than the sum of (A) the outstanding principal amount or, if greater, committed amount of the Indebtedness described under clauses (4), (5), (6), (28) and (34) of this definition at the time the original Lien became a Permitted Lien under this Indenture, and (B) an amount necessary to pay any fees and expenses, including premiums, related to such refinancing, refunding, extension, renewal or replacement;
15.	Liens arising out of conditional sale, title retention, consignment or similar arrangements for the sale or purchase of goods entered into in the ordinary course of business;
16.	Liens incurred to secure cash management services or to implement cash pooling arrangements in the ordinary course of business and Liens arising by virtue of any statutory or common law provisions relating to banker’s Liens, rights of set-off or similar rights and remedies as to deposit accounts or other funds maintained with a depository or financial institution;

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17.	any encumbrance or restriction (including put and call arrangements) with respect to Capital Stock of any joint venture or similar arrangement pursuant to any joint venture or similar agreement;
18.	any amounts held by a trustee in the funds and accounts under an indenture securing any revenue bonds issued for the benefit of the Issuer or any Restricted Subsidiary;
19.	judgment Liens not giving rise to an Event of Default so long as such Lien is adequately bonded and any appropriate legal proceedings which may have been duly initiated for the review of such judgment shall not have been finally terminated or the period within which such proceedings may be initiated shall not have expired;
20.	minor survey exceptions, minor encumbrances, easements or reservations of, or rights of other for, licenses, rights-of-way, sewers, electric lines, telegraph and telephone lines and other similar purposes or zoning or other restrictions as to the use of real property or Liens incidental to the conduct of the Permitted Business of the Company and its Subsidiaries and other similar charges or encumbrances in respect of real property not interfering, in the aggregate, in any material respect with the ordinary conduct of the business of the Company or any of its Subsidiaries;
21.	any interest or title of a lessor under any Capitalized Lease Obligation; provided that such Liens do not extend to any property or assets which is not leased property subject to such Capitalized Lease Obligation;
22.	Liens upon specific items of inventory or other goods and proceeds of any Person securing such Person’s obligations in respect of bankers’ acceptances issued or created for the account of such Person to facilitate the purchase, shipment or storage of such inventory or other goods;
23.	Liens securing reimbursement obligations with respect to commercial letters of credit which encumber documents and other property relating to such letters of credit and products and proceeds thereof;
24.	Liens encumbering deposits made to secure obligations arising from statutory, regulatory, contractual, or warranty requirements of the Company or any of its Subsidiaries, including rights of offset and set-off;
25.	Liens securing Permitted Hedging Transactions and the costs thereof;
26.	Liens securing Indebtedness under Currency Agreements;
27.	Liens with respect to obligations at any one time outstanding that do not exceed the greater of (x) $25.0 million and (y) 1.0% of Total Assets;
28.	Liens securing Indebtedness incurred to finance the construction or purchase of assets (excluding MSR Assets) by the Company or any of its Restricted Subsidiaries (including any acquisition of Capital Stock or by means of a merger, amalgamation or consolidation with or into the Company or any Restricted Subsidiary), provided that any such Lien may not extend to any other property owned by the Company or any of its Restricted Subsidiaries at the time the Lien is incurred and the Indebtedness secured by the Lien may not be incurred more than 180 days after the acquisition or completion of the construction of the property subject to the Lien, provided further that the amount of Indebtedness secured by such Liens does not exceed the purchase price of the assets purchased or constructed with the proceeds of such Indebtedness;
29.	Liens on Securitization Assets and the proceeds thereof incurred in connection with Permitted Securitization Indebtedness or permitted guarantees thereof;

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30.	Liens on spread accounts and credit enhancement assets, Liens on the stock of Restricted Subsidiaries of the Company substantially all of which are spread accounts and credit enhancement assets and Liens on interests in Securitization Entities, in each case incurred in connection with Credit Enhancement Agreements;
31.	Liens to secure Indebtedness of any Foreign Subsidiary of the Company or Excluded Restricted Subsidiary securing Indebtedness of such Foreign Subsidiary of the Company or any Excluded Restricted Subsidiary that is permitted by the terms of the Indenture to be incurred;
32.	Liens (i) of a collection bank arising under Section 4-210 of the Uniform Commercial Code, or any comparable or successor provision, on items in the course of collection and (ii) in favor of banking institutions arising as a matter of law encumbering deposits (including the right of set-off) and which are within the general parameters customary in the banking industry;
33.	Liens solely on any cash earnest money deposits made by the Issuer or any of its Restricted Subsidiaries in connection with any letter of intent or purchase agreement; and
34.	Liens securing Indebtedness incurred to finance the purchase of MSR Assets (“Acquired MSR Assets”) by the Company or any of its Restricted Subsidiaries (including any acquisition of Capital Stock or by means of a merger, amalgamation or consolidation with or into the Company or any Restricted Subsidiary), provided that (x) any such Lien may not extend to any other property owned by the Company or any of its Restricted Subsidiaries at the time the Lien is incurred and the Indebtedness secured by the Lien may not be incurred more than 180 days after the acquisition of the property subject to the Lien and (y) the aggregate amount of Indebtedness secured by the Acquired MSR Assets in such purchase does not exceed the greater of $50.0 million and 35.0% of the purchase price of such Acquired MSR Assets less the amount necessary to pay any fees and expenses related to such acquisition (the purchase price of the Acquired MSR Assets shall be determined by the terms of the contract governing such purchase or, if not specified in such contract, management in good faith).

“Permitted MSR Indebtedness” means MSR Indebtedness; provided, that the excess (determined as of the most recent date for which internal financial statements are available), if any, of (x) the amount of any such MSR Indebtedness for which the holder thereof has contractual recourse to the Company or its Restricted Subsidiaries to satisfy claims with respect to such MSR Indebtedness (excluding recourse for matters such as fraud, misappropriation, breaches of representations and warranties and misapplication) over (y) the aggregate (without duplication of amounts) Realizable Value of the assets that secure such MSR Indebtedness shall not be Permitted MSR Indebtedness (but shall not be deemed to be a new incurrence of Indebtedness subject to the provisions in the covenant described above under the caption “—Limitation on Incurrence of Indebtedness and Issuance of Preferred Stock” except with respect to, and solely to the extent of, any such excess that exists upon the initial incurrence of such Indebtedness which excess shall be entitled to be incurred pursuant to any other provisions in the covenant described above under the caption ‘‘—Limitation on Incurrence of Indebtedness and Issuance of Preferred Stock”). The amount of any particular Permitted MSR Indebtedness as of any date of determination shall be calculated in accordance with GAAP.

“Permitted Residual Indebtedness” means any Indebtedness of the Company or any of its Restricted Subsidiaries under a Residual Funding Facility; provided that the excess (determined as of the most recent date for which internal financial statements are available), if any of (x) the amount of any such Permitted Residual Indebtedness for which the holder thereof has contractual recourse to the Company or its Restricted Subsidiaries to satisfy claims with respect to such Permitted Residual Indebtedness (not including customary contractual recourse for breaches of representations and warranties) over (y) the aggregate (without duplication of amounts) Realizable Value of the assets that secure such Permitted Residual Indebtedness shall be deemed not to be Permitted Residual

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Indebtedness (but shall not be deemed to be a new incurrence of Indebtedness subject to the provisions in the covenant described above under the caption “—Limitation on Incurrence of Indebtedness and Issuance of Preferred Stock” except with respect to, and solely to the extent of, any such excess that exists upon the initial incurrence of such Indebtedness which excess shall be entitled to be incurred pursuant to any other provisions in the covenant described above under the caption “—Limitation on Incurrence of Indebtedness and Issuance of Preferred Stock”) of the Company or such Restricted Subsidiary, as the case may be, at such time.

“Permitted Securitization Indebtedness” means Securitization Indebtedness; provided that (i) in connection with any Securitization, any Warehouse Indebtedness or MSR Indebtedness used to finance the purchase, origination or pooling of any Receivables subject to such Securitization is repaid in connection with such Securitization to the extent of the net proceeds received by the Company and its Restricted Subsidiaries from the applicable Securitization Entity, and (ii) the excess (determined as of the most recent date for which internal financial statements are available), if any, of (x) the amount of any such Securitization Indebtedness for which the holder thereof has contractual recourse to the Company or its Restricted Subsidiaries to satisfy claims with respect to such Securitization Indebtedness (excluding recourse for matters such as fraud, misappropriation, breaches of representations and warranties and misapplication) over (y) the aggregate (without duplication of amounts) Realizable Value of the assets that secure such Securitization Indebtedness shall not be Permitted Securitization Indebtedness (but shall not be deemed to be a new incurrence of Indebtedness subject to the provisions in the covenant described above under the caption “—Limitation on Incurrence of Indebtedness and Issuance of Preferred Stock” except with respect to, and solely to the extent of, any such excess that exists upon the initial incurrence of such Indebtedness which excess shall be entitled to be incurred pursuant to any other provisions in the covenant described above under the caption “—Limitation on Incurrence of Indebtedness and Issuance of Preferred Stock”).

“Permitted Servicing Advance Facility Indebtedness” means any Indebtedness of the Company or any of its Restricted Subsidiaries incurred under a Servicing Advance Facility; provided, however, that the excess (determined as of the most recent date for which internal financial statements are available), if any of (x) the amount of any such Permitted Servicing Advance Facility Indebtedness for which the holder thereof has contractual recourse (other than subject to such customary carve-out matters for which such Person or its Restricted Subsidiaries acts as a guarantor in connection with such Indebtedness, such as fraud, misappropriation, breaches of representations or warranties and misapplication, unless, until and for so long as a claim for payment or performance has been made thereunder (which has not been satisfied) at which time the obligations with respect to any such customary carve-out shall not be considered Non-Recourse Indebtedness, to the extent that such claim is a liability of such Person for GAAP purposes) to the Company or its Restricted Subsidiaries to satisfy claims with respect to such Permitted Servicing Advance Facility Indebtedness over (y) the aggregate (without duplication of amounts) Realizable Value of the assets that secure such Permitted Servicing Advance Facility Indebtedness shall not be Permitted Servicing Advance Facility Indebtedness (but shall not be deemed to be a new incurrence of Indebtedness subject to the provisions in the covenant described above under the caption “—Limitation on Incurrence of Indebtedness and Issuance of Preferred Stock” except with respect to, and solely to the extent of, any such excess that exists upon the initial incurrence of such Indebtedness under a Servicing Advance Facility which excess shall be entitled to be incurred pursuant to any other provisions in the covenant described above under the caption “—Limitation on Incurrence of Indebtedness and Issuance of Preferred Stock”) of the Company or such Restricted Subsidiary, as the case may be, at such time.

“Permitted Warehouse Indebtedness” means Warehouse Indebtedness; provided, that the excess (determined as of the most recent date for which internal financial statements are available), if any, of (x) the amount of any such Warehouse Indebtedness for which the holder thereof has contractual recourse to the Company or its Restricted Subsidiaries to satisfy claims with respect to such Warehouse Indebtedness (excluding recourse for matters such as fraud, misappropriation, breaches of

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representations and warranties and misapplication) over (y) the aggregate (without duplication of amounts) Realizable Value of the assets that secure such Warehouse Indebtedness shall not be Permitted Warehouse Indebtedness (but shall not be deemed to be a new incurrence of Indebtedness subject to the provisions in the covenant described above under the caption ‘‘—Limitation on Incurrence of Indebtedness and Issuance of Preferred Stock” except with respect to, and solely to the extent of, any such excess that exists upon the initial incurrence of such Indebtedness which excess shall be entitled to be incurred pursuant to any other provisions the covenant described above under the caption ‘‘—Limitation on Incurrence of Indebtedness and Issuance of Preferred Stock”). The amount of any particular Permitted Warehouse Indebtedness as of any date of determination shall be calculated in accordance with GAAP.

“Person” means an individual, partnership, corporation, unincorporated organization, trust or joint venture, or a governmental agency or political subdivision thereof.

“Preferred Stock” of any Person means any Capital Stock of such Person that has preferential rights to any other Capital Stock of such Person with respect to dividends or redemptions or upon liquidation.

“Qualified Capital Stock” means any Capital Stock that is not Disqualified Capital Stock.

“Rating Agencies” means Moody’s and S&P.

“Realizable Value” of an asset means (i) with respect to any REO Asset, the value realizable upon the disposition of such asset as determined by the Company in its reasonable discretion and consistent with customary industry practice and (ii) with respect to any other asset, the lesser of (x) if applicable, the face value of such asset and (y) the market value of such asset as determined by the Company in accordance with the agreement governing the applicable Permitted Servicing Advance Facility Indebtedness, Permitted Warehouse Indebtedness, Permitted MSR Indebtedness or Permitted Residual Indebtedness, as the case may be, (or, if such agreement does not contain any related provision, as determined by senior management of the Company in good faith); provided, however, that the realizable value of any asset described in clause (i) or (ii) above which an unaffiliated third party has a binding contractual commitment to purchase from the Company or any of its Restricted Subsidiaries shall be the minimum price payable to the Company or such Restricted Subsidiary for such asset pursuant to such contractual commitment.

“Receivables” means loans and other mortgage-related receivables (including Servicing Receivables and MSRs but excluding Residual Interests and net interest margin securities) purchased or originated by the Company or any Restricted Subsidiary of the Company or, with respect to Servicing Receivables and MSRs, otherwise arising in the ordinary course of business; provided, however, that for purposes of determining the amount of a Receivable at any time, such amount shall be determined in accordance with GAAP, consistently applied, as of the most recent practicable date.

“Refinance” means, in respect of any security or Indebtedness, to refinance, extend, renew, refund, repay, prepay, redeem, defease or retire, or to issue a security or Indebtedness in exchange or replacement for, such security or Indebtedness in whole or in part. “Refinanced” and “Refinancing” shall have correlative meanings.

“Refinancing Indebtedness” means any Refinancing by the Company or any Subsidiary of the Company of Indebtedness incurred in accordance with clauses (1), (4), (13), (16), (17), (28) or (29) of the definition of Permitted Indebtedness, and in each case that does not:

1.  result in an increase in the aggregate principal amount of Indebtedness of such Person as of the date of such proposed Refinancing (plus the amount of any premium required to be paid under the terms of the instrument governing such Indebtedness and plus the amount of reasonable expenses incurred by the Company in connection with such Refinancing and amounts of Indebtedness otherwise permitted to be incurred under the Indenture); or

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2.  create Indebtedness with a Weighted Average Life to Maturity that is less than the Weighted Average Life to Maturity of the Indebtedness being Refinanced; or a final maturity earlier than the final maturity of the Indebtedness being Refinanced; provided that (i) such Indebtedness is incurred either (a) by the Company or any Guarantor or (b) by the Restricted Subsidiary that is the obligor on the Indebtedness being Refinanced and (ii) if such Indebtedness being Refinanced is subordinate or junior to the notes, then such Refinancing Indebtedness shall be subordinate to the notes at least to the same extent and in the same manner as the Indebtedness being Refinanced.

“Registration Rights Agreement” means the Registration Rights Agreement with respect to the notes dated as of the Issue Date, among the Issuers, the Guarantors and the Initial Purchasers.

“REO Asset” of a Person means a real estate asset owned by such Person and acquired as a result of the foreclosure or other enforcement of a lien on such asset securing a Servicing Advance or loans and other mortgage-related receivables purchased or originated by the Company or any Restricted Subsidiary of the Company in the ordinary course of business.

“Residual Funding Facility” means any funding arrangement with a financial institution or institutions or other lenders or purchasers under which advances are made to the Company or any Restricted Subsidiary secured by Residual Interests.

“Residual Interests” means any residual, subordinated, reserve accounts and retained ownership interest held by the Company or a Restricted Subsidiary in Securitization Entities, Warehouse Facility Trusts and/or MSR Facility Trusts, regardless of whether required to appear on the face of the consolidated financial statements in accordance with GAAP.

“Restricted Investment” means an Investment other than a Permitted Investment.

“Restricted Subsidiary” of a Person means any Subsidiary of the referent Person that is not an Unrestricted Subsidiary.

“Required Asset Sale” means any Asset Sale that is a result of a repurchase right or obligation or a mandatory sale right or obligation related to (i) MSRs, (ii) pools or portfolios of MSRs, or (iii) the Capital Stock of any Person that holds MSRs or pools or portfolios of MSRs, which rights or obligations are either in existence on the Issue Date (or substantially similar in nature to such rights or obligations in existence on the Issue Date) or pursuant to the guidelines or regulations of a government-sponsored enterprise.

“S&P” means Standard & Poor’s Ratings Services, a division of The McGraw-Hill Companies, Inc., and its successors.

“SEC” means the Securities and Exchange Commission.

“Secured Debt” means any Indebtedness secured by a Lien upon the property of the Company or any of its Restricted Subsidiaries (regardless of the Realizable Value of such property).

“Securities Act” means the Securities Act of 1933, as amended, or any successor statute or statutes thereto.

“Securitization” means a public or private transfer, sale or financing of Servicing Advances and/or mortgage loans, installment contracts, other loans and any other asset capable of being securitized (collectively, the “Securitization Assets”) by which the Company or any of its Restricted Subsidiaries directly or indirectly securitizes a pool of specified Securitization Assets including, without limitation, any such transaction involving the sale of specified Servicing Advances or mortgage loans to a Securitization Entity.

“Securitization Assets” has the meaning set forth in the definition of “Securitization.”

“Securitization Entity” means (i) any Person (whether or not a Restricted Subsidiary of the Company) established for the purpose of issuing asset-backed or mortgaged-backed or mortgage

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pass-through securities of any kind (including collateralized mortgage obligations and net interest margin securities), (ii) any special purpose Subsidiary established for the purpose of selling, depositing or contributing Securitization Assets into a Person described in clause (i) or holding securities in any related Securitization Entity, regardless of whether such person is an issuer of securities; provided that such Person is not an obligor with respect to any Indebtedness of the Company or any Guarantor and (iii) any special purpose Subsidiary of the Company formed exclusively for the purpose of satisfying the requirements of Credit Enhancement Agreements and regardless of whether such Subsidiary is an issuer of securities; provided that such Person is not an obligor with respect to any Indebtedness of the Company or any Guarantor other than under Credit Enhancement Agreements. As of the Issue Date, Nationstar Home Equity Loan Trust 2009-A, Nationstar Home Equity Loan 2009-A REO LLC, Nationstar Mortgage Advance Receivables Trust 2009-ADVI, Nationstar Funding LLC, Nationstar Residual, LLC and Nationstar Advance Funding LLC shall be deemed to satisfy the requirements of the foregoing definition.

“Securitization Indebtedness” means (i) Indebtedness of the Company or any of its Restricted Subsidiaries incurred pursuant to on-balance sheet Securitizations treated as financings and (ii) any Indebtedness consisting of advances made to the Company or any of its Restricted Subsidiaries based upon securities issued by a Securitization Entity pursuant to a Securitization and acquired or retained by the Company or any of its Restricted Subsidiaries.

“Servicing Advances” means advances made by the Company or any of its Restricted Subsidiaries in its capacity as servicer of any mortgage-related receivables to fund principal, interest, escrow, foreclosure, insurance, tax or other payments or advances when the borrower on the underlying receivable is delinquent in making payments on such receivable; to enforce remedies, manage and liquidate REO Assets; or that the Company or any of its Restricted Subsidiaries otherwise advances in its capacity as servicer.

“Servicing Advance Facility” means any funding arrangement with lenders collateralized in whole or in part by Servicing Advances under which advances are made to the Company or any of its Restricted Subsidiaries based on such collateral.

“Servicing Receivables” means rights to collections under mortgage-related receivables, or other rights to reimbursement of Servicing Advances that the Company or a Restricted Subsidiary of the Company has made in the ordinary course of business and on customary industry terms.

“Significant Subsidiary,” with respect to any Person, means any Subsidiary of such Person that satisfies the criteria for a “significant subsidiary” set forth in Rule 1-02 of Regulation S-X under the Exchange Act, as such regulation is in effect on the Issue Date.

“Sponsor” means Fortress Investment Group LLC.

“Subsidiary,” with respect to any Person, means:

1.	any corporation of which the outstanding Capital Stock having at least a majority of the votes entitled to be cast in the election of directors under ordinary circumstances shall at the time be owned, directly or indirectly, by such Person; or
2.	any other Person of which at least a majority of the voting interest under ordinary circumstances is at the time, directly or indirectly, owned by such Person.

“Taxable Income” means, for any period, the taxable income or loss of the Company for such period for federal income tax purposes.

“Tax Amount” means, for any period, the combined federal, state and local income taxes, including estimated taxes, that would be payable with respect to the Company’s taxable income for such period (or in respect of the actual or deemed transfer of an interest in the Company to a corporation in connection with the public issuance of shares in a transaction intended to qualify (based upon an opinion of a nationally recognized accounting or law firm that the transaction should so

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qualify) under Section 351 of the Internal Revenue Code of 1986, as amended from time to time, in which the only consideration is common stock of the corporation and the assumption of liabilities of the Company) by an equity owner of the Company who is an individual resident in New York City who is subject to the maximum rates of tax; provided that in determining the Tax Amount, the effect thereon of any net operating loss carryforwards or other carryforwards or tax attributes, such as alternative minimum tax carryforwards, that would apply to such an individual shall be taken into account assuming the only income and gain of such individual in current and prior tax periods is income and gain attributable to the Company; provided, further, that (i) if there is an adjustment in the amount of the Taxable Income for any period, an appropriate positive or negative adjustment shall be made in the Tax Amount, and if the Tax Amount is negative, then the Tax Amount for succeeding periods shall be reduced (without duplication of reductions due to the first proviso hereof) to take into account such negative amount until such negative amount is reduced to zero and (ii) any Tax Amount other than amounts relating to estimated taxes shall be computed by a nationally recognized accounting firm.

“Total Assets” means the total assets of the Company and its Restricted Subsidiaries, determined on a consolidated basis in accordance with GAAP, as shown on the most recent balance sheet of the Company.

“Unrestricted Subsidiary” means any Subsidiary of the Company that is designated by the Board of Directors of the Company as an Unrestricted Subsidiary pursuant to a resolution of the Board of Directors, but only to the extent that such Subsidiary:

(1)	has no Indebtedness other than Non-Recourse Indebtedness and other Indebtedness that is not recourse to the Company or any Restricted Subsidiary or any of their assets;
(2)	except as permitted by the covenant described above under the caption “—Certain Covenants—Transactions with Affiliates,” is not party to any agreement, contract, arrangement or understanding with the Company or any Restricted Subsidiary of the Company unless the terms of any such agreement, contract, arrangement or understanding are no less favorable to the Company or such Restricted Subsidiary than those that might be obtained at the time from Persons who are not Affiliates of the Company;
(3)	is a Person with respect to which neither the Company nor any of its Restricted Subsidiaries has any direct or indirect obligation (a) to subscribe for additional Equity Interests or (b) to maintain or preserve such Person’s financial condition or to cause such Person to achieve any specified levels of operating results; and
(4)	has not guaranteed or otherwise directly or indirectly provided credit support for any Indebtedness of the Company or any of its Restricted Subsidiaries.

“Voting Stock” of any Person as of any date means the Capital Stock of such Person that is at the time entitled to vote in the election of the board of directors of such Person.

“Warehouse Facility” means any financing arrangement of any kind, including, but not limited to, financing arrangements in the form of repurchase facilities, loan agreements, note issuance facilities and commercial paper facilities (excluding in all cases, Securitizations), with a financial institution or other lender or purchaser exclusively to (i) finance or refinance the purchase, origination or funding by the Company or a Restricted Subsidiary of the Company of, provide funding to the Company or a Restricted Subsidiary of the Company through the transfer of, loans, mortgage related securities and other mortgage-related receivables purchased or originated by the Company or any Restricted Subsidiary of the Company in the ordinary course of business, (ii) finance the funding of or refinance Servicing Advances; or (iii) finance or refinance the carrying of REO Assets related to loans and other mortgage-related receivables purchased or originated by the Company or any Restricted Subsidiary of the Company; provided that such purchase, origination, pooling, funding, refinancing and carrying is in the ordinary course of business.

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“Warehouse Facility Trust” means any Person (whether or not a Restricted Subsidiary of the Company) established for the purpose of issuing notes or other securities in connection with a Warehouse Facility, which (i) notes and securities are backed by specified Servicing Advances purchased by such Person from the Company or any other Restricted Subsidiary, or (ii) notes and securities are backed by specified mortgage loans purchased by such Person from the Company or any other Restricted Subsidiary.

“Warehouse Indebtedness” means Indebtedness in connection with a Warehouse Facility; the amount of any particular Warehouse Indebtedness as of any date of determination shall be calculated in accordance with GAAP.

“Weighted Average Life to Maturity” means, when applied to any Indebtedness, Disqualified Capital Stock or Preferred Stock, as the case may be, at any date, the number of years obtained by dividing: (1) the then outstanding aggregate principal amount of such Indebtedness or redemption or similar payment with respect to such Disqualified Capital Stock or Preferred Stock into; (2) the sum of the total of the products obtained by multiplying (i) the amount of each then remaining installment, sinking fund, serial maturity or other required payment of principal, including payment at final maturity, in respect thereof, by (ii) the number of years (calculated to the nearest one-twelfth) which will elapse between such date and the making of such payment.

“Wholly Owned Restricted Subsidiary” of any Person means any Restricted Subsidiary of such Person of which all the outstanding voting securities (other than in the case of a Foreign Subsidiary, directors’ qualifying shares or an immaterial amount of shares required to be owned by other Persons pursuant to applicable law) are owned by such Person or any Wholly Owned Restricted Subsidiary of such Person.

“Working Capital Facility” means (i), any indentures or credit facilities or commercial paper facilities with banks or other institutional lenders or investors that provide loans, notes, other credit facilities or commitments permitted under clause (3) of the definition of Permitted Indebtedness and (ii) any indentures or credit facilities or commercial paper facilities with banks or other institutional lenders or investors that extend, replace, refund, refinance, renew or defease any part of the loans, notes, other credit facilities or commitments thereunder, including any such replacement, refunding or refinancing facility or indenture that alters the maturity thereof, as such agreements may be amended (including any amendment and restatement thereof), supplemented or otherwise modified from time to time.

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FORM, BOOK-ENTRY PROCEDURES AND TRANSFER

General

The New Notes will be issued in fully registered global form. The New Notes initially will be represented by one or more global certificates without interest coupons (the “global notes”). The global notes will be deposited upon issuance with the trustee as custodian for DTC and registered in the name of DTC or its nominee for credit to the accounts of direct or indirect participants in DTC, as described below under “—Depositary Procedures.”

The global notes will be deposited on behalf of the acquirers of the New Notes for credit to the respective accounts of the acquirers or to such other accounts as they may direct. Except as described below, the global notes may be transferred, in whole and not in part, only to another nominee of DTC or to a successor of DTC or its nominee. Beneficial interests in the global notes may not be exchanged for New Notes in certificated form except in the limited circumstances described below under “—Exchange of Book-Entry Notes for Certificated Notes.”

Transfers of beneficial interests in the global notes will be subject to the applicable rules and procedures of DTC and its direct or indirect participants, which may change from time to time.

Depositary Procedures

The following description of the operations and procedures of DTC is provided solely as a matter of convenience. These operations and procedures are solely within the control of the respective settlement systems and are subject to changes by them. We take no responsibility for these operations and procedures and urge investors to contact the systems or their participants directly to discuss these matters.

DTC has advised us that it is:

•  a limited purpose trust company organized under the New York State Banking Law;

•  a “banking organization” within the meaning of the New York State Banking Law;

•  a member of the U.S. Federal Reserve System;

•  a “clearing corporation” within the meaning of the New York Uniform Commercial Code; and

•  a “clearing agency” registered under Section 17A of the Exchange Act.

DTC was created to hold securities for its participating organizations (collectively, the “participants”) and facilitate the clearance and settlement of transactions in those securities between participants through electronic book-entry changes in accounts of its participants. The participants include securities brokers and dealers, banks, trust companies, clearing corporations and certain other organizations. Access to DTC’s system is also available to other entities such as banks, brokers, dealers and trust companies that clear through or maintain a custodial relationship with a participant, either directly or indirectly (collectively, the “indirect participants”). Persons who are not participants may beneficially own securities held by or on behalf of DTC only through participants or indirect participants. DTC has no knowledge of the identity of beneficial owners of securities held by or on behalf of DTC. DTC’s records reflect only the identity of participants to whose accounts securities are credited. The ownership interests and transfer of ownership interests of each beneficial owner of each security held by or on behalf of DTC are recorded on the records of the participants and indirect participants.

DTC has also advised us that, pursuant to procedures established by DTC, ownership of interests in the global notes will be shown on, and the transfer of ownership of such interest will be effected only through, records maintained by DTC (with respect to the participants) or by the participants and the indirect participants (with respect to other owners of beneficial interests in the global notes).

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Investors in the global notes may hold their interests therein directly through DTC if they are participants in such system or indirectly through organizations that are participants or indirect participants in such system. All interests in the global notes will be subject to the procedures and requirements of DTC. The laws of some states require that certain persons take physical delivery of certificates evidencing securities they own. Consequently, the ability to transfer beneficial interests in the global notes to such persons will be limited to that extent. Because DTC can act only on behalf of participants, which in turn act on behalf of indirect participants, the ability of beneficial owners of interests in the global notes to pledge such interests to persons or entities that do not participate in the DTC system, or otherwise take actions in respect of such interests, may be affected by the lack of a physical certificate evidencing such interests.

Except as described below, owners of interests in the global notes will not have New Notes registered in their names, will not receive physical delivery of New Notes in certificated form and will not be considered the registered owners or holders thereof under the indenture for any purpose.

Payments in respect of the principal of and premium, if any, and interest on the global notes registered in the name of DTC or its nominee will be payable by the trustee (or the paying agent if other than the trustee) to DTC in its capacity as the registered holder under the indenture. We and the trustee will treat the persons in whose names the New Notes, including the global notes, are registered as the owners thereof for the purpose of receiving such payments and for any and all other purposes whatsoever. Consequently, none of us, the trustee or any agent of ours or the trustee has or will have any responsibility or liability for:

•  any aspect of DTC’s records or any participant’s or indirect participant’s records relating to or payments made on account of beneficial ownership interests in the global notes, or for maintaining, supervising or reviewing any of DTC’s records or any participant’s or indirect participant’s records relating to the beneficial ownership interests in the global notes; or

•  any other matter relating to the actions and practices of DTC or any of its participants or indirect participants.

DTC has advised us that its current practice, upon receipt of any payment in respect of securities such as the New Notes (including principal and interest), is to credit the accounts of the relevant participants with the payment on the payment date in amounts proportionate to their respective holdings in the principal amount of the relevant security as shown on the records of DTC, unless DTC has reason to believe it will not receive payment on such payment date. Payments by the participants and the indirect participants to the beneficial owners of New Notes will be governed by standing instructions and customary practices and will be the responsibility of the participants or the indirect participants and will not be the responsibility of DTC, the trustee or us. Neither we nor the trustee will be liable for any delay by DTC or any of its participants in identifying the beneficial owners of the New Notes, and we and the trustee may conclusively rely on and will be protected in relying on instructions from DTC or its nominee for all purposes.

Interests in the global notes are expected to be eligible to trade in DTC’s Same-Day Funds Settlement System and secondary market trading activity in such interests will therefore settle in immediately available funds, subject in all cases to the rules and procedures of DTC and its participants.

DTC has advised us that it will take any action permitted to be taken by a holder of New Notes only at the direction of one or more participants to whose account with DTC interests in the global notes are credited and only in respect of such portion of the aggregate principal amount of the New Notes as to which such participant or participants has or have given such direction.

Although DTC has agreed to the foregoing procedures to facilitate transfers of interests in the global notes among participants in DTC, it is under no obligation to perform or to continue to perform such procedures, and the procedures may be discontinued at any time. Neither we nor the trustee will

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have any responsibility for the performance by DTC or its participants or indirect participants of their respective obligations under the rules and procedures governing their operations.

The information in this section concerning DTC and its book-entry system has been obtained from sources that we believe to be reliable, but we take no responsibility for the accuracy thereof.

Exchange of Book-Entry Notes for Certificated Notes

If (i) DTC is at any time unwilling or unable to continue as depositary and a successor depositary is not appointed by us within 90 days, (ii) DTC has ceased to be a clearing agency registered under the Exchange Act, (iii) we, at our option, notify the trustee in writing that we elect to cause the issuance of the Notes in the form of certificated notes, or (iv) an Event of Default has occurred and is continuing, upon request by the holders of the Notes, we will issue Notes in certificated form in exchange for global securities. The indenture permits us to determine at any time and in our sole discretion that Notes shall no longer be represented by global securities. DTC has advised us that, under its current practices, it would notify its participants of our request, but will only withdraw beneficial interests from the global security at the request of each DTC participant. We would issue definitive certificates in exchange for any beneficial interests withdrawn.

186

CERTAIN UNITED STATES FEDERAL INCOME TAX CONSIDERATIONS

The following is a summary of certain U.S. federal income tax considerations that may be relevant to holders of the Notes who are exchanging Notes pursuant to the Offer to Exchange. This summary is based on the Internal Revenue Code of 1986, as amended, or the Code, administrative pronouncements, judicial decisions and final, temporary and proposed Treasury regulations, in each case as of the date hereof, changes to any of which subsequent to the date of this offering memorandum may affect the tax consequences described herein, possibly with retroactive effect. This summary deals only with notes that will be held as capital assets and, except where otherwise specifically noted, is only addressed to persons who hold Notes pursuant to this Offer to Exchange. It does not address tax considerations applicable to investors that may be subject to special tax rules, such as banks, tax-exempt entities, insurance companies, dealers in securities or currencies, traders in securities electing to mark to market, persons that will hold notes as a position in a “straddle” or conversion transaction, or as part of a “synthetic security” or other integrated financial transaction, persons subject to the alternative minimum tax, certain U.S. expatriates, controlled foreign corporations, passive foreign investment companies, pass-through entities (including partnerships and entities and arrangements classified as partnerships for U.S. federal tax purposes), or persons that have a “functional currency” other than the U.S. dollar.

If an entity classified as a partnership for U.S. federal income tax purposes holds our notes, the tax treatment of a partner will generally depend upon the status of the partner and the activities of the partnership. Persons who are partners of a partnership holding our Notes should consult their tax advisors.

Persons considering the exchange of Notes should consult their own tax advisors in determining the tax consequences to them of the ownership and disposition of Notes, including the application to their particular situation of the U.S. federal income tax considerations discussed below, as well as the application of state, local, foreign or other tax laws.

Pursuant to U.S. Treasury Department Circular 230, holders of Notes or prospective purchasers are hereby notified that: (a) any discussion of U.S. federal tax issues contained or referred to in this Offer to Exchange or any document referred to herein is not intended or written to be used, and cannot be used by note holders for the purpose of avoiding penalties that may be imposed under the Code; (b) such discussion is written for use in connection with the promotion or marketing of the transactions or matters addressed herein; and (c) note holders should seek advice based on their particular circumstances from an independent tax advisor.

As used under this heading “Certain United States Federal Income Tax Considerations,” the term “U.S. Holder” means a beneficial owner of a note that is (i) an individual citizen or resident of the United States; (ii) a U.S. domestic corporation; (iii) an estate the income of which is subject to U.S. federal income taxation regardless of its source; or (iv) a trust if (A) a U.S. court is able to exercise primary supervision over the trust’s administration and one or more “United States persons” (within the meaning of the Code) have the authority to control all of the trust’s substantial decisions, or (B) the trust has a valid election in effect under applicable Treasury regulations to be treated as a “United States person.” As used under this heading “Certain United States Federal Income Tax Considerations” the term “Non-U.S. Holder” means a beneficial owner of a note that is neither a U.S. Holder nor a partnership (or other entity or arrangement classified as a partnership) that is organized in or under the laws of the United States or any political subdivision thereof. The following summary applies equally to all Notes, except where expressly stated otherwise.

Exchange Pursuant to the Offer to Exchange

The exchange of Old Notes for New Notes in this Offer to Exchange will not be treated as an “exchange” for U.S. federal income tax purposes because the New Notes will not be considered to differ materially in kind or extent from the Old Notes. Accordingly, the exchange of Old Notes for New Notes will not be a taxable event to holders for U.S. federal income tax purposes. Moreover, the New Notes will have the same tax attributes and tax consequences as the outstanding notes exchanged

187

therefor, including without limitation, the same issue price, adjusted issue price, adjusted tax basis and holding period.

Tax Consequences to U.S. Holders

Original Issue Discount

The Notes were issued with original issue discount (“OID”) for U.S. federal income tax purposes. The amount of OID with respect to the Notes is equal to the excess of the “stated redemption price at maturity” of the Notes over the issue price of the Notes. For U.S. federal income tax purposes, each U.S. Holder (regardless of its regular accounting method) generally must accrue the OID in gross income over the term of the Notes on a constant yield to maturity method that reflects compounding of interest. As a result, U.S. Holders generally will recognize taxable income in respect of a Note in advance of the receipt of cash attributable to such income.

Market Discount, Acquisition Premium, Amortizable Bond Premium

If a U.S. Holder acquires a Note at a cost that is less than its adjusted issue price on the acquisition date, the amount of the difference is treated as “market discount” for U.S. federal income tax purposes, unless the difference is de minimis. In general, market discount will be treated as accruing ratably over the remaining term of the Note or, at the holder’s election, on a constant yield to maturity basis. A U.S. holder may elect to include market discount in income currently as it accrues. The holder that does not make this election will be required to treat any gain on the disposition of the Note as ordinary income to the extent of accrued market discount not previously included in income with respect to the Note, and to defer the deduction of a portion of the interest on any indebtedness incurred or maintained to purchase or carry the Note until maturity or until a taxable disposition of the Note.

If a U.S. Holder has a tax basis in a Note that is more than the issue price of such Note but less than the stated redemption price at maturity of such Note, the U.S. Holder will have acquisition premium with respect to such Note to the extent of that excess, and the amounts of OID otherwise included in the U.S. Holder’s income will generally be reduced to the extent of the acquisition premium.

If a U.S. Holder’s tax basis in a Note exceeds the Note’s stated redemption price at maturity, the Note has bond premium to the extent of that excess, and the U.S. Holder will not be required to include any of the OID on the Note in income. It is generally possible to elect to amortize bond premium on a constant yield to maturity method, as a reduction of interest income from a Note. Such election, once made, generally applies to all bonds held or subsequently acquired by the U.S. Holder on or after the first taxable year to which the election applies and may not be revoked without the consent of the IRS. A U.S. holder who elects to amortize bond premium must reduce its tax basis in the Note by the amount of bond premium used to offset stated interest income.

Purchase, Sale and Retirement of Notes

Initially, the tax basis in a Note generally will equal the cost of the Note to the U.S. Holder. A U.S. Holder’s basis will increase by any amounts that are included in income under the rules governing original issue discount and market discount, and will decrease by the amount of any amortized premium and any payments other than qualified stated interest made on the Note.

Upon the sale, exchange or retirement of a Note, a U.S. Holder generally will recognize taxable gain or loss equal to the difference between the amount realized on the sale, exchange or retirement (not including accrued qualified stated interest, which will be taxable as ordinary interest income) and the U.S. Holder’s tax basis in such Note.

Tax Consequences to Non-U.S. Holders

Under U.S. federal income tax law, and subject to the discussion below concerning backup withholding, no withholding of U.S. federal income tax generally will be required with respect to the payment by us or our paying agent on a Note owned by a Non-U.S. Holder of interest (including OID) that qualifies as portfolio interest (including payment of the mandatory principal redemption amount). Interest on a Note owned by a Non-U.S. Holder will qualify as portfolio interest, provided that (i) such

188

interest is not effectively connected with the conduct of such U.S. Holder’s U.S. trade or business, (ii) such Non-U.S. Holder does not actually or constructively own 10% or more of the total combined voting power of all classes of our stock entitled to vote within the meaning of the Code and applicable U.S. Treasury regulations, (iii) such Non-U.S. Holder is not a controlled foreign corporation that is related to us actually or constructively through stock ownership, and (iv) such Non-U.S. Holder either a) provides a statement signed under penalties of perjury that includes its name and address and certifies that it is a Non-U.S. Holder in compliance with applicable requirements generally made, under current procedures, on IRS Form W-8BEN (or satisfies certain documentary evidence requirements for establishing that is it a Non-U.S. Holder) or b) holds Notes through certain foreign intermediaries and satisfies the certification requirements of applicable U.S. Treasury regulations. Special certification and other rules apply to certain non-U.S. holders that are entities rather than individuals.

A Non-U.S. Holder with interest income that does not qualify as portfolio interest will be subject to a 30% U.S. federal withholding tax unless, under current procedures, it delivers a properly completed IRS Form W-8ECI (stating that interest paid on its Notes is not subject to withholding tax because it is effectively connected to its conduct of a trade or business in the U.S.) or IRS Form W-8BEN (claiming an exemption from or reduction in withholding tax under an applicable income tax treaty).

A Non-U.S. Holder will generally not be subject to U.S. federal income tax on any gain realized on the sale, exchange or redemption of a Note, unless (i) such gain is effectively connected with the conduct by the Non-U.S. Holder of a trade or business in the U.S. or (ii) in the case of gain realized by an individual holder, the holder is present in the U.S. for 183 days or more in the taxable year of the retirement or disposition and certain other conditions are met.

Notwithstanding the foregoing, a Non-U.S. Holder generally will be taxed in the same manner as a U.S. Holder with respect to interest (including OID) income or gain that is effectively connected with its U.S. trade or business and, if required by an applicable income tax treaty, that is attributable to its U.S. “permanent establishment,” unless such treaty provides otherwise. In addition, under certain circumstances, effectively connected earnings and profits of a corporate Non-U.S. Holder may be subject to a “branch profits” tax imposed at a 30% rate or at such lower rate as may be specified by an applicable income tax treaty.

Information Reporting and Backup Withholding

Under current U.S. federal income tax law, information reporting requirements apply with respect to payments made to U.S. Holders of principal, interest and OID on, and the proceeds of dispositions (including retirements and redemptions) of, Notes unless an exemption exists. In addition, if a U.S. Holder is not exempt, such U.S. Holder will be subject to backup withholding tax (currently at a rate of 28%) in respect of such payments if, among other things, that U.S. Holder does not provide his or her correct taxpayer identification number to us or our paying agent. All individuals are subject to these requirements. In general, corporations are exempt from these requirements. Backup withholding tax is not an additional tax and may be credited against a U.S. Holder’s U.S. federal income tax liability (and may entitle you to a refund), provided that correct information is timely provided to the IRS.

A Non-U.S. Holder will not be subject to backup withholding and information reporting with respect to payments made by us with respect to the Notes if the beneficial owner has provided us with an IRS Form W-8BEN and we do not have actual knowledge or reason to know that such Non-U.S. Holder is a U.S. person. In addition, no backup withholding will be required regarding the gross proceeds of the sale of Notes made within the United States or conducted through certain U.S. financial intermediaries if the payor receives that statement described above and does not have actual knowledge or reason to know that the Non-U.S. Holder is a U.S. person or the Non-U.S. Holder otherwise establishes an exemption. Backup withholding is not an additional tax. Any amounts so withheld will be allowed as a credit against such non-U.S. Holder’s federal income tax liability and may entitle you to a refund provided you timely furnish the required information to the IRS.

189

PLAN OF DISTRIBUTION

Each broker-dealer that receives New Notes for its own account pursuant to the exchange offer must acknowledge that it will deliver a prospectus in connection with any resale of such New Notes. This prospectus, as it may be amended or supplemented from time to time, may be used by a broker-dealer in connection with resales of New Notes received in exchange for Old Notes, where such Old Notes were acquired as a result of market-making activities or other trading activities. Starting on the Expiration Date and ending on the close of business 90 days after the Expiration Date, we will make this prospectus, as amended or supplemented, available to any broker-dealer for use in connection with any such resale. In addition, until the date that is 90 days from the date of original issuance of the New Notes, all dealers effecting transactions in the New Notes may be required to deliver a prospectus.

We will not receive any proceeds from any sale of New Notes by broker-dealers. New Notes received by broker-dealers for their own account pursuant to the exchange offer may be sold from time to time in one or more transactions in the over-the-counter market, in negotiated transactions, through the writing of options on the New Notes or a combination of such methods of resale, at market prices prevailing at the time of resale, at prices related to such prevailing market prices or negotiated prices. Any such resale may be made directly to purchasers or to or through brokers or dealers who may receive compensation in the form of commissions or concessions from any such broker-dealer and/or the purchasers of any such New Notes. Any broker-dealer that resells New Notes that were received by it for its own account pursuant to the exchange offer and any broker or dealer that participates in a distribution of such New Notes may be deemed to be an “underwriter” within the meaning of the Securities Act and any profit of any such resale of New Notes and any commissions or concessions received by any such persons may be deemed to be underwriting compensation under the Securities Act. The letter of transmittal states that by acknowledging that it will deliver and by delivering a prospectus, a broker-dealer will not be deemed to admit that it is an “underwriter” within the meaning of the Securities Act.

For a period of 90 days after the Expiration Date, we will promptly send additional copies of this prospectus and any amendment or supplement to this prospectus to any broker-dealer that requests such documents in the letter of transmittal. We have agreed to pay all expenses incident to the exchange offer (including the expenses of one counsel for the holders of the Notes) other than commissions or concessions of any brokers or dealers and will indemnify the holders of the Notes (including any broker-dealers) against certain liabilities, including liabilities under the Securities Act.

USE OF PROCEEDS

We will not receive any proceeds from the issuance of New Notes in the exchange offer. In consideration for issuing the New Notes, we will receive Old Notes in like principal amount. The Old Notes surrendered in exchange for the New Notes will be retired and cancelled.

LEGAL MATTERS

The validity of the New Notes, the Indenture under which they will be issued, and/or the corporate action authorizing the same will be passed upon for us by Cleary Gottlieb Steen & Hamilton LLP, New York, New York, Bass, Berry & Sims PLC, Memphis, Tennessee, and Greenberg Traurig LLP, Dallas, Texas, as more particularly set forth in the applicable opinions.

EXPERTS

The consolidated financial statements of Nationstar Mortgage LLC at December 31, 2010 and 2009, and for each of the three years in the period ended December 31, 2010, appearing in this Registration Statement have been audited by Ernst & Young LLP, independent registered public accounting firm, as set forth in their report thereon appearing elsewhere herein, and are included in reliance upon such report given on the authority of such firm as experts in accounting and auditing.

190

Nationstar Mortgage LLC

INDEX TO CONSOLIDATED FINANCIAL STATEMENTS

CONTENTS

 

Audited Financial Statements
Report of Independent Auditors	F-2
Consolidated Balance Sheets—December 31, 2010 and 2009	F-3
Consolidated Statements of Operations—For the years ended December 31, 2010, 2009, and 2008	F-4
Consolidated Statements of Members’ Equity—For the years ended December 31, 2010, 2009, and 2008	F-5
Consolidated Statements of Cash Flows—For the years ended December 31, 2010, 2009, and 2008	F-6
Notes to Consolidated Financial Statements	F-8

F-1

REPORT OF INDEPENDENT AUDITORS

The Members

Nationstar Mortgage LLC

We have audited the accompanying consolidated balance sheets of Nationstar Mortgage LLC and subsidiaries (the Company) as of December 31, 2010 and 2009, and the related consolidated statements of operations, members’ equity, and cash flows for each of the three years in the period ended December 31, 2010. These financial statements are the responsibility of the Company’s management. Our responsibility is to express an opinion on these consolidated financial statements based on our audits.

We conducted our audits in accordance with the standards of the Public Company Accounting Oversight Board (United States). Those standards require that we plan and perform the audit to obtain reasonable assurance about whether the financial statements are free of material misstatement. We were not engaged to perform an audit of the Company’s internal control over financial reporting. Our audits included consideration of internal control over financial reporting as a basis for designing audit procedures that are appropriate in the circumstances, but not for the purpose of expressing an opinion on the effectiveness of the Company’s internal control over financial reporting. Accordingly, we express no such opinion. An audit also includes examining, on a test basis, evidence supporting the amounts and disclosures in the financial statements, assessing the accounting principles used and significant estimates made by management, and evaluating the overall financial statement presentation. We believe that our audits provide a reasonable basis for our opinion.

In our opinion, the consolidated financial statements referred to above present fairly, in all material respects, the consolidated financial position of Nationstar Mortgage LLC and subsidiaries at December 31, 2010 and 2009, and the consolidated results of their operations and their cash flows for each of the three years in the period ended December 31, 2010, in conformity with U.S. generally accepted accounting principles.

As discussed in Note 3 to the consolidated financial statements, the Company changed its method of accounting for transfers of financial assets and consolidation of variable interest entities, effective January 1, 2010.

/s/  Ernst & Young LLP

Dallas, Texas

March 28, 2011,

F-2

NATIONSTAR MORTGAGE LLC AND SUBSIDIARIES

CONSOLIDATED BALANCE SHEETS

	December 31,
	2010		2009
	(in thousands)
Assets
Cash and cash equivalents	$	21,223	$	41,645
Restricted cash (includes $1,472 and $0, respectively, of restricted cash, subject to ABS nonrecourse debt)		91,125		52,795
Accounts receivable, net (includes $2,392 and $0, respectively, of accrued interest, subject to ABS nonrecourse debt)		439,071		509,974
Mortgage loans held for sale		371,160		203,131
Mortgage loans held for investment, subject to nonrecourse debt—Legacy Assets, net		266,840		301,910
Mortgage loans held for investment, subject to ABS nonrecourse debt		538,440		—
Investment in debt securities—available-for-sale		—		2,486
Receivables from affiliates		8,993		12,574
Mortgage servicing rights		145,062		114,605
Property and equipment, net		8,394		6,575
Real estate owned, net (includes $17,509 and $0, respectively, of real estate owned, subject to ABS nonrecourse debt)		27,337		10,262
Other assets		29,536		24,228
Total assets	$	1,947,181	$	1,280,185
Liabilities and members’ equity
Notes payable	$	709,758	$	771,857
Unsecured senior notes		244,061		—
Payables and accrued liabilities (includes $95 and $0, respectively, of accrued interest payable, subject to ABS nonrecourse debt)		75,054		66,830
Derivative financial instruments		7,801		—
Derivative financial instruments, subject to ABS nonrecourse debt		18,781		—
Nonrecourse debt—Legacy Assets		138,662		177,675
ABS nonrecourse debt		496,692		—
Total liabilities		1,690,809		1,016,362
Commitments and contingencies (Note 14)
Total members’ equity		256,372		263,823
Total liabilities and members’ equity	$	1,947,181	$	1,280,185

See accompanying notes.

F-3

NATIONSTAR MORTGAGE LLC AND SUBSIDIARIES

CONSOLIDATED STATEMENTS OF OPERATIONS

	Year Ended December 31
	2010			2009			2008
				(in thousands)
Revenues:
Servicing fee income	$	167,126		$	90,195		$	68,052
Other fee income		16,958			10,023			5,955
Total fee income		184,084			100,218			74,007
Gain/(loss) on mortgage loans held for sale		77,344			(21,349	)		(86,663	)
Total revenues		261,428			78,869			(12,656	)
Expenses and impairments:
Salaries, wages, and benefits		149,115			90,689			61,783
General and administrative		58,913			30,494			22,194
Loss on mortgage loans held for investment and foreclosed real estate		3,503			7,512			2,567
Occupancy		9,445			6,863			6,021
Loss on available-for-sale securities—other-than-temporary		—			6,809			55,212
Total expenses and impairments		220,976			142,367			147,777
Other income (expense):
Interest income		98,895			52,518			92,060
Interest expense		(116,163	)		(69,883	)		(65,548	)
Loss on interest rate swaps and caps		(9,801	)		(14	)		(23,689	)
Fair value changes in ABS securitizations		(23,297	)		—			—
Total other income (expense)		(50,366	)		(17,379	)		2,823
Net loss	$	(9,914	)	$	(80,877	)	$	(157,610	)

See accompanying notes.

F-4

NATIONSTAR MORTGAGE LLC AND SUBSIDIARIES

CONSOLIDATED STATEMENTS OF MEMBERS’ EQUITY

Years Ended December 31, 2010, 2009 and 2008

				Accumulated
				Other			Total
	Member			Comprehensive			Members’
	Units			Loss			Equity
				(in thousands)
Balance at January 1, 2008	$	265,599		$	(3,903	)	$	261,696
Capital contributions		145,600			—			145,600
Share-based compensation		2,333			—			2,333
Comprehensive loss:
Net loss		(157,610	)		—			(157,610	)
Reclassification of loss on investment in debt securities due to other-than-temporary impairments		—			3,903			3,903
Total comprehensive loss								(153,707	)
Balance at December 31, 2008		255,922			—			255,922
Capital contributions		87,951			—			87,951
Share-based compensation		827			—			827
Net loss and comprehensive loss		(80,877	)		—			(80,877	)
Balance at December 31, 2009		263,823			—			263,823
Cumulative effect of change in accounting principles as of January 1, 2010 related to adoption of new accounting guidance on consolidation of variable interest entities		(8,068	)		—			(8,068	)
Share-based compensation		12,856			—			12,856
Tax related share-based settlement of units by members		(3,396	)		—			(3,396	)
Comprehensive loss:
Net loss		(9,914	)		—			(9,914	)
Change in value of cash flow hedge		—			1,071			1,071
Total comprehensive loss								(8,843	)
Balance at December 31, 2010	$	255,301		$	1,071		$	256,372

See accompanying notes.

F-5

NATIONSTAR MORTGAGE LLC AND SUBSIDIARIES

CONSOLIDATED STATEMENTS OF CASH FLOWS

	Year Ended December 31
	2010			2009			2008
				(in thousands)
Operating activities
Net loss	$	(9,914	)	$	(80,877	)		(157,610	)
Adjustments to reconcile net loss to net cash provided by (used in) operating activities:
Share-based compensation		12,856			827			2,333
Loss/(gain) on mortgage loans held for sale		(77,344	)		21,349			86,663
Loss on mortgage loans held for investment and foreclosed real estate		3,503			7,512			2,567
Depreciation and amortization		2,117			1,767			1,309
Accretion of discount on securities		—			—			(4,422	)
Impairment of investments in debt securities		—			6,809			55,212
Fair value changes in ABS securitizations		23,297			—			—
Loss on interest rate swaps and caps		8,872			14			23,689
Unrealized gains/losses on derivative financial instruments		—			(2,436	)		2,077
Change in fair value of mortgage servicing rights		6,043			27,915			11,701
Amortization of debt discount		18,731			21,287			8,879
Amortization of premiums/discounts		(4,526	)		(1,394	)		(85	)
Mortgage loans originated and purchased, net of fees		(2,791,639	)		(1,480,549	)		(545,860	)
Cost of loans sold, net of fees		2,621,275			1,007,369			513,924
Principal payments/prepayments received and other changes in mortgage loans originated as held for sale		32,415			470,072			201,184
Changes in assets and liabilities:
Accounts receivable, net		39,388			(154,000	)		(165,566	)
Receivables from affiliates		3,958			66,940			2,452
Other assets		1,152			(9,115	)		38,363
Payables and accrued liabilities		8,163			12,869			(36,598	)
Net cash provided by (used in) operating activities		(101,653	)		(83,641	)		40,212

Continued on following page

F-6

NATIONSTAR MORTGAGE LLC AND SUBSIDIARIES

CONSOLIDATED STATEMENTS OF CASH FLOWS (continued)

	Year Ended December 31
	2010			2009			2008
				(in thousands)
Investing activities
Principal payments received and other changes on mortgage loans held for investment, subject to ABS nonrecourse debt	$	48,838		$	—		$	—
Proceeds from sales of real estate owned		74,107			34,181			29,276
Purchase of mortgage servicing rights, net of liabilities incurred		(17,812	)		(1,169	)		(19,013	)
Interest rate swap settlements		—			—			(51,570	)
Property and equipment additions, net of disposals		(3,936	)		(3,029	)		(1,772	)
Principal payments received on debt securities		—			—			8,436
Net cash provided by (used in) investing activities		101,197			29,983			(34,643	)
Financing activities
Transfers to restricted cash, net		(33,731	)		(31,763	)		(9,871	)
Issuance of non-recourse debt, net		—			191,272			—
Issuance of unsecured notes, net of issue discount		243,013			—			—
Repayment of nonrecourse debt—Legacy assets		(45,364	)		(15,809	)		—
Repayment of ABS nonrecourse debt		(103,466	)		—			—
Decrease in notes payable, net		(62,099	)		(60,395	)		(157,266	)
Debt financing costs		(14,923	)		(18,059	)		(15,926	)
Tax related share-based settlement of units by members		(3,396	)		—			—
Capital contributions from members		—			20,700			145,600
Net cash provided by (used in) financing activities		(19,966	)		85,946			(37,463	)
Net increase (decrease) in cash and cash equivalents		(20,422	)		32,288			(31,894	)
Cash and cash equivalents at beginning of year		41,645			9,357			41,251
Cash and cash equivalents at end of year	$	21,223		$	41,645		$	9,357
Supplemental disclosures of noncash activities
Transfer of mortgage loans held for sale to real estate owned	$	827		$	73,264		$	65,304
Mortgage servicing rights resulting from sale or securitization of mortgage loans		26,253			8,332			4,522
Transfer of mortgage loans held for investment to real estate owned		53,408			12,990			—
Transfer of mortgage loans held for investment, subject to ABS nonrecourse debt, to real estate owned		111,865			—			—
Transfer of mortgage loans held for sale to mortgage loans held for investment		—			319,183			—
Contribution of intercompany payable from parent		—			67,251			—
Financing of acquisition of mortgage servicing rights		—			22,211			—
Change in value of cash flow hedge—accumulated other comprehensive income		1,071			—			—
See accompanying notes.

F-7

Nationstar Mortgage LLC and Subsidiaries

Notes to Consolidated Financial Statements

1.   Description of the Companies and Basis of Presentation

General

The consolidated financial statements include the accounts of Nationstar Mortgage LLC (Nationstar), formerly Centex Home Equity Company, LLC (CHEC), a Delaware limited liability company, and its wholly owned subsidiaries, after the elimination of intercompany balances and transactions. Nationstar is a subsidiary of FIF HE Holdings LLC (FIF), a subsidiary of Fortress Private Equity Funds III and IV (Fortress).

Nature of Business

Nationstar’s principal business is the origination and selling or securitization of single-family conforming mortgage loans to government-sponsored entities and the servicing of residential mortgage loans for others.

The sale or securitization of mortgage loans typically involves Nationstar retaining the right to service the mortgage loans that it sells. The servicing of mortgage loans includes the collection of principal and interest payments and the assessment of ancillary fees related to the servicing of mortgage loans. Additionally, Nationstar may occasionally obtain additional servicing rights through the acquisition of servicing portfolios from third parties.

2.   Significant Accounting Policies

Use of Estimates in Preparation of Consolidated Financial Statements

The accompanying consolidated financial statements were prepared in conformity with accounting principles generally accepted in the United States (GAAP). The preparation of the financial statements in conformity with GAAP requires management to make estimates and assumptions that affect the amounts reported in the financial statements and accompanying notes. Actual results could differ from these estimates due to factors such as adverse changes in the economy, increases in interest rates, declines in home prices or discrete events adversely affecting specific borrowers, and such differences could be material.

Nationstar evaluated subsequent events through the date these consolidated financial statements were issued.

Reclassification Adjustments

Certain prior-period amounts have been reclassified to conform to the current-period presentation.

Cash and Cash Equivalents

Cash and cash equivalents include unrestricted cash on hand and other highly liquid investments having an original maturity of less than three months.

Restricted Cash

Restricted cash consists of custodial accounts related to Nationstar’s portfolio securitizations or to collections on certain mortgage loans and mortgage loan advances that have been pledged to a financial services company under a Master Repurchase Agreement. Restricted cash also includes certain fees collected on mortgage loan payments that are required to be remitted to a government-sponsored entity (GSE) to settle outstanding guarantee fee requirements.

F-8

Nationstar Mortgage LLC and Subsidiaries

Notes to Consolidated Financial Statements (continued)

2.   Significant Accounting Policies (continued)

Mortgage Loans Held for Sale

Nationstar maintains a strategy of originating mortgage loan products primarily for the purpose of selling to government-sponsored entities or other third-party investors in the secondary market. Generally, all newly originated mortgage loans held for sale are delivered to third-party purchasers or securitized within three months after origination.

Through September 30, 2009, mortgage loans held for sale were carried at the lower of amortized cost or fair value on an aggregate basis grouped by delinquency status. Nationstar estimates fair value by evaluating a variety of market indicators including recent trades and outstanding commitments, calculated on an aggregate basis (see Note 16).

Effective October 1, 2009, Nationstar elected to measure newly originated prime residential mortgage loans held for sale at fair value, as permitted under Financial Accounting Standards Board (FASB) Accounting Standards Codification (ASC) 825, Financial Instruments.

In connection with Nationstar’s election to measure mortgage loans held for sale at fair value, Nationstar is no longer permitted to defer the loan origination fees, net of direct loan origination costs associated with these loans. Prior to October 1, 2009, Nationstar deferred all nonrefundable fees and costs as required under ASC 310, Receivables. In accordance with this guidance, loan origination fees, net of direct loan origination costs were capitalized and added as an adjustment to the basis of the individual loans originated. These fees are accreted into income as an adjustment to the loan yield over the life of the loan or recognized when the loan is sold to a third party purchaser.

Mortgage Loans Held for Investment, Net

Mortgage loans held for investment principally consist of nonconforming or subprime mortgage loans securitized which serve as collateral for the issued debt. These loans were transferred on October 1, 2009, from mortgage loans held for sale at fair value on the transfer date, as determined by the present value of expected future cash flows, with no valuation allowance recorded. The difference between the undiscounted cash flows expected and the investment in the loan is recognized as interest income on a level-yield method over the life of the loan. Contractually required payments for interest and principal that exceed the undiscounted cash flows expected at transfer are not recognized as a yield adjustment or as a loss accrual or a valuation allowance. Increases in expected cash flows subsequent to the transfer are recognized prospectively through adjustment of the yield on the loans over the remaining life. Decreases in expected cash flows subsequent to transfer are recognized as a valuation allowance.

Allowance for Loan Losses on Mortgage Loans Held for Investment

An allowance for loan losses is established by recording a provision for loan losses in the consolidated statement of operations when management believes a loss has occurred on a loan held for investment. When management determines that a loan held for investment is partially or fully uncollectible, the estimated loss is charged against the allowance for loan losses. Recoveries on losses previously charged to the allowance are credited to the allowance at the time the recovery is collected.

Nationstar accounts for the loans that were transferred to held for investment from held for sale during October 2009 in a manner similar to ASC 310-30, Loans and Debt Securities Acquired with Deteriorated Credit Quality. At the date of transfer, management evaluated such loans to determine whether there was evidence of deterioration of credit quality since acquisition and if it was probable that Nationstar would be unable to collect all amounts due according to the loan’s contractual terms.

F-9

Nationstar Mortgage LLC and Subsidiaries

Notes to Consolidated Financial Statements (continued)

2.   Significant Accounting Policies (continued)

The transferred loans were aggregated into separate pools of loans based on common risk characteristics (loan delinquency). Nationstar considers expected prepayments, and estimates the amount and timing of undiscounted expected principal, interest, and other cash flows for each aggregated pool of loans. Nationstar determines the excess of the pool’s scheduled contractual principal and contractual interest payments over all cash flows expected as of the transfer date as an amount that should not be accreted (nonaccretable difference). The remaining amount is accreted into interest income over the remaining life of the pool of loans (accretable yield).

Over the life of the transferred loans, management continues to estimate cash flows expected to be collected. Nationstar evaluates at the balance sheet date whether the present value of the loans determined using the effective interest rates has decreased, and if so, records an allowance for loan loss. The present value of any subsequent increase in the transferred loans cash flows expected to be collected is used first to reverse any existing allowance for loan loss related to such loans. Any remaining increase in cash flows expected to be collected are used to adjust the amount of accretable yield recognized on a prospective basis over the remaining life of the loans.

Nationstar accounts for its allowance for loan losses for all other mortgage loans held for investment in accordance with ASC 450-20, Loss Contingencies. The allowance for loan losses represents management’s best estimate of probable losses inherent in the loans held for investment portfolio. Mortgage loans held for investment portfolio is comprised primarily of large groups of homogeneous residential mortgage loans. These loans are evaluated based on the loan’s present delinquency status. The estimate of probable losses on these loans considers the rate of default of the loans and the amount of loss in the event of default. The rate of default is based on historical experience related to the migration of these from each delinquency category to default over a twelve-month period. The entire allowance is available to absorb probable credit losses from the entire held for investment portfolio.

Substantially, all mortgage loans held for investment were transferred from mortgage loans held for sale at fair value in October 2009.

Investment in Debt Securities

Investment in debt securities consists of beneficial interests Nationstar retains in securitization transactions accounted for as a sale under the guidance of ASC 860, Transfers and Servicing. These securities are classified as available-for-sale securities, and are therefore carried at their market value with the net unrealized gains or losses reported in the comprehensive income (loss) component of members’ equity. Nationstar accounts for debt securities based on ASC 320, Investments—Debt and Equity Securities. Nationstar evaluates investment in debt securities for impairment each quarter, and investment in debt securities is considered to be impaired when the fair value of the investment is less than its cost. The impairment is separated into impairments related to credit losses, which are recorded in current-period operations, and impairments related to all other factors, which are recorded in other comprehensive income/(loss). Substantially all impairments related to Nationstar’s investment in debt securities were credit related.

Receivables from Affiliates

Nationstar engages in periodic transactions with Nationstar Regular Holdings, Ltd., a subsidiary of FIF. These transactions typically involve the monthly payment of principal and interest advances that are required to be remitted to the securitization trusts as required under various Pooling and Servicing

F-10

Nationstar Mortgage LLC and Subsidiaries

Notes to Consolidated Financial Statements (continued)

2.   Significant Accounting Policies (continued)

Agreements. These amounts are later repaid to Nationstar when principal and interest advances are recovered from the respective borrowers.

Mortgage Servicing Rights (MSRs)

Nationstar recognizes MSRs related to all existing residential mortgage loans transferred to a third party in a transfer that meets the requirements for sale accounting and for which the servicing rights are retained. Additionally, Nationstar may acquire the rights to service residential mortgage loans that do not relate to assets transferred by Nationstar through the purchase of these rights from third parties. Nationstar applies fair value accounting to these MSRs, with all changes in fair value recorded as charges or credits to servicing fee income.

Property and Equipment, Net

Property and equipment, net is comprised of land, furniture, fixtures, leasehold improvements, computer software, and computer hardware. These assets are stated at cost less accumulated depreciation. Repairs and maintenance are expensed as incurred. Depreciation is recorded using the straight-line method over the estimated useful lives of the related assets, usually three to ten years. Cost and accumulated depreciation applicable to assets retired or sold are eliminated from the accounts, and any resulting gains or losses are recognized at such time through a charge or credit to general and administrative expenses.

Real Estate Owned, Net

Nationstar holds real estate owned as a result of foreclosures on delinquent mortgage loans. Real estate owned is recorded at estimated fair value less costs to sell at the date of foreclosure. Any subsequent declines in fair value are credited to a valuation allowance and charged to operations as incurred.

Variable Interest Entities

Nationstar has been the transferor in connection with a number of securitizations or asset-backed financing arrangements, from which Nationstar has continuing involvement with the underlying transferred financial assets. Nationstar aggregates these securitizations or asset-backed financing arrangements into two groups: 1) securitizations of residential mortgage loans that were accounted for as sales and 2) financings accounted for as secured borrowings.

On securitizations of residential mortgage loans, Nationstar’s continuing involvement typically includes acting as servicer for the mortgage loans held by the trust and holding beneficial interests in the trust. Nationstar’s responsibilities as servicer include, among other things, collecting monthly payments, maintaining escrow accounts, providing periodic reports and managing insurance in exchange for a contractually specified servicing fee. The beneficial interests held consist of both subordinate and residual securities that were retained at the time of the securitization. Prior to January 1, 2010, each of these securitization trusts were considered QSPEs, and these trusts were excluded from Nationstar’s consolidated financial statements.

Nationstar also maintains various agreements with special purpose entities (SPEs), under which Nationstar transfers mortgage loans and/or advances on residential mortgage loans in exchange for cash. These SPEs issue debt supported by collections on the transferred mortgage loans and/or advances. These transfers do not qualify for sale treatment because Nationstar continues to retain control over the transferred assets. As a result, Nationstar accounts for these transfers as financings

F-11

Nationstar Mortgage LLC and Subsidiaries

Notes to Consolidated Financial Statements (continued)

2.   Significant Accounting Policies (continued)

and continues to carry the transferred assets and recognizes the related liabilities on Nationstar’s consolidated balance sheets. Collections on the mortgage loans and/or advances pledged to the SPEs are used to repay principal and interest and to pay the expenses of the entity. The holders of these beneficial interests issued by these SPEs do not have recourse to Nationstar and can only look to the assets of the SPEs themselves for satisfaction of the debt.

Prior to January 1, 2010, Nationstar evaluated each special purpose entity (SPE) for classification as a QSPE. QSPEs were not consolidated in Nationstar’s consolidated financial statements. When an SPE was determined to not be a QSPE, Nationstar further evaluated it for classification as a VIE. When an SPE met the definition of a VIE, and when it was determined that Nationstar was the primary beneficiary, Nationstar included the SPE in its consolidated financial statements.

Nationstar considers the SPEs created for the purpose of issuing debt supported by collections on loans and/or advances that have been transferred to it as VIEs, and Nationstar is the primary beneficiary of these VIEs. Nationstar consolidates the assets and liabilities of the VIEs into its consolidated financial statements.

Effective January 1, 2010, new accounting guidance eliminated the concept of a QSPE and all existing SPEs are now subject to new consolidation guidance. Upon adoption of this new accounting guidance, Nationstar identified certain securitization trusts where Nationstar, or through its affiliates, continued to hold beneficial interests in these trusts. These retained beneficial interests obligate Nationstar to absorb losses of the VIE that could potentially be significant to the VIE or the right to receive benefits from the VIE that could potentially be significant. In addition, Nationstar as Master Servicer on the related mortgage loans, retains the power to direct the activities of the VIE that most significantly impact the economic performance of the VIE. When it is determined that Nationstar has both the power to direct the activities that most significantly impact the VIE’s economic performance and the obligation to absorb losses or the right to receive benefits that could potentially be significant to the VIE, the assets and liabilities of these VIEs are included in Nationstar’s consolidated financial statements. Upon consolidation of these VIEs, Nationstar derecognized all previously recognized beneficial interests obtained as part of the securitization, including any retained investment in debt securities, mortgage servicing rights, and any remaining residual interests. In addition, Nationstar recognized the securitized mortgage loans as mortgage loans held for investment, subject to ABS nonrecourse debt, and the related asset-backed certificates (ABS nonrecourse debt) acquired by third parties as ABS nonrecourse debt on Nationstar’s consolidated balance sheet.

Derivative Financial Instruments

Nationstar enters into interest rate lock commitments (IRLCs) with prospective borrowers. These commitments are carried at fair value in accordance with ASC 815, Derivatives and Hedging. ASC 815 clarifies that the expected net future cash flows related to the associated servicing of a loan should be included in the measurement of all written loan commitments that are accounted for at fair value through earnings. The estimated fair values of IRLCs are based on quoted market values and are recorded in other assets in the consolidated balance sheets. The initial and subsequent changes in the value of IRLCs are a component of gain (loss) on mortgage loans held for sale.

Nationstar actively manages the risk profiles of its IRLCs and mortgage loans held for sale on a daily basis. To manage the price risk associated with IRLCs, Nationstar enters into forward sales of mortgage backed securities (MBS) in an amount equal to the portion of the IRLC expected to close, assuming no change in mortgage interest rates. In addition, to manage the interest rate risk associated with mortgage loans held for sale, Nationstar enters into forward sales of MBS to deliver mortgage

F-12

Nationstar Mortgage LLC and Subsidiaries

Notes to Consolidated Financial Statements (continued)

2.   Significant Accounting Policies (continued)

loan inventory to investors. The estimated fair values of forward sales of MBS and forward sale commitments are based on quoted market values and are recorded as a component of mortgage loans held for sale in the consolidated balance sheets. The initial and subsequent changes in value on forward sales of MBS are a component of gain (loss) on mortgage loans held for sale.

Periodically, Nationstar has entered into interest rate swap agreements to hedge the interest payment on the warehouse debt and securitization of its mortgage loans held for sale. These interest rate swap agreements generally require Nationstar to pay a fixed interest rate and receive a variable interest rate based on LIBOR. Unless designated as an accounting hedge, Nationstar records losses on interest rate swaps as a component of loss on interest rate swaps and caps in Nationstar’s consolidated statements of operations. Unrealized losses on undesignated interest rate derivatives are separately disclosed under operating activities in the consolidated statements of cash flows. At December 31, 2009, Nationstar had no interest rate swap agreements designated as accounting hedges.

On October 1, 2010, the Company designated an existing interest rate swap as a cash flow hedge against outstanding floating rate financing associated with the Nationstar Mortgage Advance Receivables Trust 2009-ADV1 financing. Under the swap agreement, the Company receives interest equivalent to one month LIBOR and pays a fixed rate of 2.0425% based on an amortizing notional of $268M as of December 31, 2010, with settlements occurring monthly until November 2013. This interest rate swap is a cash flow hedge under ASC 815, Derivatives and Hedging, and is recorded at fair value on the Company’s consolidated balance sheet, with any changes in fair value being recorded as an adjustment to other comprehensive income. To qualify as a cash flow hedge, the hedge must be highly effective at reducing the risk associated with the exposure being hedged and must be formally designated at hedge inception. Nationstar considers a hedge to be highly effective if the change in fair value of the derivative hedging instrument is within 80% to 125% of the opposite change in the fair value of the hedged item attributable to the hedged risk. Ineffective portions of the cash flow hedge are reflected in earnings as they occur as a component of interest expense.

During 2008, Nationstar entered into interest rate cap agreements to hedge the interest payment on the servicing advance facility. These interest rate cap agreements generally require an upfront payment and receive cash flow only when a variable rate based on LIBOR exceeds a defined interest rate. These interest rate cap agreements are not designated as hedging instruments, and unrealized gains and losses are recorded in loss on interest rate swaps and caps in Nationstar’s consolidated statements of operations.

Interest Income

Interest income is recognized using the interest method. Revenue accruals are suspended and accrued amounts reversed when the mortgage loan becomes contractually delinquent for 90 days or more. Delinquency payment status is based on the most recently received payment from the borrower. The accrual is resumed when the mortgage loan becomes less than 90 days contractually delinquent. For loans that have been modified, a period of six timely payments is required before the loan is returned to an accrual basis. Interest income also includes (1) interest earned on custodial cash deposits associated with the mortgage loans serviced and (2) deferred origination income, net of deferred origination costs and other revenues derived from the origination of mortgage loans, which is deferred and recognized over the life of a mortgage loan or recognized when the related loan is sold to a third-party purchaser. Effective October 1, 2009, in connection with Nationstar’s election to measure mortgage loans held for sale at fair value, Nationstar is no longer permitted to defer the loan

F-13

Nationstar Mortgage LLC and Subsidiaries

Notes to Consolidated Financial Statements (continued)

2.   Significant Accounting Policies (continued)

origination fees, net of direct loan origination costs for such loans originated subsequent to the election date.

Servicing Fee Income

Servicing fees include contractually specified servicing fees, late charges, prepayment penalties and other ancillary charges. Servicing encompasses, among other activities, the following processes: billing, collection of payments, movement of cash to the payment clearing bank accounts, investor reporting, customer service, recovery of delinquent payments, instituting foreclosure, and liquidation of the underlying collateral.

Nationstar recognizes servicing and ancillary fees as they are earned, which is generally upon collection of the payments from the borrower. In addition, Nationstar also receives various fees in the course of providing servicing on its various portfolios. These fees include modification fees for modifications performed outside of government programs, modification fees for modifications pursuant to various government programs, and incentive fees for servicing performance on specific GSE portfolios.

Fees recorded on modifications of mortgage loans held for investment performed outside of government programs are deferred and recognized as an adjustment to the loans held for investment. These fees are accreted into interest income as an adjustment to the loan yield over the life of the loan. Fees recorded on modifications of mortgage loans serviced by Nationstar for others are recognized on collection and are recorded as a component of service fee income. Fees recorded on modifications pursuant to various government programs are recognized when Nationstar has completed all necessary steps and the loans have performed for the minimum required time frame to establish eligibility for the fee. Revenue earned on modifications pursuant to various government programs are included as a component of service fee income. Incentive fees for servicing performance on specific GSE portfolios are recognized as various incentive standards are achieved and are recorded as a component of service fee income.

Sale of Mortgage Loans

Transfers of financial assets are accounted for as sales when control over the assets has been surrendered. Control over transferred assets is deemed to be surrendered when (1) the assets have been isolated from Nationstar, (2) the transferee has the right (free of conditions that constrain it from taking advantage of that right) to pledge or exchange the transferred assets, and (3) Nationstar does not maintain effective control over the transferred assets through either (a) an agreement that entitles and obligates Nationstar to repurchase or redeem them before their maturity or (b) the ability to unilaterally cause the holder to return specific assets.

Loan securitizations structured as sales, as well as whole loan sales, are accounted for in accordance with ASC 860 and the resulting gains on such sales, net of any accrual for recourse obligations, are reported in operating results during the period in which the securitization closes or the sale occurs.

Share-Based Compensation Expense

Share-based compensation is recognized in accordance with ASC 718, Compensation—Stock Compensation. This guidance requires all share-based payments to employees, including grants of employee stock options, to be recognized as an expense in the consolidated statements of operations, based on their fair values. The amount of compensation is measured at the fair value of the awards

F-14

Nationstar Mortgage LLC and Subsidiaries

Notes to Consolidated Financial Statements (continued)

2.   Significant Accounting Policies (continued)

when granted and this cost is expensed over the required service period, which is normally the vesting period of the award.

Advertising Costs

Advertising costs are expensed as incurred and are included as part of general and administrative expenses.

Income Taxes

For federal income tax purposes, Nationstar has elected to be a disregarded entity and is treated as a branch of its parent, FIF HE Holdings LLC. FIF HE Holdings LLC is taxed as a partnership, whereby all income is taxed at the member level. Certain states impose income taxes on LLC’s. However, Nationstar does not believe it is subject to material state or local income tax in any of the jurisdictions in which it does business.

Consolidated Statement of Cash Flows—Supplemental Disclosure

Total interest paid for the years ended December 31, 2010, 2009, and 2008, was approximately $91.8 million, $47.6 million, and $58.8 million, respectively.

New Accounting Standards

On January 1, 2010, the Company adopted new FASB accounting guidance on transfers of financial assets and consolidation of VIEs. This new accounting guidance revises sale accounting criteria for transfers of financial assets, including elimination of the concept of and accounting for qualifying special purpose entities (QSPEs), and significantly changes the criteria for consolidation of a VIE. The adoption of this new accounting guidance resulted in the consolidation of certain VIEs that previously were QSPEs that were not recorded on the Company’s Consolidated Balance Sheet prior to January 1, 2010. The adoption of this new accounting guidance resulted in a net incremental increase in assets of $905.5 million and a net increase in liabilities of $913.6 million. These amounts are net of retained interests in securitizations held on the Consolidated Balance Sheet at December 31, 2009. The Company recorded an $8.1 million charge to members’ equity on January 1, 2010 for the cumulative effect of the adoption of this new accounting guidance, which resulted principally from the derecognition of the retained interests in the securitizations. Initial recording of these assets and liabilities on the Company’s Consolidated Balance Sheet had no impact at the date of adoption on consolidated results of operations. See Note 3.

Accounting Standards Update No. 2010-06, Fair Value Measurements and Disclosures (Topic 820): Improving Disclosures about Fair Value Measurements (Update No. 2010-06). Update No. 2010-06 requires additional disclosures about fair value measurements, including separate disclosures of significant transfers in and out of Level 1 and Level 2 fair value measurements and the reasons for the transfers. Additionally, the reconciliation for fair value measurements using significant unobservable inputs (Level 3) should present separately information about purchases, sales, issuances, and settlements. Update No. 2010-06 also clarifies previous disclosure requirements, including the requirement that entities provide disclosures about the valuation techniques and inputs used to measure fair value for both recurring and nonrecurring fair value measurements for both Level 2 and Level 3 measurements. The new disclosures and clarifications of existing disclosures required under Update No. 2010-06 is effective for interim and annual reporting periods beginning after December 15, 2009, and was adopted for the interim reporting period ending March 31, 2010, except for the disclosures about purchases, sales, issuances, and settlement in the roll forward of activity in Level 3

F-15

Nationstar Mortgage LLC and Subsidiaries

Notes to Consolidated Financial Statements (continued)

2.   Significant Accounting Policies (continued)

fair value measurements. Those disclosures are effective for fiscal years beginning after December 15, 2010, and for interim periods within those fiscal years.

Accounting Standards Update No. 2010-18, Effect of a Loan Modification When the Loan Is Part of a Pool That Is Accounted for as a Single Asset (Update No. 2010-18). Update No. 2010-18 clarifies the accounting treatment for modifications of loans that are accounted for within a pool under Subtopic 310-30, Receivables—Loans and Debt Securities Acquired with Deteriorated Credit Quality (Subtopic 310-30), requiring an entity to continue to include modified loans in the pool even if the modification of those loans would otherwise be considered a troubled debt restructuring. Loans accounted for individually under Subtopic 310-30 continue to be subject to the troubled debt restructuring accounting provisions within Subtopic 310-40, Receivables—Troubled Debt Restructurings by Creditors. The amendments in this update were effective for Nationstar for modifications of loans accounted for within pools under Subtopic 310-30 occurring in the first interim or annual period ending on or after July 15, 2010. The adoption of Update No. 2010-18 did not have a material impact on Nationstar’s financial condition, liquidity or results of operations.

Accounting Standards Update No. 2010-20, Disclosures about the Credit Quality of Financing Receivables and the Allowance for Credit Losses (Update No. 2010-20). Update No. 2010-20 is intended to provide users of financial statements with greater transparency regarding a company’s allowance for credit losses and the credit quality of its financing receivables. It is intended to provide additional information to assist financial statement users in assessing an entity’s credit risk exposures and evaluating the adequacy of its allowance for credit losses. The additional disclosure requirements for this amendment were initially to be effective for Nationstar for annual reporting periods ending on or after December 15, 2011, but was subsequently deferred by Accounting Standards Update No. 2011-01, Deferral of the Effective Date of Disclosures about Troubled Debt Restructurings in Update No. 2010-20. In the proposed Update for determining what constitutes a troubled debt restructuring, the clarifications would be effective for interim and annual periods ending after June 15, 2011. The adoption of Update No. 2010-20 will not have a material impact on Nationstar’s financial condition, liquidity or results of operations.

3.   Variable Interest Entities and Securitizations

A VIE is an entity that has either a total equity investment that is insufficient to permit the entity to finance its activities without additional subordinated financial support or whose equity investors lack the characteristics of a controlling financial interest. A VIE is consolidated by its primary beneficiary, which is the entity that, through its variable interests has both the power to direct the activities of a VIE that most significantly impact the VIEs economic performance and the obligation to absorb losses of the VIE that could potentially be significant to the VIE or the right to receive benefits from the VIE that could potentially be significant to the VIE.

Effective January 1, 2010, new accounting guidance eliminated the concept of a QSPE and all existing SPEs are now subject to new consolidation guidance. Upon adoption of this new accounting guidance, Nationstar identified certain securitization trusts where Nationstar had both the power to direct the activities that most significantly impacted the VIE’s economic performance and the obligation to absorb losses or the right to receive benefits that could potentially be significant to the VIE, the assets and liabilities of these VIEs are included in Nationstar’s consolidated financial statements. The net incremental impact of this accounting change on the Company’s Consolidated

F-16

Nationstar Mortgage LLC and Subsidiaries

Notes to Consolidated Financial Statements (continued)

3.   Variable Interest Entities and Securitizations (continued)

Balance Sheet is set forth in the following table. The net effect of the accounting change on January 1, 2010 members’ equity was an $8.1 million charge to members’ equity (in thousands).

	Ending Balance					Beginning Balance
	Sheet		Net Increase/			Sheet
	December 31, 2009		(Decrease)			January 1, 2010
Assets
Cash and cash equivalents	$	41,645	$	—		$	41,645
Restricted cash		52,795		6,183			58,978
Accounts receivable		509,974		(39,612	)		470,362
Mortgage loans held for sale		203,131		—			203,131
Mortgage loans held for investment, subject to nonrecourse debt—Legacy Assets		301,910		—			301,910
Mortgage loans held for investment, subject to ABS nonrecourse debt		—		928,891			928,891
Investment in debt securities—available-for-sale		2,486		(2,486	)		—
Receivables from affiliates		12,574		—			12,574
Mortgage servicing rights		114,605		(10,431	)		104,174
Property and equipment, net		6,575		—			6,575
Real estate owned, net		10,262		22,970			33,232
Other assets		24,228		—			24,228
Total assets	$	1,280,185	$	905,515		$	2,185,700
Liabilities and members’ equity
Notes payable	$	771,857	$	—		$	771,857
Payables and accrued liabilities		66,830		123			66,953
Derivative financial instruments, subject to ABS nonrecourse debt		—		28,614			28,614
Nonrecourse debt—Legacy Assets		177,675		—			177,675
ABS nonrecourse debt		—		884,846			884,846
Total liabilities		1,016,362		913,583			1,929,945
Total members’ equity		263,823		(8,068	)		255,755
Total liabilities and members’ equity	$	1,280,185	$	905,515		$	2,185,700

As a result of market conditions and deteriorating credit performance on these consolidated VIEs, Nationstar expects minimal to no future cash flows on the economic residual. Under existing GAAP, Nationstar would be required to provide for additional allowances for loan losses on the securitization collateral as credit performance deteriorated, with no offsetting reduction in the securitization’s debt balances, even though any nonperformance of the assets will ultimately pass through as a reduction of amounts owed to the debt holders, once the economic residuals are extinguished. Therefore, Nationstar would be required to record accounting losses beyond its economic exposure.

To more accurately represent the future economic performance of the securitization collateral and related debt balances, Nationstar elected the fair value option provided for by ASC 825-10,

F-17

Nationstar Mortgage LLC and Subsidiaries

Notes to Consolidated Financial Statements (continued)

3.   Variable Interest Entities and Securitizations (continued)

Financial Instruments-Overall. This option was applied to all eligible items within the VIE, including mortgage loans held for investment, subject to ABS nonrecourse debt, and the related ABS nonrecourse debt.

Subsequent to this fair value election, Nationstar no longer records an allowance for loan loss on mortgage loans held for investment, subject to ABS nonrecourse debt. Nationstar continues to record interest income in Nationstar’s consolidated statement of operations on these fair value elected loans until they are placed on a nonaccrual status when they are 90 days or more past due. The fair value adjustment recorded for the mortgage loans held for investment is classified within fair value changes of ABS securitizations in Nationstar’s consolidated statement of operations.

Subsequent to the fair value election for ABS nonrecourse debt, Nationstar continues to record interest expense in Nationstar’s consolidated statement of operations on the fair value elected ABS nonrecourse debt. The fair value adjustment recorded for the ABS nonrecourse debt is classified within fair value changes of ABS securitizations in Nationstar’s consolidated statement of operations.

Under the existing pooling and servicing agreements of these securitization trusts, the principal and interest cash flows on the underlying securitized loans are used to service the asset-backed certificates. Accordingly, the timing of the principal payments on this nonrecourse debt is dependent on the payments received on the underlying mortgage loans and liquidation of real estate owned.

Nationstar consolidates the SPEs created for the purpose of issuing debt supported by collections on loans and advances that have been transferred to it as VIEs, and Nationstar is the primary beneficiary of these VIEs. Nationstar consolidates the assets and liabilities of the VIEs into its consolidated financial statements.

F-18

Nationstar Mortgage LLC and Subsidiaries

Notes to Consolidated Financial Statements (continued)

3.   Variable Interest Entities and Securitizations (continued)

A summary of the assets and liabilities of Nationstar’s transactions with VIEs included in Nationstar’s consolidated financial statements as of December 31, 2010 is presented in the following table (in thousands).

			Transfers
			Accounted for as
	Securitization		Secured
	Trusts		Borrowings		Total
Assets
Restricted cash	$	1,472	$	32,075	$	33,547
Accounts receivable		2,392		286,808		289,200
Mortgage loans held for investment, subject to nonrecourse debt		—		261,305		261,305
Mortgage loans held for investment, subject to ABS nonrecourse debt		538,440		—		538,440
Real estate owned		17,509		9,505		27,014
Total Assets	$	559,813	$	589,693	$	1,149,506
Liabilities
Notes payable	$	—	$	236,808	$	236,808
Payables and accrued liabilities		95		1,173		1,268
Outstanding servicer advances(1)		32,284		—		32,284
Derivative financial instruments		—		7,801		7,801
Derivative financial instruments, subject to ABS nonrecourse debt		18,781		—		18,781
Nonrecourse debt—Legacy Assets		—		138,662		138,662
ABS nonrecourse debt		497,289		—		497,289
Total Liabilities	$	548,449	$	384,444	$	932,893

(1) Outstanding servicer advances consists of principal and interest advances paid by Nationstar to cover scheduled payments and interest that have not been timely paid by borrowers. These outstanding servicer advances are eliminated upon the consolidation of the securitization trusts.

F-19

Nationstar Mortgage LLC and Subsidiaries

Notes to Consolidated Financial Statements (continued)

3.   Variable Interest Entities and Securitizations (continued)

A summary of the assets and liabilities of Nationstar’s transactions with VIEs included in Nationstar’s consolidated financial statements as of December 31, 2009 is presented in the following table (in thousands).

	Transfers
	Accounted for as
	Secured
	Borrowings
Assets
Restricted cash	$	11,318
Accounts receivable		294,973
Mortgage loans held for investment, subject to nonrecourse debt		297,737
Real estate owned		10,262
Total Assets	$	614,290
Liabilities
Notes payable	$	240,935
Payables and accrued liabilities		1,393
Nonrecourse debt—Legacy Assets		177,675
Total Liabilities	$	420,003

As of July 1, 2010, cumulative realized losses related to a consolidated securitization trust were in excess of Nationstar’s retained beneficial interests. In accordance with ASC 810, Consolidation, Nationstar has evaluated this securitization trust and determined that Nationstar no longer has both the power to direct the activities that most significantly impact the VIE’s economic performance and the obligation to absorb losses or the right to receive benefits that could potentially be significant to the VIE, and this securitization trust was derecognized on July 1, 2010. Upon derecognition of this VIE, Nationstar derecognized the securitized mortgage loans held for investment, subject to ABS nonrecourse debt, and the related ABS nonrecourse debt, and recognized any mortgage servicing rights on Nationstar’s consolidated balance sheet. The impact of this derecognition on Nationstar’s consolidated statement of operations was a decrease in net income of approximately $0.7 million during 2010.

A summary of the outstanding collateral and certificate balances for securitization trusts, including any retained beneficial interests and mortgage servicing rights, that were not consolidated by Nationstar for the years ended December 31, 2010 and 2009 are presented in the following table (in thousands).

	December 31
	2010(1)		2009
Total collateral balance	$	4,038,978	$	3,240,879
Total certificate balance		4,026,844		3,262,995
Total beneficial interests held at fair value		—		2,486
Total mortgage servicing rights at fair value		26,419		20,505

(1) Unconsolidated securitization trusts as of December 31, 2010 consist of VIE’s where Nationstar does not have both the power to direct the activities that most significantly impact the VIE’s economic performance and the obligation to absorb losses or the right to receive benefits that could potentially be significant to the VIE.

F-20

Nationstar Mortgage LLC and Subsidiaries

Notes to Consolidated Financial Statements (continued)

3.   Variable Interest Entities and Securitizations (continued)

Nationstar has no recorded variable interests in the unconsolidated securitization trusts that were outstanding as of December 31, 2010, and does not have any exposure to loss related to these unconsolidated VIEs.

A summary of mortgage loans transferred to unconsolidated securitization trusts that are 60 days or more past due and the credit losses incurred in the unconsolidated securitization trusts are presented below (in thousands):

Year Ended

Year Ended

Year Ended

December 31, 2010

December 31, 2009

December 31, 2008

Principal Amount of

Principal Amount of

Principal Amount of

Loans 60 Days or

Credit

Loans 60 Days or

Credit

Loans 60 Days or

Credit

More Past Due

Losses

More Past Due

Losses

More Past Due

Losses

Total securitization Trusts

$

830,953

$

18,341

$

1,172,822

$

27,734

$

979,556

$

16,708

Certain cash flows received from securitization trusts accounted for as sales for the dates indicated were as follows (in thousands):

December 31, 2010

December 31, 2009

December 31, 2008

Servicing

Servicing

Servicing

Fees

Loan

Fees

Loan

Fees

Loan

Received

Repurchases

Received

Repurchases

Received

Repurchases

Total securitization trusts

$

29,129

$

—

$

32,593

$

—

$

25,535

$

—

4.   Accounts Receivable

Accounts receivable consist primarily of accrued interest receivable on mortgage loans and securitizations, collateral deposits on surety bonds, and advances made to securitization trusts, as required under various servicing agreements related to delinquent loans, which are ultimately paid back to Nationstar from such trusts.

Accounts receivable consist of the following (in thousands):

	December 31
	2010		2009
Delinquency advances	$	148,752	$	206,446
Corporate and escrow advances		233,432		275,001
Insurance deposits		6,390		6,025
Accrued interest (includes $2,392 and $0, respectively, subject to ABS nonrecourse debt)		4,302		3,353
Receivable from trusts		30,095		1,779
Other		16,100		17,370
Total accounts receivable	$	439,071	$	509,974

F-21

Nationstar Mortgage LLC and Subsidiaries

Notes to Consolidated Financial Statements (continued)

5.   Mortgage Loans Held for Sale and Investment

Mortgage loans held for sale consist of the following (in thousands):

	December 31
	2010		2009
Mortgage loans held for sale—unpaid principal balance	$	366,880	$	201,121
Mark-to-market adjustment		4,280		2,010
Total mortgage loans held for sale	$	371,160	$	203,131

Mortgage loans held for sale on a nonaccrual status are presented in the following table for the years indicated (in thousands):

	December 31,
	2010		2009		2008
Mortgage loans held for sale	$	2,016	$	920	$	101,418

A reconciliation of the changes in mortgage loans held for sale to the amounts presented in the consolidated statements of cash flows for the dates indicated is presented in the following table (in thousands):

	December 31
	2010			2009
Mortgage loans held for sale—beginning balance	$	203,131		$	560,354
Mortgage loans originated and purchased, net of fees		2,791,639			1,480,549
Cost of loans sold, net of fees		(2,621,275	)		(1,007,369	)
Principal payments/prepayments received on mortgage loans held for sale and other changes (including fair value mark-to-market adjustments from adoption of ASC 825 and other lower of cost or market valuation adjustments)		(1,508	)		(437,956	)
Transfer of mortgage loans held for sale to mortgage loans held for investment		—			(319,183	)
Transfer of mortgage loans held for sale to real estate owned		(827	)		(73,264	)
Mortgage loans held for sale—ending balance	$	371,160		$	203,131

In November 2009, Nationstar completed the securitization of approximately $222 million of asset-backed securities, which was structured as a secured borrowing, resulting in carrying the securitized loans as mortgage loans on Nationstar’s consolidated balance sheets and recognizing the asset-backed certificates as nonrecourse debt. Prior to this securitization, Nationstar transferred $530.9 million in mortgage loans held for sale to mortgage loans held for investment. These mortgage loans were transferred to the held for investment classification at their fair value of $319.2 million with no associated allowance for loan losses, in accordance with ASC 310, Receivables. Subsequent to the transfer date, mortgage loans held for sale consisted principally of single-family conforming loans originated for sale to GSEs or the other third-party investors in the secondary market.

F-22

Nationstar Mortgage LLC and Subsidiaries

Notes to Consolidated Financial Statements (continued)

5.   Mortgage Loans Held for Sale and Investment (continued)

Mortgage loans held for investment consist of the following (in thousands):

	December 31
	2010			2009
Mortgage loans held for investment—unpaid principal balance	$	412,398		$	490,610
Transfer discount
Accretable		(25,219	)		(22,040	)
Non-accretable		(117,041	)		(166,660	)
Allowance for loan losses		(3,298	)		—
Total mortgage loans held for investment, net	$	266,840		$	301,910

Over the life of the loan pools, Nationstar continues to estimate cash flows expected to be collected. Nationstar considers expected prepayments and estimates the amount and timing of undiscounted expected principal, interest, and other cash flows (expected as of the transfer date) for each aggregate pool of loans. Nationstar evaluates at the balance sheet date whether the present value of its loans determined using the effective interest rates, has decreased and if so, recognizes a valuation allowance subsequent to the transfer date. The present value of any subsequent increase in the loan pool’s actual cash flows expected to be collected is used first to reverse any existing valuation allowance for that loan pool. Any remaining increase in cash flows expected to be collected adjusts the amount of accretable yield recognized on a prospective basis over the loan pool’s remaining life.

The changes in accretable yield on loans transferred to mortgage loans held for investment were as follows (in thousands):

	December 31,
	2010			2009
Balance at the beginning of the period	$	22,040		$	—
Additions		—			23,331
Accretion		(4,082	)		(1,291	)
Reclassifications from (to) nonaccretable discount		7,261			—
Disposals		—			—
Balance at the end of the period	$	25,219		$	22,040

The changes in the allowance for loan losses on mortgage loans held for investment were as follows (in thousands):

	December 31, 2010
Balance at the beginning of the period	$	—
Provision for loan losses		3,298
Recoveries on loans previously charged off		—
Charge-offs		—
Balance at the end of the period	$	3,298

Loan delinquency, and Loan-to-Value Ratio (LTV) are common credit quality indicators that Nationstar monitors and utilizes in its’ evaluation of the adequacy of the allowance for loan losses, of which the primary indicator of credit quality being loan delinquency. LTV refers to the ratio of comparing the loan’s unpaid principal balance to the property’s collateral value. These values are

F-23

Nationstar Mortgage LLC and Subsidiaries

Notes to Consolidated Financial Statements (continued)

5.   Mortgage Loans Held for Sale and Investment (continued)

frequently updated based on the most recent unpaid principal balance, however, updated appraisal values are obtained on an as needed basis.

The following tables provide the outstanding unpaid principal balance of Nationstar’s mortgage loans held for investment by credit quality indicators as of December 31, 2010.

	2010
	(In thousands)
Credit Quality by Delinquency Status
Performing	$	311,122
Non-Performing		101,276
Total	$	412,398
Credit Quality by Loan-to-Value Ratio
Less than 60	$	47,627
Less than 70 and more than 60		17,498
Less than 80 and more than 70		26,805
Less than 90 and more than 80		36,125
Less than 100 and more than 90		37,599
Greater than 100		246,744
Total	$	412,398

Effective January 1, 2010, new accounting guidance eliminated the concept of a QSPE, and all existing securitization trusts are considered VIEs and are now subject to new consolidation guidance provided in ASC 810. Upon consolidation of these VIEs, Nationstar recognized the securitized mortgage loans related to these securitization trusts as mortgage loans held for investment, subject to ABS nonrecourse debt (see Note 3). Additionally, Nationstar elected the fair value option provided for by ASC 825-10.

Mortgage loans held for investment, subject to ABS nonrecourse debt as of December 31, 2010 includes (in thousands):

Mortgage loans held for investment, subject to ABS nonrecourse debt—unpaid principal balance	$	983,106
Fair value adjustment		(444,666	)
Mortgage loans held for investment, subject to ABS nonrecourse debt, net	$	538,440

As of December 31, 2010, approximately $223.5 million of the unpaid principal balance of mortgage loans held for investment, subject to ABS nonrecourse debt were over 90 days past due. The fair value of such loans was approximately $117.6 million.

6.   Investment in Debt Securities

Effective January 1, 2010, new accounting guidance eliminated the concept of a QSPE, and all existing securitization trusts are considered VIEs and are now subject to new accounting guidance provided in ASC 810. Upon consolidation of these VIEs, Nationstar derecognized all previously recognized beneficial interests, including retained investment in debt securities, obtained as part of the securitization (see Note 3).

F-24

Nationstar Mortgage LLC and Subsidiaries

Notes to Consolidated Financial Statements (continued)

6.   Investment in Debt Securities (continued)

The following table presents a summary of Nationstar’s bonds retained from securitization trusts as of December 31, 2009, which are classified as available-for-sale securities, and are therefore carried at fair value (in thousands):

	December 31, 2009
	Outstanding		Accreted		Fair
	Face		Cost		Value
Retained bonds security rating
BBs	$	68,432	$	2,486	$	2,486
Bs		—		—		—
Total retained bonds		68,432		2,486		2,486
Retained net interest margin securities		11,950		—		—
Total investment in debt securities	$	80,382	$	2,486	$	2,486

The following table presents a summary of unrealized gains (losses), both temporary and other-than-temporary, recognized on outstanding debt securities for the periods indicated (in thousands):

	Year Ended December 31, 2009					Year Ended December 31, 2008
				Unrealized					Unrealized
	Other-than-			Gains		Other-than-			Gains
	Temporary			(Losses)(1)		Temporary(2)			(Losses)(1)
Retained bonds security rating
BBs	$	(5,505	)	$	—	$	(40,901	)	$	—
Bs		(1,214	)		—		(3,670	)		—
Total retained bonds		(6,719	)		—		(44,571	)		—
Retained net interest margin securities		(90	)		—		(10,641	)		—
Total investment in debt securities	$	(6,809	)	$	—	$	(55,212	)	$	—

(1) Unrealized gains (losses) are recorded as a component of other comprehensive income (loss).

(2) As part of the 2008 impairment charges, Nationstar reclassified approximately $3.9 million in unrealized losses from other comprehensive income (loss).

7.   Mortgage Servicing Rights

MSRs arise from contractual agreements between Nationstar and investors in mortgage securities and mortgage loans. Nationstar records MSR assets when it sells loans on a servicing-retained basis, at the time of securitization or through the acquisition or assumption of the right to service a financial asset. Under these contracts, Nationstar performs loan servicing functions in exchange for fees and other remuneration.

The fair value of the MSRs is based upon the present value of the expected future cash flows related to servicing these loans. Nationstar receives a base servicing fee ranging from 0.25% to 0.50% annually on the remaining outstanding principal balances of the loans. The servicing fees are collected from investors. Nationstar determines the fair value of the MSRs by the use of a cash flow model that incorporates prepayment speeds, discount rate, and other assumptions management believes are consistent with the assumptions other major market participants use in valuing the MSRs. During 2010,

F-25

Nationstar Mortgage LLC and Subsidiaries

Notes to Consolidated Financial Statements (continued)

7.   Mortgage Servicing Rights (continued)

Nationstar obtained third-party valuations of a portion of its MSRs to assess the reasonableness of the fair value calculated by the cash flow model.

Nationstar used the following assumptions in estimating the fair value of MSRs for the dates indicated:

	December 31
	2010		2009
Discount rate		9.7% to 30.0%		15.0%
Total prepayment speeds		10.57% to 28.71%		12.89% to 25.40%
Expected weighted-average life		3.49 to 6.75 years		3.50 to 6.37 years
Credit losses		5.82% to 60.19%		12.50% to 64.62%

The activity of MSRs carried at fair value is as follows (in thousands):

	December 31
	2010			2009
Fair value at the beginning of the period	$	114,605		$	110,808
Additions:
Servicing resulting from transfers of financial assets		26,253			8,332
Recognition of MSRs from derecognition of variable interest entities		2,866			—
Purchases of servicing assets		17,812			23,380
Deductions:
Derecognition of servicing assets due to new accounting guidance on consolidation of variable interest entities		(10,431	)		—
Changes in fair value:
Due to changes in valuation inputs or assumptions used in the valuation model		9,455			(9,355	)
Other changes in fair value		(15,498	)		(18,560	)
Fair value at the end of the period	$	145,062		$	114,605
Unpaid principal balance of loans serviced for others
Originated or purchased mortgage loans	$	31,686,641		$	32,109,547
Subserviced for others		30,649,472			793,428
Total unpaid principal balance of loans serviced for others	$	62,336,113		$	32,902,975

The following table shows the hypothetical effect on the fair value of the MSRs using various unfavorable variations of the expected levels of certain key assumptions used in valuing these assets at December 31, 2010 and 2009 (in thousands).

							Total Prepayment
	Discount Rate						Speeds						Credit Losses
	100 bps			200 bps			10%			20%			10%			20%
	Adverse			Adverse			Adverse			Adverse			Adverse			Adverse
	Change			Change			Change			Change			Change			Change
December 31, 2010
Mortgage servicing rights	$	(3,828	)	$	(7,458	)	$	(8,175	)	$	(16,042	)	$	(4,310	)	$	(9,326	)

F-26

Nationstar Mortgage LLC and Subsidiaries

Notes to Consolidated Financial Statements (continued)

7.   Mortgage Servicing Rights (continued)

These sensitivities are hypothetical and should be evaluated with care. The effect on fair value of a 10% variation in assumptions generally cannot be determined because the relationship of the change in assumptions to the fair value may not be linear. Additionally, the impact of a variation in a particular assumption on the fair value is calculated while holding other assumptions constant. In reality, changes in one factor may lead to changes in other factors (e.g., a decrease in total prepayment speeds may result in an increase in credit losses), which could impact the above hypothetical effects.

In November 2008, Nationstar acquired MSRs on a portfolio of residential mortgage loans with an aggregate unpaid principal balance of $12.7 billion from a third-party servicer. Nationstar’s share of the acquisition price was $35.4 million. An additional amount was paid by a third-party investor in the underlying loans to the previous servicer. Contemporaneously, Nationstar and the third-party investor entered into a supplemental servicing agreement, which, among other matters, established that any sale by Nationstar of these servicing rights had to be approved by the investor and that if Nationstar were to sell the MSRs in the five-year period following the acquisition transaction, Nationstar would be entitled to the proceeds from the sale of up to a specified amount of the then existing aggregate unpaid principal balance of the underlying mortgage loans, the investor would be entitled to a specified amount, and the remaining excess proceeds, if any, over and above these allocations would be retained by Nationstar. In October 2009, Nationstar acquired MSRs on a portfolio of residential mortgage loans with an aggregate unpaid principal balance of $12.3 billion from another third party servicer. Nationstar’s share of the acquisition price of these servicing rights was $23.4 million. An additional amount was paid by a third-party investor in the underlying loans to the previous servicer. Contemporaneously, Nationstar and the third-party investor entered into a supplemental servicing agreement, which, among other matters, established that any sale by Nationstar of these servicing rights had to be approved by the investor and that if Nationstar were to sell the MSRs following the acquisition transaction, Nationstar would be entitled to the proceeds from the sale of up to a specified amount of the then existing aggregate unpaid principal balance of the underlying mortgage loans, the investor would be entitled to a specified amount, and the remaining excess proceeds, if any, over and above these allocations would be retained by Nationstar. Nationstar carries these mortgage servicing rights at their estimated fair value, which includes consideration of the effect of the restriction on any sale by Nationstar due to the investor’s right to approve such sale. Under the supplemental servicing agreement, Nationstar is entitled to all of the contractually specified servicing fees, ancillary fees and also certain incentive fees, if certain performance conditions are met, and does not share these servicing revenues with the investor.

Total servicing and ancillary fees from Nationstar’s portfolio of residential mortgage loans are presented in the following table for the years indicated (in thousands):

	For the Years Ended
	December 31,
	2010		2009		2008
Servicing fees	$	103,690	$	89,893	$	60,021
Ancillary fees		70,130		28,642		19,734
Total servicing and ancillary fees	$	173,820	$	118,535	$	79,755

F-27

Nationstar Mortgage LLC and Subsidiaries

Notes to Consolidated Financial Statements (continued)

7.   Mortgage Servicing Rights (continued)

8.   Other Assets

Other assets consisted of the following (in thousands):

	December 31,
	2010		2009
Deferred financing costs	$	14,396	$	11,786
Derivative financial instruments		8,666		7,236
Prepaid expenses		3,379		2,791
Other		3,095		2,415
Total other assets	$	29,536	$	24,228

9.   Derivative Financial Instruments

On October 1, 2010, the Company designated an existing interest rate swap as a cash flow hedge against outstanding floating rate financing associated with the Nationstar Mortgage Advance Receivables Trust 2009-ADV1 financing. Under the swap agreement, the Company receives interest equivalent to one month LIBOR and pays a fixed rate of 2.0425% based on an amortizing notional of $268.0 million as of December 31, 2010, with settlements occurring monthly until November 2013. Unrealized gains associated with the effective portion of this cash flow hedge of approximately $1.1 million were recorded in accumulated other comprehensive income for the year ended December 31, 2010. Realized gains associated with the ineffective portion of this cash flow hedge of approximately $0.9 million were recorded as a component of interest expense for the year ended December 31, 2010.

As of December 31, 2010, there are no credit risk related contingent features in any of the Company’s derivative agreements. The amount of OCI expected to be reclassified to the consolidated statement of operations in the next 12 months is $5.0 million.

F-28

Nationstar Mortgage LLC and Subsidiaries

Notes to Consolidated Financial Statements (continued)

9.   Derivative Financial Instruments (continued)

The following tables provide the outstanding notional balances and fair values of outstanding positions for the dates indicated, and recorded gains (losses) during the years indicated (in thousands).

						Recorded
	Expiration	Outstanding		Fair		Gains /
	Dates	Notional		Value		Losses
Year-ended December 31, 2010
MORTGAGE LOANS HELD FOR INVESTMENT
Loan sale commitments	2011	$	28,641	$	42	$	(1,397	)
Other Assets
IRLCs	2011		391,990		4,703		2,289
Forward MBS trades	2011		546,500		3,963		580
LIABILITIES
Interest rate swaps and caps	2011-2013		429,000		7,801		8,872
Interest rate swap,subject to ABS nonrecourse debt	2013		245,119		18,781		2,049
Year-ended December 31, 2009
Other Assets
IRLCs	2010	$	278,181	$	2,414	$	1,207
Forward MBS trades	2010		292,553		3,383		(210	)
Loan sale commitments	2010		56,131		1,439		1,439
Interest rate cap agreements	2011		344,075		—		(14	)
Interest rate swap	2013		220,000		—		—

F-29

Nationstar Mortgage LLC and Subsidiaries

Notes to Consolidated Financial Statements (continued)

10.  Indebtedness

   Notes Payable

A summary of the balances of notes payable for the dates indicated is presented below (in thousands).

	December 31, 2010				December 31, 2009
			Collateral				Collateral
	Outstanding		Pledged		Outstanding		Pledged
Financial institutions repurchase facility (2010)(1)	$	43,059	$	45,429	$	—	$	—
Financial services company repurchase facility(1)		209,477		223,119		149,449		159,281
Financial services company unsecured line of credit(1)		—		N/A		88,915		N/A
Financial institutions repurchase facility (2009)(1)		39,014		40,640		31,582		33,245
Financial services company 2009-ADV1 advance facility(1)		236,808		285,226		240,935		291,462
Financial institutions 2010-ADV1 advance facility		—		—		—		—
GSE MSR facility(1)		15,733		18,951		21,286		23,185
GSE ASAP+ facility(1)		51,105		53,230		7,755		7,803
GSE EAF facility(1)		114,562		142,327		231,935		252,034
Total notes payable	$	709,758	$	808,922	$	771,857	$	767,010

(1) Guaranteed by FIF HE Holdings LLC

In February 2010, Nationstar executed a Master Repurchase Agreement (MRA) with a financial institution, under which Nationstar may currently enter into transactions, for an aggregate amount of $75 million, in which Nationstar agrees to transfer to the same financial institution certain mortgage loans against the transfer of funds by the same financial institution, with a simultaneous agreement by the same financial institution to transfer such mortgage loans to Nationstar at a date certain, or on demand by Nationstar, against the transfer of funds from Nationstar. The interest rate is based on LIBOR plus a spread ranging from 2.75% to 3.50%, with a minimum interest rate of 4.75%. The maturity date of this MRA is October 2011.

Nationstar has a second MRA with a financial services company, which expires in February 2011. The MRA states that from time to time Nationstar may enter into transactions, for an aggregate amount of $300 million, in which Nationstar agrees to transfer to the financial services company certain mortgage loans or mortgage-backed securities against the transfer of funds by the financial services company, with a simultaneous agreement by the financial services company to transfer such mortgage loans or mortgage-backed securities to Nationstar at a certain date, or on demand by Nationstar, against the transfer of funds from Nationstar. The interest rate is based on LIBOR plus a margin of 2.00%, with a minimum interest rate of 4.00%.

In October 2009, Nationstar executed a third MRA with a financial institution. This MRA states that from time to time Nationstar may currently enter into transactions, for an aggregate amount of $100 million, in which Nationstar agrees to transfer to the financial institution certain mortgage loans against the transfer of funds by the financial institution, with a simultaneous agreement by the financial institution to transfer such mortgage loans to Nationstar at a certain date, or on demand by Nationstar, against the transfer of funds from Nationstar. The interest rate is based on LIBOR plus a spread of 3.50%. The maturity date of this MRA with the financial institution is December 2011.

F-30

Nationstar Mortgage LLC and Subsidiaries

Notes to Consolidated Financial Statements (continued)

10.  Indebtedness (continued)

Nationstar maintains a facility with a financial services company, the 2009-ADV1 Advance Facility. This facility has the capacity to purchase up to $350 million of advance receivables. The interest rate is based on LIBOR plus a spread ranging from 3.00% to 12.00%. The maturity date of this facility with the financial services company is December 2011. This debt is nonrecourse to Nationstar.

In December 2010, Nationstar executed the 2010-ADV1 Advance Facility with a financial institution. This facility has the capacity to purchase up to $200 million of advance receivables. The interest rate is based on LIBOR plus a spread of 3.00%. The maturity date of this facility with the financial institution is July 2011, which may be extended if Nationstar elects to pledge any additional advances to this facility. This debt is nonrecourse to Nationstar.

In connection with the October 2009 mortgage servicing rights acquisition, Nationstar executed a four-year note agreement with a government-sponsored enterprise (GSE). As collateral for this note, Nationstar has pledged Nationstar’s rights, title, and interest in the acquired servicing portfolio. The interest rate is based on LIBOR plus 2.50%. The maturity date of this facility is October 2013.

During 2009, Nationstar began executing As Soon As Pooled Plus agreements with a GSE, under which Nationstar transfers to the GSE eligible mortgage loans that are to be pooled into the GSE MBS against the transfer of funds by the GSE. The interest rate is based on LIBOR plus a spread of 1.50%. These agreements typically have a maturity of up to 45 days.

In September 2009, Nationstar executed a committed facility agreement with a GSE, under which Nationstar agrees to transfer to the GSE certain servicing advance receivables against the transfer of funds by the GSE. This facility currently has the capacity to purchase up to $275 million in eligible servicing advance receivables. The interest rate is based on LIBOR plus a spread of 2.50%. The maturity date of this facility is December 2011.

   Senior Unsecured Notes

In March 2010, Nationstar completed the offering of $250 million of unsecured senior notes, which were issued with an issue discount of $7.0 million for net cash proceeds of $243.0 million, with a maturity date of April 2015. These unsecured senior notes pay interest biannually at an interest rate of 10.875%.

The indenture for the unsecured senior notes contains various covenants and restrictions that limit Nationstar, or certain of its subsidiaries’, ability to incur additional indebtedness, pay dividends, make certain investments, create liens, consolidate, merge or sell substantially all the assets, or enter into certain transactions with affiliates.

   Nonrecourse Debt—Legacy Assets

In November 2009, Nationstar completed the securitization of approximately $222 million of asset-backed securities, which was structured as a secured borrowing. This structure resulted in Nationstar carrying the securitized loans as mortgages on Nationstar’s consolidated balance sheet and recognizing the asset-backed certificates acquired by third parties as nonrecourse debt, totaling approximately $138.7 million and $177.7 million at December 31, 2010 and 2009, respectively. The principal and interest on these notes are paid using the cash flows from the underlying mortgage loans, which serve as collateral for the debt. The interest rate paid on the outstanding securities is 7.50%, which is subject to an available funds cap. The total outstanding principal balance on the underlying mortgage loans serving as collateral for the debt was approximately $430.0 million and $515.5 million at December 31, 2010 and December 31, 2009, respectively. Accordingly, the timing of

F-31

Nationstar Mortgage LLC and Subsidiaries

Notes to Consolidated Financial Statements (continued)

10.  Indebtedness (continued)

the principal payments on this nonrecourse debt is dependent on the payments received on the underlying mortgage loans. The unpaid principal balance on the outstanding notes was $161.2 million and $206.6 million at December 31, 2010 and December 31, 2009, respectively.

   ABS Nonrecourse Debt

Effective January 1, 2010, new accounting guidance eliminated the concept of a QSPE, and all existing securitization trusts are considered VIEs and are now subject to new consolidation guidance provided in ASC 810. Upon consolidation of these VIEs, Nationstar derecognized all previously recognized beneficial interests obtained as part of the securitization. In addition, Nationstar recognized the securitized mortgage loans as mortgage loans held for investment, subject to ABS nonrecourse debt, and the related asset-backed certificates acquired by third parties as ABS nonrecourse debt on Nationstar’s consolidated balance sheet (see Note 3). Additionally, Nationstar elected the fair value option provided for by ASC 825-10. The principal and interest on these notes are paid using the cash flows from the underlying mortgage loans, which serve as collateral for the debt. The interest rate paid on the outstanding securities is based on LIBOR plus a spread ranging from 0.13% to 2.00%, which is subject to an interest rate cap. The total outstanding principal balance on the underlying mortgage loans serving as collateral for the debt was approximately $1,025.3 million at December 31, 2010. The timing of the principal payments on this ABS nonrecourse debt is dependent on the payments received on the underlying mortgage loans. The outstanding principal balance on the outstanding notes related to these consolidated securitization trusts was $1,037.9 million at December 31, 2010.

   Financial Covenants

As of December 31, 2010, Nationstar was in compliance with its covenants on Nationstar’s borrowing arrangements and credit facilities. These covenants generally relate to Nationstar’s tangible net worth, liquidity reserves, and leverage requirements.

11.  Repurchase Reserves

Certain whole loan sale contracts include provisions requiring Nationstar to repurchase a loan if a borrower fails to make certain initial loan payments due to the acquirer or if the accompanying mortgage loan fails to meet customary representations and warranties. These representations and warranties are made to the loan purchasers about various characteristics of the loans, such as manner of origination, the nature and extent of underwriting standards applied and the types of documentation being provided and typically are in place for the life of the loan. In the event of a breach of the representations and warranties, the Company may be required to either repurchase the loan or indemnify the purchaser for losses it sustains on the loan. In addition, an investor may request that Nationstar refund a portion of the premium paid on the sale of mortgage loans if a loan is prepaid within a certain amount of time from the date of sale. Nationstar records a provision for estimated repurchases and premium recapture on loans sold, which is charged to gain (loss) on mortgage loans held for sale. The reserve for repurchases is included as a component of payables and accrued liabilities. The current unpaid principal balance of loans sold by Nationstar represents the maximum potential exposure to repurchases related to representations and warranties. Reserve levels are a function of expected losses based on actual pending and expected claims, repurchase requests, historical experience, and loan volume. While the amount of repurchases and premium recapture is uncertain, Nationstar considers the liability to be adequate.

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Notes to Consolidated Financial Statements (continued)

11.  Repurchase Reserves (continued)

The activity of the outstanding repurchase reserves were as follows (in thousands):

	December 31,
	2010			2009			2008
Repurchase reserves, beginning of period	$	3,648		$	3,965		$	4,196
Additions		4,649			820			1,164
Charge-offs		(976	)		(1,137	)		(1,395	)
Repurchase reserves, end of period	$	7,321		$	3,648		$	3,965

12.  General and Administrative

General and administrative expense consists of the following for the dates indicated (in thousands).

	December 31,
	2010		2009		2008
Depreciation and amortization	$	2,117	$	1,767	$	1,309
Advertising		4,559		3,882		3,318
Equipment		3,862		3,300		3,359
Servicing		14,122		1,951		1,739
Telecommunications		2,347		1,590		1,479
Legal and professional fees		14,736		9,610		6,184
Postage		4,220		2,315		1,057
Stationary and supplies		2,594		1,500		903
Travel		2,231		827		740
Dues and fees		4,114		2,264		1,383
Insurance and taxes		2,798		1,218		1,680
Other		1,213		270		(957	)
Total general and administrative expense	$	58,913	$	30,494	$	22,194

13.  Members’ Equity

The limited liability company interests in FIF HE Holdings LLC are represented by four separate classes of units, Class A Units, Class B Units, Class C Preferred Units, and Class D Preferred Units, as defined in the FIF HE Holdings LLC Amended and Restated Limited Liability Company Agreement dated December 31, 2008 (the Agreement). Class A Units have voting rights and Class B Units, Class C Preferred Units, and Class D Preferred Units have no voting rights. Distributions and allocations of profits and losses to members are made in accordance with the Agreement. Class C Preferred Units and Class D Preferred Units represent preferred priority return units, accruing distribution preference on any contributions at an annual rate of 15% and 20%, respectively.

A total of 100,887 Company Match Class A Units were granted to certain management members on the date of the acquisition of CHEC. Subsequently, the Company Match Class A Units were increased to 141,707, net of forfeitures. No consideration was paid for the Company Match Class A Units, and these units vest in accordance with the Vesting Schedule per the Agreement, generally in years three through five after grant date.

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Nationstar Mortgage LLC and Subsidiaries

Notes to Consolidated Financial Statements (continued)

13.  Members’ Equity (continued)

Effective September 17, 2010, FIF HE Holdings LLC executed the FIF HE Holdings LLC Fifth Amended and Restated Limited Liability Company Agreement (the Fifth Agreement). This Fifth Agreement provided for a total of 457,526 Class A Units to be granted to certain management members. No consideration was paid for the granted units, and the units vest in accordance with the Vesting Schedule per the Fifth Agreement.

Simultaneously to the execution of the Fifth Agreement, FIF HE Holdings LLC executed several Restricted Series I Preferred Stock Unit Award Agreements (PRSU Agreements). These Agreements provided for a total of 3,304,000 Class C Units and 3,348,000 Class D Units to be granted to certain management members. No consideration was paid for the granted units, and the units vest in accordance with the Vesting Schedule per the PRSU Agreements.

These awards were valued using a sum of the parts analysis in computing the fair value of the company’s equity. The analysis adds the value of the servicing and originations businesses to the value of the assets and securities that Nationstar owns. The value of the servicing and originations businesses is derived using both a market approach and an income approach. The market approach considers market multiples from public company examples in the industry. The income approach employs a discounted cash flow analysis that utilizes several factors to capture the ongoing cash flows of the business and then is discounted with an assumed equity cost of capital. The valuation of the assets applies a net asset value method utilizing a variety of assumptions, including assumptions for prepayments, cumulative losses, and other variables. Recent market transactions, experience with similar assets and securities, current business combinations, and analysis of the underlying collateral, as available, are considered in the valuation.

The Class A, Class C and Class D Units vest over 1.8 years, vesting schedule of these Units are as follows:

	September 17, 2010	June 30, 2011	June 30, 2012	Total
Class A Units	93,494	182,016	182,016	457,526
Class C Units	1,101,332	1,101,334	1,101,334	3,304,000
Class D Units	1,116,000	1,116,000	1,116,000	3,348,000

The weighted average grant date fair value of the Units was $4.23. Subsequent to December 31, 2010, Nationstar expects to recognize $16.9 million of compensation expense over the next 1.6 years.

In 2010, certain management members elected to settle a portion of the units which vested during the year to offset tax liabilities of $3.4 million that these members have incurred related to these awarded units.

Total share-based compensation expense, net of forfeitures, is provided in the table below for the years indicated.

	December 31,
	2010		2009		2008
Share-based compensation	$	12,856	$	827	$	2,333

14.  Commitments and Contingencies

Nationstar leases various office facilities under noncancelable lease agreements with primary terms extending through fiscal 2016. These lease agreements generally provide for market-rate renewal options, and may provide for escalations in minimum rentals over the lease term (see Note 19).

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Nationstar Mortgage LLC and Subsidiaries

Notes to Consolidated Financial Statements (continued)

14.  Commitments and Contingencies (continued)

Minimum annual rental commitments for office leases with unrelated parties and with initial or remaining terms of one year or more, net of sublease payments, are presented below (in thousands).

2011	$	7,015
2012		6,756
2013		6,543
2014		4,591
Thereafter		4,624
Total	$	29,529

Nationstar enters into IRLCs with prospective borrowers whereby the Company commits to lend a certain loan amount under specific terms and interest rates to the borrower. These IRLCs are treated as derivatives and are carried at fair value (See Note 9).

Nationstar is engaged in legal actions arising from the normal course of business. In management’s opinion, Nationstar has adequate legal defenses with respect to these actions, and the resolution of these matters is not expected to have a material adverse effect upon the consolidated results of operations or financial condition of Nationstar.

During December 2009, Nationstar entered into a strategic relationship with a major mortgage market participant, which contemplates, among other things, significant mortgage servicing rights and subservicing transfers to Nationstar upon terms to be determined. Under this arrangement, if certain delivery thresholds have been met, the market participant may require Nationstar to establish an operating division or newly created subsidiary with separate, dedicated employees within a specified timeline to service such mortgage servicing rights and subservicing. After a specified time period, this market participant may purchase the subsidiary at an agreed upon price. As of December 2010, all of the required delivery thresholds with this market participant have been met, but the market participant has not required the Company to establish an operating division or newly created subsidiary with separate, dedicated employees.

15.  Employee Benefits

Nationstar holds a contributory defined contribution plan (401(k) plan) that covers substantially all full-time employees. Nationstar matches 50% of participant contributions, up to 6% of each participant’s total annual base compensation. Matching contributions totaled approximately $1.5 million, $1.0 million, and $0.8 million for the years ended December 31, 2010, 2009, and 2008, respectively.

16.  Fair Value Measurements

ASC 820 provides a definition of fair value, establishes a framework for measuring fair value, and requires expanded disclosures about fair value measurements. The standard applies when GAAP requires or allows assets or liabilities to be measured at fair value and, therefore, does not expand the use of fair value in any new circumstance.

ASC 820 emphasizes that fair value is a market-based measurement, not an entity-specific measurement. Therefore, a fair value measurement should be determined based on the assumptions that market participants would use in pricing the asset or liability. As a basis for considering market participant assumptions in fair value measurements, ASC 820 establishes a three-tiered fair value hierarchy based on the level of observable inputs used in the measurement of fair value (e.g., Level 1

F-35

Nationstar Mortgage LLC and Subsidiaries

Notes to Consolidated Financial Statements (continued)

16.  Fair Value Measurements (continued)

representing quoted prices for identical assets or liabilities in an active market; Level 2 representing values using observable inputs other than quoted prices included within Level 1; and Level 3 representing estimated values based on significant unobservable inputs). In addition, ASC 820 requires an entity to consider all aspects of nonperformance risk, including its own credit standing, when measuring the fair value of a liability. Under ASC 820, related disclosures are segregated for assets and liabilities measured at fair value based on the level used within the hierarchy to determine their fair values.

The following describes the methods and assumptions used by Nationstar in estimating fair values:

Cash and Cash Equivalents, Restricted Cash, Notes Payable—The carrying amount reported in the consolidated balance sheets approximates fair value.

Mortgage Loans Held for Sale—Nationstar originates mortgage loans in the U.S. that it intends to sell to Fannie Mae, Freddie Mac, and GNMA (collectively, the Agencies). Additionally, Nationstar holds mortgage loans that it intends to sell into the secondary markets via whole loan sales or securitizations. Effective October 2009, in conjunction with Nationstar’s election under ASC 825, Nationstar began measuring newly originated prime residential mortgage loans held for sale at fair value.

Mortgage loans held for sale are typically pooled together and sold into certain exit markets, depending upon underlying attributes of the loan, such as agency eligibility, product type, interest rate, and credit quality.

Mortgage loans held for sale are valued using a market approach by utilizing either: (i) the fair value of securities backed by similar mortgage loans, adjusted for certain factors to approximate the fair value of a whole mortgage loan, including the value attributable to mortgage servicing and credit risk, (ii) current commitments to purchase loans or (iii) recent observable market trades for similar loans, adjusted for credit risk and other individual loan characteristics. As these prices are derived from quoted market prices, Nationstar classifies these valuations as Level 2 in the fair value disclosures.

Mortgage Loans Held for Investment, subject to nonrecourse debt—Nationstar determines the fair value on loans held for investment using internally developed valuation models. These valuation models estimate the exit price Nationstar expects to receive in the loan’s principal market. Although Nationstar utilizes and gives priority to observable market inputs such as interest rates and market spreads within these models, Nationstar typically is required to utilize internal inputs, such as prepayment speeds, credit losses, and discount rates. These internal inputs require the use of judgment by Nationstar and can have a significant impact on the determination of the loan’s fair value. As these prices are derived from a combination of internally developed valuation models and quoted market prices, Nationstar classifies these valuations as Level 3 in the fair value disclosures.

Mortgage Loans Held for Investment, subject to ABS nonrecourse debt—Nationstar determines the fair value on loans held for investment, subject to ABS nonrecourse debt using internally developed valuation models. These valuation models estimate the exit price Nationstar expects to receive in the loan’s principal market. Although Nationstar utilizes and gives priority to observable market inputs such as interest rates and market spreads within these models, Nationstar typically is required to utilize internal inputs, such as prepayment speeds, credit losses, and discount rates. These internal inputs require the use of judgment by Nationstar and can have a significant impact on the determination of the loan’s fair value. As these prices are derived from a combination of

F-36

Nationstar Mortgage LLC and Subsidiaries

Notes to Consolidated Financial Statements (continued)

16.  Fair Value Measurements (continued)

internally developed valuation models and quoted market prices, Nationstar classifies these valuations as Level 3 in the fair value disclosures.

Investment in Debt Securities—Nationstar bases its valuation of debt securities on observable market prices when available; however, due to illiquidity in the markets, observable market prices were not available on these debt securities at December 31, 2009. When observable market prices are not available, Nationstar bases valuations on internally developed discounted cash flow models that use a market-based discount rate. The valuation considers recent market transactions, experience with similar securities, current business conditions, and analysis of the underlying collateral, as available. In order to estimate cash flows, Nationstar utilizes a variety of assumptions, including assumptions for prepayments, cumulative losses, and other variables. These assumptions require the use of judgment by Nationstar and can have a significant impact on the determination of the securities’ fair values. Accordingly, Nationstar classifies these valuations as Level 3 in the fair value disclosures.

Mortgage Servicing Rights—Nationstar will typically retain the servicing rights when it sells loans into the secondary market. Nationstar estimates the fair value of its MSRs using a process that combines the use of a discounted cash flow model and analysis of current market data to arrive at an estimate of fair value. The cash flow assumptions and prepayment assumptions used in the model are based on various factors, with the key assumptions being mortgage prepayment speeds, discount rates and credit losses. These assumptions are generated and applied based on collateral stratifications including product type, remittance type, geography, delinquency and coupon dispersion. These assumptions require the use of judgment by Nationstar and can have a significant impact on the determination of the MSR’s fair value. During 2010, management obtained third-party valuations that covered portions of the portfolio to assess the reasonableness of the fair value calculations provided by the cash flow model. Because of the nature of the valuation inputs, Nationstar classifies these valuations as Level 3 in the fair value disclosures.

Real Estate Owned—Nationstar determines the fair value of real estate owned properties through the use of third-party appraisals and broker price opinions, adjusted for estimated selling costs. Such estimated selling costs include realtor fees and other anticipated closing costs. These values are adjusted to take into account factors that could cause the actual liquidation value of foreclosed properties to be different than the appraised values. This valuation adjustment is based upon Nationstar’s historical experience with real estate owned. Nationstar regularly reviews recent sales activity of its real estate owned properties in order to ensure that the estimated realizable value is consistent with the recorded amount. Real estate owned is classified as Level 3 in the fair value disclosures.

Derivative Instruments—Nationstar enters into a variety of derivative financial instruments as part of its hedging strategy. The majority of these derivatives are exchange-traded or traded within highly active dealer markets. In order to determine the fair value of these instruments, Nationstar utilizes the exchange price or dealer market price for the particular derivative contract; therefore, these contracts are classified as Level 2.

Unsecured Senior Notes—The fair value of unsecured senior notes are based on quoted market prices, and Nationstar classifies these valuations as Level 1 in the fair value disclosures.

Nonrecourse Debt — Legacy Assets—Nationstar estimates fair value based on the present value of future expected discounted cash flows with the discount rate approximating current market value for similar financial instruments. As these prices are derived from a combination of internally developed valuation models and quoted market prices, Nationstar classifies these valuations as Level 3 in the fair value disclosures.

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Nationstar Mortgage LLC and Subsidiaries

Notes to Consolidated Financial Statements (continued)

16.  Fair Value Measurements (continued)

ABS Nonrecourse Debt—Nationstar estimates fair value based on the present value of future expected discounted cash flows with the discount rate approximating current market value for similar financial instruments. As these prices are derived from a combination of internally developed valuation models and quoted market prices, Nationstar classifies these valuations as Level 3 in the fair value disclosures.

The estimated carrying amount and fair value of Nationstar’s financial instruments and other assets and liabilities measured at fair value on a recurring basis is as follows for the dates indicated (in thousands):

			December 31, 2010
	Total		Recurring Fair Value Measurements
	Fair Value		Level 1		Level 2		Level 3
Assets
Mortgage loans held for sale(1)	$	371,160	$	—	$	371,160	$	—
Mortgage loans held for investment, subject to ABS nonrecourse debt(1)		538,440		—		—		538,440
Mortgage servicing rights(1)		145,062		—		—		145,062
Other assets:
IRLCs		4,703		—		4,703		—
Forward MBS trades		3,963		—		3,963		—
Total assets	$	1,063,328	$	—	$	379,826	$	683,502
Liabilities
Derivative financial instruments
Interest rate swaps	$	7,801	$	—	$	7,801	$	—
Derivative financial instruments, subject to ABS nonrecourse debt		18,781		—		18,781		—
ABS nonrecourse debt(1)		496,692		—		—		496,692
Total liabilities	$	523,274	$	—	$	26,582	$	496,692

(1) Based on the nature and risks of these assets and liabilities, the Company has determined that presenting them as a single class is appropriate.

			December 31, 2009
	Total		Recurring Fair Value Measurements
	Fair Value		Level 1		Level 2		Level 3
Assets
Mortgage loans held for sale(1)	$	203,131	$	—	$	203,131	$	—
Investment in debt securities(1)		2,486		—		—		2,486
Mortgage servicing rights(1)		114,605		—		—		114,605
Other assets:
IRLCs		2,414		—		2,414		—
Forward MBS trades		3,383		—		3,383		—
Loan sale commitments		1,439		—		1,439		—
Total assets	$	327,458	$	—	$	210,367	$	117,091

(1) Based on the nature and risks of these assets and liabilities, the Company has determined that presenting them as a single class is appropriate.

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Nationstar Mortgage LLC and Subsidiaries

Notes to Consolidated Financial Statements (continued)

16.  Fair Value Measurements (continued)

The table below presents a reconciliation for all of Nationstar’s Level 3 assets measured at fair value on a recurring basis (in thousands).

	Level 3 Recurring Fair Value Measurements
			Total Gains (Losses) Included in					Purchases,
	Fair Value—					Other		Sale,			Transfers
	Beginning of		Net Income			Comprehensive		Issuances, and			In/Out of		Fair Value—
	Period(1)		(Loss)			Income		Settlements			Level 3		End of Period
Year-ended December 31, 2010
Assets
Mortgage loans held for investment, subject to ABS nonrecourse debt	$	928,891	$	71,239		$	—	$	(461,690	)	$	—	$	538,440
Mortgage servicing rights		104,174		20,210			—		20,678			—		145,062
Total assets	$	1,033,065	$	91,449		$	—	$	(441,012	)	$	—	$	683,502
LIABILITIES
ABS nonrecourse debt	$	884,846	$	(16,937	)	$	—	$	(371,217	)	$	—	$	496,692
Year-ended December 31, 2009
Assets
Investment in debt securities	$	9,294	$	(6,808	)	$	—	$	—		$	—	$	2,486
Mortgage servicing rights		110,808		(19,583	)		—		23,380			—		114,605
Total assets	$	120,102	$	(26,391	)	$	—	$	23,380		$	—	$	117,091

(1) Amounts include derecognition of previously retained beneficial interests and mortgage servicing rights upon adoption of ASC 810 related to consolidation of certain VIEs.

The table below presents the items which Nationstar measures at fair value on a nonrecurring basis (in thousands).

									Total Gains
	Nonrecurring Fair Value						Total		(Losses)
	Measurements						Estimated		Included in
	Level 1		Level 2		Level 3		Fair Value		Earnings
Year-ended December 31, 2010
Assets
Real estate owned(1)	$	—	$	—	$	27,337	$	27,337	$	—
Total assets	$	—	$	—	$	27,337	$	27,337	$	—
Year-ended December 31, 2009
Assets
Real estate owned(1)	$	—	$	—	$	10,262	$	10,262	$	(7,512	)
Total assets	$	—	$	—	$	10,262	$	10,262	$	(7,512	)

(1) Based on the nature and risks of these assets and liabilities, the Company has determined that presenting them as a single class is appropriate.

For the year ended December 31, 2009, Nationstar transferred approximately $530.9 million in mortgage loans held for sale to the held for investment classification in connection with the securitization of approximately $222 million of asset-backed securities, which was structured as a

F-39

Nationstar Mortgage LLC and Subsidiaries

Notes to Consolidated Financial Statements (continued)

16.  Fair Value Measurements (continued)

secured borrowing. These loans were classified as Level 3 assets that were measured on a nonrecurring basis for the year ended December 31, 2008, but were not measured at fair value for the year ended December 31, 2009. In addition, Nationstar elected under ASC 825-10, Financial Instruments-Overall to measure newly originated prime residential mortgage loans held for sale at fair value at origination. These newly originated prime residential mortgage loans were classified as Level 2 assets that were measured on a nonrecurring basis for the year ended December 31, 2008, but are measured on a recurring basis for the year ended December 31, 2009.

The table below presents a summary of the estimated carrying amount and fair value of Nationstar’s financial instruments (in thousands).

	December 31, 2010				December 31, 2009
	Carrying				Carrying
	Amount		Fair Value		Amount		Fair Value
Financial assets:
Cash and cash equivalents	$	21,223	$	21,223	$	41,645	$	41,645
Restricted cash		91,125		91,125		52,795		52,795
Mortgage loans held for sale		371,160		371,160		203,131		203,131
Mortgage loans held for investment, subject to nonrecourse debt—Legacy assets		266,840		239,035		301,910		284,774
Mortgage loans held for investment, subject to ABS nonrecourse debt		538,440		538,440		—		—
Investment in debt securities		—		—		2,486		2,486
Derivative instruments		8,666		8,666		7,236		7,236
Financial liabilities:
Notes payable		709,758		709,758		771,857		771,857
Unsecured senior notes		244,061		244,375		—		—
Derivative financial instruments		7,801		7,801		—		—
Derivative instruments, subject to ABS nonrecourse debt		18,781		18,781		—		—
Nonrecourse debt		138,662		140,197		177,675		178,161
ABS nonrecourse debt		496,692		496,692		—		—

17.  Termination of the Company

The duration of Nationstar’s existence is indefinite per the Agreement and shall continue until dissolved in accordance with the terms of the Agreement and the Delaware Limited Liability Company Act (DLLCA).

18.  Limited Liability of Members

The members of a Delaware limited liability company are generally not liable for the acts and omissions of the company, much in the same manner as the shareholders, officers, and directors of a corporation are generally limited by the provisions of the DLLCA and by applicable case law.

19.  Restructuring Charges

To respond to the decreased demand in the home equity mortgage market and other market conditions, Nationstar initiated a program to reduce costs and improve operating effectiveness in 2007. This program included the closing of several offices and the termination of a large portion of

F-40

Nationstar Mortgage LLC and Subsidiaries

Notes to Consolidated Financial Statements (continued)

19.  Restructuring Charges (continued)

Nationstar’s workforce. As part of this plan, Nationstar expected to incur lease and other contract termination costs. Nationstar recorded restructuring charges totaling $2.3 million, $2.2 million, and $1.2 million for the years ended December 31, 2010, 2009, and 2008, respectively, related to cancelled lease expenses that are reflected in general and administrative expenses. In addition, Nationstar recorded severance and other employee termination benefits totaling $0.3 million for the year ended December 31, 2008. No severance or other employee termination benefits were incurred for the years ended December 31, 2010 and 2009.

The following table summarizes, by category, the Company’s restructuring charge activity for the dates indicated (in thousands):

	Liability Balance		Restructuring		Restructuring			Liability Balance
	at January 1		Adjustments		Settlements			at December 31
Year-ended December 31, 2008
Restructuring charges:
Employee severance and other	$	1,048	$	270	$	(1,318	)	$	—
Lease terminations		18,310		1,237		(8,644	)		10,903
Total	$	19,358	$	1,507	$	(9,962	)	$	10,903
Year-ended December 31, 2009
Restructuring charges:
Lease terminations	$	10,903	$	2,222	$	(3,660	)	$	9,465
Total	$	10,903	$	2,222	$	(3,660	)	$	9,465
Year-ended December 31, 2010
Restructuring charges:
Lease terminations	$	9,465	$	2,287	$	(2,569	)	$	9,183
Total	$	9,465	$	2,287	$	(2,569	)	$	9,183

20.  Concentrations of Credit Risk

Properties collateralizing mortgage loans held for investment and real estate owned were geographically disbursed throughout the United States (measured by principal balance and expressed as a percent of the total outstanding mortgage loans held for investment and real estate owned).

The following table details the geographical concentration of mortgage loans held for investment and real estate owned by state for the dates indicated (in thousands).

	December 31, 2010					December 31, 2009
	Unpaid		% of			Unpaid		% of
	Principal		Total			Principal		Total
State	Balance		Outstanding			Balance		Outstanding
Florida	$	62,775		14.4	%	$	78,331		15.1	%
Texas		58,815		13.4	%		65,519		12.6	%
California		41,019		9.4	%		55,785		10.7	%
All other states(1)		274,235		62.8	%		320,010		61.6	%
	$	436,844		100.0	%	$	519,645		100.0	%

(1) No other state contains more than 5.0% of the total outstanding.

F-41

Nationstar Mortgage LLC and Subsidiaries

Notes to Consolidated Financial Statements (continued)

20.  Concentrations of Credit Risk (continued)

Additionally, certain loan products’ contractual terms may give rise to a concentration of credit risk and increase Nationstar’s exposure to risk of nonpayment or realization.

The following table details the unpaid principal balance of ARM loans included in mortgage loans held for investment that are subject to future payment increases for the dates indicated (in thousands).

	December 31,		December 31,
	2010		2009
Interest only ARMs	$	43,687	$	57,745
Amortizing ARMs:
2/28		71,614		108,052
3/27		5,608		9,900
All other ARMs		11,173		5,617
	$	132,082	$	181,314

21.  Capital Requirements

Certain of Nationstar’s secondary market investors require various capital adequacy requirements, as specified in the respective selling and servicing agreements. To the extent that these mandatory, imposed capital requirements are not met, Nationstar’s secondary market investors may ultimately terminate Nationstar’s selling and servicing agreements, which would prohibit Nationstar from further originating or securitizing these specific types of mortgage loans. In addition, these secondary market investors may impose additional net worth or financial condition requirements based on an assessment of market conditions or other relevant factors.

Among Nationstar’s various capital requirements related to its outstanding selling and servicing agreements, the most restrictive of these requires Nationstar to maintain a minimum adjusted net worth balance of $83.2 million.

As of December 31, 2010, Nationstar was in compliance with all of its selling and servicing capital requirements. Additionally, Nationstar is required to maintain a minimum tangible net worth of at least $150 million as of each quarter-end related to its outstanding Master Repurchase Agreements on our outstanding repurchase facilities. As of December 31, 2010, Nationstar was in compliance with these minimum tangible net worth requirements.

22.  Business Segment Reporting

Nationstar currently conducts business in two separate operating segments: Servicing and Originations. The Servicing segment provides loan servicing on Nationstar’s total servicing portfolio, including the collection of principal and interest payments and the assessment of ancillary fees related to the servicing of mortgage loans. The Originations segment involves the origination, packaging, and sale of agency mortgage loans into the secondary markets via whole loan sales or securitizations. Nationstar reports the activity not related to either operating segment in the Legacy Portfolio and Other column. The Legacy Portfolio and Other column primarily includes all sub-prime mortgage loans originated in the latter portion of 2006 and during 2007 or acquired from CHEC and consolidated VIEs which were consolidated pursuant to the adoption of new accounting guidance related to VIEs adopted on January 1, 2010.

F-42

Nationstar Mortgage LLC and Subsidiaries

Notes to Consolidated Financial Statements (continued)

22.  Business Segment Reporting (continued)

Nationstar’s segments are based upon Nationstar’s organizational structure which focuses primarily on the services offered. The accounting policies of each reportable segment are the same as those of Nationstar except for 1) expenses for consolidated back-office operations and general overhead-type expenses such as executive administration and accounting and 2) revenues generated on inter-segment services performed. Expenses are allocated to individual segments based on the estimated value of services performed, including estimated utilization of square footage and corporate personnel as well as the equity invested in each segment. Revenues generated or inter-segment services performed are valued based on similar services provided to external parties.

To reconcile to Nationstar’s consolidated results, certain inter-segment revenues and expenses costs are eliminated in the “Elimination” column in the following tables.

The following tables are a presentation of financial information by segment for the periods indicated (in thousands):

	Year Ended December 31, 2010
							Operating			Legacy Portfolio
	Servicing			Originations			Segments			and Other			Eliminations			Consolidated
REVENUES:
Servicing fee income	$	175,569		$	—		$	175,569		$	820		$	(9,263	)	$	167,126
Other fee income		7,273			7,042			14,315			2,643			—			16,958
Total fee income		182,842			7,042			189,884			3,463			(9,263	)		184,084
Gain (loss) on mortgage loans held for sale		—			77,498			77,498			—			(154	)		77,344
Total revenues		182,842			84,540			267,382			3,463			(9,417	)		261,428
Total expenses and impairments		107,283			86,920			194,203			26,927			(154	)		220,976
Other income (expense):
Interest income		263			11,848			12,111			77,521			9,263			98,895
Interest expense		(51,791	)		(8,806	)		(60,597	)		(55,566	)		—			(116,163	)
Loss on interest rate swaps and caps		(9,801	)		—			(9,801	)		—			—			(9,801	)
Change in fair value on ABS nonrecourse debt		—			—			—			(23,297	)		—			(23,297	)
Total other income (expense)		(61,329	)		3,042			(58,287	)		(1,342	)		9,263			(50,366	)
NET INCOME (LOSS)	$	14,230		$	662		$	14,892		$	(24,806	)	$	—		$	(9,914	)
Depreciation and amortization	$	1,092		$	781		$	1,873		$	244		$	—		$	2,117
Total assets		689,923			402,627			1,092,550			854,631			—			1,947,181

F-43

Nationstar Mortgage LLC and Subsidiaries

Notes to Consolidated Financial Statements (continued)

22. Business Segment Reporting (continued)

	Year Ended December 31, 2009
							Operating			Legacy Portfolio
	Servicing			Originations			Segments			and Other			Eliminations			Consolidated
REVENUES:
Servicing fee income	$	91,266		$	—		$	91,266		$	—		$	(1,071	)	$	90,195
Other fee income		8,867			1,156			10,023			—			—			10,023
Total fee income		100,133			1,156			101,289			—			(1,071	)		100,218
Gain (loss) on mortgage loans held for sale		—			54,437			54,437			(75,786	)		—			(21,349	)
Total revenues		100,133			55,593			155,726			(75,786	)		(1,071	)		78,869
Total expenses and impairments		70,897			47,532			118,429			25,009			(1,071	)		142,367
Other income (expense):
Interest income		4,143			4,261			8,404			44,114			—			52,518
Interest expense		(25,877	)		(3,438	)		(29,315	)		(40,568	)		—			(69,883	)
Loss on interest rate swaps and caps		—			—			—			(14	)		—			(14	)
Total other income (expense)		(21,734	)		823			(20,911	)		3,532			—			(17,379	)
NET INCOME (LOSS)	$	7,502		$	8,884		$	16,386		$	(97,263	)	$	—		$	(80,877	)
Depreciation and amortization	$	1,004		$	538		$	1,542		$	225		$	—		$	1,767
Total assets		681,543			239,202			920,745			359,440			—			1,280,185

	Year Ended December 31, 2008
							Operating			Legacy Portfolio
	Servicing			Originations			Segments			and Other			Eliminations			Consolidated
REVENUES:
Servicing fee income	$	69,235		$	—		$	69,235		$	—		$	(1,183	)	$	68,052
Other fee income		5,366			589			5,955			—			—			5,955
Total fee income		74,601			589			75,190			—			(1,183	)		74,007
Gain (loss) on mortgage loans held for sale		—			21,985			21,985			(108,648	)		—			(86,663	)
Total revenues		74,601			22,574			97,175			(108,648	)		(1,183	)		(12,656	)
Total expenses and impairments		55,037			30,795			85,832			63,128			(1,183	)		147,777
Other income (expense):
Interest income		10,872			1,920			12,792			79,268			—			92,060
Interest expense		(15,718	)		(1,289	)		(17,007	)		(48,541	)		—			(65,548	)
Loss on interest rate swaps and caps		—			—			—			(23,689	)		—			(23,689	)
Total other income (expense)		(4,846	)		631			(4,215	)		7,038			—			2,823
NET INCOME (LOSS)	$	14,718		$	(7,590	)	$	7,128		$	(164,738	)		—		$	(157,610	)
Depreciation and amortization	$	789		$	383		$	1,172		$	137			—		$	1,309
Total assets		479,819			72,888			552,707			569,294			—			1,122,001

F-44

Nationstar Mortgage LLC and Subsidiaries

Notes to Consolidated Financial Statements (continued)

23.  Guarantor Financial Statement Information

In March 2010, Nationstar Mortgage LLC and Nationstar Capital Corporation (the “Issuers”), sold in a private offering $250.0 million aggregate principal amount of 10.875% senior unsecured notes which mature on April 1, 2015. In December 2010, the Company filed with the Securities and Exchange Commission a Form S-4 registration statement to exchange the privately placed notes with registered notes. The terms of the registered notes are substantially identical to those of the privately placed notes. The notes are jointly and severally guaranteed on a senior unsecured basis by all of the Issuer’s existing and future wholly-owned domestic restricted subsidiaries, with certain exceptions. All guarantor subsidiaries are 100% owned by the Issuer. All amounts in the following tables are in thousands.

F-45

Nationstar Mortgage LLC and Subsidiaries

Notes to Consolidated Financial Statements (continued)

23.  Guarantor Financial Statement Information (continued)

NATIONSTAR MORTGAGE LLC

CONSOLIDATING BALANCE SHEET

DECEMBER 31, 2010

(In Thousands)

					Non-
	Issuer		Guarantor		Guarantor
	(Parent)		(Subsidiaries)		(Subsidiaries)		Eliminations			Consolidated
Assets
Cash and cash equivalents	$	20,904	$	319	$	—	$	—		$	21,223
Restricted cash		57,579		—		33,546		—			91,125
Accounts receivable, net		435,096		—		3,975		—			439,071
Mortgage loans held for sale		371,160		—		—		—			371,160
Mortgage loans held for investment, subject to nonrecourse debt-Legacy Assets, net		5,536		—		261,304		—			266,840
Mortgage loans held for investment, subject to ABS nonrecourse debt		—		—		538,440		—			538,440
Investment in debt securities—available-for-sale		597		—		—		(597	)		—
Investment in subsidiaries		158,276		—		—		(158,276	)		—
Receivables from affiliates		—		62,171		132,353		(185,531	)		8,993
Mortgage servicing rights		145,062		—		—		—			145,062
Property and equipment, net		7,559		835		—		—			8,394
Real estate owned, net		323		—		27,014		—			27,337
Other assets		29,536		—		—		—			29,536
Total assets	$	1,231,628	$	63,325	$	996,632	$	(344,404	)	$	1,947,181
Liabilities and members’ equity
Notes payable	$	472,950	$	—	$	236,808	$	—		$	709,758
Unsecured senior notes		244,061		—		—		—			244,061
Payables and accrued liabilities		73,785		—		1,269		—			75,054
Payables to affiliates		185,531		—		—		(185,531	)		—
Derivative financial instruments		—		—		7,801		—			7,801
Derivative financial instruments, subject to ABS nonrecourse debt		—		—		18,781		—			18,781
Nonrecourse debt—Legacy Assets		—		—		138,662		—			138,662
ABS nonrecourse debt		—		—		497,289		(597	)		496,692
Total liabilities		976,327		—		900,610		(186,128	)		1,690,809
Total members’ equity		255,301		63,325		96,022		(158,276	)		256,372
Total liabilities and members’ equity	$	1,231,628	$	63,325	$	996,632	$	(344,404	)	$	1,947,181

F-46

Nationstar Mortgage LLC and Subsidiaries

Notes to Consolidated Financial Statements (continued)

23.  Guarantor Financial Statement Information (continued)

NATIONSTAR MORTGAGE LLC

CONSOLIDATING STATEMENT OF OPERATIONS

FOR THE YEAR ENDED DECEMBER 31, 2010

(In Thousands)

						Non-
	Issuer			Guarantor		Guarantor
	(Parent)			(Subsidiaries)		(Subsidiaries)			Eliminations			Consolidated
Revenues:
Servicing fee income	$	174,660		$	1,730	$	—		$	(9,264	)	$	167,126
Other fee income		8,259			7,551		1,148			—			16,958
Total fee income		182,919			9,281		1,148			(9,264	)		184,084
Gain on mortgage loans held for sale		77,344			—		—			—			77,344
Total revenues		260,263			9,281		1,148			(9,264	)		261,428
Expenses and impairments:
Salaries, wages, and benefits		146,746			2,369		—			—			149,115
General and administrative		57,329			1,642		(58	)		—			58,913
Loss on mortgage loans held for investment and foreclosed real estate		1,558			—		1,945			—			3,503
Occupancy		9,289			156		—			—			9,445
Total expenses and impairments		214,922			4,167		1,887			—			220,976
Other income (expense):
Interest income		17,019			6		72,606			9,264			98,895
Interest expense		(54,075	)		—		(62,088	)		—			(116,163	)
Loss on interest rate swaps and caps		—			—		(9,801	)		—			(9,801	)
Fair value changes in ABS securitizations		—			—		(23,748	)		451			(23,297	)
Gain (loss) from subsidiaries		(18,650	)		—		—			18,650			—
Total other income (expense)		(55,706	)		6		(23,031	)		28,365			(50,366	)
Net income (loss)	$	(10,365	)	$	5,120	$	(23,770	)	$	19,101		$	(9,914	)

F-47

Nationstar Mortgage LLC and Subsidiaries

Notes to Consolidated Financial Statements (continued)

23.  Guarantor Financial Statement Information (continued)

NATIONSTAR MORTGAGE LLC

CONSOLIDATING STATEMENT OF CASH FLOWS

FOR THE YEAR ENDED DECEMBER 31, 2010

(In Thousands)

							Non-
	Issuer			Guarantor			Guarantor
	(Parent)			(Subsidiaries)			(Subsidiaries)			Eliminations			Consolidated
Operating activities
Net income (loss)	$	(10,365	)	$	5,120		$	(23,770	)	$	19,101		$	(9,914	)
Adjustments to reconcile net income (loss) to net cash provided by (used in) operating activities:
Loss from subsidiaries		18,650			—			—			(18,650	)		—
Share-based compensation		12,856			—			—			—			12,856
Gain on mortgage loans held for sale		(77,344	)		—			—			—			(77,344	)
Loss on mortgage loans held for investment and foreclosed real estate		1,558			—			1,945			—			3,503
Depreciation and amortization		2,104			13			—			—			2,117
Fair value changes in ABS securitization		—			—			23,297			—			23,297
Loss on interest rate swaps and caps		—			—			8,872			—			8,872
Change in fair value of mortgage servicing rights		6,043			—			—			—			6,043
Amortization of debt discount		12,380			—			6,351			—			18,731
Amortization of premiums/discounts		—			—			(4,526	)		—			(4,526	)
Mortgage loans originated and purchased, net of fees		(2,791,639	)		—			—			—			(2,791,639	)
Cost of loans sold, net of fees		2,621,275			—			—			—			2,621,275
Principal payments/prepayments received and other changes in mortgage loans originated as held for sale		49,049			—			(16,634	)		—			32,415
Changes in assets and liabilities:
Accounts receivable, net		71,364			3			(31,979	)		—			39,388
Payables to affiliates		(52,594	)		(5,110	)		61,662			—			3,958
Other assets		1,152			—			—			—			1,152
Payables and accrued liabilities		8,444			(96	)		(185	)		—			8,163
Net cash provided by (used) in operating activities		(127,067	)		(70	)		25,033			451			(101,653	)
Investing activities
Principal payments received and other changes on mortgage loans held for investment, subject to ABS nonrecourse debt		—			—			48,838			—			48,838
Proceeds from sales of real estate owned		504			—			73,603			—			74,107
Purchase of mortgage servicing rights, net of liabilities incurred		(17,812	)		—			—			—			(17,812	)
Property and equipment additions, net of disposals		(3,923	)		(13	)		—			—			(3,936	)
Net cash provided by (used) in investing activities		(21,231	)		(13	)		122,441			—			101,197
Financing activities
Transfers to/from restricted cash, net		(38,617	)		—			4,886			—			(33,731	)
Issuance of unsecured notes, net of issue discount		243,013			—			—			—			243,013

F-48

Nationstar Mortgage LLC and Subsidiaries

Notes to Consolidated Financial Statements (continued)

23.  Guarantor Financial Statement Information (continued)

							Non-
	Issuer			Guarantor			Guarantor
	(Parent)			(Subsidiaries)			(Subsidiaries)			Eliminations			Consolidated
Repayment of non-recourse debt—Legacy assets		—			—			(45,364	)		—			(45,364	)
Repayment of ABS nonrecourse debt		(146	)		—			(102,869	)		(451	)		(103,466	)
Decrease in notes payable, net		(57,972	)		—			(4,127	)		—			(62,099	)
Debt financing costs		(14,923	)		—			—			—			(14,923	)
Tax related share-based settlement of units by members		(3,396	)		—			—			—			(3,396	)
Net cash provided by (used in) financing activities		127,959			—			(147,474	)		(451	)		(19,966	)
Net increase (decrease) in cash and cash equivalents		(20,339	)		(83	)		—			—			(20,422	)
Cash and cash equivalents at beginning of year		41,243			402			—			—			41,645
Cash and cash equivalents at end of year	$	20,904		$	319		$	—		$	—		$	21,223

F-49

Nationstar Mortgage LLC and Subsidiaries

Notes to Consolidated Financial Statements (continued)

23.  Guarantor Financial Statement Information (continued)

NATIONSTAR MORTGAGE LLC

CONSOLIDATING BALANCE SHEET

DECEMBER 31, 2009

(In Thousands)

					Non-
	Issuer		Guarantor		Guarantor
	(Parent)		(Subsidiaries)		(Subsidiaries)		Eliminations			Consolidated
Assets
Cash and cash equivalents	$	41,243	$	402	$	—	$	—		$	41,645
Restricted cash		18,962		—		33,833		—			52,795
Accounts receivable, net		506,460		3		3,511		—			509,974
Mortgage loans held for sale		203,131		—		—		—			203,131
Mortgage loans held for investment, subject to nonrecourse debt—Legacy Assets, net		6,413		—		295,497		—			301,910
Investment in debt securities—available-for-sale		2,486		—		—		—			2,486
Investment in subsidiaries		275,661		—		—		(275,661	)		—
Receivables from affiliates		—		160,645		190,772		(338,843	)		12,574
Mortgage servicing rights		114,605		—		—		—			114,605
Property and equipment, net		5,740		835		—		—			6,575
Real estate owned, net		—		—		10,262		—			10,262
Other assets		24,228		—		—		—			24,228
Total assets	$	1,198,929	$	161,885	$	533,875	$	(614,504	)	$	1,280,185
Liabilities and members’ equity
Notes payable	$	530,922	$	—	$	240,935	$	—		$	771,857
Payables and accrued liabilities		65,341		96		1,393		—			66,830
Payables to affiliates		338,843		—		—		(338,843	)		—
Nonrecourse debt—Legacy Assets		—		—		177,675		—			177,675
Total liabilities		935,106		96		420,003		(338,843	)		1,016,362
Total members’ equity		263,823		161,789		113,872		(275,661	)		263,823
Total liabilities and members’ equity	$	1,198,929	$	161,885	$	533,875	$	(614,504	)	$	1,280,185

F-50

Nationstar Mortgage LLC and Subsidiaries

Notes to Consolidated Financial Statements (continued)

23.  Guarantor Financial Statement Information (continued)

NATIONSTAR MORTGAGE LLC

CONSOLIDATING STATEMENT OF OPERATIONS

FOR THE YEAR ENDED DECEMBER 31, 2009

(In Thousands)

							Non-
	Issuer			Guarantor			Guarantor
	(Parent)			(Subsidiaries)			(Subsidiaries)			Eliminations		Consolidated
Revenues:
Servicing fee income	$	89,151		$	1,044		$	—		$	—	$	90,195
Other fee income		4,823			5,200			—			—		10,023
Total fee income		93,974			6,244			—			—		100,218
Loss on mortgage loans held for sale		(21,349	)		—			—			—		(21,349	)
Total revenues		72,625			6,244			—			—		78,869
Expenses and impairments:
Salaries, wages, and benefits		88,075			2,614			—			—		90,689
General and administrative		30,111			379			4			—		30,494
Loss on mortgage loans held for investment and foreclosed real estate		(1,352	)		(10,925	)		19,789					7,512
Occupancy		6,621			242			—			—		6,863
Loss on available-for-sale securities-other-than-temporary		6,809			—			—			—		6,809
Total expenses and impairments		130,264			(7,690	)		19,793					142,367
Other income (expense):
Interest income		42,160			233			10,125			—		52,518
Interest expense		(52,810	)		(2,694	)		(14,379	)		—		(69,883	)
Loss on interest rate swaps and caps		(14	)		—			—			—		(14	)
Gain (loss) from subsidiaries		(12,574	)		—			—			12,574		—
Total other income (expense)		(23,238	)		(2,461	)		(4,254	)		12,574		(17,379	)
Net income/(loss)	$	(80,877	)	$	11,473		$	(24,047	)	$	12,574	$	(80,877	)

F-51

Nationstar Mortgage LLC and Subsidiaries

Notes to Consolidated Financial Statements (continued)

23.  Guarantor Financial Statement Information (continued)

NATIONSTAR MORTGAGE LLC

CONSOLIDATING STATEMENT OF CASH FLOWS
FOR THE YEAR ENDED DECEMBER 31, 2009

(In Thousands)

							Non-
	Issuer			Guarantor			Guarantor
	(Parent)			(Subsidiaries)			(Subsidiaries)			Eliminations			Consolidated
Operating activities:
Net income (loss)	$	(80,877	)	$	11,473		$	(24,047	)	$	12,574		$	(80,877	)
Adjustments to reconcile net income (loss) to net cash provided by (used in) operating activities:
Loss from subsidiaries		12,574			—			—			(12,574	)		—
Share-based compensation		827			—			—			—			827
Loss on mortgage loans held for sale		21,349			—			—			—			21,349
Loss on mortgage loans held for investment and foreclosed real estate		(1,352	)		(10,925	)		19,789			—			7,512
Loss on interest rate swaps and caps		14			—			—			—			14
Unrealized gain on derivative financial instruments		(2,436	)		—			—			—			(2,436	)
Depreciation and amortization		1,728			39			—			—			1,767
Impairment of investments in debt securities		6,809			—			—			—			6,809
Change in fair value of mortgage servicing rights		27,915			—			—			—			27,915
Amortization of debt discount		19,075			—			2,212			—			21,287
Amortization of premiums/discounts		(1,394	)		—			—			—			(1,394	)
Mortgage Loans originated and purchased, net of fees		(1,480,549	)		—			—			—			(1,480,549	)
Cost of loans sold, net of fees		1,007,369			—			—			—			1,007,369
Principal payments/prepayments received and other changes in mortgage loans originated as held for sale		403,256			—			66,816			—			470,072
Changes in assets and liabilities:
Accounts receivable, net		(151,602	)		1,113			(3,511	)		—			(154,000	)
Payables to affiliates		247,676			(47,397	)		(133,339	)		—			66,940
Other assets		(9,115	)		—			—			—			(9,115	)
Payables and accrued liabilities		11,550			(12	)		1,331			—			12,869
Net cash provided by (used) in operating activities		32,817			(45,709	)		(70,749	)		—			(83,641	)
Investing activities:
Proceeds from sales of real estate owned		1,896			32,202			83			—			34,181
Purchase of mortgage servicing rights, net of liabilities incurred		(1,169	)		—			—			—			(1,169	)
Property and equipment additions, net of disposals		(2,990	)		(39	)		—			—			(3,029	)
Net cash provided by (used) in investing activities		(2,263	)		32,163			83			—			29,983

F-52

Nationstar Mortgage LLC and Subsidiaries

Notes to Consolidated Financial Statements (continued)

23.  Guarantor Financial Statement Information (continued)

						Non-
	Issuer			Guarantor		Guarantor
	(Parent)			(Subsidiaries)		(Subsidiaries)			Eliminations		Consolidated
Financing activities:
Transfers to/from restricted cash, net		(18,444	)		13,737		(27,056	)		—		(31,763	)
Issuance of non-recourse debt, net		—			—		191,272			—		191,272
(Decrease) increase in notes payable, net		17,346			—		(77,741	)		—		(60,395	)
Repayment of non-recourse debt—Legacy assets		—			—		(15,809	)		—		(15,809	)
Debt financing costs		(18,059	)		—		—			—		(18,059	)
Capital contributions from members		20,700			—		—			—		20,700
Net cash provided by financing activities		1,543			13,737		70,666			—		85,946
Net increase (decrease) in cash and cash equivalents		32,097			191		—			—		32,288
Cash and cash equivalents at beginning of year		9,146			211		—			—		9,357
Cash and cash equivalents at end of year	$	41,243		$	402	$	—		$	—	$	41,645

F-53

Nationstar Mortgage LLC and Subsidiaries

Notes to Consolidated Financial Statements (continued)

23.  Guarantor Financial Statement Information (continued)

NATIONSTAR MORTGAGE LLC

CONSOLIDATING STATEMENT OF OPERATIONS

FOR THE YEAR ENDED DECEMBER 31, 2008

(In Thousands)

							Non-
	Issuer			Guarantor			Guarantor
	(Parent)			(Subsidiaries)			(Subsidiaries)			Eliminations		Consolidated
Revenues
Servicing fee income	$	67,876		$	74		$	102		$	—	$	68,052
Other fee income		1,304			4,651			—			—		5,955
Total fee income		69,180			4,725			102			—		74,007
Loss on mortgage loans held for sale		(86,663	)		—			—			—		(86,663	)
Total revenues		(17,483	)		4,725			102			—		(12,656	)
Expenses and impairments
Salaries, wages, and benefits		60,808			975			—			—		61,783
General and administrative		22,059			135			—			—		22,194
Loss on mortgage loans held for investment and foreclosed real estate		(1,011	)		3,578			—			—		2,567
Occupancy		5,989			32			—			—		6,021
Loss on available-for-sale securities- other-than-temporary		55,212			—			—			—		55,212
Total expenses and impairments		143,057			4,720			—			—		147,777
Other income (expense)
Interest income		92,030			30			—			—		92,060
Interest expense		(52,931	)		(45	)		(12,572	)		—		(65,548	)
Loss on interest rate swaps and caps		(23,689	)		—			—			—		(23,689	)
Gain (loss) from subsidiaries		(12,480	)		—			—			12,480		—
Total other income (expense)		2,930			(15	)		(12,572	)		12,480		2,823
Net income (loss)	$	(157,610	)	$	(10	)	$	(12,470	)	$	12,480	$	(157,610	)

F-54

Nationstar Mortgage LLC and Subsidiaries

Notes to Consolidated Financial Statements (continued)

23.  Guarantor Financial Statement Information (continued)

NATIONSTAR MORTGAGE LLC

CONSOLIDATING STATEMENT OF CASH FLOWS

FOR THE YEAR ENDED DECEMBER 31, 2008

(In Thousands)

							Non-
	Issuer			Guarantor			Guarantor
	(Parent)			(Subsidiaries)			(Subsidiaries)			Eliminations			Consolidated
Operating activities
Net income (loss)	$	(157,610	)	$	(10	)	$	(12,470	)	$	12,480		$	(157,610	)
Adjustments to reconcile net income (loss) to net cash provided by (used in) operating activities:
Loss from subsidiaries		12,480			—			—			(12,480	)		—
Share-based compensation		2,333			—			—			—			2,333
Loss on mortgage loans held for sale		86,663			—			—			—			86,663
Loss on mortgage loans held for investment and foreclosed real estate		(1,011	)		3,578			—			—			2,567
Loss on interest rate swaps and caps		23,689			—			—			—			23,689
Unrealized loss on derivative financial instruments		2,077			—			—			—			2,077
Depreciation and amortization		1,301			8			—			—			1,309
Accretion of discount on securities		(4,422	)		—			—			—			(4,422	)
Impairment of investments in debt securities		55,212			—			—			—			55,212
Change in fair value of mortgage servicing rights		11,701			—			—			—			11,701
Amortization of debt discount		8,879			—			—			—			8,879
Amortization of premiums/discounts		(85	)		—			—			—			(85	)
Mortgage loans originated and purchased, net of fees		(545,860	)		—			—			—			(545,860	)
Cost of loans sold, net of fees		513,924			—			—			—			513,924
Principal payments/prepayments received and other changes in mortgage loans originated as held for sale		201,184			—			—			—			201,184
Changes in assets and liabilities:
Accounts receivable, net		(164,961	)		(605	)		—			—			(165,566	)
Payables to affiliates		129,110			128,659			(255,317	)		—			2,452
Other assets		38,363			—			—			—			38,363
Payables and accrued liabilities		(36,363	)		(297	)		62			—			(36,598	)
Net cash provided by (used) in operating activities		176,604			131,333			(267,725	)		—			40,212
Investing activities
Proceeds from sales of real estate owned		52,764			(23,488	)		—			—			29,276
Purchase of mortgage servicing rights, net of liabilities incurred		(19,013	)		—			—			—			(19,013	)
Interest rate swap settlements		(51,570	)		—			—			—			(51,570	)
Property and equipment additions, net of disposals		(1,764	)		(8	)		—			—			(1,772	)
Principal payments received on debt securities		8,436			—			—			—			8,436
Net cash used in investing activities		(11,147	)		(23,496	)		—			—			(34,643	)
Financing activities
Transfers to/from restricted cash, net		(517	)		(8,402	)		(952	)		—			(9,871	)
(Decrease)/increase in notes payable, net		(325,943	)		(100,000	)		268,677			—			(157,266	)

F-55

Nationstar Mortgage LLC and Subsidiaries

Notes to Consolidated Financial Statements (continued)

23.  Guarantor Financial Statement Information (continued)

							Non-
	Issuer			Guarantor			Guarantor
	(Parent)			(Subsidiaries)			(Subsidiaries)		Eliminations		Consolidated
Debt financing costs		(15,926	)		—			—		—		(15,926	)
Capital contributions from members		145,600			—			—		—		145,600
Net cash provided by (used in) financing activities		(196,786	)		(108,402	)		267,725		—		(37,463	)
Net increase (decrease) in cash and cash equivalents		(31,329	)		(565	)		—		—		(31,894	)
Cash and cash equivalents at beginning of year		40,475			776			—		—		41,251
Cash and cash equivalents at end of year	$	9,146		$	211		$	—	$	—	$	9,357

24.  Subsequent Events

In February 2011, Nationstar amended one of its outstanding Master Repurchase Agreements with a financial services company. Under the terms of this new agreement, Nationstar is now required to maintain a minimum tangible net worth of not less than $175 million and is now set to expire in February 2012. In addition, the interest rate paid on any transfer loans has been amended to LIBOR plus a margin of 3.25%.

In March 2011, Nationstar executed a MRA with a financial institution, under which Nationstar may enter into transactions, for an aggregate amount of $50.0 million, in which Nationstar agrees to transfer to the same financial institution certain mortgage loans and certain securities against the transfer of funds by the same financial institution, with a simultaneous agreement by the same financial institution to transfer such mortgage loans and securities to Nationstar at a date certain, or on demand by Nationstar, against the transfer of funds Nationstar. The interest rate is based on LIBOR plus a spread of 1.45% to 3.95%, which varies based on the underlying transferred collateral. The maturity date of this MRA is March 2012.

F-56

Annex A

THIS DOCUMENT IS IMPORTANT AND REQUIRES YOUR IMMEDIATE ATTENTION. If you are in any doubt as to the action to be taken, you should immediately consult your broker, bank manager, lawyer, accountant, investment advisor or other professional adviser.

LETTER OF TRANSMITTAL

Relating to

Nationstar Mortgage LLC

Nationstar Capital Corporation

Offer to Exchange

any and all of their outstanding unregistered 10.875% Senior Notes due 2015 (CUSIP Nos. U6375Y AA4 and 63860U AA8) for $250,000,000 aggregate principal amount of its new 10.875% Senior Notes due 2015 that have been registered under the Securities Act of 1933

This document relates to the exchange offer (the “Exchange Offer”) made by Nationstar Mortgage LLC (the “Company”) and Nationstar Capital Corporation (the “Co-issuer,” and together with the Company, the “Issuers”) to exchange any and all of their unregistered $250,000,000 10.875% Senior Notes due 2015 (the “Old Notes”) for new 10.875% Senior Notes due 2015 (the “New Notes”) that have been registered under the Securities Act of 1933, as amended (the “Securities Act”). The Exchange Offer is described in the Prospectus dated          , 2011 (the “Prospectus”) and in this letter of transmittal (this “Letter of Transmittal”). All terms and conditions contained in, or otherwise referred to in, the Prospectus are deemed to be incorporated in, and form a part of, this Letter of Transmittal. Therefore you are urged to read carefully the Prospectus and the items referred to therein. The terms and conditions contained in the Prospectus, together with the terms and conditions governing this Letter of Transmittal and the instructions herein, are collectively referred to herein as the “terms and conditions.”

The Exchange Offer will expire at 5:00 p.m., New York City time, on          , 2011, unless extended by the Issuers (such date and time, as they may be extended, the “Expiration Date”). Tendered Old Notes may be withdrawn at any time prior to the expiration of the Exchange Offer.

Upon the satisfaction or waiver of the conditions to the acceptance of Old Notes set forth in the Prospectus under “Description of the Exchange Offer—Conditions to the Exchange Offer”, the Issuers will accept for settlement Old Notes that have been validly tendered (and not subsequently validly withdrawn). This acceptance date is referred to as the “Acceptance Date.” The Issuers will deliver the New Notes on a date (the “Settlement Date”) as soon as practicable after the Expiration Date.

The Exchange Agent for the Exchange Offer is:

By Regular Mail or Overnight Courier:

Wells Fargo Bank, National Association
Corporate Trust Operations
MAC N9303-121
Sixth & Marquette Avenue
Minneapolis, MN 55479

By facsimile: (612)-667-6282

For Information or Confirmation by Telephone: (800) 344-5128

This Letter of Transmittal is to be used by holders of the Old Notes. Tender of Old Notes is to be made using the Automated Tender Offer Program (“ATOP”) of The Depository Trust Company (“DTC”) pursuant to the procedures set forth in the Prospectus under the caption “Description of the Exchange Offer—Procedures for Tendering.” DTC participants that are accepting the Exchange Offer must

A-1

transmit their acceptance to DTC, which will verify the acceptance and execute a book-entry delivery to the Exchange Agent’s DTC account. DTC will then send a computer-generated message known as an “agent’s message” to the Exchange Agent for its acceptance. For you to validly tender your Old Notes in the Exchange Offer, the Exchange Agent must receive, prior to the Expiration Date, an agent’s message under the ATOP procedures that confirms that:

•  DTC has received your instructions to tender your Old Notes; and

•  You agree to be bound by the terms of this Letter of Transmittal.

By using the ATOP procedures to tender Old Notes, you will not be required to deliver this Letter of Transmittal to the Exchange Agent. However, you will be bound by its terms, and you will be deemed to have made the acknowledgments and the representations and warranties it contains, just as if you had signed it.

The New Notes will be issued in full exchange for Old Notes in the Exchange Offer, if consummated, on the Settlement Date and will be delivered in book-entry form.

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Please read the accompanying instructions carefully.

Ladies and Gentlemen:

Upon the terms and subject to the conditions of the Exchange Offer, the undersigned hereby tenders to the Issuers the aggregate principal amount of Old Notes credited by the undersigned to the Exchange Agent’s account at DTC using ATOP.

The undersigned understands that validly tendered Old Notes (or defectively tendered Old Notes with respect to which the Issuers have waived such defect or caused such defect to be waived) will be deemed to have been accepted by the Issuers if, as and when the Issuers give oral or written notice thereof to the Exchange Agent. The undersigned understands that, subject to the terms and conditions, Old Notes properly tendered and accepted (and not validly withdrawn) in accordance with the terms and conditions will be exchanged for New Notes. The undersigned understands that, under certain circumstances, the Issuers may not be required to accept any of the Old Notes tendered (including any such Old Notes tendered after the Expiration Date). If any Old Notes are not accepted for exchange for any reason (or if Old Notes are validly withdrawn), such Old Notes will be returned, without expense, to the undersigned’s account at DTC or such other account as designated herein, pursuant to the book-entry transfer procedures described in the Prospectus, as promptly as practicable after the expiration or termination of the Exchange Offer.

By tendering Old Notes in the Exchange Offer, the undersigned acknowledges that the Exchange Offer is being made based upon the Issuers’ understanding of an interpretation by the staff of the Securities and Exchange Commission (the “SEC”) as set forth in no-action letters issued to other parties, including Exxon Capital Holdings Corporation, SEC No-Action Letter (available May 13, 1988), Morgan Stanley & Co. Incorporated, SEC No-Action Letter (available June 5, 1991) and Shearman & Sterling, SEC No-Action Letter (available July 2, 1993), that the New Notes issued in exchange for the Old Notes pursuant to the Exchange Offer may be offered for resale, resold and otherwise transferred by each holder thereof (other than a broker-dealer who acquires such New Notes directly from the Issuers for resale pursuant to Rule 144A under the Securities Act or any other available exemption under the Securities Act or any such holder that is an “affiliate” of the Issuers within the meaning of Rule 405 under the Securities Act), without compliance with the registration and prospectus delivery provisions of the Securities Act, provided that such New Notes are acquired in the ordinary course of the business of such holder and any beneficial owner and such holder is not engaged in, and does not intend to engage in, a distribution of such New Notes and has no arrangement with any person to participate in the distribution of such New Notes. If the undersigned is not a broker-dealer, the undersigned represents that it acquires the New Notes in the ordinary course of the business of such undersigned and any beneficial owner, it is not engaged in, and does not intend to engage in, a distribution of New Notes and it has no arrangements or understandings with any person to participate in a distribution of the New Notes. If the undersigned is a broker-dealer that will receive New Notes for its own account in exchange for Old Notes, it represents that the Old Notes to be exchanged for New Notes were acquired by it as a result of market-making activities or other trading activities and acknowledges that it will deliver a prospectus in connection with any resale of such New Notes; however, by so acknowledging and by delivering a prospectus, the undersigned will not be deemed to admit that it is an “underwriter” within the meaning of the Securities Act.

Upon agreement to the terms of this Letter of Transmittal pursuant to an agent’s message, the undersigned, or the beneficial holder of Old Notes on behalf of which the undersigned has tendered, will, subject to that holder’s ability to withdraw its tender, and subject to the terms and conditions of the Exchange Offer generally, hereby:

•  irrevocably sell, assign and transfer to or upon the order of the Issuers or their nominee all right, title and interest in and to, and any and all claims in respect of or arising or having arisen as a result of the undersigned’s status as a holder of, all Old Notes tendered hereby, such that thereafter it shall have no contractual or other rights or claims in law or equity against the

A-3

Issuers or any fiduciary, trustee, fiscal agent or other person connected with the Old Notes arising under, from or in connection with such Old Notes;

•  waive any and all rights with respect to the Old Notes tendered hereby, including, without limitation, any existing or past defaults and their consequences in respect of such Old Notes; and

•  release and discharge the Issuers, the Guarantors and Wells Fargo Bank, National Association, as the trustee for the Old Notes from any and all claims the undersigned may have, now or in the future, arising out of or related to the Old Notes tendered hereby, including, without limitation, any claims that the undersigned is entitled to receive additional principal or interest payments with respect to the Old Notes tendered hereby, other than as expressly provided in the Prospectus and in this Letter of Transmittal, or to participate in any redemption or defeasance of the Old Notes tendered hereby.

The undersigned understands that tenders of Old Notes pursuant to the procedures described in the Prospectus and in this Letter of Transmittal and acceptance of such Old Notes by the Issuers will, following such acceptance, constitute a binding agreement between the undersigned and the Issuers upon the terms and conditions.

By tendering Old Notes in the Exchange Offer, the undersigned represents, warrants and agrees that:

•  it has received and reviewed the Prospectus;

•  it is the beneficial owner (as defined below) of, or a duly authorized representative of one or more beneficial owners of, the Old Notes tendered hereby, and it has full power and authority to execute this Letter of Transmittal;

•  the Old Notes being tendered hereby were owned as of the date of tender, free and clear of any liens, charges, claims, encumbrances, interests and restrictions of any kind, and the Issuers will acquire good, indefeasible and unencumbered title to such Old Notes, free and clear of all liens, charges, claims, encumbrances, interests and restrictions of any kind, when the Issuers accept the same;

•  it will not sell, pledge, hypothecate or otherwise encumber or transfer any Old Notes tendered hereby from the date of this Letter of Transmittal, and any purported sale, pledge, hypothecation or other encumbrance or transfer will be void and of no effect;

•  in evaluating the Exchange Offer and in making its decision whether to participate in the Exchange Offer by tendering its Old Notes, the undersigned has made its own independent appraisal of the matters referred to in the Prospectus and this Letter of Transmittal and in any related communications and it is not relying on any statement, representation or warranty, express or implied, made to such holder by the Issuers or the Exchange Agent, other than those contained in the Prospectus, as amended or supplemented through the Expiration Date;

•  the execution and delivery of this Letter of Transmittal shall constitute an undertaking to execute any further documents and give any further assurances that may be required in connection with any of the foregoing, in each case on and subject to the terms and conditions described or referred to in the Prospectus;

•  the agreement to the terms of this Letter of Transmittal pursuant to an agent’s message shall, subject to the terms and conditions of the Exchange Offer, constitute the irrevocable appointment of the Exchange Agent as its attorney and agent and an irrevocable instruction to such attorney and agent to complete and execute all or any forms of transfer and other documents at the discretion of that attorney and agent in relation to the Old Notes tendered hereby in favor of the Issuers or any other person or persons as the Issuers may direct and to deliver such forms of transfer and other documents in the attorney’s and agent’s discretion and

A-4

the certificates and other documents of title relating to the registration of such Old Notes and to execute all other documents and to do all other acts and things as may be in the opinion of that attorney or agent necessary or expedient for the purpose of, or in connection with, the acceptance of the Exchange Offer, and to vest in the Issuers or their nominees such Old Notes;

•  the terms and conditions of the Exchange Offer shall be deemed to be incorporated in, and form a part of, this Letter of Transmittal, which shall be read and construed accordingly;

•  it is acquiring the New Notes in the ordinary course of the business of such undersigned and any beneficial owner;

•  it is not participating in, and does not intend to participate in, a distribution of the New Notes within the meaning of the Securities Act and has no arrangement or understanding with any person to participate in a distribution of the New Notes within the meaning of the Securities Act;

•  it is not a broker-dealer who acquired the Old Notes directly from the Issuers; and

•  it is not an “affiliate” of the Issuers, within the meaning of Rule 405 of the Securities Act.

The representations, warranties and agreements of a holder tendering Old Notes shall be deemed to be repeated and reconfirmed on and as of the Expiration Date and the Settlement Date. For purposes of this Letter of Transmittal, the “beneficial owner” of any Old Notes means any holder that exercises investment discretion with respect to such Old Notes.

The undersigned understands that tenders may not be withdrawn at any time after the Expiration Date, except as set forth in the Prospectus, unless the Exchange Offer is amended with changes to the terms and conditions that are, in the reasonable judgment of the Issuers, materially adverse to the tendering holders, in which case tenders may be withdrawn under the conditions described in the extension.

If the Exchange Offer is amended in a manner determined by the Issuers to constitute a material change, the Issuers will extend the Exchange Offer for a period of two to ten business days, depending on the significance of the amendment and the manner of disclosure to such holders, if the Exchange Offer would otherwise have expired during such two to ten business day period.

All authority conferred or agreed to be conferred in this Letter of Transmittal and every obligation of the undersigned hereunder shall be binding upon the undersigned’s successors, assigns, heirs, executors, administrators, trustees in bankruptcy and legal representatives of the undersigned and shall not be affected by, and shall survive, the death or incapacity of the undersigned.

o   CHECK HERE IF YOU ARE A BROKER-DEALER AND WISH TO RECEIVE 10 ADDITIONAL COPIES OF THE PROSPECTUS AND 10 COPIES OF ANY AMENDMENTS OR SUPPLEMENTS THERETO.

Name:

Address:

Name of Tendering Institution:

Account Number:

Transaction Code Number:

By crediting the Old Notes to the Exchange Agent’s account at DTC using ATOP and by complying with applicable ATOP procedures with respect to the Exchange Offer, the participant in DTC confirms on behalf of itself and the beneficial owners of such Old Notes all provisions of this Letter of Transmittal (including all representations and warranties) applicable to it and such beneficial owner as fully as if it had completed the information required herein and executed and transmitted this Letter of Transmittal to the Exchange Agent.

A-5

INSTRUCTIONS FORMING PART OF
THE TERMS AND CONDITIONS OF THE EXCHANGE OFFER

1.  Book-Entry Confirmations

Any confirmation of a book-entry transfer to the Exchange Agent’s account at DTC of Old Notes tendered by book-entry transfer, as well as an agent’s message, and any other documents required by this Letter of Transmittal, must be received by the Exchange Agent at its address set forth on the cover page of this Letter of Transmittal prior to 5:00 p.m., New York City time, on the Expiration Date.

2.  Validity of Tenders

The Issuers will determine in their sole discretion all questions as to the validity, form, eligibility, time of receipt, acceptance of tendered Old Notes and withdrawal of tendered Old Notes. The Issuers’ determination will be final and binding. The Issuers reserve the absolute right to reject any Old Notes not properly tendered or any acceptance of Old Notes that would, in the opinion of its counsel, be unlawful. The Issuers also reserve the right to waive any defect, irregularities or conditions of tender as to particular Old Notes. The Issuers’ interpretation of the terms and conditions of the Exchange Offer, including the instructions in this Letter of Transmittal, will be final and binding on all parties. Unless waived, all defects or irregularities in connection with tenders of Old Notes must be cured within such time as the Issuers shall determine. Although the Issuers intend to notify holders of defects or irregularities with respect to tenders of Old Notes, none of the Issuers, the Exchange Agent and any other person will incur any liability for failure to give such notification. Tenders of Old Notes will not be deemed made until such defects or irregularities have been cured or waived. Any Old Notes received by the Exchange Agent that are not properly tendered and as to which the defects or irregularities have not been cured or waived will be returned to the tendering holder through the facilities of DTC as soon as practicable after the Expiration Date.

3.  Waiver of Conditions

The Issuers reserve the absolute right to waive, in whole or part, at any time or from time to time, any of the conditions to the Exchange Offer set forth in the Prospectus or in this Letter of Transmittal.

4.  No Conditional Tender

No alternative, conditional, irregular or contingent tender of Old Notes will be accepted.

5.  Request for Assistance or Additional Copies

Requests for assistance or for additional copies of the Prospectus or this Letter of Transmittal may be directed to the Exchange Agent at the address, telephone numbers or fax number set forth on the cover page of this Letter of Transmittal. Holders may also contact their commercial bank, broker, dealer, trust company or other nominee for assistance concerning the Exchange Offer.

6.  Withdrawal

Tenders of Old Notes may be withdrawn at any time prior to 5:00 p.m., New York City time, on the Expiration Date. For a withdrawal to be effective you must comply with the appropriate ATOP procedures. Any notice of withdrawal must specify the name and number of the account at DTC to be credited with withdrawn Old Notes and otherwise comply with the ATOP procedures. For more information, see the section of the Prospectus entitled “Description of the Exchange Offer—Withdrawal of Tenders.”

A-6

7.  Transfer Taxes

Holders who tender their Old Notes for exchange will not be obligated to pay any transfer taxes in connection with that tender or exchange, except that holders who instruct the Issuers to register New Notes in the name of, or request that Old Notes not tendered or not accepted in the exchange offer be returned to, a person other than the registered tendering holder will be responsible for the payment of any applicable transfer tax on those Old Notes.

IMPORTANT: BY USING THE ATOP PROCEDURES TO TENDER OLD NOTES, YOU WILL NOT BE REQUIRED TO DELIVER THIS LETTER OF TRANSMITTAL TO THE EXCHANGE AGENT. HOWEVER, YOU WILL BE BOUND BY ITS TERMS, AND YOU WILL BE DEEMED TO HAVE MADE THE ACKNOWLEDGMENTS AND THE REPRESENTATIONS AND WARRANTIES IT CONTAINS, JUST AS IF YOU HAD SIGNED IT.

A-7

Nationstar Mortgage LLC

Nationstar Capital Corporation

PART II

INFORMATION NOT REQUIRED IN PROSPECTUS

Item 20.   Indemnification of Directors and Officers.

(a) Nationstar Capital Corporation; Nationstar 2009 Equity Corporation; NSM Recovery Services Inc.; NSM Foreclosure Services Inc. (each a Delaware corporation and, collectively referred to herein as the “Delaware Corporations”)

Subsection (a) of Section 145 of the General Corporation Law of the State of Delaware (the “DGCL”), empowers a corporation to indemnify any person who was or is a party or is threatened to be made a party to any threatened, pending or completed action, suit or proceeding, whether civil, criminal, administrative or investigative (other than an action by or in the right of the corporation) by reason of the fact that the person is or was a director, officer, employee or agent of the corporation, or is or was serving at the request of the corporation as a director, officer, employee or agent of another corporation, partnership, joint venture, trust or other enterprise, against expenses (including attorneys’ fees), judgments, fines and amounts paid in settlement actually and reasonably incurred by the person in connection with such action, suit or proceeding if the person acted in good faith and in a manner the person reasonably believed to be in or not opposed to the best interests of the corporation, and, with respect to any criminal action or proceeding, had no reasonable cause to believe the person’s conduct was unlawful. The termination of any action, suit or proceeding by judgment, order, settlement, conviction, or upon a plea of nolo contendere or its equivalent, shall not, of itself, create a presumption that the person did not act in good faith and in a manner which the person reasonably believed to be in or not opposed to the best interests of the corporation, and, with respect to any criminal action or proceeding, had reasonable cause to believe that the person’s conduct was unlawful.

Subsection (b) of Section 145 of the DGCL empowers a corporation to indemnify any person who was or is a party or is threatened to be made a party to any threatened, pending or completed action or suit by or in the right of the corporation to procure a judgment in its favor by reason of the fact that such person acted in any of the capacities set forth above, against expenses (including attorneys’ fees) actually and reasonably incurred by the person in connection with the defense or settlement of such action or suit if the person acted in good faith and in a manner the person reasonably believed to be in or not opposed to the best interests of the corporation and except that no indemnification may be made in respect of any claim, issue or matter as to which such person shall have been adjudged to be liable to the corporation unless and only to the extent that the Court of Chancery or the court in which such action or suit was brought shall determine upon application that, despite the adjudication of liability but in view of all the circumstances of the case, such person is fairly and reasonably entitled to indemnity for such expenses which the Court of Chancery or such other court shall deem proper.

Subsection (d) of Section 145 of the DGCL provides that any indemnification under subsections (a) and (b) of Section 145 (unless ordered by a court) shall be made by the corporation only as authorized in the specific case upon a determination that indemnification of the present or former director, officer, employee or agent is proper in the circumstances because the person has met the applicable standard of conduct set forth in subsections (a) and (b) of Section 145. Such determination shall be made, with respect to a person who is a director or officer at the time of such determination, (1) by a majority vote of the directors who are not parties to such action, suit or proceeding, even though less than a quorum, or (2) by a committee of such directors designated by majority vote of such directors, even though less than a quorum, or (3) if there are no such directors, or if such directors so direct, by independent legal counsel in a written opinion, or (4) by the stockholders.

Section 145 of the DGCL further provides that to the extent a present or former director or officer of a corporation has been successful on the merits or otherwise in the defense of any action, suit or proceeding referred to in subsections (a) and (b) of Section 145, or in defense of any claim,

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issue or matter therein, such person shall be indemnified against expenses (including attorneys’ fees) actually and reasonably incurred by such person in connection therewith and that such expenses may be paid by the corporation in advance of the final disposition of such action, suit or proceeding upon receipt of an undertaking by or on behalf of such director or officer to repay such amount if it shall ultimately be determined that such person is not entitled to be indemnified by the corporation as authorized in Section 145 of the DGCL; that any indemnification and advancement of expenses provided by, or granted pursuant to, Section 145 shall not be deemed exclusive of any other rights to which the indemnified party may be entitled; that any indemnification and advancement of expenses provided by, or granted pursuant to, Section 145 shall, unless otherwise provided when authorized or ratified, continue as to a person who has ceased to be a director, officer, employee or agent and shall inure to the benefit of such person’s heirs, executors and administrators; and empowers the corporation to purchase and maintain insurance on behalf of any person who is or was a director, officer, employee or agent of the corporation or is or was serving at the request of the corporation as a director, officer, employee or agent of another corporation, partnership, joint venture, trust or other enterprise against any liability asserted against such person and incurred by such person in any such capacity, or arising out of such person’s status as such, whether or not the corporation would have the power to indemnify such person against such liabilities under Section 145.

Section 174 of the DGCL provides, among other things, that a director, who willfully or negligently approves of an unlawful payment of dividends or an unlawful stock purchase or redemption, may be held liable for these actions. A director who was either absent when the unlawful actions were approved or dissented at the time, may avoid liability by causing his or her dissent to these actions to be entered in the books containing the minutes of the meetings of the board of directors at the time the action occurred or immediately after the absent director receives notice of the unlawful acts.

Section 102(b)(7) of the DGCL provides that a certificate of incorporation may contain a provision eliminating or limiting the personal liability of a director to the corporation or its stockholders for monetary damages for breach of fiduciary duty as a director, provided that such provision shall not eliminate or limit the liability of a director (i) for any breach of the director’s duty of loyalty to the corporation or its stockholders, (ii) for acts or omissions not in good faith or which involve intentional misconduct or a knowing violation of law, (iii) under Section 174 of the DGCL, or (iv) for any transaction from which the director derived an improper personal benefit.

Article VII of By-laws of Nationstar Capital Corporation provides that it shall indemnify each person who is or was an officer or director to the fullest extent permitted by Certificate of Incorporation, which in turns provides in Article IV that the Corporation shall, to the fullest extent permitted by DGCL, indemnify any director or officer against any expenses, liabilities or other matter referred to in Section 145 of DGCL.

Article VII of By-laws of Nationstar 2009 Equity Corporation provides that it shall indemnify each person who is or was an officer or director to the fullest extent permitted by Certificate of Incorporation, which in turns provides in Article IV that the Corporation shall, to the fullest extent permitted by DGCL, indemnify any director or officer against any expenses, liabilities or other matter referred to in Section 145 of DGCL.

Both Article VII of Certificate of Incorporation and Article VIII of By-laws of NSM Recovery Services Inc. provide that the Corporation shall, to the fullest extent permitted by Section 145 of DGCL, indemnify any director, officer against expenses (including attorney’s fees), judgments, fines, amounts paid in settlements and/or other matters referred to in or covered by Section 145 of DGCL.

Both Article VII of Certificate of Incorporation and Article VIII of By-laws of NSM Foreclosure Services Inc. provide that the Corporation shall, to the fullest extent permitted by Section 145 of DGCL, indemnify any director, officer against expenses (including attorney’s fees), judgments, fines, amounts paid in settlements and/or other matters referred to in or covered by Section 145 of DGCL.

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(b) Nationstar Mortgage LLC; Centex Land Vista Ridge Lewisville III General Partner, LLC; Harwood Service Company LLC; Homeselect Settlement Solutions, LLC (each a Delaware limited liability company and, collectively referred to herein as the “LLCs”)

The LLCs are each empowered by Section 18-108 of the Delaware Limited Liability Company Act to indemnify and hold harmless any member or manager or other person from and against any and all claims and demands whatsoever.

Section 19 of Third Amended and Restated Limited Liability Company Agreement of Nationstar Mortgage LLC provides that officers and directors shall be entitled, to the fullest extent permitted by law, to indemnification from the Company for any liability, loss, damage or claim arises out of any action or inaction of an officer or director, which indemnification shall only be available, except in cases of fraud, gross negligence, or willful misconduct.

Centex Land Vista Ridge Lewisville III General Partner, LLC’s Certificate of Formation and Limited Liability Company Agreement are silent on indemnification provisions.

Harwood Service Company LLC’s Certificate of Formation and Limited Liability Company Agreement are silent on indemnification provisions.

Homeselect Settlement Solutions, LLC’s Certificate of Formation and Limited Liability Company Agreement are silent on indemnification provisions.

Nationstar Mortgage LLC maintains insurance on behalf of its members, managers and officers, insuring them against any liability asserted against them in their capacities as members, managers and officers or arising out of such status.

(c) Centex Land Vista Ridge Lewisville III, L.P. (a Delaware limited partnership and referred to herein as the “Delaware LP”)

The Delaware LP is empowered by Section 17-108 of the Delaware Revised Uniform Limited Partnership Act, subject to the limitations in the partnership agreement, to indemnify and hold harmless any person against any and all claims and demands.

The Section 5.4 of the Agreement of Limited Partnership of the Delaware LP provides that the Partnership shall indemnify and hold harmless the General Partner, any such Affiliates, and any Specified Agents against losses, damages, expenses (including attorney’s fees), judgments and amounts paid in settlement actually and reasonably incurred by or in connection with such claim, action, suit or processing, except in cases of bad faith, willful misconduct or fraud.

(d) Harwood Insurance Services, LLC (a California Limited Liability Company and referred to herein as the “California LLC”)

Under Section 17153 of the California Limited Liability Company Act, except for a breach of duty, the articles of organization or written operating agreement of a limited liability company may provide for indemnification of any person, including, without limitation, any manager, member, officer, employee or agent of the limited liability company, against judgments, settlements, penalties, fines or expenses of any kind incurred as a result of acting in that capacity. A limited liability company shall have the power to purchase and maintain insurance on behalf of any manager, member, officer, employee or agent of the limited liability company against any liability asserted against on incurred by the person in that capacity or arising out of the person’s status as a manager, member, officer, employee or agent of the limited liability company.

The California LLC’s Articles of Organization and Limited Liability Company Agreement are silent on indemnification provisions.

(e) Harwood Service Company Of Georgia, LLC (a Georgia Limited Liability Company and referred to herein as the “Georgia LLC”)

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Section 14-11-306 of the Georgia Limited Liability Company Act provides that subject to the standards and restrictions, if any, set forth in the article of organization or written operating agreement, a limited liability company may indemnify and hold harmless any member or manager or other person from and against any and all claims and demands whatsoever arising in connection with the limited liability company; provided that a limited liability company shall not have the power to indemnify any member or manager for (i) for his or her intentional misconduct or knowing violation of the law or (ii) for any transaction for which the person received a personal benefit in violation of any provision of a written operating agreement.

The Georgia LLC’s Articles of Organization and Limited Liability Company Agreement are silent on indemnification provisions.

(f) Harwood Service Company of New Jersey, LLC (a New Jersey Limited Liability Company and referred to herein as the “New Jersey LLC”)

Section 42:2B-10 of the New Jersey Limited Liability Company Act provides that subject to such standards and restrictions, if any, as are set forth in a limited liability company’s operating agreement, a limited liability company may, and shall have the power to, indemnify and hold harmless any member or manager or other person from and against any and all claims and demands whatsoever.

The New Jersey LLC’s Articles of Organization and Limited Liability Company Agreement are silent on indemnification provisions.

(g) Nationstar Equity Corporation (a Nevada Corporation and referred to herein as the “Nevada Corporation”)

Chapter 78 of the Nevada Revised Statutes (“NRS”) allows directors and officers to be indemnified against liabilities they may incur while serving in such capacities. Under the applicable statutory provisions, the registrant may indemnify its directors or officers who were or are a party or are threatened to be made a party to any threatened, pending, or completed action, suit, or proceeding, whether civil, criminal, administrative, or investigative, by reason of the fact that they are or were directors or officers of the corporation, or are or were serving at the request of the corporation as directors or officers of another corporation, partnership, joint venture, trust, or other enterprise, against expenses, including attorneys’ fees, judgments, fines, and amounts paid in settlement, actually and reasonably incurred by them in connection with the action, suit, or proceeding, unless it is ultimately determined by a court of competent jurisdiction that they breached their fiduciary duties by intentional misconduct, fraud, or a knowing violation of law or did not act in good faith and in a manner which they reasonably believed to be in or not opposed to the best interests of the registrant, and, with respect to any criminal action or proceeding, had no reasonable cause to believe their conduct was unlawful. In addition, the applicable statutory provisions mandate that the registrant indemnify its directors and officers who have been successful on the merits or otherwise in defense of any action, suit, or proceeding against expenses, including attorneys’ fees, actually and reasonably incurred by them in connection with the defense. The registrant will advance expenses incurred by directors or officers in defending any such action, suit, or proceeding upon receipt of written confirmation from such officers or directors that they have met certain standards of conduct and an undertaking by or on behalf of such officers or directors to repay such advances if it is ultimately determined that they are not entitled to indemnification by the registrant.

Article VI of the By-laws of the Nevada Corporation provides that the Nevada Corporation shall indemnify any director or officer who was or is a party or is threatened to be made a party to any threatened, pending or completed action, suit or proceeding, whether civil, criminal, administrative or investigative against expenses (including attorney’s fees), judgments, fines and amounts paid in settlement actually and reasonably incurred by him or her in connection with the action, suit or proceeding, if he or she acted in good faith and in a manner he or she reasonably believed to be in or not opposed to be the best interests of the Nevada Corporation.

(h) Nationstar Industrial Loan Company (a Tennessee Company and referred to herein as the “Tennessee Corporation”)

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Part 5 of Chapter 18 of the Tennessee Business Corporation Act authorizes a court to award, or a corporation’s board of directors to grant, indemnity to an officer, director, employee or agent of the corporation under certain circumstances and subject to certain limitations.

Sections 48-18-301(d) and 48-18-403(d) of the Tennessee Business Corporation Act provide that a director or officer shall not be liable for any action taken as a director or officer or any failure to take any action if the director or officer performed the duties of his or her office (i) in good faith, (ii) with the care an ordinarily prudent person in a like position would exercise under similar circumstances and (iii) in a manner the director reasonably believes to be in the best interests of the corporation.

Article IV of the By-laws of the Tennessee Corporation provides that the Tennessee Corporation shall indemnify any director or officer who was or is a party or is threatened to be made a party to any threatened, pending or completed action, suit or proceeding, whether civil, criminal, administrative or investigative against expenses (including attorney’s fees), judgments, fines and amounts paid in settlement actually and reasonably incurred by him or her in connection with the action, suit or proceeding, if he or she acted in good faith and in a manner he or she reasonably believed to be in or not opposed to be the best interests of the Tennessee Corporation.

(i) Nationstar Industrial Loan Corporation (a Minnesota Corporation and referred to herein as the “Minnesota Corporation”)

Section 302A.521 of the Minnesota Business Corporation Act (“MNBCA”) provides that a corporation shall indemnify any person made or threatened to be made a party to a proceeding by reason of the former or present official capacity (as defined in Section 302A.521 of the MNBCA) of such person against judgments, penalties, fines, including, without limitation, excise taxes assessed against such person with respect to an employee benefit plan, settlements and reasonable expenses, including attorneys’ fees and disbursements, incurred by such person in connection with the proceeding, if, with respect to the acts or omissions of such person complained of in the proceeding, such person: has not been indemnified therefor by another organization or employee benefit plan; acted in good faith; received no improper personal benefit and Section 302A.255 of the MNBCA (with respect to director conflicts of interest), if applicable, has been satisfied; in the case of a criminal proceeding, had no reasonable cause to believe the conduct was unlawful; and in the case of acts or omissions occurring in such person’s performance in an official capacity, such person must have acted in a manner such person reasonably believed was in the best interests of the corporation or, in certain limited circumstances, not opposed to the best interests of the corporation.

In addition, Section 302A.521, subd. 3 of the MNBCA requires payment by the registrant, upon written request, of reasonable expenses in advance of final disposition in certain instances. A decision as to required indemnification is made by a majority of the disinterested board of directors present at a meeting at which a disinterested quorum is present, or by a designated committee of disinterested directors, by special legal counsel, by the disinterested shareholders, or by a court.

Article IV of the By-laws of the Minnesota Corporation provides that the Minnesota Corporation shall indemnify any director or officer who was or is a party or is threatened to be made a party to any threatened, pending or completed action, suit or proceeding, whether civil, criminal, administrative or investigative against expenses (including attorney’s fees), judgments, fines and amounts paid in settlement actually and reasonably incurred by him or her in connection with the action, suit or proceeding, if he or she acted in good faith and in a manner he or she reasonably believed to be in or not opposed to be the best interests of the Minnesota Corporation.

Item 21.   Exhibits and Financial Statement Schedules.

Exhibit
Number			Description
	3	.1	Certificate of Formation of Nationstar Mortgage LLC.(1)
	3	.2	Operating Agreement of Nationstar Mortgage LLC.(1)

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Exhibit
Number			Description
	3	.3	Certificate of Incorporation of Nationstar Capital Corporation.(1)
	3	.4	By-Laws of Nationstar Capital Corporation.(1)
	3	.5	Certificate of Formation of Centex Land Vista Ridge Lewisville III General Partner, LLC(2)
	3	.6	Limited Liability Company Agreement of Centex Land Vista Ridge Lewisville III General Partner, LLC(2)
	3	.7	Certificate of Limited Partnership of Centex Land Vista Ridge Lewisville III, L.P.(2)
	3	.8	Agreement of Limited Partnership of Centex Land Vista Ridge Lewisville III, L.P.(2)
	3	.9	Certificate of Formation of Harwood Service Company, LLC(2)
	3	.10	Limited Liability Company Agreement of Harwood Service Company, LLC(2)
	3	.11	Limited Liability Company Articles of Organization of Harwood Insurance Services, LLC(2)
	3	.12	Limited Liability Company Agreement of Harwood Insurance Services, LLC(2)
	3	.13	Certificate of Organization of Harwood Service Company of Georgia, LLC(2)
	3	.14	Limited Liability Company Agreement of Harwood Service Company of Georgia, LLC(2)
	3	.15	Certificate of Formation of Harwood Service Company of New Jersey, LLC(2)
	3	.16	Limited Liability Company Agreement of Harwood Service Company of New Jersey, LLC(2)
	3	.17	Certificate of Formation of Homeselect Settlement Solutions, LLC(2)
	3	.18	Limited Liability Company Agreement of Homeselect Settlement Solutions, LLC(2)
	3	.19	Certificate of Incorporation of Nationstar 2009 Equity Corporation(2)
	3	.20	By-Laws of Nationstar 2009 Equity Corporation(2)
	3	.21	Articles of Incorporation of Nationstar Equity Corporation(2)
	3	.22	By-Laws of Nationstar Equity Corporation(2)
	3	.23	Charter of Nationstar Industrial Loan Company(2)
	3	.24	By-Laws of Nationstar Industrial Loan Company(2)
	3	.25	Articles of Incorporation of Nationstar Industrial Loan Corporation(2)
	3	.26	By-Laws of Nationstar Industrial Loan Corporation(2)
	3	.27	Certificate of Incorporation of NSM Recovery Services Inc.(2)
	3	.28	By-Laws of NSM Recovery Services Inc.(2)
	3	.29	Certificate of Incorporation of NSM Foreclosure Services Inc.(2)
	3	.30	By-Laws of NSM Foreclosure Services Inc.(2)
	4	.1	Indenture, dated as of March 26, 2010, among Nationstar Mortgage LLC, Nationstar Capital Corporation, and Wells Fargo Bank, N.A., as trustee, including the form of 10.875% Senior Note due 2015 (the “Indenture”).(1)
	4	.2	Supplemental Indenture dated as of August 31, 2010, among NSM Recovery Services Inc, a subsidiary of Nationstar Mortgage LLC, and Wells Fargo Bank, National Association, as trustee.(1)
	4	.3	Supplemental Indenture, dated as of December 13, 2010, among NSM Foreclosure Services Inc, a subsidiary of Nationstar Mortgage LLC, and Wells Fargo Bank, National Association, as trustee.(1)
	4	.4	Registration Rights Agreement, dated as of March 26, 2010, among Nationstar Mortgage LLC, Nationstar Capital Corporation, Barclays Capital Inc., Banc of America Securities LLC, Deutsche Bank Securities Inc. and RBS Securities Inc.(1)
	5	.1	Opinion of Cleary Gottlieb Steen & Hamilton LLP.(3)
	5	.2	Opinion of Bass, Berry & Sims PLC.(3)
	5	.3	Opinion of Greenberg Traurig LLP.(3)
	10	.1	Amended and Restated Servicer Advance Early Reimbursement Addendum, dated as of August 16, 2010, between Nationstar Mortgage LLC and Fannie Mae.*(1)

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Exhibit
Number			Description
	10	.2	Fifth Amended and Restated Master Repurchase Agreement, dated as of January 27, 2010, between The Royal Bank of Scotland plc, as buyer, and Nationstar Mortgage LLC, as seller.*(1)
	10	.3	Subservicing Agreement, dated as of October 29, 2010, between Fannie Mae and Nationstar Mortgage LLC.*(2)
	10	.4	Strategic Relationship Agreement, dated as of December 16, 2009, between Fannie Mae and Nationstar Mortgage LLC.*(1)
	10	.5	Subservicing Agreement, dated as of February 1, 2011, among MorEquity, Inc., American General Financial Services of Arkansas, Inc. and American General Home Equity, Inc. as owners and as servicers, and Nationstar Mortgage LLC, as subservicer*(3)
	10	.6	Subservicing Agreement (American General Mortgage Loan Trust 2006-1), dated as of February 1, 2011, between MorEquity, Inc., as servicer, and Nationstar Mortgage LLC, as subservicer*(3)
	10	.7	Subservicing Agreement (American General Mortgage Loan Trust 2010-1), dated as of February 1, 2011, between MorEquity, Inc., as servicer, and Nationstar Mortgage LLC, as subservicer*(3)
	10	.8	Employment Agreement, dated as of January 29, 2008, by and between Nationstar Mortgage LLC and Robert L. Appel.(1)
	10	.9	Amendment, dated as of September 17, 2010, to Employment Agreement dated January 29, 2008 by and between Nationstar Mortgage LLC and Robert L. Appel.(1)
	10	.10	Employment Agreement, dated as of February 19, 2009, by and between Nationstar Mortgage LLC and Douglas Krueger.(1)
	10	.11	Employment Agreement, dated as of September 17, 2010, by and between Nationstar Mortgage LLC and Anthony H. Barone.(1)
	10	.12	Employment Agreement, dated as of September 17, 2010, by and between the Company and Jay Bray.(1)
	10	.13	Employment Agreement, dated as of September 17, 2010, by and between Nationstar Mortgage LLC and Amar Patel.(1)
	10	.14	Form of Restricted Series 1 Preferred Unit Award Agreement under FIF HE Holdings LLC Fifth Amended and Restated Limited Liability Company Agreement.(1)
	10	.15	Form of Series 1 Class A Unit Award Agreement under FIF HE Holdings LLC Fifth Amended and Restated Limited Liability Company.(1)
	10	.16	Form of Series 2 Class A Unit Award Agreement under FIF HE Holdings LLC Fifth Amended and Restated Limited Liability Company.(1)
	10	.17	Nationstar Mortgage LLC Annual Incentive Compensation Plan.(1)
	10	.18	Nationstar Mortgage LLC Incentive Program for Mr. Krueger.(1)
	10	.19	Nationstar Mortgage LLC Long-Term Incentive Plan for Mr. Krueger.(1)
	12	.1	Computation of Ratio of Earnings to Fixed Charges.(3)
	21	.1	Subsidiaries of the Registrants.(1)
	23	.1	Consent of Ernst & Young LLP, Independent Registered Public Accounting Firm.(3)
	23	.2	Consent of Cleary Gottlieb Steen & Hamilton LLP (included in Exhibit 5.1).
	23	.3	Consent of Bass, Berry & Sims PLC (included in Exhibit 5.2).
	23	.4	Consent of Greenberg Traurig LLP (included in Exhibit 5.3).
	25	.1	Form T-1 Statement of Eligibility under the Trust Indenture Act of 1939, as amended, of Wells Fargo Bank, N.A., as trustee under the Indenture.(1)

*	Certain portions of this exhibit have been omitted and have been filed separately with the SEC pursuant to a request for confidential treatment under Rule 406 as promulgated under the Securities Act of 1933, as amended.
(1)	Previously filed with Form S-4 on December 22, 2010.

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(2)  Previously filed with Form S-4/A on February 9, 2011.

(3)  Filed herewith.

Item 22.   Undertakings.

(a) The undersigned registrants hereby undertake:

(1) To file, during any period in which offers or sales are being made, a post-effective amendment to this registration statement:

(i) To include any prospectus required by Section 10(a)(3) of the Securities Act of 1933;

(ii) To reflect in the prospectus any facts or events arising after the effective date of this registration statement (or the most recent post-effective amendment thereof) which, individually or in the aggregate, represent a fundamental change in the information set forth in this registration statement. Notwithstanding the foregoing, any increase or decrease in volume of securities offered (if the total dollar value of securities offered would not exceed that which was registered) and any deviation from the low or high end of the estimated maximum offering range may be reflected in the form of prospectus filed with the Commission pursuant to Rule 424(b) if, in the aggregate, the changes in volume and price represent no more than 20% change in the maximum aggregate offering price set forth in the “Calculation of Registration Fee” table in the effective registration statement; and

(iii) To include any material information with respect to the plan of distribution not previously disclosed in the registration statement or any material change to such information in the registration statement;

(2) That, for the purpose of determining any liability under the Securities Act of 1933, each such post-effective amendment shall be deemed to be a new registration statement relating to the securities offered therein, and the offering of such securities at that time shall be deemed to be the initial bona fide offering thereof.

(3) To remove from registration by means of a post-effective amendment any of the securities being registered which remain unsold at the termination of the offering.

(b) The undersigned registrants hereby undertakes that, for purposes of determining any liability under the Securities Act of 1933, each filing of the registrant’s annual report pursuant to Section 13(a) or 15(d) of the Securities Exchange Act of 1934 (and, where applicable, each filing of an employee benefit plan’s annual report pursuant to Section 15(d) of the Securities Exchange Act of 1934) that is incorporated by reference in the registration statement shall be deemed to be a new registration statement relating to the securities offered therein, and the offering of such securities at that time shall be deemed to be the initial bona fide offering thereof.

(c) Insofar as indemnification for liabilities arising under the Securities Act of 1933 may be permitted to directors, officers and controlling persons of each registrant pursuant to the foregoing provisions, or otherwise, each registrant has been advised that in the opinion of the Securities and Exchange Commission such indemnification is against public policy as expressed in the Act and is, therefore, unenforceable. In the event that a claim for indemnification against such liabilities (other than the payment by each registrant of expenses incurred or paid by a director, officer or controlling person of each registrant in the successful defense of any action, suit or proceeding) is asserted by such director, officer or controlling person in connection with the securities being registered, each registrant will, unless in the opinion of its counsel the matter has been settled by controlling precedent, submit to a court of appropriate jurisdiction the question whether such indemnification by it is against public policy as expressed in the Act and will be governed by the final adjudication of such issue.

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(d) The undersigned registrant hereby undertakes to respond to requests for information that is incorporated by reference into the prospectus pursuant to Items 4, 10(b), 11, or 13 of Form S-4, within one business day of receipt of such request, and to send the incorporated documents by first class mail or other equally prompt means. This includes information contained in documents filed subsequent to the effective date of the registration statement through the date of responding to the request.

(e) The undersigned registrant hereby undertakes to supply by means of a post-effective amendment all information concerning a transaction, and the company being acquired involved therein, that was not the subject of and included in the registration statement when it became effective.

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SIGNATURES

Pursuant to the requirements of the Securities Act, each registrant has duly caused this registration statement to be signed on its behalf by the undersigned, thereunto duly authorized, in the City of Lewisville, State of Texas, on March 28, 2011.

NATIONSTAR MORTGAGE LLC

By:  /s/  Ron L. Fountain

Ron L. Fountain

Assistant Secretary

Pursuant to the requirements of the Securities Act, this registration statement has been signed by the following persons in the capacities indicated on March 28, 2011.

/s/  Anthony H. Barone Anthony H. Barone	President, Chief Executive Officer and Manager (Principal Executive Officer)
/s/  Jay Bray Jay Bray	Executive Vice President and Chief Financial Officer (Principal Financial and Accounting Officer)
/s/  Peter Smith Peter Smith	Manager

SIGNATURES

Pursuant to the requirements of the Securities Act, each registrant has duly caused this registration statement to be signed on its behalf by the undersigned, thereunto duly authorized, in the City of Lewisville, State of Texas, on March 28, 2011.

NATIONSTAR CAPITAL CORPORATION

By:  /s/  Ron L. Fountain

Ron L. Fountain

Assistant Secretary

Pursuant to the requirements of the Securities Act, this registration statement has been signed by the following persons in the capacities indicated on March 28, 2011.

/s/  Anthony H. Barone Anthony H. Barone	President, Chief Executive Officer and Director (Principal Executive Officer)
/s/  Jay Bray Jay Bray	Executive Vice President, Chief Financial Officer and Director (Principal Financial and Accounting Officer)

SIGNATURES

Pursuant to the requirements of the Securities Act, each registrant has duly caused this registration statement to be signed on its behalf by the undersigned, thereunto duly authorized, in the City of Lewisville, State of Texas, on March 28, 2011.

CENTEX LAND VISTA RIDGE LEWISVILLE III
     GENERAL PARTNER, LLC

By:  /s/  Ron L. Fountain

Ron L. Fountain

Assistant Secretary

Pursuant to the requirements of the Securities Act, this registration statement has been signed by the following persons in the capacities indicated on March 28, 2011.

/s/  Anthony H. Barone Anthony H. Barone	President and Chief Executive Officer (Principal Executive Officer)
/s/  Jay Bray Jay Bray	Executive Vice President and Chief Financial Officer (Principal Financial and Accounting Officer)

SIGNATURES

Pursuant to the requirements of the Securities Act, each registrant has duly caused this registration statement to be signed on its behalf by the undersigned, thereunto duly authorized, in the City of Lewisville, State of Texas, on March 28, 2011.

CENTEX LAND VISTA RIDGE LEWISVILLE III, L.P.

By:  CENTEX LAND VISTA RIDGE LEWISVILLE III
     GENERAL PARTNER, LLC,

its General Partner

By:  NATIONSTAR MORTGAGE LLC,

its Sole Member

By:  /s/  Ron L. Fountain

Ron L. Fountain

Assistant Secretary

Pursuant to the requirements of the Securities Act, this registration statement has been signed by the following persons in the capacities indicated on March 28, 2011.

/s/  Anthony H. Barone Anthony H. Barone	President and Chief Executive Officer (Principal Executive Officer)
/s/  Jay Bray Jay Bray	Executive Vice President and Chief Financial Officer (Principal Financial and Accounting Officer)

SIGNATURES

Pursuant to the requirements of the Securities Act, each registrant has duly caused this registration statement to be signed on its behalf by the undersigned, thereunto duly authorized, in the City of Lewisville, State of Texas, on March 28, 2011.

HARWOOD SERVICE COMPANY LLC

By:  NATIONSTAR MORTGAGE LLC

its Sole Member

By:  /s/  Ron L. Fountain

Ron L. Fountain

Assistant Secretary

Pursuant to the requirements of the Securities Act, this registration statement has been signed by the following persons in the capacities indicated on March 28, 2011.

/s/  Anthony H. Barone Anthony H. Barone	President and Chief Executive Officer (Principal Executive Officer)
/s/  Jay Bray Jay Bray	Executive Vice President and Chief Financial Officer (Principal Financial and Accounting Officer)

SIGNATURES

Pursuant to the requirements of the Securities Act, each registrant has duly caused this registration statement to be signed on its behalf by the undersigned, thereunto duly authorized, in the City of Lewisville, State of Texas, on March 28, 2011.

HARWOOD INSURANCE SERVICES, LLC

By:  NATIONSTAR MORTGAGE LLC

its Sole Member

By:  /s/  Ron L. Fountain

Ron L. Fountain

Assistant Secretary

Pursuant to the requirements of the Securities Act, this registration statement has been signed by the following persons in the capacities indicated on March 28, 2011.

/s/  Anthony H. BaroneAnthony H. Barone	President and Chief Executive Officer (Principal Executive Officer)
/s/  Jay BrayJay Bray	Executive Vice President and Chief Financial Officer (Principal Financial and Accounting Officer)

SIGNATURES

Pursuant to the requirements of the Securities Act, each registrant has duly caused this registration statement to be signed on its behalf by the undersigned, thereunto duly authorized, in the City of Lewisville, State of Texas, on March 28, 2011.

HARWOOD INSURANCE COMPANY OF
GEORGIA, LLC

By:  NATIONSTAR MORTGAGE LLC

its Sole Member

By:  /s/  Ron L. Fountain

Ron L. Fountain

Assistant Secretary

Pursuant to the requirements of the Securities Act, this registration statement has been signed by the following persons in the capacities indicated on March 28, 2011.

/s/  Anthony H. BaroneAnthony H. Barone	President and Chief Executive Officer (Principal Executive Officer)
/s/  Jay BrayJay Bray	Executive Vice President and Chief Financial Officer (Principal Financial and Accounting Officer)

SIGNATURES

Pursuant to the requirements of the Securities Act, each registrant has duly caused this registration statement to be signed on its behalf by the undersigned, thereunto duly authorized, in the City of Lewisville, State of Texas, on March 28, 2011.

HARWOOD SERVICE COMPANY OF NEW JERSEY, LLC

By:  NATIONSTAR MORTGAGE LLC

its Sole Member

By:  /s/  Ron L. Fountain

Ron L. Fountain

Assistant Secretary

Pursuant to the requirements of the Securities Act, this registration statement has been signed by the following persons in the capacities indicated on March 28, 2011.

/s/  Anthony H. BaroneAnthony H. Barone	President and Chief Executive Officer (Principal Executive Officer)
/s/  Jay BrayJay Bray	Executive Vice President and Chief Financial Officer (Principal Financial and Accounting Officer)

SIGNATURES

Pursuant to the requirements of the Securities Act, each registrant has duly caused this registration statement to be signed on its behalf by the undersigned, thereunto duly authorized, in the City of Lewisville, State of Texas, on March 28, 2011.

HOMESELECT SETTLEMENT SOLUTIONS, LLC

By:  NATIONSTAR MORTGAGE LLC

its Sole Member

By:  /s/  Ron L. Fountain

Ron L. Fountain

Assistant Secretary

Pursuant to the requirements of the Securities Act, this registration statement has been signed by the following persons in the capacities indicated on March 28, 2011.

/s/  Anthony H. BaroneAnthony H. Barone	President and Chief Executive Officer (Principal Executive Officer)
/s/  Jay BrayJay Bray	Executive Vice President and Chief Financial Officer (Principal Financial and Accounting Officer)

SIGNATURES

Pursuant to the requirements of the Securities Act, each registrant has duly caused this registration statement to be signed on its behalf by the undersigned, thereunto duly authorized, in the City of Lewisville, State of Texas, on March 28, 2011.

NATIONSTAR EQUITY CORPORATION

By:  /s/  Ron L. Fountain

Ron L. Fountain

Assistant Secretary

Pursuant to the requirements of the Securities Act, this registration statement has been signed by the following persons in the capacities indicated on March 28, 2011.

/s/  Anthony H. BaroneAnthony H. Barone	President, Chief Executive Officer and Director (Principal Executive Officer)
/s/  Jay BrayJay Bray	Executive Vice President, Chief Financial Officer and Director (Principal Financial and Accounting Officer)

SIGNATURES

Pursuant to the requirements of the Securities Act, each registrant has duly caused this registration statement to be signed on its behalf by the undersigned, thereunto duly authorized, in the City of Lewisville, State of Texas, on March 28, 2011.

NATIONSTAR INDUSTRIAL LOAN COMPANY

By:  /s/  Ron L. Fountain

Ron L. Fountain

Assistant Secretary

Pursuant to the requirements of the Securities Act, this registration statement has been signed by the following persons in the capacities indicated on March 28, 2011.

/s/  Anthony H. BaroneAnthony H. Barone	President, Chief Executive Officer and Director (Principal Executive Officer)
/s/  Jay BrayJay Bray	Executive Vice President, Chief Financial Officer and Director (Principal Financial and Accounting Officer)

SIGNATURES

Pursuant to the requirements of the Securities Act, each registrant has duly caused this registration statement to be signed on its behalf by the undersigned, thereunto duly authorized, in the City of Lewisville, State of Texas, on March 28, 2011.

NATIONSTAR INDUSTRIAL LOAN CORPORATION

By:  /s/  Ron L. Fountain

Ron L. Fountain

Assistant Secretary

Pursuant to the requirements of the Securities Act, this registration statement has been signed by the following persons in the capacities indicated on March 28, 2011.

/s/  Anthony H. BaroneAnthony H. Barone	President, Chief Executive Officer and Director (Principal Executive Officer)
/s/  Jay BrayJay Bray	Executive Vice President, Chief Financial Officer and Director (Principal Financial and Accounting Officer)

SIGNATURES

Pursuant to the requirements of the Securities Act, each registrant has duly caused this registration statement to be signed on its behalf by the undersigned, thereunto duly authorized, in the City of Lewisville, State of Texas, on March 28, 2011.

NATIONSTAR 2009 EQUITY CORPORATION

By:  /s/  Ron L. Fountain

Ron L. Fountain

Assistant Secretary

Pursuant to the requirements of the Securities Act, this registration statement has been signed by the following persons in the capacities indicated on March 28, 2011.

/s/  Anthony H. BaroneAnthony H. Barone	President, Chief Executive Officer and Director (Principal Executive Officer)
/s/  Jay BrayJay Bray	Executive Vice President, Chief Financial Officer and Director (Principal Financial and Accounting Officer)

SIGNATURES

Pursuant to the requirements of the Securities Act, each registrant has duly caused this registration statement to be signed on its behalf by the undersigned, thereunto duly authorized, in the City of Lewisville, State of Texas, on March 28, 2011.

NSM RECOVERY SERVICES INC.

By:  /s/  Ron L. Fountain

Ron L. Fountain

Assistant Secretary

Pursuant to the requirements of the Securities Act, this registration statement has been signed by the following persons in the capacities indicated on March 28, 2011.

/s/  Anthony H. BaroneAnthony H. Barone	President, Chief Executive Officer and Director (Principal Executive Officer)
/s/  Jay BrayJay Bray	Executive Vice President, Chief Financial Officer and Director (Principal Financial and Accounting Officer)

SIGNATURES

Pursuant to the requirements of the Securities Act, each registrant has duly caused this registration statement to be signed on its behalf by the undersigned, thereunto duly authorized, in the City of Lewisville, State of Texas, on March 28, 2011.

NSM FORECLOSURE SERVICES INC.

By:  /s/  Ron L. Fountain

Ron L. Fountain

Assistant Secretary

Pursuant to the requirements of the Securities Act, this registration statement has been signed by the following persons in the capacities indicated on March 28, 2011.

/s/  Anthony H. BaroneAnthony H. Barone	President, Chief Executive Officer and Director (Principal Executive Officer)
/s/  Jay BrayJay Bray	Executive Vice President, Chief Financial Officer and Director (Principal Financial and Accounting Officer)

EXHIBIT INDEX

Exhibit
Number			Description
	3	.1	Certificate of Formation of Nationstar Mortgage LLC.(1)
	3	.2	Operating Agreement of Nationstar Mortgage LLC.(1)
	3	.3	Certificate of Incorporation of Nationstar Capital Corporation.(1)
	3	.4	By-Laws of Nationstar Capital Corporation.(1)
	3	.5	Certificate of Formation of Centex Land Vista Ridge Lewisville III General Partner, LLC(2)
	3	.6	Limited Liability Company Agreement of Centex Land Vista Ridge Lewisville III General Partner, LLC(2)
	3	.7	Certificate of Limited Partnership of Centex Land Vista Ridge Lewisville III, L.P.(2)
	3	.8	Agreement of Limited Partnership of Centex Land Vista Ridge Lewisville III, L.P.(2)
	3	.9	Certificate of Formation of Harwood Service Company, LLC(2)
	3	.10	Limited Liability Company Agreement of Harwood Service Company, LLC(2)
	3	.11	Limited Liability Company Articles of Organization of Harwood Insurance Services, LLC(2)
	3	.12	Limited Liability Company Agreement of Harwood Insurance Services, LLC(2)
	3	.13	Certificate of Organization of Harwood Service Company of Georgia, LLC(2)
	3	.14	Limited Liability Company Agreement of Harwood Service Company of Georgia, LLC(2)
	3	.15	Certificate of Formation of Harwood Service Company of New Jersey, LLC(2)
	3	.16	Limited Liability Company Agreement of Harwood Service Company of New Jersey, LLC(2)
	3	.17	Certificate of Formation of Homeselect Settlement Solutions, LLC(2)
	3	.18	Limited Liability Company Agreement of Homeselect Settlement Solutions, LLC(2)
	3	.19	Certificate of Incorporation of Nationstar 2009 Equity Corporation(2)
	3	.20	By-Laws of Nationstar 2009 Equity Corporation(2)
	3	.21	Articles of Incorporation of Nationstar Equity Corporation(2)
	3	.22	By-Laws of Nationstar Equity Corporation(2)
	3	.23	Charter of Nationstar Industrial Loan Company(2)
	3	.24	By-Laws of Nationstar Industrial Loan Company(2)
	3	.25	Articles of Incorporation of Nationstar Industrial Loan Corporation(2)
	3	.26	By-Laws of CHEC Industrial Loan Corporation(2)
	3	.27	Certificate of Incorporation of NSM Recovery Services Inc.(2)
	3	.28	By-Laws of NSM Recovery Services Inc.(2)
	3	.29	Certificate of Incorporation of NSM Foreclosure Services Inc.(2)
	3	.30	By-Laws of NSM Foreclosure Services Inc.(2)
	4	.1	Indenture, dated as of March 26, 2010, among Nationstar Mortgage LLC, Nationstar Capital Corporation, and Wells Fargo Bank, N.A., as trustee, including the form of 10.875% Senior Note due 2015 (the “Indenture”).(1)
	4	.2	Supplemental Indenture dated as of August 31, 2010, among NSM Recovery Services Inc, a subsidiary of Nationstar Mortgage LLC, and Wells Fargo Bank, National Association, as trustee.(1)
	4	.3	Supplemental Indenture, dated as of December 13, 2010, among NSM Foreclosure Services Inc, a subsidiary of Nationstar Mortgage LLC, and Wells Fargo Bank, National Association, as trustee.(1)
	4	.4	Registration Rights Agreement, dated as of March 26, 2010, among Nationstar Mortgage LLC, Nationstar Capital Corporation, Barclays Capital Inc., Banc of America Securities LLC, Deutsche Bank Securities Inc. and RBS Securities Inc.(1)
	5	.1	Opinion of Cleary Gottlieb Steen & Hamilton LLP.(3)
	5	.2	Opinion of Bass, Berry & Sims PLC.(3)
	5	.3	Opinion of Greenberg Traurig LLP.(3)

Exhibit
Number			Description
	10	.1	Amended and Restated Servicer Advance Early Reimbursement Addendum, dated as of August 16, 2010, between Nationstar Mortgage LLC and Fannie Mae.*(1)
	10	.2	Fifth Amended and Restated Master Repurchase Agreement, dated as of January 27, 2010, between The Royal Bank of Scotland plc, as buyer, and Nationstar Mortgage LLC, as seller.*(1)
	10	.3	Subservicing Agreement, dated as of October 29, 2010, between Fannie Mae and Nationstar Mortgage LLC.*(2)
	10	.4	Strategic Relationship Agreement, dated as of December 16, 2009, between Fannie Mae and Nationstar Mortgage LLC.*(1)
	10	.5	Subservicing Agreement, dated as of February 1, 2011, among MorEquity, Inc., American General Financial Services of Arkansas, Inc. and American General Home Equity, Inc. as owners and as servicers, and Nationstar Mortgage LLC, as subservicer*(3)
	10	.6	Subservicing Agreement (American General Mortgage Loan Trust 2006-1), dated as of February 1, 2011, between MorEquity, Inc., as servicer, and Nationstar Mortgage LLC, as subservicer*(3)
	10	.7	Subservicing Agreement (American General Mortgage Loan Trust 2010-1), dated as of February 1, 2011, between MorEquity, Inc., as servicer, and Nationstar Mortgage LLC, as subservicer*(3)
	10	.8	Employment Agreement, dated as of January 29, 2008, by and between Nationstar Mortgage LLC and Robert L. Appel.(1)
	10	.9	Amendment, dated as of September 17, 2010, to Employment Agreement dated January 29, 2008 by and between Nationstar Mortgage LLC and Robert L. Appel.(1)
	10	.10	Employment Agreement, dated as of February 19, 2009, by and between Nationstar Mortgage LLC and Douglas Krueger.(1)
	10	.11	Employment Agreement, dated as of September 17, 2010, by and between Nationstar Mortgage LLC and Anthony H. Barone.(1)
	10	.12	Employment Agreement, dated as of September 17, 2010, by and between the Company and Jay Bray.(1)
	10	.13	Employment Agreement, dated as of September 17, 2010, by and between Nationstar Mortgage LLC and Amar Patel.(1)
	10	.14	Form of Restricted Series 1 Preferred Unit Award Agreement under FIF HE Holdings LLC Fifth Amended and Restated Limited Liability Company Agreement.(1)
	10	.15	Form of Series 1 Class A Unit Award Agreement under FIF HE Holdings LLC Fifth Amended and Restated Limited Liability Company.(1)
	10	.16	Form of Series 2 Class A Unit Award Agreement under FIF HE Holdings LLC Fifth Amended and Restated Limited Liability Company.(1)
	10	.17	Nationstar Mortgage LLC Annual Incentive Compensation Plan.(1)
	10	.18	Nationstar Mortgage LLC Incentive Program for Mr. Krueger.(1)
	10	.19	Nationstar Mortgage LLC Long-Term Incentive Plan for Mr. Krueger.(1)
	12	.1	Computation of Ratio of Earnings to Fixed Charges.(3)
	21	.1	Subsidiaries of the Registrants.(1)
	23	.1	Consent of Ernst & Young LLP, Independent Registered Public Accounting Firm.(3)
	23	.2	Consent of Cleary Gottlieb Steen & Hamilton LLP (included in Exhibit 5.1).
	23	.3	Consent of Bass, Berry & Sims PLC (included in Exhibit 5.2).
	23	.4	Consent of Greenberg Traurig LLP (included in Exhibit 5.3).
	25	.1	Form T-1 Statement of Eligibility under the Trust Indenture Act of 1939, as amended, of Wells Fargo Bank, National Association, as trustee under the Indenture.(1)

*	Certain portions of this exhibit have been omitted and have been filed separately with the SEC pursuant to a request for confidential treatment under Rule 406 as promulgated under the Securities Act of 1933, as amended.
(1)	Previously filed with Form S-4 on December 22, 2010.

(2)  Previously filed with Form S-4/A on February 9, 2011.

(3)  Filed herewith.

EX-5.1

Exhibit 5.1

[CGSH Letterhead]

                                        March 28, 2011

Nationstar Mortgage LLC
Nationstar Capital Corporation
350 Highland Drive
Lewisville, Texas 75067

           Re: Amendment No. 2 to the Registration Statement on Form S-4

Ladies and Gentlemen:

          We have acted as special counsel to Nationstar Mortgage LLC, a Delaware limited liability company (the “Company”), Nationstar Capital Corporation, a Delaware corporation (the “Co-Issuer” and, together with the Company, the “Issuers”), and each of the guarantors listed in the Registration Statement (the “Guarantors” and, together with the Issuers, the “Registrants”), in connection with Amendment No. 2 to the Registration Statement on Form S-4 (the “Registration Statement”) filed with the Securities and Exchange Commission (the “Commission”) pursuant to the Securities Act of 1933, as amended (the “Securities Act”), in respect of up to $250,000,000 aggregate principal amount of the Issuers’ 10.875% Senior Notes due 2015 (the “Exchange Notes”) to be offered in exchange for any and all of the Issuers’ outstanding 10.875% Senior Notes due 2015 originally issued on March 26, 2010 (the “Initial Notes”). The Exchange Notes will be issued under an indenture dated as of March 26, 2010, as amended, (the “Indenture”), among the Company, the Co-Issuer, the Guarantors and Wells Fargo Bank, National Association, as trustee (the “Trustee”). The Indenture includes the guarantees of the Exchange Notes by the Guarantors (the “Guarantees”).

          In arriving at the opinions expressed below, we have reviewed the following documents:

Nationstar Mortgage LLC, et al., pg. 2

          (a) an executed copy of the Indenture;

          (b) the Registration Statement; and

          (c) the form of the Exchange Notes included in the Indenture.

          In addition, we have reviewed the originals or copies certified or otherwise identified to our satisfaction of all such corporate or other records of the Issuers, Centex Land Vista Ridge Lewisville III General Partner, LLC, Centex Land Vista Ridge Lewisville III, L.P., Harwood Service Company LLC, Homeselect Settlement Solutions, LLC, Nationstar 2009 Equity Corporation, NSM Recovery Services Inc., and NSM Foreclosure Services Inc., (together, the “Delaware Companies”) and such other documents, and other certificates of public officials, officers and representatives of the Delaware Companies and such other persons, and we have made such investigations of law, as we have deemed appropriate as a basis for the opinions expressed below.

          In rendering the opinions expressed below, we have assumed the authenticity of all documents submitted to us as originals and the conformity to the originals of all documents submitted to us as copies. In addition, we have assumed and have not verified (i) the accuracy as to factual matters of each document we have reviewed and (ii) that the Exchange Notes will conform to the form thereof that we have reviewed and will be duly authenticated in accordance with the terms of the Indenture.

          Based on the foregoing, and subject to the further assumptions and qualifications set forth below, it is our opinion that when the Exchange Notes, in the form included in the Indenture, have been duly executed, authenticated and delivered in accordance with the Indenture, and duly issued and delivered by the Issuers in exchange for an equal principal amount of Initial Notes, (a) the Exchange Notes will be valid, binding and enforceable obligations of each of the Issuers, entitled to the benefits of the Indenture and (b) the Guarantees set forth in the Indenture will be valid, binding and enforceable obligations of each of the Guarantors, entitled to the benefits of the Indenture.

          Insofar as the foregoing opinions relate to the validity, binding effect or enforceability of any agreement or obligation of any Registrant, such opinions are subject to applicable bankruptcy, insolvency, fraudulent conveyance and similar laws affecting creditors’ rights generally and to general principles of equity.

          In giving the foregoing opinions relating to the validity, binding effect or enforceability of any agreement or obligation of the Guarantor incorporated in the State of Tennessee, we have relied without independent investigation, as to matters relating to the law of State of Tennessee, on the opinion of Bass, Berry & Sims, PLC, a copy of which is filed as Exhibit 5.2 to the Registration Statement, and our opinions are subject to all of the limitations and qualifications contained therein.

          In giving the foregoing opinions relating to the validity, binding effect or enforceability of any agreement or obligation of any of the Guarantors incorporated or organized in the states of California, Georgia, Minnesota, Nevada, or New Jersey, we have relied without independent investigation, as to matters relating to the law of such state as applicable, on the

Nationstar Mortgage LLC, et al., pg. 3

opinion of Greenberg Traurig LLP, a copy of which is filed as Exhibit 5.3 to the Registration Statement, and our opinions are subject to all of the limitations and qualifications contained therein.

     The foregoing opinions are limited to the federal law of the United States of America, the law of the State of New York and the General Corporation Law of the State of Delaware, the Limited Liability Company Act of the State of Delaware and the Revised Uniform Limited Partnership Act of the State of Delaware, including applicable provisions of the Delaware Constitution and reported judicial decisions interpreting such laws.

     We hereby consent to the filing of this opinion as Exhibit 5.1 to the Registration Statement and to the reference to this firm in the Registration Statement and the related prospectus under the caption “Legal Matters.” In giving such consent, we do not thereby admit that we are experts with respect to any part of the Registration Statement, including this Exhibit, within the meaning of the term “expert” as used in the Securities Act or the rules and regulations of the Commission issued thereunder. The opinions expressed herein are rendered on and as of the date hereof, and we assume no obligation to advise you or any other person, or to make any investigations, as to any legal developments or factual matters arising subsequent to the date hereof that might affect the opinion expressed herein.

Very truly yours,
CLEARY GOTTLIEB STEEN & HAMILTON LLP
By	/s/ Duane McLaughlin
	Duane McLaughlin, a Partner

EX-5.2

Exhibit 5.2

The Tower at Peabody Place
100 Peabody Place, Suite 900
Memphis, TN 38103-3672
(901) 543-5900

March 28, 2011

Nationstar Mortgage LLC
Nationstar Capital Corporation

c/o Nationstar Mortgage LLC
350 Highland Drive
Lewisville, Texas 75067

Ladies and Gentlemen:

     We have acted as special Tennessee counsel to Nationstar Industrial Loan Company, a Tennessee corporation (the “Tennessee Guarantor”), in connection with the Registration Statement on Form S-4 (the “Registration Statement”), filed with the Securities and Exchange Commission (the “Commission”) pursuant to the Securities Act of 1933, as amended (the “Securities Act”), in respect of up to $250,000,000 aggregate principal amount of the 10.875% Senior Notes due 2015 (the “Exchange Notes”) issued by Nationstar Mortgage LLC, a Delaware limited liability company, and Nationstar Capital Corporation, a Delaware corporation (together, the “Issuers”) to be offered in exchange for any and all of the Issuers’ outstanding 10.875% Senior Notes due 2015 originally issued on March 26, 2010 (the “Initial Notes”). The Exchange Notes will be issued under an indenture dated as of March 26, 2010 (the “Indenture”), among the Issuers, the guarantors listed in the Registration Statement (the “Guarantors”), including the Tennessee Guarantor, and Wells Fargo Bank, National Association, as trustee (the “Trustee”). The Indenture includes the guarantees of the Exchange Notes by the Guarantors (the “Guarantees”).

     In arriving at the opinions expressed below, we have reviewed the following documents (the “Corporate Documents”):

(a)	a certified copy of the Charter of the Tennessee Guarantor filed July 17, 1998 at filing number 3537-0435 with the Secretary of State of the State of Tennessee, as amended by the Articles of Amendment to the Charter filed August 25, 2006 at filing number 5848-2606 with said office;
(b)	a certified copy of the Bylaws of the Tennessee Guarantor; and
(c)	a certified copy of the resolutions of the Tennessee Guarantor’s board of directors approving the Indenture and the transactions contemplated thereby.

In addition, we have reviewed the originals or copies certified or otherwise identified to our satisfaction of all such corporate records of the Tennessee Guarantor and such other documents,

Nationstar Mortgage LLC, et al., p. 2

and we have made such investigations of law, as we have deemed appropriate as a basis for the opinions expressed below. As to factual matters, we have assumed the correctness of and relied upon statements and other representations of the officer(s) of the Tennessee Guarantor set forth in the certification of the aforementioned documents.

     In rendering the opinion expressed below, we have assumed the authenticity of all documents submitted to us as originals, the conformity to the originals of all documents submitted to us as copies and that all signatures on any executed documents submitted to us are genuine.

     Based on the foregoing, and subject to the further assumptions and qualifications set forth below, it is our opinion:

     1. The Tennessee Guarantor is a validly existing corporation under the laws of the State of Tennessee.

     2. Based solely on our review of the Corporate Documents, the execution and delivery of the Indenture have been duly authorized by all necessary corporate action on the part of the Tennessee Guarantor.

     Insofar as the foregoing opinions relate to the valid existence of the Tennessee Guarantor, they are based solely on a certificate of existence for the Tennessee Guarantor dated February 9, 2011 received from the Secretary of State of the State of Tennessee.

     The foregoing opinions are limited to the law of the State of Tennessee.

     Our opinion is rendered as of the date hereof and we assume no obligation to advise you of changes in law or fact (or the effect thereof on the opinions expressed herein) that hereafter may come to our attention.

     The opinions rendered herein are solely for the benefit of the Issuers and their successors and assigns in connection with the transactions that are the subject of the Indenture, and this opinion letter may not be delivered to or relied upon by any other person nor quoted or reproduced in any report or other document without our prior written consent in each case; provided, however, that (i) we hereby consent to the filing of this opinion as Exhibit 5.2 to the Registration Statement and to the reference to this firm in the Registration Statement and related prospectus under the caption “Legal Matters” (in giving such consent, we do not thereby admit that we are experts with respect to any part of the Registration Statement, including this Exhibit, within the meaning of the term “expert” as used in the Securities Act or the rules and regulations of the Commission thereunder) and (ii) a copy of this opinion letter may be furnished to your regulators, accountants, attorneys and other professional advisors for the purpose of confirming its existence, and this opinion letter may be disclosed in connection with any legal or regulatory proceeding relating to the subject matter hereof.

Very truly yours,

BASS, BERRY & SIMS PLC

EX-5.3

Exhibit 5.3

[Letterhead of GREENBERG TRAURIG, LLP]

March 28, 2011

Nationstar Mortgage LLC
Nationstar Capital Corporation
c/o Nationstar Mortgage LLC
350 Highland Drive
Lewisville, Texas 75067

     Re: Guarantors of Exchange Notes for California, Georgia, New Jersey, Nevada and Minnesota

Ladies and Gentlemen:

     In connection with the Registration Statement on Form S-4 (the “Registration Statement”) filed with the Securities and Exchange Commission pursuant to the Securities Act of 1933, as amended, in respect of up to $250,000,000 aggregate principal amount of the 10.875% Senior Notes due 2015 (the “Exchange Notes”) issued by Nationstar Mortgage LLC, a Delaware limited liability company, and Nationstar Capital Corporation, a Delaware corporation (together, the “Issuers”) to be offered in exchange for any and all of the Issuers’ outstanding 10.875% Senior Notes due 2015 originally issued on March 26, 2010 (the “Initial Notes”), we have acted as counsel to each of the following guarantors of the Exchange Notes: (A) Harwood Insurance Services, LLC, a California limited liability company (the “California Guarantor”); (B) Harwood Service Company of Georgia, LLC, a Georgia limited liability company (the “Georgia Guarantor”): (C) Harwood Service Company of New Jersey, LLC, a New Jersey limited liability company (the “New Jersey Guarantor”); (D) Nationstar Equity Corporation, a Nevada corporation (the “Nevada Guarantor”); and (E) Nationstar Industrial Loan Corporation, a Minnesota corporation (the “Minnesota Guarantor”). The Exchange Notes are fully and unconditionally guaranteed by each of the guarantors listed in the Registration Statement (the “Guarantors”), including each of the California Guarantor, the Georgia Guarantor, the New Jersey Guarantor, the Nevada Guarantor and the Minnesota Guarantor (collectively, the “Opinion Guarantors”). The Exchange Notes will be issued under an indenture dated as of March 26, 2010 (the “Indenture”), among the Issuers, the Guarantors and Wells Fargo Bank, National Association, as trustee. The Indenture includes the guarantees of the Exchange Notes by each of the Opinion Guarantors (the “Guarantee”).

I. DOCUMENT REVIEW

     (A) In arriving at the opinions expressed below for the California Guarantor, we have reviewed the following documents:

(i)	a certified copy of the Articles of Organization of the California Guarantor;
(ii)	a certificate from the Secretary of State of the State of California, dated February 9, 2011, as to the active status of good standing of the California

Nationstar Mortgage LLC
Re: Guarantor of Exchange Notes for California, Georgia, New Jersey, Nevada and Minnesota
March 28, 2011
Page 2

Guarantor in the State of California (the “California Existence Certificate”); and

(ii)

an Officer’s Certificate of the California Guarantor certifying as to (i) its Limited Liability Company Agreement, as amended by the First Amendment to Limited Liability Agreement, (ii) the Unanimous Written Consent of the California Guarantor’s sole member containing resolutions approving the Indenture and the transactions contemplated thereby, and (iii) certain other factual matters set forth therein.

     (B) In arriving at the opinions expressed below for the Georgia Guarantor, we have reviewed the following documents:

(i)	a certified copy of the Articles of Organization of the Georgia Guarantor;
(ii)	a certificate from the Secretary of State of the State of Georgia, dated February 9, 2011, as to the valid existence of the Georgia Guarantor in the State of Georgia (the “Georgia Existence Certificate”); and
(iii)	an Officer’s Certificate of the Georgia Guarantor certifying as to (i) its Limited Liability Company Agreement, as amended by the First Amendment to Limited Liability Company Agreement, (ii) the resolutions of the Georgia Guarantor’s sole member approving the Indenture and the transactions contemplated thereby, and (iii) certain other factual matters set forth therein.

     (C) In arriving at the opinions expressed below for the New Jersey Guarantor, we have reviewed the following documents:

(i)	a certified copy of the Certificate of Formation dated May 2, 2002 of the New Jersey Guarantor;
(ii)	a certificate from the State Treasurer of the State of New Jersey, dated February 10, 2011, as to the active status and good standing of the New Jersey Guarantor in the State of New Jersey (the “New Jersey Existence Certificate”); and
(iii)	an Officer’s Certificate of the New Jersey Guarantor certifying as to (i) its Limited Liability Company Agreement, as amended by the First Amendment to Limited Liability Company Agreement, (ii) the resolutions of the New Jersey Guarantor’s sole member approving the Indenture and the transactions contemplated thereby, and (iii) certain other factual matters set forth therein.

Nationstar Mortgage LLC
Re: Guarantor of Exchange Notes for California, Georgia, New Jersey, Nevada and Minnesota
March 28, 2011
Page 3

     (D) In arriving at the opinions expressed below for the Nevada Guarantor, we have reviewed the following documents:

(i)	a certified copy of the Articles of Incorporation and all amendments thereto of the Nevada Guarantor;
(ii)	a certificate from the Secretary of State of the State of Nevada, dated February 9, 2011, as to the valid existence and good standing of the Nevada Guarantor in the State of Nevada (the “Nevada Existence Certificate”); and
(iii)	an Officer’s Certificate of the Nevada Guarantor certifying as to (i) its Articles of Incorporation, (ii) its By-Laws, (iii) the resolutions of the Nevada Guarantor’s Board of Directors approving the Indenture and the transactions contemplated thereby, (iv) the unanimous written consent of its sole shareholder and (v) certain other factual matters set forth therein.

     (E) In arriving at the opinions expressed below for the Minnesota Guarantor, we have reviewed the following documents:

(i) a certified copy of the Articles of Incorporation of the Minnesota Guarantor;

(ii) a certificate from the Secretary of State of the State of Minnesota, dated February 9, 2011, as to the valid existence of the Minnesota Guarantor in the State of Minnesota (the “Minnesota Existence Certificate”); and

(iii) an Officer’s Certificate of the Minnesota Guarantor certifying as to (i) its Articles of Incorporation, (ii) its By-Laws, as amended by the First Amendment to By-Laws, (iii) the resolutions of the Minnesota Guarantor’s Board of Directors approving the Indenture and the transactions contemplated thereby, (iv) the unanimous written consent of its sole shareholder and (v) certain other factual matters set forth therein.

For purposes of this opinion with respect to each of the Opinion Guarantors, we have not reviewed any documents other than the respective documents listed in clauses (i) through (iii) in each of the subsections (A) through (E) above for the applicable Opinion Guarantor (the “Reviewed Documents”). We have assumed that the provisions in any other documents relating to the transactions covered by this opinion, which we have not reviewed, are not inconsistent with or do not contradict the Reviewed Documents or the opinions stated herein for the respective Opinion Guarantor. We have conducted no independent factual investigation of our own, but rather have relied solely upon the foregoing Reviewed Documents, the statements and information set forth therein and the additional matters recited or assumed herein for the respective Opinion Guarantor, all of which we have assumed to be true, complete and accurate in all material respects.

Nationstar Mortgage LLC
Re: Guarantor of Exchange Notes for California, Georgia, New Jersey, Nevada and Minnesota
March 28, 2011
Page 4

II. OPINIONS

     A. With respect to California Guarantor, based on the foregoing, and subject to the further assumptions and qualifications set forth below, it is our opinion:

     1. The California Guarantor is a duly formed limited liability company and is existing in good standing under the laws of the State of California.

     2. The execution and delivery of the Indenture have been duly authorized by all necessary limited liability company action on the part of the California Guarantor.

     B. With respect to Georgia Guarantor, based on the foregoing, and subject to the further assumptions and qualifications set forth below, it is our opinion:

     1. The Georgia Guarantor is a validly existing limited liability company under the laws of the State of Georgia.

     2. The execution and delivery of the Indenture have been duly authorized by all necessary action of the Georgia Guarantor.

     C. With respect to New Jersey Guarantor, based on the foregoing, and subject to the further assumptions and qualifications set forth below, it is our opinion:

     1. The New Jersey Guarantor is a validly existing limited liability company under the laws of the State of New Jersey.

     2. The execution and delivery of the Indenture have been duly authorized by all necessary limited liability company action of the New Jersey Guarantor.

     D. With respect to Nevada Guarantor, based on the foregoing, and subject to the further assumptions and qualifications set forth below, it is our opinion:

     1. The Nevada Guarantor is a validly existing corporation under the laws of the State of Nevada.

     2. The execution and delivery of the Indenture have been duly authorized by all necessary action of the Nevada Guarantor.

     E. With respect to the Minnesota Guarantor, based on the foregoing, and subject to the further assumptions and qualifications set forth below, it is our opinion:

     1. The Minnesota Guarantor is a validly existing corporation under the laws of the State of Minnesota.

     2. The execution and delivery of the Indenture have been duly authorized by all necessary action of the Minnesota Guarantor.

Nationstar Mortgage LLC
Re: Guarantor of Exchange Notes for California, Georgia, New Jersey, Nevada and Minnesota
March 28, 2011
Page 5

III. ASSUMPTIONS AND QUALIFICATIONS

     The opinions expressed in Section II above are subject to the following assumptions and qualifications:

     (a) We have assumed that each document submitted to us for review is accurate and complete, each such document that is an original is authentic, each such document that is a copy conforms to an authentic original and all signatures on each document are genuine.

     (b) We have assumed that the Indenture (i) constitutes the legal, valid, and binding agreement of each party thereto enforceable against each such party thereto, (ii) has been duly and validly authorized by each party thereto (other than as specifically set forth in Section II above with respect to each of the Opinion Guarantors), and (iii) has been duly and validly executed and delivered by each party thereto.

     (c) As to any facts material to the opinions expressed herein, we have made no independent investigation of such facts and have relied upon the respective Reviewed Documents, including the certificates of governmental officials and the officer’s certification of each of the Opinion Guarantors.

     (d) In rendering our opinion in paragraph A.1 of Section II above, we have relied, with your permission, solely upon the California Existence Certificate. In rendering our opinion in paragraph B.1 of Section II above, we have relied, with your permission, solely upon the Georgia Existence Certificate. In rendering our opinion in paragraph C.1 of Section II above, we have relied, with your permission, solely upon the New Jersey Existence Certificate. In rendering our opinion in paragraph D.1 of Section II above, we have relied, with your permission, solely upon the Nevada Existence Certificate. In rendering our opinion in paragraph E.1 of Section II above, we have relied, with your permission, solely upon the Minnesota Existence Certificate.

     (e) We have assumed that the execution and delivery of the Indenture, and the performance of the obligations thereunder of the parties thereto, do not and will not contravene, violate or constitute a default under (i) the formation and organizational documents of any such party, (ii) any lease, indenture, instrument or other agreement to which any party to any such document or its property is subject, (iii) any law, rule or regulation to which any party to any such document is subject, (iv) any judicial or administrative order or decree of any governmental authority or (v) the law of any jurisdiction where such obligations are to be incurred or performed.

     (f) The opinions set forth in Section II above are limited to the Indenture and we express no opinion, whether by implication or otherwise, as to any other document or agreement, including any other document or agreement referred to or incorporated therein by reference.

     (g) We express no opinion herein with respect to the enforceability of (i) the Indenture, the Exchange Notes, or any provision of the Indenture or the Exchange Notes,

Nationstar Mortgage LLC
Re: Guarantor of Exchange Notes for California, Georgia, New Jersey, Nevada and Minnesota
March 28, 2011
Page 6

including without limitation, the Guarantees, or (ii) the Initial Notes or any provision thereof.

     (h) With respect to our opinions in Section II.A above, we express no opinion as to the laws of any jurisdiction other than the substantive laws of the State of California which in our experience are normally applicable to the California Guarantor. With respect to our opinions in Section II.B above, we express no opinion as to the laws of any jurisdiction other than the substantive laws of the State of Georgia which in our experience are normally applicable to the Georgia Guarantor. With respect to our opinions in Section II.C above, we express no opinion as to the laws of any jurisdiction other than the substantive laws of the State of New Jersey which in our experience are normally applicable to the New Jersey Guarantor. With respect to our opinions in Section II.D above, we express no opinion as to the laws of any jurisdiction other than the substantive laws of the State of Nevada which in our experience are normally applicable to the Nevada Guarantor. With respect to our opinions in Section II.E above, we express no opinion as to the laws of any jurisdiction other than the substantive laws of the State of Minnesota which in our experience are normally applicable to the Minnesota Guarantor.

     (i) The opinions herein expressed are limited to the matters expressly set forth in this opinion letter, and no opinion is implied or may be inferred beyond the matters expressly so stated.

     (j) There has not been any mutual mistake of fact or misunderstanding, fraud, duress or undue influence in connection with the Indenture, Exchange Notes, the Guarantees or Initial Notes. The conduct of the parties to the Indenture, Exchange Notes, the Guarantees and the Initial Notes have complied with any requirements of good faith, fair dealing and conscionability.

Nationstar Mortgage LLC
Re: Guarantor of Exchange Notes for California, Georgia, New Jersey, Nevada and Minnesota
March 28, 2011
Page 7

IV. CONCLUSION

     We hereby consent to the filing of this opinion as Exhibit 5.3 to the Registration Statement and to the reference to this firm in the Registration Statement and related prospectus under the caption “Legal Matters.” In giving such consent, we do not thereby admit that we are experts with respect to any part of the Registration Statement, including this Exhibit, within the meaning of the term “expert” as used in the Securities Act of 1933, as amended, or the rules and regulations of the Securities and Exchange Commission thereunder.

     This letter (i) has been furnished to you at your request, (ii) is rendered in connection with the transactions contemplated by the Indenture and may not be relied upon by any person other than the addressees hereof without our prior written consent, and (iii) is rendered as of the date hereof, and we undertake no, and hereby disclaim any, obligation to advise you of any changes in or any new developments which might affect any matters or opinions set forth herein.

Respectfully submitted,

GREENBERG TRAURIG, LLP

EX-10.5

Exhibit 10.5

EXECUTED

(CONFIDENTIAL TREATMENT OF CERTAIN DESIGNATED PORTIONS OF THIS AGREEMENT HAVE BEEN REQUESTED BY NATIONSTAR MORTGAGE LLC, SUCH CONFIDENTIAL PORTIONS HAVE BEEN OMITTED, AS INDICATED BY AN [*] IN THE TEXT, AND SUBMITTED TO THE SECURITIES AND EXCHANGE COMMISSION).

SUBSERVICING AGREEMENT

Effective as of February 1, 2011

Among

MorEquity, Inc., American General Financial Services of Arkansas, Inc. and
American General Home Equity, Inc.
(and any other entity that becomes a party hereto)
as Owner(s)

MorEquity, Inc., American General Financial Services of Arkansas, Inc. and
American General Home Equity, Inc.
as Servicer(s)

and

Nationstar Mortgage LLC
as Subservicer

RESIDENTIAL MORTGAGE LOANS

Table of Contents

	Page
Article I Definitions	1
Section 1.1 Defined Terms	1
Article II Engagement of Subservicer	13
Section 2.1 Servicing; Possession of Servicing Files	13
Section 2.2 Books and Records	15
Section 2.3 Custodial Agreement	15
Section 2.4 Limitation on Scope of Servicing Obligation	16
Section 2.5 Loss Mitigation and Recovery Actions	16
Section 2.6 HMP Program	16
Section 2.7 Oversight Program	16
Article III Representations, Warranties and Covenants	17
Section 3.1 Servicer Representations, Warranties and Covenants	17
Section 3.2 Owner Representations, Warranties and Covenants	18
Section 3.3 Owner’s Representations, Warranties and Covenants for Mortgage Loans	19
Article IV Servicing of the Mortgage Loans	20
Section 4.1 Standard and Scope of Service	20
Section 4.2 Authority of the Subservicer; Delinquencies	20
Section 4.3 Collection of Mortgage Loan Payments	23
Section 4.4 Notification of Adjustments	23
Section 4.5 Duties the Subservicer May Delegate	23
Section 4.6 Servicing Files	24
Section 4.7 Imaged Records	25
Section 4.8 Enforcement of Due-On-Sale Clause; Assumption	26
Section 4.9 Insurance	26
Section 4.10 Insurance Notices	28
Section 4.11 Tax and Flood Contracts	28
Section 4.12 Tax and Insurance Accounts; Tax Service	28
Section 4.13 Superior Liens	30
Section 4.14 Bankruptcies	30
Section 4.15 Foreclosure Procedures	31
Section 4.16 Reinstatement of Mortgage Loans	32
Section 4.17 Servicing REO Property	32
Section 4.18 Satisfactions	34
Section 4.19 Servicing Advances and Pass-Through Expenses	34
Section 4.20 Mortgage Loan Transfers	35
Section 4.21 Prepayment Penalties	37
Section 4.22 Restoration and Repair	38
Section 4.23 Subservicer Bond, Errors and Omissions Insurance	39
Section 4.24 Disaster Recovery	39
Section 4.25 High Cost Loans	40
Article V Compensation to the Subservicer	40
Section 5.1 Compensation to the Subservicer	40

	Page
Article VI Accounting	40
Section 6.1 General	40
Section 6.2 Account Maintenance	41
Section 6.3 P & I Custodial Account; Remittance	42
Section 6.4 T & I Escrow Accounts	43
Section 6.5 Interest on Tax and Insurance Reserves	44
Section 6.6 Access to Records	44
Article VII Reports to the Owner	45
Section 7.1 Reports to the Owner	45
Section 7.2 Annual Independent Certified Public Accountants’ Servicing Report	46
Section 7.3 Reports of Foreclosures and Abandonment of Mortgaged Property	47
Section 7.4 Real Estate Owned Reports	48
Section 7.5 Liquidation Reports	48
Section 7.6 Compliance with Gramm-Leach-Bliley Act of 1999	48
Section 7.7 Reporting	48
Article VIII Servicer and Indemnification	48
Section 8.1 Merger or Consolidation of the Subservicer	48
Section 8.2 Limitation on Resignation	49
Section 8.3 Subservicer Limitation on Liability and Indemnification	49
Section 8.4 Owner Limitation on Liability and Indemnification	50
Section 8.5 Notice of Litigation	51
Article IX Termination	51
Section 9.1 Events of Default	51
Section 9.2 Termination of Agreement	53
Article X Miscellaneous Provisions	54
Section 10.1 Protection of Confidential and Proprietary Information.	54
Section 10.2 Notices	55
Section 10.3 Severability Clause	58
Section 10.4 Performance Audits	59
Section 10.5 Counterparts	59
Section 10.6 Place of Delivery and Governing Law	59
Section 10.7 Waiver of Jury Trial	59
Section 10.8 Further Agreements	59
Section 10.9 Successors and Assigns; Assignment of Servicing Agreement	59
Section 10.10 Amendments, Etc.	60
Section 10.11 Exhibits	60
Section 10.12 General Interpretive Principles	60
Section 10.13 Reproduction of Documents	61

Exhibit A	Mortgage Loan Data Field Request
Exhibit B	Servicing Transfer Instructions
Exhibit C	Limited Power of Attorney
Exhibit D	Pricing Schedule
Exhibit E	[RESERVED]
Exhibit F	Tax and Flood List of Preferred Vendors
Exhibit G-1	Monthly Reports and Files
Exhibit G-2	Daily Reports and Files
Exhibit H	Nationstar Security Assessment
Exhibit I	Approval Matrix

SERVICING AGREEMENT

     This Agreement is dated as of February 1, 2011 (the “Agreement”), by and among Nationstar Mortgage LLC, as subservicer of residential mortgage loans (the “Subservicer”), MorEquity, Inc., American General Financial Services of Arkansas, Inc. and American General Home Equity, Inc., as owners of certain residential mortgage loans (individually and collectively, as the case may be, referred to herein as the “Owner”) and MorEquity, Inc., American General Financial Services of Arkansas, Inc. and American General Home Equity, Inc., as servicers of residential mortgage loans (individually and collectively, as the case may be, referred to herein as the “Servicer”).

Recitals

     Whereas, the Subservicer subservices residential mortgage loans and the Owner is, or will be, acquiring and owning residential mortgage loans;

     Whereas, the Servicer currently services residential mortgage loans for the Owner;

     Whereas, the Subservicer will act as subservicer of the residential mortgage loans owned by the Owner and currently serviced by the Servicer;

     Whereas, the Owner, the Servicer and the Subservicer desire to contract to provide for the subservicing and administration of certain mortgage loans owned by the Owner and currently serviced by the Servicer;

     Whereas, based upon the terms and conditions set forth in this Agreement, the Owner and Servicer are willing to transfer and the Subservicer is willing to accept the subservicing and administration of the Mortgage Loans (as defined below).

     Now, therefore, in consideration of the mutual agreements set forth herein, and for other good and reasonable consideration, the receipt and adequacy of which are hereby acknowledged, the Owner, the Servicer and the Subservicer hereby agree as follows:

ARTICLE I
DEFINITIONS

     Section 1.1 Defined Terms.

     For purposes of this Agreement, the following capitalized terms, unless the context requires otherwise, shall have the respective meanings set forth below:

     Accepted Servicing Practices means, with respect to any Mortgage Loan, those mortgage servicing practices that comply with the terms of the Mortgage Loans, the Legal Requirements and the terms and conditions of this Agreement (including those requirements on Exhibit I of the Agreement) and consistent with the same standard of care, skill, prudence, and diligence with which the Subservicer services similar mortgage loans within its servicing portfolio, giving due consideration to (i) the customary and usual standards of practice of prudent institutional mortgage loan servicers that are utilized with respect to mortgage loans comparable to the

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Mortgage Loans and (ii) the objective of maximizing the timely recovery of principal and interest on the Mortgage Loans in the best interests of the Owner.

     Accounts mean the P & I Custodial Accounts and the T & I Escrow Accounts.

     Affiliate means, with respect to any Person, any other Person that, directly or indirectly, through one or more intermediaries, controls, is controlled by or is under common control with, such Person. As used in the immediately preceding sentence, the term “control” (including the terms “controlled by” and “under common control with”) means the direct or indirect possession of ordinary voting power to elect a majority of the board of directors (or comparable body) of a Person.

     Agreement means this Servicing Agreement and all written amendments hereof and supplements hereto.

     Ancillary Income means an amount equivalent to all income derived from the Mortgage Loans in accordance with Accepted Servicing Practices (other than Subservicing Fees and prepayment penalties) from Late Fees, phone pay fees, fees received with respect to checks or bank drafts returned by the related bank for non-sufficient funds, investment income on the Accounts, assumption fees and modification fees.

     Appraisal Report means a report setting forth the fair market value of a Mortgaged Property as determined by an appraiser and in compliance with applicable law. For appraisals conducted prior to the Servicing Transfer Date, such Appraisal Reports shall be in the form received by the Subservicer, and for appraisals conducted subsequent to the Servicing Transfer Date, such Appraisal Reports shall be in a form indicating that the related appraisals have been conducted in accordance with the Uniform Standards of Professional Appraisal Practice, provided in each case by an independent appraiser.

     Approval Matrix means the delegated authority to initiate loss mitigation or recovery actions within the agreed parameters set forth in Section 2.5 and in Exhibit I.

     Assignment of Mortgage means an assignment of the Mortgage, notice of transfer or equivalent instrument in recordable form, sufficient under the laws of the jurisdiction wherein the related Mortgaged Property is located to reflect the transfer of the Mortgage to the party indicated therein.

     Broker Price Opinion (“BPO”) means an opinion of the fair market value of a Mortgaged Property given by a licensed real estate broker, which generally includes at least three comparable sales and three comparable listings.

     Business Day means any day other than (i) a Saturday or Sunday, or (ii) a day on which banking and savings and loan institutions in the states of Texas, Indiana or New York are authorized or obligated by law to be closed.

     Code means the Internal Revenue Code of 1986, as amended.

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     Condemnation Proceeds means all awards of settlements in respect of a Mortgaged Property, whether permanent or temporary, partial or entire, by exercise of the power of eminent domain or condemnation, to the extent the award of settlement is not required to be released to a Mortgagor in accordance with the terms of the related Mortgage Loan Documents.

     Custodial Agreement means the custodial agreement between the Owner and any Custodian (as the same may be amended, restated, supplemented or otherwise modified from time to time), which provides for the custody of the original Mortgage Note and recorded Mortgage, and which the Owner provides notice in writing to the Subservicer.

     Custodian means, with respect to a Mortgage Loan, the third party custodian or any successor custodian under any Custodial Agreement, as designated by the Owner pursuant to a written notice to the Subservicer.

     De-Boarding Fee means a fee paid by Owner to Subservicer when a Mortgage Loan transfers from Subservicer to another servicer and in accordance with Exhibit D.

     Defaulted Loan means a Mortgage Loan that is sixty (60) or more days Delinquent, or such other Mortgage Loan as may be agreed upon between Owner and Subservicer.

     Delinquency or Delinquent means, with respect to a Mortgage Loan, when all or part of the related Monthly Payment is not paid on the related Due Date, irrespective of any grace period, in each case subject to customary and reasonable industry practices for de minimis shortfall from the scheduled monthly payment received from the Mortgagor.

     Determination Date means, with respect to each Remittance Date, the last Business Day prior to that Remittance Date.

     Due Date means the day of the month on which the Mortgagor’s Monthly Payment is due as stated in the related Mortgage Note. The Due Date for all Mortgage Loans will be specified in the related Mortgage Note.

     Eligible Investments means any one or more of the obligations and securities listed below which investment provides for a date of maturity not later than the Remittance Date in each month.

     A. direct obligations of, or obligations fully guaranteed by, (i) the United States of America, or (ii) any agency or instrumentality of the United States of America, the obligations of which are backed by the full faith and credit of the United States of America;

     B. federal funds, demand and time deposits in, certificates of deposits of, or bankers’ acceptances issued by, any depository institution or trust company incorporated or organized under the laws of the United States of America or any state thereof and subject to supervision and examination by federal and/or state banking authorities, so long as at the time of such investment or contractual commitment providing for such investment the commercial paper or other short-term debt obligations of such depository institution or trust company (or, in the case of a

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depository institution or trust company which is a subsidiary of a holding company, the commercial paper or other short-term debt obligations of such holding company) are rated “P-1” by Moody’s Investors Service, Inc. and “A-1” by Standard & Poor’s Ratings Services, and the long-term debt obligations of such depository institution or trust company (or, in the case of a depository institution or trust company which is a subsidiary of a holding company, the long-term debt obligations of such holding company) are rated at least “Aa2” by Moody’s Investors Service, Inc. and “AA” by Standard & Poor’s Ratings Services; and

     C. any other demand, money market or time deposit account or obligation, or interest-bearing or other security or investment, acceptable to the Owner.

     Notwithstanding the foregoing, Eligible Investments shall not include “stripped securities” or any investments which contractually may return less than the unpaid principal balance therefore.

     Escrow means all funds collected by the Subservicer and to be held in one or more T & I Escrow Accounts to cover expenses of the Mortgagor required to be paid under the Mortgage to third parties, including, without limitation, (i) taxes, special assessments, water, sewer and other governmental impositions or charges that are or may become liens on the Mortgaged Property prior to that of the Mortgage Loan, (ii) ground rents, and (iii) Hazard Insurance, Flood Insurance, and Private Mortgage Insurance and other insurance premiums.

     Escrow Payments means with respect to any Mortgage Loan amounts constituting ground rents, taxes, assessments, water rates, mortgage insurance premiums, fire and hazard insurance premiums and all other payments required to be escrowed by the Mortgagor with the mortgagee pursuant to the Mortgage or any other Mortgage Loan document.

     Event of Default means any event set forth in Section 9.1 hereof.

     Fannie Mae means the government sponsored entity organized or known as the Federal National Mortgage Association or any successor thereto.

     Fannie Mae Guidelines means the guidelines contained in the Fannie Mae Servicing Guide pertaining to one-to-four-family, first or junior lien, conventional single family mortgage loans, and all supplements, amendments or additions thereto, but only with respect to the practices set forth therein that are applicable to actions undertaken in connection with the delinquency, foreclosure, REO disposition, remedies for defaulted loans and property insurance procedures and claims.

     FDIC means the Federal Deposit Insurance Corporation.

     FHA means the Federal Housing Administration of the United States Department of Housing and Urban Development, or any successor thereto.

     First Lien Mortgage Loan means a Mortgage Loan secured by a first priority lien Mortgage on the related Mortgage Property.

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     Flood Insurance or Flood Insurance Policy means an insurance policy insuring against loss or damage from flood hazards not typically covered within the scope of standard extended hazard coverage, together with all riders and endorsements thereto.

     Freddie Mac means the government sponsored entity organized or known as the Federal Home Loan Mortgage Corporation or any successor thereto.

     Freddie Mac Guidelines means the guidelines contained in the Freddie Mac Single-Family Seller/Servicer Guide and all supplements, amendments, or additions thereto, but only with respect to the practices set forth therein that are applicable to actions undertaken in connection with the delinquency, foreclosure, REO disposition, remedies for defaulted loans and property insurance procedures and claims.

     Hazard Insurance or Hazard Insurance Policy means a fire casualty extended coverage insurance policy insuring against loss or damage from fire hazard, wind, liability and other risks covered within the scope of standard extended hazard coverage, together with all riders and endorsements thereto.

     HELOC means a Mortgage Loan that is a Home Equity Line of Credit.

     High Cost Loan means any Mortgage Loan, as specifically identified on the Mortgage Loan Schedule, classified at the time of its origination as (a) a “high cost” loan under HOEPA, or (b) a “high cost,” “threshold,” “covered” (provided however the “covered” classification does not apply to loans originated subject to the New Jersey Home Ownership Act of 2002 as a “covered home loan” which are not also high cost loans), “predatory” or similar loan under any other applicable state, federal or local law (or a similarly classified loan using different terminology under a law imposing heightened regulatory scrutiny or additional legal liability for residential mortgage loans having high interest rates, points and/or fees.

     HOEPA means the Home Ownership and Equity Protection Act of 1994.

     HMP Owner Payments means payments from the U.S. Treasury to an investor, as outlined under the heading “Lender/Investor Compensation” in the guidelines established under the HMP Program.

     HMP Program means the Home Affordable Modification Program as issued by the United States Treasury Department.

     HMP Servicer Payments means payments from the U.S. Treasury to a servicer, as outlined under the heading “Servicer Compensation” in the guidelines established under the HMP Program, including but not limited to any and all incentive payments due under the guidelines on and after the Transfer Date.

     Insurance Policy means any insurance policy issued for a Mortgage Loan, including any related Private Mortgage Insurance, Hazard Insurance, Flood Insurance, and Title Insurance, including all riders and endorsements thereto in effect, including any replacement policy or policies for any such Insurance Policies.

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     Insurance Proceeds means proceeds received by the Subservicer from an Insurance Policy to the extent such proceeds are not applied to the restoration of the related Mortgaged Property or released to the related Mortgagor in accordance with the Subservicer’s normal servicing procedures.

     Insurer means an insurance company that provides an Insurance Policy.

     Late Fee means, as described in the Mortgage Note, any fee paid by or due from a Mortgagor as an additional payment in respect of Mortgagor’s making payment later than the Due Date thereof, after application of any applicable grace period.

     Legal Requirements means, with respect to the context in which this defined term is used herein, all applicable federal, state or local laws (including without limitation any Predatory Lending Law and anti-money laundering law) and any other applicable requirements of any government or any agency or instrumentality thereof, which involve or relate to the origination and servicing of a Mortgage Loan, the actions or interests of the lender or mortgagee of a Mortgage Loan, the management (including ownership, servicing, and disposition) of a Mortgaged Property or REO Property, and the performance of the servicing obligations by the Subservicer hereunder.

     Lender-Paid Mortgage Insurance means lender-paid mortgage insurance.

     LIBOR means, as of any date of determination, the rate per annum equal to the one-month LIBOR rate published by Bloomberg for such date or, if such rate is not available, the rate appearing at page 3750 of the Telerate Screen as one-month LIBOR for such date.

     Limited Power of Attorney means the power of attorney or other documentation executed by the Owner which enables the Subservicer to carry out certain of its Servicing Duties under this Agreement, the form which is attached hereto as Exhibit C.

     Liquidation means either (a) with respect to a Defaulted Loan, the date on which the Subservicer reasonably determines that a de minimis amount of proceeds are likely to be recovered from such Mortgage Loan in respect of the related costs to obtain such recovery, or (b) with respect to any Mortgage Loan (including a Defaulted Loan not covered in clause (a) above), the date on which an action occurs that results in the release in full of the lien of the related Mortgage on the Mortgaged Property, whether through Short Payoff, foreclosure, charge-off, condemnation, Paid-In-Full or otherwise.

     Liquidation Proceeds means funds received in connection with a Liquidation of a Mortgage Loan.

     MERS^® means the proprietary system of recording transfers of mortgages electronically, which was created and is maintained by Mortgage Electronic Registration Systems, Inc., a corporation organized and existing under the laws of the State of Delaware.

     Monthly Payment means the scheduled monthly payment of principal and interest and required Escrow Payment, if applicable, under the terms of a Mortgage Loan.

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     Mortgage means the mortgage, deed of trust, credit line agreement, promissory note or other instrument securing a Mortgage Note, which creates a first priority or junior lien on an estate in fee simple in real property securing the Mortgage Note (or a first priority or junior lien on (i) in the case of a cooperative, the related shares of stock in the cooperative securing the Mortgage Note and (ii) in the case of a ground rent, the leasehold interest securing the Mortgage Note).

     Mortgage Interest Rate means the per annum rate of interest provided in a Mortgage Note.

     Mortgage Loan means an individual mortgage loan which is the subject of this Agreement as a result of the Owner’s identification of such Mortgage Loan and the delegation of the servicing thereof to the Subservicer pursuant to Section 2.1 hereof and which mortgage loan is included on the Mortgage Loan Schedule, and includes without limitation the Mortgage Loan Documents, the Monthly Payments, Principal Prepayments, Liquidation Proceeds, Condemnation Proceeds, Insurance Proceeds, REO Disposition Proceeds, Ancillary Income and all other rights, benefits, proceeds and obligations arising from or in connection with such Mortgage Loan. As applicable, “Mortgage Loan” shall be deemed to refer to the related REO Property or unsecured debt.

     Mortgage Loan Documents means all documents relating to a Mortgage Loan held by the Owner, any Custodian, any Owner Designee and the Subservicer or its designee.

     Mortgage Loan Pool means each group of Mortgage Loans identified on a Mortgage Loan Schedule and made subject to this Agreement from time to time.

     Mortgage Loan Schedule means a schedule of the Mortgage Loans prepared by the Servicer to be delivered by the Servicer as set forth in Section 2.1 (a) of this Agreement.

     Mortgage Note means the note or other instrument executed by a Mortgagor, and secured by a Mortgage, that evidences the indebtedness of a Mortgagor.

     Mortgaged Property means the real property and improvements thereon securing repayment of the debt evidenced by a Mortgage Note (or (i) in the case of a cooperative, the related shares of stock in the cooperative securing repayment of the debt evidenced by a Mortgage Note and (ii) in the case of a ground rent, the leasehold interest and improvements on the related real property securing repayment of the debt evidenced by a Mortgage Note).

     Mortgagor means any Person obligated to pay on a Mortgage Note, excluding any Private Mortgage Insurers, but including any guarantors.

     Negative Environmental Condition means, with respect to any Mortgaged Property, a violation of any standards under applicable statutes, ordinances, rules, regulations, orders or decisions relating to pollution, protection of human health or the environment (including, without limitation, ambient air, surface water, ground water, land surface or subsurface strata and natural resources), including without limitation, applicable statutes, ordinances, rules, regulations, orders or decisions relating to emissions, discharges, releases or threatened releases of chemicals, pollutants, contaminants, wastes, toxic substances, petroleum and petroleum products, asbestos

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and asbestos-containing materials, polychlorinated biphenyls and lead and lead-containing materials, or otherwise relating to the manufacture, processing, distribution, use, treatment, storage, disposal, transport or handling of such items.

     Non-recoverable Servicing Advance means any Servicing Advance previously made or proposed to be made in respect of a Mortgage Loan or REO Property that, in the reasonable business judgment of the Subservicer, will not, or, in the case of a proposed Servicing Advance, would not be, ultimately recoverable from related late payments, Insurance Proceeds, Primary Insurance Proceeds, Condemnation Proceeds or Liquidation Proceeds on such Mortgage Loan or REO Property as provided herein.

     NPV Tool means the Fannie Mae approved Net Present Value calculator utilized pursuant to the HMP Program for determining whether foreclosure, a deed in lieu, short sale or a loan modification (or other loss mitigation treatment) results in the optimal economic outcome.

     Owner means the parties designated as Owners on the first page hereof or their successors in interest or assignees or any successor to the Owners under this Agreement.

     Owner Designee means a Person designated by the Owner pursuant to a written notice delivered to the Subservicer that identifies the full legal name and address of such Person and the purpose for which such Person has been designated to act or serve on behalf of the Owner.

     P & I Custodial Account means the separate account or accounts created and maintained pursuant to Article VI hereof.

     Paid-In-Full means with respect to a Mortgage Loan, the amount required to satisfy a Mortgage Loan in full, which amount includes the unpaid principal balance, interest due on account and, to the extent permitted by the Legal Requirements, any other funds to be collected at the time of payoff from the Mortgagor pursuant to the terms of such Mortgage Loan, such as recording fees, service fees, attorney fees, escrow advances, prepayment penalties and other costs as applicable.

     Pass-Through Expense means all customary and reasonable costs and expenses incurred by the Subservicer, which pursuant to customary industry standards are due and payable to a Person other than the Subservicer, which are not reimbursable to the Subservicer from the Mortgagor or through the netting of proceeds from the related Mortgage Loan or Mortgaged Property, and which are in the nature of an expenditure that relates to establishing, maintaining or curing the right, title or interests of the mortgagee or lender of the Mortgage Loan; provided that such costs and expenses shall not include any allocation of overhead costs of the Subservicer. If not specifically listed in Exhibit I, such Pass-Through Expenses shall include, but are not limited to, each of the following items:

1.	The reasonable actual cost of research, recovery and locating any documents missing from the Mortgage Loan Documents.
2.	Payments for reasonable actual costs, fees and expenses incurred in perfecting, filing or recording documents evidencing the assignment, foreclosure, sale or mortgaging of any Mortgaged Property.

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3.	Reasonable actual expenses incurred to resolve or cure a dispute or issue involving any failure of the Mortgage Loan to comply with any Legal Requirements or customary industry standards that is attributable to the Owner, originator or any Person (other than the Subservicer).
4.	Expenses or costs incurred in connection with any proceeding, investigation, audit, request or other inquiry by any governmental regulatory agency or other instrumentality involving the compliance of any Mortgage Loans with the Legal Requirements relating to the origination or servicing prior to the Servicing Transfer Date of such Mortgage Loans.
5.	Prior Servicer Expenses — for the prior servicers’ failure to fund or offset the funding of the following; non-funded positive escrow, unapplied balances, non-documented corporate advances, monthly payments not forwarded to the Subservicer, and positive Lender-Paid Mortgage Insurance collected or advanced balances.
6.	Tax Penalties and Interest Expenses — incurred as a result of a prior servicer not disbursing property taxes in a timely manner as defined in the Servicing Transfer Procedures.
7.	Regulatory fines and or penalties associated with the Owner’s or Owner Designee’s or Custodian’s failure to provide required documents in order to complete the timely satisfaction or release of the mortgage.
8.	Set-up, transfer, and release fees for MERS® Mortgage Loans.
9.	Payments for the cost of transfer and/or purchase of services, including such services for property taxes and flood insurance information.

     Pass-Through Transfer means the sale or transfer of some or all of the Mortgage Loans by the Owner to a trust to be formed as part of a publicly issued or privately placed mortgage-backed securities transaction.

     Person means any individual, corporation, partnership, limited liability company, joint venture, association, joint-stock company, trust, unincorporated organization, government or any agency or political subdivision thereof.

     Predatory Lending Law means any Federal, state or local law relating to any predatory, High Cost Loan or abusive lending practices or transactions, which involve or govern single family mortgage loans, including without limitation any such law that provides for the assessment of liability against the purchaser or assignee of the mortgage loan for violations of such law.

     Pricing Schedule means the schedule attached hereto and incorporated herein by reference as Exhibit D, which sets forth certain pricing and compensation rates and amounts accruing and due to the Subservicer hereunder.

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     Principal Prepayment means any payment or other recovery of principal on a Mortgage Loan, which is received in advance of its scheduled Due Date, and which is not accompanied by an amount of interest representing scheduled interest due on any date or dates in any month or months subsequent to the month of prepayment.

     Private Mortgage Insurance or Private Mortgage Insurance Policy means insurance obtained from a Private Mortgage Insurer that insures the holder of the Mortgage Note against all or a portion of any loss incurred from a Mortgagor default under the Mortgage Note or the Mortgage, including all endorsements or riders thereto.

     Private Mortgage Insurer means, with respect to any Mortgage Loan, the entity that has provided Private Mortgage Insurance with respect to such Mortgage Loan.

     Proprietary Information has the meaning set forth in Section 11.1 hereof.

     Qualified Depository has the meaning set forth in Section 6.2 hereof.

     Released Servicing Date means, with respect to a Mortgage Loan, the date on which the servicing of such Mortgage Loan is released from this Agreement and which the servicing functions for such Mortgage Loan are transferred by the Subservicer to another Person.

     Remittance Date means each Business Day of each month.

     Reporting Date means the applicable date for reports and files as set forth on Exhibit G-1 and Exhibit G-2.

     REO Disposition means the final sale or other disposition by the Subservicer of any REO Property.

     REO Disposition Proceeds means all amounts received with respect to an REO Disposition.

     REO Property means a Mortgaged Property acquired by the Subservicer on behalf of the Owner or its designee through foreclosure or by deed in lieu of foreclosure.

     Servicer means MorEquity, Inc., American General Financial Services of Arkansas, Inc. and American General Home Equity, Inc., or their successor in interest or assigns or any successor to the Servicer under this Agreement, as permitted pursuant to this Agreement.

     Servicing Advances means all customary and reasonable costs and expenses incurred by the Subservicer which pursuant to customary industry standards are due and payable to a Person other than the Subservicer (including advances that, in the reasonable determination of the Subservicer, are not Non-recoverable Servicing Advances when made, but thereafter become Non-recoverable Servicing Advances) which are reimbursable to the Subservicer from the Mortgagor or through the netting of proceeds from the related Mortgage Loan or Mortgaged Property, which are advanced for the benefit of or on behalf of the Mortgagor, to protect interests of the mortgagee or lender in the Mortgage Loan (exclusive of any Pass-Through Expenses) or to pursue remedies against or recoveries from a Mortgage Loan, and which, in each case, such

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advances are made by the Subservicer in accordance with Section 4.19 and while performing its servicing obligations under this Agreement; provided that such costs and expenses shall not include any allocation of overhead costs of the Subservicer or expenses which are generally incurred by the Subservicer in servicing mortgage loans of a type similar to the Mortgage Loans. Such Servicing Advances shall include, but are not limited to (except as provided in Exhibit I), by way of example the following (provided, however, Servicing Advances shall not include T & I Advances):

     A. the reasonable cost of the preservation, restoration and protection of the Mortgaged Property;

     B. the reasonable cost of any enforcement or judicial proceedings, including foreclosures;

     C. the reasonable cost of the management and liquidation of the REO Property;

     D. the reasonable cost of obtaining Valuations;

     E. payments for real estate taxes on any Mortgaged Property;

     F. payments to purchase or maintain any senior liens or other interests in a Mortgaged Property being sold in a foreclosure proceeding;

     G. reasonable legal expenses paid in connection with collection of a Mortgage Loan, or incurred and paid in connection with the pursuit of a claim with respect to a Mortgage Loan;

     H. payments to obligors or tenants in connection with obtaining title to or possession of any Mortgaged Property pursuant to a deed-in-lieu of foreclosure, unlawful detainer or eviction action;

     I. payments for hazard insurance coverage (including lender-placed insurance) and Private Mortgage Insurance expenses covering any Mortgaged Property;

     J. payments for title insurance, survey, environmental evaluations, real property appraisals or broker price opinions of any Mortgaged Property;

     K. payments for homeowner’s association dues, utility expenses or other preservation costs with respect to any Mortgaged Property;

     L. payments for advertising costs, real estate commissions and other closing, escrow and title insurance costs and expenses incurred in the sale of any Mortgaged Property or REO Property; and

     M. Lender-Paid Mortgage Insurance.

     Subservicing Fees shall have the meaning set forth in Section 5.1 hereof.

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     Servicing File means the applicable documents identified in Section 4.6 pertaining to a particular Mortgage Loan, and the computer files, data disks, books, records, data tapes, notes and additional documents generated in the course of servicing the Mortgage Loan, in paper or electronic form.

     Servicing Transfer Date means, with respect to a Mortgage Loan, the date on which the Owner or its designee transfers the servicing of such Mortgage Loan to the Subservicer.

     Servicing Transfer Procedures means the procedures for effecting servicing transfers to the Subservicer hereunder as set forth on Exhibit B attached hereto.

     Short Payoff means the amount received under an arrangement entered into with a Mortgagor whereby the Subservicer or Owner, as applicable, allows the Mortgagor (i) to pay off the Mortgage Loan for less than the outstanding balance owed by the Mortgagor on the Mortgage Loan in complete satisfaction of the Mortgagor’s obligation under the Mortgage Loan, or (ii) to sell the Mortgaged Property to a third party at less than the outstanding balance owed by the Mortgagor on the Mortgage Loan.

     Stated UPB means, with respect to each Mortgage Loan, for the month in which servicing of such Mortgage Loan is delegated to the Subservicer, the unpaid principal balance of such Mortgage Loan as of the Servicing Transfer Date, and for each subsequent month, the unpaid principal balance of the Mortgage Loan as of the Determination Date.

     Subservicer means Nationstar Mortgage LLC, or its successor in interest or assigns or any successor to the Subservicer under this Agreement, as permitted pursuant to this Agreement.

     Subservicing Officer means any officer of the Subservicer involved in, or responsible for, the administration and servicing of Mortgage Loans, whose name and specimen signature appear on a list of servicing officers furnished by the Subservicer to the Owner on the Servicing Transfer Date, as such list may be amended from time to time.

     T & I Advance has the meaning set forth in Section 4.12 hereof.

     T & I Escrow Account means the separate account or accounts defined in Section 6.1 and operated and maintained pursuant to Article VI hereof.

     Tax and Insurance Reserve means an accounting maintained by the Subservicer for tracking a Mortgagor’s Escrow Payments and Insurance Proceeds.

     Termination for Convenience has the meaning given in Section 9.2(a) hereof.

     Title Insurance or Title Insurance Policy means an American Land Title Association (ALTA) mortgage loan title policy form 1970, or other form of lender’s title insurance policy in accordance with Freddie Mac or Fannie Mae requirements, including all riders and endorsements thereto, insuring that the Mortgage constitutes a valid lien of specified priority on the Mortgaged Property.

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     Valuation means an Appraisal Report, or Broker Price Opinion of any Mortgaged Property.

     Whole Loan Transfer means any sale or transfer of some or all of the Mortgage Loans by the Owner to an unaffiliated third party, which sale or transfer is not a Pass-Through Transfer.

ARTICLE II
ENGAGEMENT OF SUBSERVICER

     Section 2.1 Servicing; Possession of Servicing Files.

     (a) The Owner shall transfer the servicing of the Mortgage Loans to the Subservicer on the Servicing Transfer Date. The procedures for affecting such transfer shall be as set forth on the Servicing Transfer Procedures schedule attached hereto as Exhibit B. The Owner shall make reasonable efforts to provide the Subservicer with advance written or electronic notice of the expected mortgage loans for which servicing may be transferred on the Servicing Transfer Date. On the Servicing Transfer Date, the Owner shall deliver twenty five (25) executed Limited Power of Attorney forms in form and substance similar to Exhibit C, authorizing Subservicer or its authorized agent to execute necessary loan and real estate documents on Owner’s behalf; and the Subservicer shall deliver a list of its Subservicing Officers to the Owner. Additionally, with respect to each Mortgage Loan to be serviced hereunder, the Owner shall, or the Owner shall cause the prior servicer to, comply with the Servicing Transfer Procedures and deliver to the Subservicer the Mortgage Loan Data Field Request (in the form set forth on Exhibit A) for each related Mortgage Loan and, by computer readable electronic transmission, the related Mortgage Loan Schedule not later than five (5) Business Days after the Servicing Transfer Date.

     (b) No later than five (5) Business Days after the Servicing Transfer Date, the Owner shall deliver or cause to be delivered to the Subservicer all of the documents, information and property that is required for the transfer and commencement of servicing for the related Mortgage Loans, including without limitation the Servicing File and all escrow balances (whether positive or negative), suspense balances, restricted escrow and other cash balances that exist in connection with the Mortgage Loans without offset or netting of any negative balances. In the event that the Subservicer reasonably incurs any cost or expenses because of the failure by the Owner to deliver or cause the delivery of all such required documents, information and property (including without limitation any advances of funds for escrows or impounds), then the Subservicer shall be reimbursed any such amounts as Pass-Through Expenses pursuant to Section 6.3 hereof. Notwithstanding any provision in this Agreement to the contrary, this paragraph shall not be applicable with respect to any Mortgage Loans to the extent servicing of such Mortgage Loans was previously transferred by the prior servicer to the Subservicer prior to the Owner becoming owner of such Mortgage Loans.

     (c) Nothing shall prohibit the Subservicer or any Affiliate of the Subservicer from taking applications from those Mortgagors who initiate action on their own, or in the case of Mortgage Loans for which default is reasonably foreseeable, from engaging in a program generally to encourage or recommend mortgage loan products provided by the Subservicer or such Affiliate, providing such refinancing is in accordance with Exhibit I. The Subservicer shall

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furnish to the Owner all marketing materials at such time such items are provided to the Mortgagors, which materials shall be acceptable to the Owner. To the extent consistent with Accepted Servicing Practices, as one of its loss mitigation options, the Subservicer shall consider the refinancing of an existing Mortgage Loan in accordance with Exhibit I and to the extent for which default is reasonably foreseeable, into a mortgage loan with a principal balance less than the principal balance of the Mortgage Loan to the extent necessary to qualify the Mortgagor for an FHA-insured mortgage loan.

     (d) The Subservicer shall service the Mortgage Loans as provided herein commencing on the related Servicing Transfer Dates. All servicing shall be conducted in the name of the Subservicer as servicing agent for the Servicer; provided, however, that the Subservicer shall conduct any foreclosure proceedings in the name of Owner or another party or an Owner Designee designated by Owner, as provided above, and may complete and record any related Assignment of Mortgage in the name of Owner, or such other party or Owner Designee, as applicable, in such proceedings. The Subservicer may enter into a commercially reasonable arrangement for certain functions relating to the servicing and administration of Mortgage Loans with any Person if such Person is in compliance with the laws of the state(s) necessary to enable it to perform its obligations under such servicing arrangement; provided, however, that pursuant to Section 4.5 the Subservicer shall not delegate the servicing responsibilities with respect to any Mortgage Loan to any subservicer without the prior written consent of the Owner. Any such arrangement shall be consistent with and not violate the provisions of this Agreement and shall not constitute a “mortgage servicing transfer” within the meaning of Section 6 of the Real Estate Procedures Settlement Act, 12 U.S.C. §2605, (“RESPA”), without prior written approval of the Owner. In each case, the Subservicer shall remain responsible for its obligations under this Agreement notwithstanding any such arrangement, the Subservicer shall be liable for all acts and omissions of such Person as fully as if such acts and omissions were those of the Subservicer, and the Subservicer shall pay all fees and expenses associated with such arrangement from the Subservicer’s own funds..

     (e) On behalf of Owner, the Subservicer may sue to enforce or collect on any of the Mortgage Loans or any Insurance Policy covering a Mortgage Loan, as agent of the Owner pursuant to the Limited Power of Attorney.

     (f) The Subservicer shall hold each Servicing File in trust for the benefit of the Owner for the sole purpose of servicing the Mortgage Loans. The Subservicer’s possession of Servicing Files shall be for the sole purpose of facilitating servicing of the related Mortgage Loan pursuant to this Agreement, and the ownership of the Servicing Files shall remain vested in the Owner and Subservicer shall provide Owner, Servicer and Owner Designee with full access to the Servicing Files. All records and documents with respect to the related Mortgage Loan prepared by or which come into the possession of the Subservicer shall become part of the Servicing Files. The ownership of each Mortgage Loan, including the Mortgage Note, the Mortgage, the Mortgage Loan Documents, the contents of the related Servicing File and all rights, benefits, proceeds and obligations arising therefrom or in connection therewith, is vested in the Owner. All rights arising out of the Mortgage Loans including, but not limited to, all funds received on or in connection with the Mortgage Loans and all records or documents with respect to the Mortgage Loans prepared by or which come into the possession of the Subservicer shall be received and held by the Subservicer in trust for the benefit of the Owner as the owner of the

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Mortgage Loans. Any portion of the Servicing Files held by the Subservicer shall be segregated from the other books and records of the Subservicer and shall be appropriately marked to clearly reflect the ownership of the Mortgage Loans by the Owner. The Subservicer shall release its custody of the contents of the Servicing Files only in accordance with written instructions of the Owner, except when such release is required as incidental to the Subservicer’s servicing of the Mortgage Loans. Except as provided herein, the original Mortgage Loan Documents for each Mortgage Loan shall be retained by the Custodian pursuant to the Custodial Agreement. Except as set forth in Section 2.3(a), any fees and expenses of the Custodian shall not be payable by the Subservicer.

     Section 2.2 Books and Records.

     Unless otherwise specifically agreed by the Owner, record title to each Mortgage and the related Mortgage Note shall remain (i) in blank, (ii) in the name of the Owner, or (iii) in the name of an Owner Designee. The Subservicer shall be responsible for maintaining, and shall maintain, a complete set of books and records for the Mortgage Loans which shall be clearly marked to reflect the ownership of the Mortgage Loans by the Owner. The Owner and its agents may from time to time upon reasonable notice inspect any of the Subservicer’s books and records pertaining to this Agreement, including without limitation all Servicing Files, at reasonable times during the Subservicer’s normal business hours at the Subservicer’s offices; provided, that upon the occurrence and continuance of an Event of Default, only one (1) Business Days’ prior notice shall be required. At all times while a Mortgage Loan is being serviced hereunder, the beneficial ownership of such Mortgage Loan shall be vested and remain in the name of the Owner. All rights arising out of each Mortgage Loan shall be vested in the Owner and the Subservicer shall not assert any contrary interest therein.

     Section 2.3 Custodial Agreement.

     (a) On or prior to the Servicing Transfer Date, the Owner shall use reasonable efforts to ensure that the Custodian has received all such Mortgage Loan Documents required to be delivered to it pursuant to the Custodial Agreement. The Owner shall be responsible for maintaining the Custodial Agreement and shall pay fees and expenses as required under the Custodial Agreement. In the event that the Subservicer is required to pay any of the Custodian’s fees and expenses, the Subservicer shall notify the Owner and if the Owner instructs the Subservicer to pay such fees and expenses these shall be considered Pass-Through Expenses and the Subservicer shall be reimbursed pursuant to the terms of Section 6.3 hereof if not previously reimbursed by the Owner.

     (b) The Subservicer shall forward to the Custodian original documents evidencing any assumption, modification, consolidation or extension of any Mortgage Loan entered into in accordance with this Agreement within ten (10) Business Days of the Subservicer’s receipt of an executed copy of such document; provided, however, that the Subservicer shall provide the Custodian with a certified true copy of any such document submitted for recordation within ten (10) Business Days of submission, and to provide the original of any document submitted for recordation or a copy of such document certified by the appropriate public recording office to be a true and complete copy of the original within ten (10) Business Days of receipt by Subservicer of the original recorded document.

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     (c) Owner shall provide to Subservicer powers of attorney to allow Subservicer to release any Mortgage Loan being Paid-In-Full (including any Liquidation of such Mortgage Loan) or proceed with foreclosure actions.

     Section 2.4 Limitation on Scope of Servicing Obligation.

     (a) The Subservicer shall not be under any obligation to appear in, prosecute or defend any legal action that (i) is not incidental to its duties to service the Mortgage Loans in accordance with this Agreement, or (ii) exclusively involves allegations against the Owner or prior owners or prior servicers of the Mortgage Loan, including without limitation any allegation or claim involving a violation or breach of any Predatory Lending Law. Notwithstanding the forgoing, should Subservicer desire to undertake to appear in, prosecute or defend actions described in (i) or (ii) above, Subservicer shall obtain Servicer’s consent prior to appearing in, prosecuting or defending these actions. In such event, the reasonable legal expenses and costs of such action and any liability resulting therefrom shall be expenses, costs and liabilities for which the Owner will be liable and the Owner agrees to reimburse the Subservicer for any such expenses, costs and liabilities as Pass-Through Expenses under the terms of this Agreement, except with respect to any expenses, costs and liabilities that are incurred solely as a result of a material breach of this Agreement, the negligence or willful misconduct of the Subservicer that relate to actions pursuant to this Section.

     Section 2.5 Loss Mitigation and Recovery Actions.

     Consistent with Section 4.2 below, Subservicer shall have the delegated authority to initiate loss mitigation or recovery actions (e.g., forbearance plans, modifications and deeds in lieu of foreclosure, foreclosures and repossessions, as applicable) within the agreed upon parameters set forth on Exhibit I hereto (also known herein as the “Approval Matrix”). Subservicer will not engage in principal forgiveness without the prior written consent of the Owner.

     Section 2.6 HMP Program.

     Subservicer shall implement the HMP Program with respect to the Mortgage Loans subserviced under the Agreement to the extent a Mortgage Loan is eligible for the HMP Program. Subservicer warrants that Subservicer is a servicer in good standing under the HMP. With regard to the Mortgage Loans, Subservicer will not participate in the HMP Principal Reduction Alternative program, the Second Lien Modification Program or the HFA Hardest-Hit Fund Program. Subservicer must obtain Servicer’s written approval with regard to Mortgage Loans to participate in any future optional HMP programs.

          If required by FNMA, FHLMC or the U.S. Department of Treasury, Owner and Subservicer will execute an Assignment and Assumption Agreement for the transfer of servicing of the Mortgage Loans.

     Section 2.7 Oversight Program.

     Subservicer shall provide to Servicer the ability to monitor Subservicer’s actions by:

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     (a) Allowing ten (10) users of Servicer to have remote access to all of Subservicer’s systems that contain account notes, balances, and loan level data. These Subservicer systems include, but are not limited to, LSAMs, Foretracs, and Remedy, as well as other Subservicer systems for which remote access is available for use.

     (b) Subservicer will provide recordings of phone calls with Mortgagors with respect to Mortgage Loans as requested by Servicer not to exceed 10 recorded phone calls per week. Servicer will provide pertinent information needed for Subservicer to identify the requested recordings and Subservicer will send the requested recordings to Servicer on a weekly basis in the form of a. wav or equivalent file per recording. The Servicer and the Subservicer may also have regularly scheduled monitoring sessions on the premises of the Subservicer to listen to the requested phone calls with Mortgagors with respect to Mortgage Loans.

     (c) Subservicer will provide oversight specific reporting. Subservicer agrees to provide data files in formats agreed to with Servicer.

ARTICLE III
REPRESENTATIONS, WARRANTIES AND COVENANTS

     Section 3.1 Subservicer Representations, Warranties and Covenants.

     With respect to each Mortgage Loan, as of the related Servicing Transfer Date and as of each day thereafter during which such Mortgage Loan is serviced hereunder, the Subservicer represents, warrants and covenants to the Owner as follows:

     (a) Due Organization and Authority. The Subservicer is a limited liability company duly organized, validly existing and in good standing under the laws of the State of Delaware and has the full power and authority to execute, deliver and perform this Agreement; the execution, delivery and performance of this Agreement by the Subservicer and the consummation of the transactions contemplated hereby have been duly and validly authorized and the Subservicer has duly executed and delivered this Agreement; and this Agreement evidences the valid and binding agreement of the Subservicer, enforceable in accordance with its terms, except as limited by applicable bankruptcy, insolvency, moratorium, reorganization or other similar laws affecting creditors’ rights generally or general equitable principles.

     (b) Ordinary Course of Business. The consummation of the transactions contemplated by this Agreement is in the ordinary course of business of the Subservicer.

     (c) No Conflicts. The execution, delivery and performance of this Agreement by the Subservicer will not: (i) conflict with or result in a material breach of any of the terms, conditions or provisions of the Subservicer’s organizational documents or any material agreement or instrument to which the Subservicer is now a party or by which it is bound, or (ii) result in the material violation of any law, rule, regulation, order, judgment or decree to which the Subservicer or its property is subject, which violations would have a material adverse effect on the Subservicer’s ability to perform its obligations hereunder.

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     (d) Ability to Perform. The Subservicer does not believe, nor does it have any reason or cause to believe, that it cannot perform in all material respects each and every covenant of the Subservicer contained in this Agreement.

     (e) No Litigation Pending. There is no action, suit, proceeding or investigation pending or, to the Subservicer’s knowledge, threatened against the Subservicer which, either in any one instance or in the aggregate, is reasonably likely to result in any material adverse change in the business, operations, financial condition, properties or assets of the Subservicer, or in any material impairment of the right or ability of the Subservicer to carry on its business substantially as now conducted, or in any material liability on the part of the Subservicer, or which would draw into question the validity of this Agreement or of any action taken or to be taken in connection with the obligations of the Subservicer contemplated herein, or which would be likely to impair materially the ability of the Subservicer to perform under the terms of this Agreement.

     (f) No Consent Required. No material consent, approval, authorization or order of any court or governmental agency or body is required for the execution, delivery and performance by the Subservicer of this Agreement or the consummation of the transactions contemplated in the Agreement, except those that have been obtained and, to the extent required, remain in full force and effect.

     (g) Qualifications. The Subservicer is an FHA nonsupervised mortgagee.

     (h) Compliance. The Subservicer, its agents and employees, have, and will maintain at all times, all requisite licenses, permits, qualifications and approvals to perform its obligations hereunder in each jurisdiction in which any Mortgaged Property or REO Property is located and is in good standing in each such jurisdiction, except where the failure to possess any such license, permit, qualification or approval would not materially and adversely affect the ability of the Subservicer to conduct its business as it is presently conducted or the enforceability of the related Mortgage Note or Mortgage.

     Section 3.2 Owner Representations, Warranties and Covenants.

     With respect to each Mortgage Loan, as of the related Servicing Transfer Date and as of each day thereafter during which such Mortgage Loan is serviced hereunder, the Owner represents, warrants and covenants to the Subservicer as follows:

     (a) Due Organization and Authority. The Owner is duly organized, validly existing and in good standing under the laws of the State of its organization; the Owner has the full power and authority to execute, deliver and perform this Agreement; the execution, delivery and performance of this Agreement by the Owner and the consummation of the transactions contemplated hereby have been duly and validly authorized and the Owner has duly executed and delivered this Agreement; and this Agreement evidences the valid and binding agreement of the Owner, enforceable in accordance with its terms, except as limited by applicable bankruptcy, insolvency, moratorium, reorganization or other similar laws affecting creditors’ rights generally or general equitable principles.

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     (b) No Conflicts. The execution, delivery and performance of this Agreement by Owner will not: (i) conflict with or result in a material breach of any of the terms, conditions or provisions of the Owner’s organizational documents or any material agreement or instrument to which the Owner is now a party or by which it is bound, or (ii) result in the material violation of any law, rule, regulation, order, judgment or decree to which the Owner or its property is subject, which violations would have a material adverse effect on Owner’s ability to perform its obligations hereunder or impair the value of the Mortgage Loans.

     (c) Ability to Perform. The Owner does not believe, nor does it have any reason or cause to believe, that it cannot perform each and every covenant of the Owner contained in this Agreement.

     (d) No Litigation Pending. There is no material action, suit, proceeding or investigation pending or, to the Owner’s knowledge, threatened against the Owner that, either in any one instance or in the aggregate, would draw into question the validity of this Agreement or of any action taken or to be taken in connection with the obligations of the Owner contemplated herein, or which would be likely to impair materially the ability of the Owner to perform under the terms of this Agreement.

     (e) No Consent Required. No material consent, approval, authorization or order of any court or governmental agency or body is required for the execution, delivery and performance by the Owner of or compliance by the Owner with this Agreement, or if required, such approval has been obtained prior to the date of this Agreement, including the approval of this Agreement by the appropriate examiners and supervisory agents.

     (f) Compliance. The Owner has all requisite licenses, permits, qualifications and approvals to own the Mortgage Loans and to perform its obligations hereunder in each jurisdiction in which any Mortgaged Property is located, except where the failure to possess any such license, permit, qualification or approval would not materially and adversely affect the enforceability of the related Mortgage Note or Mortgage.

     Section 3.3 Owner’s Representations, Warranties and Covenants for Mortgage Loans.

     Subject to any disclosures provided by the Owner, with respect to each Mortgage Loan as of the related Servicing Transfer Date, the Owner represents, warrants and covenants to the Subservicer as follows:

     (a) Ownership. As of the Servicing Transfer Date the Owner is the sole owner and holder of the Mortgage Loans and the servicing rights related thereto. The servicing responsibilities contracted for as of the Servicing Transfer Date have not been assigned or pledged, and the Owner has good and marketable interest therein, and has full right to transfer the servicing responsibilities to the Subservicer and has full right and authority subject to no interest, or agreement with, any other party (other than any notice required by law, regulation or otherwise, to be delivered to the Mortgagors) to assign the servicing responsibilities pursuant to this Agreement. Upon execution of this Agreement by the parties, no right, title, and interest in and to the ownership of the servicing rights arising from or in connection with the Mortgage

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Loans shall transfer to the Subservicer. Notwithstanding the foregoing representations made in this subsection, certain of the Mortgage Loans, including the corresponding servicing rights, may be subject to a pledge or other security interest created by the Owner in connection with credit facility arrangements.

     (b) Compliance; Enforceability. Except as previously disclosed to the Subservicer in writing: (i) to Owner’s knowledge, each Mortgage Loan conforms in all material respects to the Legal Requirements; and (ii) to Owner’s knowledge, the Owner and each other originator or servicer, as applicable, have complied with all Legal Requirements, the related Mortgage Note and Mortgage and any applicable Insurance Policy with respect to the processing, origination and servicing of each Mortgage Loan.

     (c) Servicing Files and Related Materials. Owner shall use commercially reasonable efforts to ensure the Servicing Files or Imaged Files provided to the Subservicer by or on behalf of the Owner and its agent, if applicable, shall contain all documents, instruments and information necessary to service the Mortgage Loans in accordance with the Accepted Servicing Practices and the Mortgage Loan Documents, which may include copies thereof.

     (d) Assistance and Cooperation of Owner. If any actions of the Owner or any applicable Owner Designee are necessary or appropriate in connection with the servicing and administration of any Mortgage Loan hereunder, following request by the Subservicer the Owner shall use its commercially reasonable efforts to perform or cause such Owner Designee to perform such actions in a timely manner and to cooperate with and assist the Subservicer in connection with such actions.

ARTICLE IV
SERVICING OF THE MORTGAGE LOANS

     Section 4.1 Standard and Scope of Service.

     On and after each Servicing Transfer Date, the Subservicer shall service each Mortgage Loan in accordance with the Accepted Servicing Practices, the Mortgage Loan Documents and the Legal Requirements and, to the extent applicable to any servicing actions undertaken in connection with the delinquency, foreclosure, REO disposition, remedies for defaulted Mortgage Loans and property insurance procedures and claims, generally in accordance with Accepted Servicing Practices and Fannie Mae Guidelines. The Subservicer shall make all Servicing Advances as required pursuant to Section 4.19 and any other applicable provisions of this Agreement. The Subservicer shall not be required to take any action with respect to a Mortgage Loan if it determines in good faith that the action is not permitted by the Legal Requirements, any related Insurance Policy or the Mortgage Loan Documents; provided, however, that the Subservicer shall be entitled to assume that the Mortgage Note and Mortgage may be enforced in accordance with their respective terms.

     Section 4.2 Authority of the Subservicer; Delinquencies.

     (a) The Subservicer shall have the full power and authority acting alone to do or cause to be done any and all things in connection with the servicing and administration of the Mortgage Loans consistent with the Accepted Servicing Practices.

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     (b) The Subservicer is hereby authorized and empowered, subject to the terms of this Agreement, to execute and deliver on behalf of the Owner or an Owner Designee, all instruments of satisfaction or cancellation, or of partial or full release, discharge and all other comparable instruments, with respect to the Mortgage Loans and with respect to the Mortgaged Properties. Upon the request of the Subservicer, the Owner shall furnish the Subservicer with a sufficient quantity of Limited Powers of Attorney and other documents necessary or appropriate, as reasonably specified by Subservicer, to enable the Subservicer to carry out its servicing and administrative duties under this Agreement.

     (c) The Subservicer will conduct its activities hereunder with the goal of curing any Delinquencies in accordance with Accepted Servicing Practices, and in no case, less than in a commercially reasonable manner, including without limitation the pursuit of any remedy or recovery in a manner that has a reasonable likelihood of realizing a higher amount of net proceeds taking into consideration the costs and expenses of obtaining such realization, the probability or risks associated in obtaining such realization and the net present value of such amount based on the expected timing of such realization. The Subservicer’s initial discussions with the Mortgagor will cover the cause of the Delinquency and the time frame in which the Mortgagor believes the Delinquency will be cured. The Subservicer will, at its sole discretion, use notices, letters, telegrams, telephone calls, face-to-face contact and other responsible collection techniques consistent with the Accepted Servicing Practices to attempt to cure the Delinquency and will maintain collection records on all contacts with the Mortgagor. Subject to Legal Requirements and the Accepted Servicing Practices, the Subservicer shall have the right, at its sole discretion and without the approval of the Servicer, to:

     (i) determine the timing, manner and amount of contact the Subservicer makes with the Mortgagors, but contact attempts with Mortgagors must be initiated no more than sixteen (16) calendar days after Mortgagor’s Due Date in the event of nonpayment by Mortgagors;

     (ii) negotiate with any Mortgagor a repayment plan of up to twelve (12) months duration; and

     (iii) determine the timing of any notice of intent to foreclose, posting of an account for foreclosure, commencement of foreclosure proceedings or the filing of any documents in connection therewith; provided, however, that the Subservicer shall follow Accepted Servicing Practices and Fannie Mae Guidelines.

     (d) Consistent with the terms of this Agreement, the Subservicer may waive, modify or vary any term of any Mortgage Loan or consent to the postponement of strict compliance with any such term or in any manner grant indulgence to any Mortgagor if in the Subservicer’s reasonable and prudent determination such waiver, modification, postponement or indulgence is not materially adverse to the Servicer; provided, however, that the Subservicer shall not permit any waiver or modification with respect to any Mortgage Loan that would change the Mortgage Interest Rate, forgive the payment thereof of any principal or interest payments, reduce the outstanding principal amount (except for actual payments of principal), extend the final maturity date with respect to such Mortgage Loan, waive any prepayment penalty (other than accordance with Section 4.21) or any other act that could reasonably be

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expected to affect materially and adversely the Owner’s interest in the Mortgage Note, Mortgage Loan, Mortgage, Mortgaged Property, Mortgage Loan Documents or Mortgage Servicing File related to a Mortgage Loan.

     (e) Notwithstanding the foregoing, in the event that any Mortgage Loan is a Defaulted Loan or, in the judgment of the Subservicer, such default is reasonably foreseeable, the Subservicer, consistent with Accepted Servicing Practices, may also waive, modify or vary the following terms of such Mortgage Loan (including modifications that would change the Mortgage Interest Rate, forgive the payment of interest or extend the final maturity date of such Mortgage Loan), accept payment from the related Mortgagor of an amount less than the stated principal balance in final satisfaction of such Mortgage Loan, or consent to the postponement of strict compliance with any such term or otherwise grant indulgence to any Mortgagor (any and all such waivers, modifications, variances, forgiveness of principal or interest, postponements, or indulgences collectively referred to herein as “forbearance”), unless prohibited by Exhibit I.

     (f) The Subservicer shall provide to the Servicer as soon as practicable and will attempt to provide to the Servicer at least four Business Days (or such fewer Business Days as remain prior to the applicable foreclosure date) notice of the Subservicer’s intention to submit a bid for the purchase of a senior lien. The Subservicer shall comply with the Servicer’s instructions with regard to such bid, provided that the Servicer responds prior to the end of such four Business Days notice period (or such shorter period, if applicable). In the event that the Servicer does not respond within such period, then the parties agree that the Servicer does not consent to such action and the Subservicer shall incur no liability for failure to submit a bid. Additionally, as to any Mortgage Loan that becomes 180 days Delinquent, if the Subservicer, determines that the expected recovery through foreclosure or other liquidation of the Mortgaged Property will result in no or a de minimus amount of Liquidation Proceeds, then the Subservicer shall provide the Servicer at least four Business Days prior notice of the Subservicer’s intention to charge-off such Mortgage Loan. In the event that the Servicer does not respond within such period, then the parties agree that the Servicer consents to such action.

     (g) The Subservicer further is hereby authorized and empowered in its own name, when such Subservicer believes it is appropriate in its best judgment and in accordance with Accepted Servicing Practices, to cause the removal from the registration of any Mortgage Loan on the MERS^® system and record the related Mortgage in the appropriate jurisdiction. Any expenses incurred in connection with the actions described in the preceding sentence shall be a Servicing Advance

     (h) The Subservicer shall not consent to the placement of any lien on the Mortgaged Property or any REO Property that would impair the Owner’s lien position without notifying and obtaining the written consent of the Servicer.

     (i) Exhibit I (Approval Matrix) hereto provides an overview of the actions which may be taken by the Subservicer under the terms of this Agreement and the corresponding Servicer approval required for such actions.

     (j) Notwithstanding anything contained in this Section 4.2 to the contrary, the Subservicer shall apply the appropriate loss mitigation treatment as identified in and in

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compliance with Approval Matrix. Such treatments include, but are not limited to, the HMP Program. With respect to Mortgage Loans modified under the HMP Program, in the event of any conflict among the HMP Program, Exhibit I, and/or the Fannie Mae Guidelines, the HMP Program will govern the servicing, and to the extent not in conflict with the HMP Program, Exhibit I will govern the servicing. Owner will be given credit for all HMP Owner Payments and the Subservicer will be given credit for all HMP Servicer Payments; provided, however, the Subservicer shall pay to the Owner fifty percent (50%) of all “Servicer Pay for Success Payments” received by the Subservicer pursuant to the HMP Program through and including January 31, 2012 within sixty (60) days of receipt thereof.

     (k) Prior to pursuing any foreclosure action hereunder with respect to a Mortgage Loan or if the related Mortgagor files for bankruptcy protection, Subservicer shall (i) if such Mortgage Loan is registered on the MERS^® system, remove the related Mortgage from the MERS system and record the related Assignment of Mortgage in the name of the Owner in the applicable jurisdiction and (ii) if such Mortgage Loan is not registered on the MERS^® system, record the related Assignment of Mortgage in the name of the Owner.

     Section 4.3 Collection of Mortgage Loan Payments.

     Continuously from each Servicing Transfer Date, in accordance with the Accepted Servicing Practices and this Agreement, the Subservicer shall diligently collect all payments due under each of the related Mortgage Loans and ascertain and estimate Escrow Payments with respect to escrowed Mortgage Loans and all other charges that will become due and payable with respect to the Mortgage Loans and each related Mortgaged Property such that the installments payable by the Mortgagors will be sufficient to pay such charges as and when they become due and payable.

     Section 4.4 Notification of Adjustments.

     With respect to each adjustable rate Mortgage Loan, the Subservicer shall adjust the Mortgage Interest Rate on the related interest rate adjustment date and shall adjust the Monthly Payment on the related mortgage payment adjustment date, if applicable, in compliance with the Legal Requirements and the related Mortgage and Mortgage Note. The Subservicer shall execute and deliver any and all necessary notices required under applicable law and the terms of the related Mortgage Note and Mortgage regarding the Mortgage Interest Rate and Monthly Payment adjustments.

     Section 4.5 Duties the Subservicer May Delegate.

     (a) Subject to the limitations set forth in Section 4.17(j) below, in the ordinary course of business, the Subservicer at any time may delegate any of its duties hereunder relating to the tracking of tax payments and insurance, collections agreements and the listing of REO Properties to any Person, including any of its Affiliates, who agrees to conduct such duties in accordance with the servicing standards set forth in Section 4.1 and pursuant to the terms of this Section 4.5.

     (b) The Subservicer shall use reasonable efforts to ensure that each such Person retained to provide any of the delegated services is fully licensed and holds all required

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governmental licenses, franchises, certificates, qualifications and permits necessary to provide, and that such Person is reputable and capable of providing, the services for which such Person is retained. Any such Person shall be retained solely for the Subservicer’s account and any servicing fees and compensation payable to the Person shall be at the sole expense of the Subservicer. The Subservicer shall remain liable to the Owner, Servicer, their successors and assigns for the performance of the Subservicer’s duties and obligations under this Agreement, notwithstanding the delegation of any servicing function pursuant to this Section 4.5.

     (c) The Subservicer shall indemnify and hold the Owner, Servicer and Owner Designee harmless from any and all claims, losses, expenses, costs, fees (including but not limited to attorney fees) and damages arising out of or relating to the delegation of any of its duties hereunder except where delegation by the Subservicer was at the request of the Owner or Owner Designee; provided, however, that this provision shall not protect the Subservicer against any liability which would be imposed on the Subservicer or any its directors, officers, agents or employees by reason of the Subservicer’s willful misconduct, bad faith, negligence or reckless disregard of its obligations hereunder in following such instructions.

     Section 4.6 Servicing Files.

     (a) Each Servicing File maintained by the Subservicer for each Mortgage Loan shall be clearly identified and marked to reflect the Owner’s ownership of the related Mortgage Loan, shall be kept in accordance with the Accepted Servicing Practices, and shall contain the following items, to the extent received by the Subservicer from the Owner or its agent or photocopies or imaged copies of each:

     (i) a copy of the Mortgage Note bearing all intervening endorsements, endorsed “Pay to the order of “[Owner’s Name], without recourse”; or in blank and signed in the name of the previous endorsee by an authorized officer;

     (ii) a copy of the Mortgage, with evidence of recording thereon;

     (iii) a copy of all assumption, modification, consolidation or extension agreements, and if recorded, with evidence of recording thereof;

     (iv) evidence (which may be a certificate of insurance) of all insurance required by such Mortgage;

     (v) a copy of the Title Insurance Policy, or, if not yet issued, evidence of the title commitment;

     (vi) a copy of all intervening Assignments of Mortgage with evidence of recording thereof unless the applicable Assignment of Mortgage is held by the related public recording office or is registered on the MERS^® system; and

     (vii) any other material documents (or copies thereof, as applicable).

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     (b) Notwithstanding any provision herein to the contrary, blanket insurance policies may be kept by the Subservicer in a separate blanket file and need not be included in each Servicing File.

     (c) Each Servicing File shall also contain the following documents or photocopies thereof, to the extent received by the Subservicer from the Owner or its agent in connection with the Subservicer’s duties under this Agreement:

     (i) the Appraisal Report made at the time the Mortgage Loan was originated;

     (ii) the settlement statement for the purchase and financing or refinancing of the Mortgaged Property under the Mortgage Note and Mortgage;

     (iii) copies or originals of any tax service contract;

     (iv) documentation of all non-HMP modifications to the original Mortgage Loan Documents;

     (v) documentation, including appropriate approval by the Owner, relating to any releases of any collateral supporting the Mortgage Loan;

     (vi) the loan application, any credit reports, verification of employment, verification of any deposit, and tax returns;

     (vii) the originals of all RESPA and Truth in Lending Act disclosure statements executed by the Mortgagor; and

     (viii) all other Mortgage Loan Documents which are customarily maintained in a Mortgage Loan file in order to properly service a Mortgage Loan.

     (d) Foreclosure correspondence, and legal notifications, if applicable, as well as documentation of all HMP modifications to the original Mortgage Loan Documents, will be provided in separate electronic files.

     (e) Upon discovery by the Subservicer or the Owner or upon the request of the Owner, the Subservicer will promptly deliver to the Custodian any original Mortgage Loan Document listed in Section 4.6(a) that comes into the Subservicer’s possession and shall retain a copy of any such Mortgage Loan Document in its Servicing File. Notwithstanding the foregoing, with respect to any document listed in clause (a)(iii) above, (1) within ten (10) Business Days of the execution of any such assumption, modification, consolidation or extension agreement, Subservicer shall provide a copy thereof to the Custodian; and (2) within sixty (60) days of the execution of any such assumption, modification, consolidation or extension agreement, Subservicer shall provide the original counterpart(s) thereof to the Custodian.

     Section 4.7 Imaged Records.

     The Subservicer, at its expense, may duplicate or image the Servicing Files on electronic media, but may not destroy hard copies of the documents required to be maintained in Servicing

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Files without the Owner’s prior consent; provided, however, if Subservicer is under no legal, regulatory, administrative or similar obligation to maintain the original contents of the Servicing Files in hard format for at least seven (7) years after the last activity on the Mortgage Loan, and the Owner does not consent to the destruction of such hard copies, the cost and responsibility of storing such hard copies shall be the cost and responsibility of Owner.

     Section 4.8 Enforcement of Due-On-Sale Clause; Assumption.

     (a) Upon the transfer of title to the Mortgaged Property, the Subservicer, upon the earlier of notice or discovery, shall enforce the due-on-sale clause contained in any Mortgage Loan, unless (i) the Subservicer determines that the enforcement would not be permitted by the Legal Requirements; provided, however, that the Subservicer shall be entitled to assume that the Mortgage Note and Mortgage may be enforced in accordance with their respective terms, (ii) a Mortgage Note assumption rider relates to the Mortgage Loan, or (iii) the applicable Insurer advises that the enforcement of the due-on-sale clause will jeopardize the Private Mortgage Insurance coverage, if any, on such Mortgage Loan. Notwithstanding the foregoing, the Subservicer may, in its reasonable discretion, provide the Mortgagor notice of the Mortgagor’s breach of the due-on-sale clause and allow the Mortgagor to cure the breach within thirty (30) days of receipt of such notice. In all circumstances of unapproved transfer initiated by the Mortgagor, the Subservicer shall notify the Servicer (which notice may be pursuant to the reports to the Servicer required by this Agreement) and the Private Mortgage Insurer, if any, of such transfer and obtain written approval from the Private Mortgage Insurer before initiating enforcement proceedings.

     (b) Notwithstanding the preceding paragraph, the Subservicer may also in its discretion waive the due-on-sale clause on any Mortgage Loan and permit the assumption of such Mortgage Loan, if the Servicer has approved of the assumption in advance, or if the assumption is required by the Legal Requirements or by the terms of the Mortgage Loan Documents without Servicer’s approval. Upon such approval and the execution by the new Mortgagor of an assumption agreement obligating the new Mortgagor to all of the terms of the related Mortgage Note and Mortgage, the Subservicer may approve such assumption in accordance with the Servicer’s approval, the Legal Requirements and the terms of the Mortgage Loan Documents as applicable. Subsequent to the assumption, the new mortgagor shall be deemed to be Mortgagor under this Agreement. The Subservicer shall notify the Servicer of the completion of any approved assumption by the tenth (10th) day of the month following the month of completion. The Subservicer shall provide to the Custodian the original assumption agreement.

     (c) Subject to the Accepted Servicing Practices, the Subservicer may charge the related Mortgagor a reasonable and customary assumption fee and retain such fee.

     Section 4.9 Insurance.

     (a) Subject to reimbursement as a Servicing Advance under the terms of this Agreement, and subject to the Accepted Servicing Practices, the Subservicer shall cause each Mortgaged Property and REO Property to be covered at all times by Hazard Insurance in an amount at least equal to the lesser of (a) the full insurable value of the Mortgaged Property or (b)

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the greater of (i) the Stated UPB owing on the Mortgage Loan (or, in the case of an REO Property, the fair market value of such REO Property) and (ii) an amount such that the proceeds of such insurance shall be sufficient to avoid the application to the Mortgagor or loss payee of any coinsurance clause under the policy.. All Hazard Insurance Policies shall be underwritten by an Insurer that has a current rating that is acceptable under Fannie Mae Guidelines. Subject to reimbursement under the terms of this Agreement, and subject to the Accepted Servicing Practices, the Subservicer shall ensure that Flood Insurance is maintained on each Mortgaged Property and REO Property located in an area that is identified in the Federal Register by the Federal Emergency Management Agency as having special flood hazards; provided, that Flood Insurance, as described below, is available on commercially reasonable terms. The Flood Insurance Policy shall be in an amount representing coverage not less than the least of (A) the replacement value of the improvements that are part of the Mortgaged Property, (B) the Stated Principal Balance of the Mortgage Loan, or (C) the maximum amount of insurance available under the available under the Flood Disaster Protection Act of 1973. All Flood Insurance Policies shall be underwritten by a federal government agency or by an Insurer that satisfies Fannie Mae Guidelines regarding the rating of the Insurer or the guarantee of the Insurer’s policies by the National Flood Insurance Program. Additionally, if a Mortgaged Property or REO Property that is not identified by the Federal Emergency Management Agency as having special flood hazards becomes so identified in the Federal Register, within a reasonable period of time after such identification, the Subservicer shall arrange for Flood Insurance to be obtained on the Mortgaged Property or REO Property in accordance with this Section 4.9. All such policies shall be endorsed with standard mortgagee clauses with loss payable to the Subservicer and shall provide for at least thirty (30) days prior written notice of any cancellation, reduction in the amount of or material change in coverage to the Subservicer. The Subservicer shall not interfere with the Mortgagor’s freedom of choice in selecting either his insurance carrier or agent, provided, however, that the Subservicer shall not accept any such insurance policies from insurance companies unless such companies are acceptable under the Fannie Mae Guidelines and are licensed to do business in the state wherein the Mortgaged Property is located.

     (b) In the event that the Subservicer shall obtain and maintain, at its own expense, a blanket policy issued by an insurer that is acceptable under the Fannie Mae Guidelines (a “Qualified Insurer”) insuring against fire and hazard losses on all of the REO Properties, then, to the extent such policy provides coverage in an amount equal to the amount required pursuant Section 4.9(a) and otherwise complies with all other requirements of Section 4.9(a), it shall conclusively be deemed to have satisfied its obligations as set forth in Section 4.9(a). It is further understood and agreed that such policy may contain a deductible clause, in which case the Subservicer shall, in the event that there shall not have been maintained on the related escrowed Mortgaged Property or REO Property a policy complying with Section 4.9(a), and there shall have been a loss which would have been covered by such policy, deposit in the P & I Custodial Account the amount not otherwise payable under the blanket policy because of such deductible clause without reimbursement therefor (and such amount shall be deemed Insurance Proceeds). Upon request of the Servicer, the Subservicer shall cause to be delivered to the Servicer a certified true copy of such policy and a statement from the insurer thereunder that such policy shall in no event be terminated or materially modified without thirty (30) days’ prior written notice to the Servicer.

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     (c) The Subservicer shall prepare and present on behalf of the Owner all claims under the Insurance Policies and take such actions (including the negotiation, settlement, compromise or enforcement of the insured’s claim) as shall be reasonably necessary to realize recovery under the Insurance Policies. Any proceeds disbursed to the Subservicer in respect of such Insurance Policies (other than amounts applied to the restoration and repair of the related Mortgaged Property or to be released to the related Mortgagor in accordance with the Subservicer’s normal servicing procedures) shall be promptly deposited in the P & I Custodial Account or the applicable T & I Escrow Account, as appropriate.

     (d) Subservicer may engage one or more insurance claim adjustors for the purpose of negotiating, settling, compromising, enforcing and otherwise managing insurance claims related to the Mortgage Loans and the REO Properties. In such event, Owner agrees to be responsible for all such fees.

     Section 4.10 Insurance Notices.

     The Owner shall arrange, or shall cause its Owner Designee to arrange, for all insurance drafts, notices, policies, invoices, and similar documents to be delivered directly to the Subservicer, to the extent permitted under the Insurance Policies and Legal Requirements.

     Section 4.11 Tax and Flood Contracts.

     With respect to each First Lien Mortgage Loan designated by Servicer, the Subservicer shall provide such real estate tax processing, delinquent tax control, tax status determination, and with respect to any first or junior lien, flood status determination, monitoring of flood insurance and customer support services (collectively the “Tax and Flood Services”) as the Subservicer typically provides for other escrowed and non-escrowed mortgage loans that it services. The purchase or transfer fees associated with the Tax and Flood Services shall be reimbursed by the Owner to the Subservicer as Pass-Through Expenses in accordance with this Agreement. If the tax or flood data supplied to Subservicer has been prepared by a provider other than Subservicer’s primary Tax or Flood Services provider (as listed on Exhibit F hereto), any transfer fees assessed shall be reimbursed by the Owner to the Subservicer as Pass-Through Expenses in accordance with this Agreement. The Subservicer shall request that the prior servicer, if any, provide Tax and Flood Services agreements and information with respect to each Mortgage Loan prior to procuring any new Tax and Flood Services. If such agreements and information are not provided by the Servicer or the prior servicer within fifteen (15) days the Servicing Transfer Date, then a tax and/or flood contract (as applicable) will be purchased by Subservicer. Notwithstanding the foregoing, the Subservicer shall have no obligation to obtain tax service contracts with respect to second lien Mortgage Loans.

     Section 4.12 Tax and Insurance Accounts; Tax Service.

     (a) All T & I Escrow Accounts shall be established and maintained in accordance with the Mortgage Loan Documents and Legal Requirements for those Mortgage Loans that provide for or otherwise require Escrow Payments. The Subservicer shall reflect in the Tax and Insurance Account the Escrow funds collected from the Mortgagor and deposited into the applicable T & I Escrow Account for the payment of real estate taxes, ground rents,

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Private Mortgage Insurance, Hazard Insurance and, if applicable, Flood Insurance premiums, assessments and other charges. If Escrow funds are being collected when the Owner transfers servicing of the Mortgage Loan to the Subservicer, the Subservicer must establish a T & I Escrow Account (either a separate account or a sub account) for such Mortgage Loan and continue to collect 1/12 of the yearly charge for Escrow with each Monthly Payment. If a Mortgagor’s Escrow funds are insufficient to pay taxes, insurance premiums or other escrowed items, the Subservicer shall timely advance to the T & I Escrow Account from its own funds an amount sufficient to cover the shortage and reflect such advance in the Mortgagor’s Tax and Insurance Account (a “T & I Advance”). Whenever possible, these T & I Advances shall be recovered from the Mortgagor’s subsequent monthly Escrow Payments, Insurance Proceeds or Liquidation Proceeds with respect to such Mortgagor’s Mortgage Loan, pursuant to Section 6.4(b). Insurance premiums that are not Escrow items but that are collected and disbursed for payment, such as life, major medical, disability or other assessments not required as part of the Mortgagor’s monthly installments, should not be reflected in the Mortgagor’s Tax and Insurance Reserve. The Subservicer shall comply with all applicable Legal Requirements in connection with Escrow items, the analysis of the Mortgagor’s T & I Escrow Account and any reports to the Mortgagor related thereto. Without limiting the foregoing, the Subservicer shall comply with all requirements concerning the handling of escrow accounts contained in the federal Real Estate Settlement Procedures Act of 1974, as amended, and all regulations promulgated thereunder.

     (b) As outlined in Exhibit I, for any First Lien Mortgage Loan that is a non-escrowed loan, in the event that any real estate taxes or assessments in connection with a Mortgage Loan are or become delinquent, then the Subservicer shall effect payment thereof as appropriate and prior to the related tax sale foreclosure date, and any such payment shall be reimbursable as a Servicing Advance under the terms of this Agreement. The Subservicer shall pay, on behalf of the related Mortgagor, any penalties, fines, similar charges or interest resulting from such delinquency, and shall be entitled to reimbursement for any such penalties, fines, similar charges or interest that it may incur as Servicing Advances under the terms of this Agreement. Additionally, in the event that any Mortgagor fails to provide Subservicer with reasonable proof of hazard insurance in connection with a Mortgage Loan, the Subservicer shall promptly provide such insurance coverage until such time as the Mortgagor submits reasonable proof of Mortgagor’s own coverage. Any such payment of hazard insurance by Subservicer shall be reimbursable as a Servicing Advance under the terms of this Agreement.

     (c) For any Mortgage Loan with an established escrow account, in the event that any real estate taxes or assessments in connection with a Mortgage Loan are or become delinquent, then the Subservicer shall effect payment thereof as soon as reasonably possible and any such payment shall be reimbursable as a Servicing Advance under the terms of this Agreement. The Subservicer shall pay, on behalf of the related Mortgagor, any penalties, fines, or other charges or interest resulting from such delinquency and shall be entitled to reimbursement from the Owner as Pass-Through Expenses, for any such expenses that it may incur, so long as such delinquency was within thirty (30) days after the Servicing Transfer Date. Any such fines, penalties, or other charges or interest incurred pursuant to this subsection after thirty (30) days following the Servicing Transfer Date shall be the responsibility of the Subservicer.

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     (d) In the event that a Mortgaged Property has outstanding tax delinquencies prior to the Servicing Transfer Date that were not reported by either a prior servicer or a prior tax service to the Subservicer, the Subservicer shall not be liable for a Mortgaged Property lost to a tax sale for a delinquency occurring prior to the Servicing Transfer Date; provided, however, that the Subservicer shall take all reasonable actions required to cure such tax delinquency in accordance with Accepted Servicing Practices and/or the reasonable instructions of the Servicer. If the Subservicer obtains prior year delinquency information from a prior servicer and/or owner, the Subservicer may find it necessary to perform a prior delinquency search in order to adequately service such loan. Subject to notice and prior approval by the Servicer, the cost of such search shall be reimbursed by the Owner to the Subservicer as a Pass-Through Expense.

     Section 4.13 Superior Liens.

     (a) With respect to each Mortgage Loan secured by a second lien on the related Mortgaged Property that is not registered with MERS^®, the Subservicer shall, upon the Servicer’s request, for the protection of the Owner’s interest, file (or cause to be filed) of record a request for notice of any action by a superior lien holder in cases in which (i) applicable state law does not require that a junior lien holder be named as a party defendant in foreclosure proceedings in order to foreclose such junior lien holder’s equity of redemption, and (ii) local law provides for such a notice to junior lien holders. The Subservicer shall, upon the Servicer’s request, also notify any superior lien holder in writing of the existence of the Mortgage Loan and request notification of any action (as described below) to be taken against the Mortgagor or the Mortgaged Property by the superior lien holder. Costs and expenses of Subservicer, if any, in performing the foregoing shall be paid by the Subservicer and reimbursed by the Owner as Pass-Through Expenses in accordance with this Agreement.

     (b) If the Subservicer is notified that any superior lien holder has accelerated or intends to accelerate the obligations secured by the superior lien, or has declared or intends to declare a default under the superior mortgage or the promissory note secured thereby, or has filed or intends to file an election to have the Mortgaged Property sold or foreclosed, the Subservicer shall take such actions as are consistent with Accepted Servicing Practices to protect the interests of the Owner, and/or to preserve the security of the related Mortgage Loan. Subject to Servicer’s prior written approval, the Subservicer may make a Servicing Advance of the funds necessary to cure the default or reinstate the superior lien, if the Subservicer determines that such Servicing Advance would satisfy the standard set forth in Section 4.2(c) hereof and would ultimately be recoverable in full from the net proceeds likely to be realized from such Mortgage Loan, including the related Mortgaged Property. The Subservicer shall thereafter take such action as Subservicer determines is commercially reasonable to recover any such Servicing Advance or as otherwise provided pursuant to this Agreement.

     Section 4.14 Bankruptcies.

     The Subservicer will represent the Owner’s interest in any bankruptcy proceedings relating to the Mortgagor and follow the procedures set forth in Section 4.2(k) hereof. The associated costs of protecting the Owner’s interest in bankruptcy shall be paid as Servicing Advances in accordance with this Agreement. If the Mortgagor, a creditor, or a bankruptcy trustee proposes to reduce the unpaid principal balance of the Mortgage Note, reduce the

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Mortgage Interest Rate, or otherwise modify a Mortgagor’s obligations under a Mortgage Loan, the Subservicer shall use reasonable efforts to challenge any such modification on a timely basis if a commercially reasonable and valid legal basis exists for such challenge, unless the Owner agrees to such reduction. Subservicer shall provide notice as provided in Exhibit I to Owner of any reduction in unpaid principal balance prior to this reduction and obtain written approval of Owner for the reduction.

     Section 4.15 Foreclosure Procedures.

     (a) In conjunction with loss mitigation efforts provided for in Exhibit I, in the event that any payment(s) due under any Mortgage Loan remains delinquent and Subservicer determines that such payment(s) are unlikely to be collected from the Mortgagor, the Subservicer shall order one or more Valuations or property inspections with respect to the related Mortgaged Property, and may commence foreclosure proceedings in accordance with Accepted Servicing Practices. In such connection, the Subservicer shall from its own funds, subject to reimbursement pursuant to Section 6.3, make all necessary and proper Servicing Advances; provided, however, that the Subservicer shall have no obligation to advance any amount that the Subservicer determines is likely to be a Non-Recoverable Servicing Advance.

     (b) As provided for in Exhibit I, the Subservicer shall initiate, carry out, complete or perform any foreclosure proceeding in the name of the Owner or Owner Designee. Immediately prior to the initiation of foreclosure of any Mortgage Loan by the Subservicer under this Agreement, the Subservicer shall perform all actions necessary to transfer ownership of such Mortgage Loan to Owner or Owner Designee.

     (c) In connection with a foreclosure or other conversion, the Subservicer shall exercise such rights and powers vested in it hereunder and use the same degree of care and skill in its exercise as prudent mortgage servicers would exercise or use under the circumstances in the conduct of their own affairs and consistent with Accepted Servicing Practices with respect to mortgage loans in foreclosure or similar proceedings. In the event that foreclosure results in a deficiency and applicable law permits, the Subservicer shall continue to perform collection services in accordance with a receivable collection agreement to be negotiated with the Owner.

     (d) Notwithstanding anything to the contrary contained in this Agreement, in connection with a foreclosure or acceptance of a deed in lieu of foreclosure, in the event the Subservicer has notice or knowledge that a Mortgaged Property has a Negative Environmental Condition or is otherwise contaminated by hazardous or toxic substances or wastes, or if the Servicer otherwise requests, an environmental inspection or review of such Mortgage Property conducted by a qualified inspector shall be arranged for by the Subservicer. Upon completion of the inspection, the Subservicer shall promptly provide the Servicer with a written report of environmental inspection. All costs incurred by the Subservicer pursuant to this paragraph shall constitute Servicing Advances.

     (e) In the event the environmental inspection report indicates that the Mortgaged Property has a Negative Environmental Condition or is otherwise contaminated by hazardous or toxic substances or wastes, the Subservicer (i) shall promptly notify the Servicer and (ii) shall not proceed with foreclosure or acceptance of a deed in lieu of foreclosure if the

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estimated costs of the environmental clean up, as estimated in the environmental inspection report, together with the Servicing Advances made by the Subservicer and the estimated costs of foreclosure or acceptance of a deed in lieu of foreclosure exceeds the estimated value of the Mortgaged Property based on a Valuation obtained by the Subservicer at such time. If, however, the aggregate of such clean up and foreclosure costs and Servicing Advances is less than the estimated value of the Mortgaged Property, then the Subservicer shall, in its reasonable judgment and in accordance with Accepted Servicing Practices, proceed with foreclosure or acceptance of a deed in lieu of foreclosure and the Subservicer shall be reimbursed for all reasonable costs associated with such foreclosure or acceptance of a deed in lieu of foreclosure and any related environmental clean up costs, as applicable. In the event the Subservicer does not proceed with foreclosure or acceptance of a deed in lieu of foreclosure pursuant to the first sentence of this paragraph, the Subservicer shall be reimbursed for all Servicing Advances and the Subservicer shall have no further obligation to service such Mortgage Loan under the provisions of this Agreement.

     Section 4.16 Reinstatement of Mortgage Loans.

     If the Mortgagor offers full reinstatement of the Mortgage Loan during the foreclosure process, the Subservicer shall accept the offer. Full reinstatement means: (i) payment of all amounts due in order to bring the Mortgage Loan current, including attorneys’ and trustees’ fees, any additional legal costs and any other expenditures or advances made by the Subservicer during the foreclosure process, and (ii) payments of all other amounts necessary to cure all other defaults under the Mortgage Loan Documents, including, without limitation, the payment of real property taxes due and owing. Upon accepting the reinstatement, the Subservicer will contact the attorney or trustee promptly to avoid incurring additional legal costs or fees. The Subservicer will apply the funds upon receipt. If the Mortgage Note and other Mortgage Loan related documents were delivered to the Subservicer by the Owner or the Custodian in connection with the Mortgagor’s delinquency, the Subservicer will return the Mortgage Note and other Mortgage Loan related documents to the Owner or the Custodian to be included in the Mortgage Loan Documents upon receipt of the reinstatement funds from the Mortgagor.

     Section 4.17 Servicing REO Property.

     (a) In the event that title to the Mortgaged Property is acquired by deed in lieu of foreclosure executed prior to the commencement of a foreclosure proceeding, then the deed or certificate of sale shall be issued in the name of the Owner or an Owner Designee. In the event that title to the Mortgaged Property is acquired in foreclosure or prior to the completion of a foreclosure proceeding commenced by the Subservicer, then the deed shall be issued in the name of Owner or the Owner Designee. The Subservicer shall cooperate with the Owner or the Owner Designee in connection with the transfer and assignment of title and ownership of REO Properties following foreclosure proceedings or the execution of deeds in lieu of foreclosure.

     (b) The Subservicer shall manage, conserve, protect, and operate each REO Property in accordance with Accepted Servicing Practices, either through itself or through an agent selected by the Subservicer, and in the manner that similar property in the same locality as the REO Property is managed. Consistent with the provisions of Exhibit I, if the Subservicer deems it advisable, the Subservicer may, in accordance with Accepted Servicing Practices, order

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one or more Valuations with respect to the REO Property. The Subservicer shall attempt to sell such REO Property on such terms and conditions as the Subservicer deems to be in the best interest of the Owner or the Owner Designee, as applicable. Pursuant to the terms of the applicable Limited Power of Attorney, the Subservicer shall be authorized to execute and deliver on behalf of the Owner or the Owner Designee, as applicable, all deeds, instruments of transfer and other closing documentation necessary and desirable to implement the disposition of REO Property.

     (c) The Subservicer shall also maintain on each REO Property fire and hazard insurance with extended coverage, liability insurance and, to the extent required and available under the National Flood Insurance Act of 1968, as amended, flood insurance, and all other insurance coverage required under Section 4.9.

     (d) Each REO Disposition shall be carried out by the Subservicer as provided in Exhibit I. If as of the date title to any REO Property was acquired by the Subservicer there were outstanding unreimbursed Servicing Advances with respect to the REO Property, the Subservicer, upon an REO Disposition of such REO Property, shall be entitled to reimbursement for any such unreimbursed Servicing Advances from proceeds received in connection with such REO Disposition. The proceeds from the REO Disposition, net of any payment to the Subservicer as provided above, shall be deposited within two (2) Business Days of receipt in the P&I Custodial Account following receipt thereof for distribution on the next Remittance Date.

     (e) The Subservicer shall cause each REO Property to be inspected promptly upon the acquisition of title thereto and shall cause each REO Property to be inspected at least annually thereafter. The Subservicer shall make or cause to be made an electronic report of each such inspection. Such reports shall be retained in the Mortgage Servicing File and copies thereof shall be forwarded by the Subservicer to the Servicer upon request. That statement shall be accompanied by such other information as the Servicer shall reasonably request.

     (f) Upon the foreclosure sale of any Mortgaged Property or the acquisition thereof by the Owner or the Owner Designee, as applicable, or pursuant to a deed in lieu of foreclosure, the Subservicer shall submit to the Owner or the Owner Designee, as applicable, a liquidation report with respect to such Mortgaged Property.

     (g) Following the foreclosure sale or abandonment of any Mortgaged Property, the Subservicer shall report such foreclosure or abandonment to the Owner and as required pursuant to Section 6050J of the Code or any successor provision thereof.

     (h) In the event that Owner requests the transfer of a serviced REO Property from the Subservicer, all costs incurred by the Subservicer in marketing the subject REO Property (prior to the Owner’s transfer request) shall be reimbursable as a Servicing Advance. Additionally, any costs and/or penalties payable by the Subservicer to a third party (to which Subservicer has delegated some or all of its duties with respect to such REO Property pursuant to Section 4.5) then-payable in connection with such REO Property shall be reimbursable as a Servicing Advance.

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     (i) The Subservicer shall deposit or cause to be deposited, on a daily basis in the P&I Custodial Account, all revenues received, including revenues from rental of an REO Property and sale proceeds, with respect to each REO Property and shall withdraw therefrom funds necessary for the proper operation, management and maintenance of the REO Property, including the cost of maintaining any hazard insurance pursuant to Section 4.9 hereof and the fees of any managing agent acting on behalf of the Subservicer.

     (j) In accordance with, and subject to the limitations of, Sections 4.5 and 4.17(j), the Subservicer may outsource the management, conservation, protection and operation of REO Property to a third party, which arrangement will result in fees to the Owner, provided that Subservicer shall seek written approval of Servicer of the third party and such fees to be charged. Such reasonable fees would be reimbursable to the Servicer as Servicing Advances. Home Select Settlement Solutions, LLC is a third party of which Servicer approves.

     Section 4.18 Satisfactions.

     The Subservicer is hereby authorized and empowered to execute and deliver on behalf of itself and the Owner all instruments of satisfaction or of partial or full release and all other comparable instruments with respect to the Mortgage Loans and Mortgaged Properties. The Subservicer shall take all actions necessary to satisfy mortgages and release their liens in a timely manner. Once the required release or satisfaction documents are executed and recorded, if applicable, and the Mortgage Note is canceled, the Subservicer shall promptly send the canceled documents to the Mortgagor if state law requires such action or the Mortgagor specifically requests the return of the documents. In other instances, the Subservicer may either return the documents to the Mortgagor or retain them (as long as they are not destroyed until after the retention period required by applicable law). The Subservicer should also take any other steps required to release the lien and assure that no penalties are incurred because the actions were not performed in a timely manner. The Subservicer may not seek reimbursement from the Owner or the Mortgagor for any penalty fee that the Subservicer has to pay because the Subservicer failed to process any release or satisfaction documents within the required time frame. If the Owner, its designee, or the Custodian fails to do so, the Subservicer may seek reimbursement from the Owner for any penalty that the Subservicer pays because the release or satisfaction was not processed in the required time frame as a result of Owner’s failure, its designee’s failure or the Custodian’s failure to act in a timely manner as a Servicing Advance under the terms of this Agreement. The Subservicer shall generally follow the procedures set forth in the Fannie Mae Guidelines regarding satisfactions of mortgages.

     Section 4.19 Servicing Advances and Pass-Through Expenses.

     (a) The Subservicer shall not have any obligation or duty hereunder to: (i) advance any amounts constituting delinquent principal and interest payments or (ii) advance any amounts that would otherwise constitute a Servicing Advance hereunder if the Subservicer reasonably determines that such amount is not likely to be recovered from late payments, insurance proceeds, liquidation proceeds, condemnation proceeds on the related Mortgage Loan or REO Property. Notwithstanding any provision to the contrary herein, including without limitation that any Servicing Advance is subsequently determined to be non-recoverable, the

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Subservicer shall be entitled to recover any Servicing Advance and any Pass-Through Expenses in accordance with the terms of Section 6.3 and Section 6.4(b)(iii).

     (b) The Subservicer shall provide and maintain appropriate procedures to ensure that each individual Servicing Advance and Pass-Through Expense is accounted for as a single item and amount without any duplication thereof.

     (c) Notwithstanding anything to the contrary contained herein, if at the end of any calendar month, the amount of unreimbursed Servicing Advances (excluding Non-recoverable Servicing advances) and unreimbursed HELOC draws exceed the aggregate amount collected by the Subservicer during such calendar month in accordance with the provisions of this Agreement, the Subservicer shall so notify the Servicer and the Owner shall remit the total amount of such shortfall plus accrued interest at the rate of LIBOR plus four percent (4%) to the Subservicer for each calendar day after the end of the calendar month until the day the payment is made, which shall be within seven (7) days of such notification. If the Owner fails to pay to the Subservicer the amount of any such shortfall within thirty (30) days of the related notification by the Subservicer to the Owner of such shortfall, such failure shall constitute an Event of Default under Section 9.1(k).

     Section 4.20 Mortgage Loan Transfers.

     (a) The Subservicer and the Owner agree that with respect to some or all of the Mortgage Loans, the Owner may affect one or more Whole Loan Transfers without the Subservicer’s prior consent; provided, however, that Owner shall pay to Subservicer the Deboarding Fee payable per Mortgage Loan pursuant to this Agreement with respect to each Whole Loan Transfer; provided further, that the minimum total amount due from Owner to Subservicer in connection with each such Whole Loan Transfer shall be $750 With respect to each Whole Loan Transfer entered into by the Owner, the Subservicer agrees:

     (i) to cooperate fully with Owner and any prospective purchaser with respect to all reasonable requests and due diligence procedures including participating in meetings with rating agencies, bond insurers and such other parties as Owner shall designate and participating in meetings with prospective purchasers of the Mortgage Loans or interests;

     (ii) to cooperate with the Owner and any prospective purchaser with respect to the preparation, endorsement, assignment, or delivery, as the case may be, of any of the Mortgage Loan Documents and other related documents, with respect to servicing requirements reasonably requested by the rating agencies and credit enhancers;

     (iii) to execute each reconstitution agreement in connection with any such transfer; subject to and conditioned upon the following: (1) the Subservicer shall be paid a monthly servicing fee thereunder that is agreed upon at reconstitution; and (2) with respect to those Mortgage Loans that will be included as part of the loan pool under such reconstitution agreement, the Subservicer shall have been transferred the servicing of such Mortgage Loans under this Agreement prior to the first remittance period under such reconstitution agreement; provided, however, that each of the

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Owner and the Subservicer is given an opportunity to review and reasonably negotiate in good faith the content of such reconstitution agreement to the extent the terms thereof are not specifically referenced or provided for herein;

     (iv) to make reasonable and customary representations and warranties regarding Subservicer; and

     (v) to deliver to Owner, and to any Person designated by the Owner, such legal documents, in-house opinions of counsel, and outside legal opinions as are customarily delivered by servicers and reasonably determined by Owner to be necessary in connection with Whole Loan Transfers; provided, however, that: the cost of any such opinions of outside counsel (other than customary corporate opinions as to organization, existence and authorization) that may be required shall be approved by Owner in advance, paid by the Subservicer and reimbursed by the Owner as Pass-Through Expenses, in accordance with this Agreement.

     (b) The Subservicer and the Owner agree that with respect to some or all of the Mortgage Loans, the Owner may affect Pass-Through Transfers without the Subservicer’s prior consent; provided, however, that Owner shall pay to Subservicer the Deboarding Fee payable per Mortgage Loan pursuant to this Agreement with respect to each Pass-Through Transfer; provided further, that the minimum total amount due from Owner to Subservicer in connection with each such Pass-Through Transfer shall be $750. With respect to each Pass-Through Loan Transfer entered into by the Owner, the Subservicer agrees:

     (i) to cooperate fully with Owner and any prospective purchaser with respect to all reasonable requests and due diligence procedures including participating in meetings with rating agencies, bond insurers and such other parties as Owner shall designate and participating in meetings with prospective purchasers of the Mortgage Loans or interests therein and providing information reasonably requested by such purchasers;

     (ii) to cooperate with the Owner and any prospective purchaser with respect to the preparation, endorsement, assignment, or delivery, as the case may be, of any of the Mortgage Loan Documents and other related documents, with respect to servicing requirements reasonably requested by the rating agencies and credit enhancers;

     (iii) to execute each reconstitution agreement in connection with any such transfer; subject to and conditioned upon the following: (1) the Subservicer shall be paid a monthly servicing fee thereunder to be mutually agreed upon at reconstitution; and (2) with respect to those Mortgage Loans that will be included as part of the loan pool under such reconstitution agreement, the Subservicer shall have been transferred the servicing of such Mortgage Loans under this Agreement prior to the first remittance period under such reconstitution agreement; provided, however, that each of the Owner and the Subservicer is given an opportunity to review and reasonably negotiate in good faith the content of such reconstitution agreement to the extent the terms thereof are not specifically referenced or provided for herein;

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     (iv) to make reasonable and customary representations and warranties regarding Subservicer;

     (v) to deliver to Owner for inclusion in any prospectus or other offering material such relevant information regarding Subservicer, its financial condition, and its mortgage loan delinquency, foreclosure and loss experience and any additional information requested by Owner, or as is otherwise reasonably requested by Owner and which Subservicer is capable of providing without unreasonable effort or expense, and to indemnify Owner, any Trustee, any Master Servicer, any Securities Administrator, American General Finance, Inc., American General Finance, Inc.’s subsidiaries and any Person designated by Owner for Subservicer’s material misstatements contained in such information and for Subservicer’s omission of any material facts necessary to make Subservicer’s statements therein, in the light of the circumstances under which they were made, not misleading;

     (vi) to deliver to Owner and to any Person designated by Owner, at Owner’s expense, any such additional statements and audit letters of reputable, certified public accountants pertaining to information provided by Subservicer as shall be reasonably requested by Owner;

     (vii) to deliver to Owner, and to any Person designated by the Owner, such legal documents, in-house opinions of counsel, and outside legal opinions as are customarily delivered by servicers and reasonably determined by Owner to be necessary in connection with Pass-Through Transfers ; provided, however, that: (1) such in-house opinions of counsel for a Pass-Through Transfer are to be in a form reasonably acceptable to Owner; and (2) the cost of any such opinions of outside counsel (other than customary corporate opinions as to organization, existence and authorization) that may be required shall be approved by Owner in advance paid by the Subservicer and reimbursed by the Owner as Pass-Through Expenses, in accordance with this Agreement; and

     (viii) such certifications required by servicers pursuant to Section 3.2(a) of the Sarbanes-Oxley Act of 2002.

     (c) All Mortgage Loans not sold pursuant to a Whole Loan Transfer or Pass-Through Transfer shall be subject to this Agreement and shall continue to be serviced in accordance with the terms of this Agreement and with respect thereto this Agreement shall remain in full force and effect.

     Section 4.21 Prepayment Penalties.

     (a) Upon receipt of a request for a payoff, if the information provided by the Owner or the prior servicer to the Subservicer indicates that a prepayment penalty is applicable with respect to a Mortgage Loan, the Subservicer shall review the Mortgage Note to determine whether a prepayment penalty may be collected from the Mortgagor and shall be obligated to collect such prepayment penalty, if any. Notwithstanding anything herein to the contrary, the Subservicer shall have no obligation to collect, or make payments to the Owner with respect to,

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any prepayment penalties, Late Fees, or other fees or items which are prohibited under applicable law for that Mortgage Loan. In addition, as long permissible under Exhibit I, the Subservicer may also waive, in whole or in part, any such fees mentioned in the preceding sentence if: (i) the enforceability thereof is limited (1) by bankruptcy, insolvency, moratorium, receivership or other similar laws relating to creditor’s rights or (2) due to acceleration in connection with a foreclosure or other involuntary payment or (ii) such waiver relates to a default or a reasonably foreseeable default and would, in the reasonable judgment of the Subservicer, maximize recovery of total proceeds taking into account the value of such fees and the related Mortgage Loan.

     (b) Upon transfer of servicing of a Mortgage Loan to the Subservicer, if the servicing transfer tape or data provided to the Subservicer indicates that such Mortgage Loan has a prepayment penalty, then the Subservicer shall flag its system to indicate that a prepayment penalty is applicable with respect to such Mortgage Loan.

     (c) Except as provided in this Section 4.21, in no event will the Subservicer waive a prepayment penalty in connection with a refinancing of a Mortgage Loan that is not related to a default or a reasonably foreseeable default without Servicer’s written approval. If the Subservicer waives or does not collect all or a portion of a prepayment penalty relating to a Principal Prepayment in full or in part due to any action or omission of the Subservicer, other than as permitted above, the Subservicer shall deposit from its own funds without any right of reimbursement therefore the amount of such prepayment penalty (or such portion thereof as had been waived for deposit) in the P & I Custodial Account for distribution in accordance with the terms of this Agreement.

     Section 4.22 Restoration and Repair.

     The Subservicer need not obtain the approval of the Servicer prior to releasing any Insurance Proceeds or Condemnation Proceeds to the Mortgagor to be applied to the restoration or repair of the Mortgaged Property or REO Property if such release is in accordance with Accepted Servicing Practices and the terms of this Agreement. If Insurance Proceeds or Condemnation Proceeds exceed $10,000, the Subservicer shall comply with the following conditions in connection with any such release :

     (a) the Subservicer shall receive satisfactory independent verification of completion of repairs and issuance of any required approvals with respect thereto;

     (b) the Subservicer shall take all steps necessary to preserve the priority of the lien of the Mortgage, including, but not limited to requiring waivers with respect to mechanics’ and material men’s liens;

     (c) the Subservicer shall verify that the Mortgage Loan is not in default; and

     (d) pending repairs or restoration, the Subservicer shall place the Insurance Proceeds or Condemnation Proceeds in the Escrow Account.

     If the Owner is named as an additional loss payee, the Subservicer is hereby empowered to endorse any loss draft issued in respect of such a claim in the name of the Owner.

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     The Subservicer shall inspect the Mortgaged Property as often as is deemed necessary by the Subservicer to assure itself that the value of the Mortgaged Property is being preserved. In addition, if any Mortgage Loan is more than ninety (90) days Delinquent, the Subservicer shall immediately inspect the Mortgaged Property and shall conduct subsequent inspections in accordance with Accepted Servicing Practices. The Subservicer shall keep a written report of each such inspection.

     Section 4.23 Subservicer Bond, Errors and Omissions Insurance.

     The Subservicer shall maintain, at its own expense, a blanket Subservicer Bond and an errors and omissions insurance policy, with broad coverage with a Qualified Insurer on all officers, employees or other Persons acting in any capacity with regard to the Mortgage Loans to handle funds, money, documents and papers relating to the Mortgage Loans. The Subservicer Bond shall be in the form of the Mortgage Banker’s Blanket Bond and shall protect and insure the Subservicer against losses, including forgery, theft, embezzlement, misrepresentation and fraud. The errors and omissions insurance policy shall protect and insure the Subservicer against losses due to errors and omissions and negligent acts of such Persons. Such errors and omissions insurance policy shall also protect and insure the Subservicer against losses in connection with the failure to maintain any insurance policies required pursuant to this Agreement and the release or satisfaction of a Mortgage Loan without having obtained payment in full of the indebtedness secured thereby. No provision of this Section 4.23 requiring the Subservicer Bond and errors and omissions insurance policy shall diminish or relieve the Subservicer from its duties and obligations as set forth in this Agreement. The minimum coverage under any such bond and insurance policy shall be at least equal to the corresponding amounts required by Fannie Mae in the Fannie Mae MBS Selling and Servicing Guide. Upon request of the Servicer, the Subservicer shall cause to be delivered to the Owner a certified true copy of the Subservicer Bond and errors and omissions insurance policy and a statement from the surety and the insurer that such Subservicer Bond and errors and omissions insurance policy shall in no event be terminated or materially modified without thirty (30) days’ prior written notice to the Servicer.

     Section 4.24 Disaster Recovery.

     The Subservicer will maintain disaster recovery services at a dedicated facility which is equipped to handle Subservicer’s data center processing in the event disaster recovery is needed. Throughout the term of this Agreement, Subservicer shall maintain in effect contracts and/or arrangements which are substantially equivalent to those that are currently in effect.

     Subservicer will test its disaster recovery capabilities at least once per calendar year and provide the results of each such test to Servicer. Subservicer will notify Servicer within one (1) hour of an event occurring that will likely result in service interruption in excess of forty-eight (48) hours. Following such a communication, Subservicer will provide updates on an hourly basis as to whether or not a disaster will be declared.

     Subservicer will provide off-site storage for Owner’s data files so that they can be reconstructed in the event of loss or destruction of Owner’s processing files at Subservicer’s location.

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     Section 4.25 High Cost Loans.

     To the extent any Mortgage Loan is discovered to be a High Cost Loan, the Subservicer shall continue to service such High Cost Loan provided that the unpaid principal balance of all High Cost Loans that the Subservicer is subservicing under this Agreement with Owner, as of any date of determination, is not more than five million ($5,000,000) dollars (or such other amount as mutually agreed upon by the Subservicer and the Owner); provided that, in the event the addition of any High Cost Loan(s) results in the unpaid principal balance of all High Cost Loans that the Subservicer is servicing pursuant to this Agreement with Owner, as of such date of determination, becomes greater than five million ($5,000,000) dollars (or such other amount as mutually agreed upon by the Subservicer and the Owner), the Subservicer shall promptly notify the Owner of such event and shall service transfer one or more High Cost Loans within one-hundred eighty (180) calendars days of Owner’s receipt of such notice such that, after the date of such service transfer, the unpaid principal balance of all High Cost Loans that the Subservicer is servicing pursuant to this Agreement with Owner, as of such date of determination, is less than five million ($5,000,000) dollars (or such other amount as mutually agreed upon by the Subservicer and the Owner); provided further that the specific High Cost Loans to be serviced transferred shall be selected by the Owner in its sole discretion. The Subservicer shall not have any affirmative obligation to determine whether a Mortgage Loan is a High Cost Loan or satisfies the document disclosure or other requirements applicable to High Cost Loans.

ARTICLE V
COMPENSATION TO THE SUBSERVICER

     Section 5.1 Compensation to the Subservicer.

     With respect to each Mortgage Loan, as compensation for its services under this Agreement the Subservicer shall be entitled to withdraw from the P & I Custodial Account when earned the fees (collectively, the “Subservicing Fees”) set forth on the Pricing Schedule attached hereto as Exhibit D. As additional servicing compensation, the Subservicer shall be entitled to receive an amount equivalent to all Ancillary Income (except as otherwise described in Section 4.2(j)) with respect to the Mortgage Loans.

ARTICLE VI
ACCOUNTING

     Section 6.1 General.

     Upon the initial Servicing Transfer Date, the Subservicer shall establish one or more escrow accounts (including subaccounts) for the deposit of Escrow funds collected (each a “T & I Escrow Account”) and one or more custodial accounts for the deposit of funds collected in connection with the Mortgage Loans for principal and interest (each a “P & I Custodial Account”). All of the foregoing accounts shall be maintained in accordance with sound and controlled practices and the Subservicer shall segregate and hold all funds collected and received separate and apart from any of its own funds and general assets. The funds in the T & I Escrow Accounts and the P & I Custodial Accounts may not be commingled with any other

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funds, including the proceeds of any other mortgage loans or with funds serviced for other investors or for the Subservicer’s own portfolio.

     Section 6.2 Account Maintenance.

     Each P & I Custodial Account and T & I Escrow Account shall meet the following guidelines:

     (a) The accounts shall be any of (i) an account or accounts maintained with a federal or state chartered depository institution or trust company the short-term unsecured debt obligations of which (or, in the case of a depository institution or trust company that is the principal subsidiary of a holding company, the short-term unsecured debt obligations of such holding company) are rated “A—1” by S&P and “P-1” by Moody’s at the time any amounts are held on deposit therein, (ii) an account or accounts the deposits in which are fully insured by the FDIC, or (iii) a trust account or accounts maintained with the trust department of a federal or state chartered depository institution, national banking association or trust company acting in its fiduciary capacity and the short-term unsecured debt obligations of which (or, in the case of a depository institution or trust company that is the principal subsidiary of a holding company, the short-term unsecured debt obligations of such holding company) are rated “P-1” by Moody’s at the time any amounts are held on deposit therein (each a “Qualified Depository”). The accounts may bear interest. If an account ceases to meet the criteria as described above, the account shall be moved within fifteen (15) Business Days to a depository which does satisfy one of the clauses above.

     (b) The name of each P & I Custodial Account and T & I Escrow Account shall be designated as:

     (i) T & I Escrow Account: “Nationstar Mortgage LLC, as agent and custodian for the mortgagors T&I Account — (Owner)”; and

     (ii) P & I Custodial Account: “Nationstar Mortgage LLC, P & I Account, in trust and as custodian for (Owner)., or any successor mortgagees.”

     (c) The Subservicer shall provide a reconciliation of each P & I Custodial Account to the Owner within 30 days after each month end. Subservicer shall provide for on-line view access to custodial accounts or PDF transmissions of transactions in lieu of on-line access.

     (d) All collections on the Mortgage Loans with posting instructions shall be deposited to the P & I Custodial Account no later than two (2) Business Days following the day on which good funds are received by the Subservicer.

     (e) Each T & I Escrow Account will be maintained at the expense of the Subservicer. Such accounts may be interest-bearing accounts; provided, however, that such accounts shall comply with the Legal Requirements and all local, state and federal laws and regulations governing interest-bearing accounts and borrower escrow accounts.

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     (f) If the Subservicer elects or is required by law to deposit a Mortgagor’s Escrow funds into an interest-bearing account, the Subservicer shall remain obligated to pay the Mortgagor’s taxes and insurance premiums when due, even if the Mortgagor’s Escrow funds are not subject to withdrawal on demand. Any amounts held in the P & I Custodial Account may be, but are not required to be, invested, and if invested by the Subservicer, such funds will be invested in Eligible Investments. Other than interest or other income received on Eligible Investments, which shall belong to the Subservicer and which may be withdrawn by the Subservicer from the P & I Custodial Account in accordance with Section 6.3 hereof, no other amounts may be commingled in the P & I Custodial Account. The Subservicer shall promptly deposit in the P & I Custodial Account from its own funds, without any right of reimbursement, the full amount of any losses on its investment of funds in the P & I Custodial Account.

     Section 6.3 P & I Custodial Account; Remittance.

     (a) The following funds received with respect to the Mortgage Loans shall be transferred into the P & I Custodial Account within two (2) Business Days of the receipt of good funds (together with information sufficient to identify the Mortgage Loan to which such funds relate). The Subservicer shall maintain separate accounting for each category of funds. Such funds may be net of reimbursements for any unreimbursed Servicing Advances and Pass-Through Expenses and any unpaid Subservicing Fees pursuant to Section 5.1 hereof:

     (i) principal collections (including prepayments and curtailments);

     (ii) interest collections;

     (iii) Liquidation Proceeds and Insurance Proceeds (except as set forth in Section 6.4(a) hereof);

     (iv) the net proceeds of any sale of an REO Property pursuant to Section 4.19 hereof;

     (v) prepayment penalties, if any;

     (vi) any amounts deposited in accordance with the last sentence of Section 6.2 hereof;

     (vii) any amounts required to be deposited by the Subservicer pursuant to Section 4.9 in connection with the deductible clause in any blanket hazard insurance policy, such deposit being made from the Subservicer’s own funds, without reimbursement therefore; and

     (b) The Subservicer may from time to time withdraw funds from the P & I Custodial Account for the following reasons:

     (i) to reimburse itself for any unreimbursed Pass-Through Expenses and unreimbursed Servicing Advances, and any unpaid Subservicing Fees pursuant to Section 5.1(a) (and Subservicer shall prepare and deliver to Servicer, a report

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detailing the reimbursement of any Servicing Advances, Pass-Through Expenses and Subservicing Fees from the P & I Custodial Account);

     (ii) to reimburse itself for Non-recoverable Servicing Advances;

     (iii) to reimburse itself for any unreimbursed HELOC draws;

     (iv) to pay itself Ancillary Income, to the extent not retained or previously paid to Subservicer to make remittances to the Owner, as set forth in subsection (c);to clear and terminate the P & I Custodial Account;

     (v) to transfer funds in any P & I Custodial Account to another P & I Custodial Account maintained by a Qualified Depository;

     (vi) to remove any deposits made in error; and

     (vii) to cover non-sufficient funds..

     (c) On each Remittance Date, the Subservicer shall remit all amounts in the P & I Custodial Account as of the close of business on the related Determination Date, net of allowable withdrawals under subsection (b), to the Owner by wire transfer of immediately available funds to the account designated in writing by the Owner.

     (d) With respect to any remittance received by the Owner after the Business Day on which such payment was due, the Subservicer shall pay to the Owner interest on any such late payment at LIBOR, plus two (2) percentage points but in no event greater than the maximum amount permitted by applicable law. Such interest shall be paid by the Subservicer to the Owner on the date such late payment is made and shall cover the period commencing with the Business Day on which such payment was due and ending with the Business Day on which such payment is made, both inclusive. Such interest shall be remitted along with such late payment. The payment by the Subservicer of any such interest shall not be deemed an extension of time for payment or a waiver by the Owner of any Subservicer Event of Default.

     Section 6.4 T & I Escrow Accounts.

     (a) The following funds shall be deposited into the applicable T & I Escrow Account promptly after the Subservicer’s receipt and verification of such amounts and the Subservicer shall maintain separate accountings for each of these types of funds:

     (i) Mortgagors’ Escrow Payments;

     (ii) Loss drafts;

     (iii) Unapplied funds; and

     (iv) Liquidation Proceeds that offset a deficit balance in a Mortgagor’s Tax and Insurance Reserve.

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     (b) The Subservicer may make withdrawals from the applicable T & I Escrow Account for the following:

     (i) timely payment of Mortgagors’ taxes and insurance premiums;

     (ii) refunds to Mortgagors of excess Escrow funds collected;

     (iii) reimbursement to itself for all T & I Advances made by the Subservicer with respect to the related Mortgage Loan;

     (iv) pay interest, if required, to Mortgagors on funds in the T & I Accounts;

     (v) removal of any deposits made in error;

     (vi) termination of the account;

     (vii) disburse loss drafts to contractors for repairs to Mortgaged Property damaged by hazard losses;

     (viii) pay loss drafts to Mortgagors to the extent a loss draft exceeds total hazard loss repair charges and the Tax & Insurance Reserve deficiency; and

     (ix) cover non-sufficient funds.

     (c) The Subservicer shall not allow the T & I Escrow Accounts to become overdrawn. If there are insufficient funds in an account, the Subservicer will make a Servicing Advance which shall be reimbursable pursuant to the terms of this Agreement.

     (d) Each T & I Escrow Account is to be designated in the name of the Subservicer acting as an agent for the applicable Mortgagors in order to show that the account is custodial in nature. The Subservicer is required to keep records identifying each Mortgagor’s payment deposited into the account.

     Section 6.5 Interest on Tax and Insurance Reserves.

     If the law requires payment of interest on Tax and Insurance Reserves to the Mortgagor, the Subservicer is solely and fully responsible for payment of such interest. Payment of such interest on Tax and Insurance Reserves shall not be reflected in the Subservicer’s accounting for principal and interest.

     Section 6.6 Access to Records.

     (a) The Subservicer will establish and maintain a system of: (i) records of operational information relating to the collection of Mortgage Loans, the conduct of default management services and the administration, management, servicing, repair, maintenance, rental, sale, or other disposition of Mortgage Loans and Mortgaged Property and (ii) books and accounts, which shall be maintained in accordance with customary business practices, of

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financial information relating to the Mortgage Loans and the Mortgaged Properties. Information may be maintained on a computer or electronic system.

     (b) The Owner, Servicer and the Owner’s accountants, attorneys, agents, or designees may at the Owner’s expense upon reasonable prior written notice and at reasonable times during the Subservicer’s regular business hours, examine the Subservicer’s books and records relating to the Mortgage Loans and the Mortgaged Properties. Such records shall not include any proprietary or confidential information, as reasonably determined by the Subservicer. In addition, the Subservicer may provide to Owner at Owner’s expense, any other information reasonably requested by the Owner related to the Mortgage Loans and Mortgaged Properties, subject to compliance by the Subservicer and Owner with the Legal Requirements, including without limitation, the Gramm-Leach-Bliley Act.

ARTICLE VII
REPORTS TO THE OWNER

     Section 7.1 Reports to the Owner.

     (a) The Subservicer shall prepare and deliver to the Owner the reports and files identified on Exhibit G-1 and Exhibit G-2 in accordance with the time frames set forth thereon; provided, however, that in the event the Subservicer fails to provide such reports and files within such time frames, the Subservicer shall submit to the Owner within ten (10) Business Days of such failure a written report detailing the reason for such failure and its recommended plan to overcome such failure in the future.

     (b) The Subservicer shall deliver to the Owner a written remittance advice on each Remittance Date.

     (c) With respect to each Reporting Date, the corresponding individual loan accounting report shall be received by the Owner no later than the next calendar date, which report shall contain the following:

     (i) with respect to each Monthly Payment, the amount of such remittance allocable to principal (including a separate breakdown of any Principal Prepayment, including the date of such prepayment, and any prepayment penalties or premiums, along with a detailed report of interest on principal prepayment amounts);

     (ii) with respect to each Monthly Payment, the amount of such remittance allocable to interest;

     (iii) the amount of servicing compensation received by the Subservicer since the preceding Remittance Date;

     (iv) the aggregate outstanding principal balance of the Mortgage Loans;

     (v) the aggregate of any expenses reimbursed to the Subservicer during the prior distribution period;

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     (vi) a listing of (a) the paid-through date of each Mortgage Loan, (b) the Mortgage Loans as to which foreclosure has commenced, which foreclosure shall be carried out in the name of the Owner or the Owner Designee, (c) the Mortgage Loans with respect to which the related Mortgagors that have declared bankruptcy; and (d) the Mortgage Loans as to which REO Property has been acquired; and

     (vii) a trial balance, sorted in the Owner’s assigned loan number order.

     (d) The Owner shall pay the Subservicer for any additional servicing reports, that are not customary in the mortgage servicing industry and for which the Subservicer would undertake significant expense to prepare. The cost for such reports or modification to existing reports, including reports or data in electronic form, shall be agreed to by the parties before Subservicer shall be obligated to produce such reports. Notwithstanding the previous sentence, if a requested report pertains to an Event of Default or other breach of this Agreement by the Subservicer, the cost of such report or reports shall be borne by the Subservicer. . Notwithstanding anything else stated previously in this subsection, Owner shall have sixty days after the effective date of this Agreement to review the reports required by this Section and determine what, if any, other reasonable reports Owner will request, and Subservicer and Owner shall mutually agree upon the type of reports to be provided by Subservicer, which reports shall be provided without additional cost, with delivery time of these reports to be as mutually agreed upon by Owner and Subservicer.

     Section 7.2 Annual Independent Certified Public Accountants’ Servicing Report.

     On or before March 30 of each year, beginning with March 30, 2011 (with respect to calendar year 2010), the Subservicer at its expense shall cause to be delivered to the Servicer a letter or letters of a firm of independent public accountants which is a member of the American Institute of Certified Public Accountants to the effect that such firm has examined certain documents and records relating to the Subservicer’s overall servicing operations and that on the basis of such an examination conducted substantially in compliance with the Uniform Single Attestation Program for Mortgage Bankers (the “Standards”), such firm confirms that such servicing has been conducted in compliance with the Standards, except for such significant exceptions or errors in the records that, in the opinion of such firm, the Uniform Single Attestation Program for Mortgage Bankers requires it to report.

     Subservicer will at its expense cause to be delivered to Servicer an initial SSAE 16 Type 2 report (formerly, through June 15, 2011, a Type II SAS 70 report) prepared by a firm of independent public accountants which is a member of the American Institute of Certified Public Accountants covering the period of April 1, 2011 to September 30, 2011, with a reporting deadline of November 15, 2011. Subservicer will provide a gap letter by January 31, 2012 to address any changes from September 30, 2011 to December 31, 2011. Thereafter, Subservicer will, at its expense, cause to be delivered to Servicer a SSAE 16 Type 2 report prepared by a firm of independent public accountants which is a member of the American Institute of Certified Public Accountants covering the annual periods of October 1 to September 30 each year with a reporting deadline of November 15. Subservicer will provide a gap letter to address any changes from September 30 to December 31 each year, which is due by January 31 of the following year. The scope of such SSAE 16 Type 2 reports shall be limited to documentation and testing of those

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areas directly affecting the servicing of the Mortgage Loans. Subservicer will also obtain a SSAE 16 Type 2 report as described above for its lockbox provider covering the annual periods of October 1 to September 30 each year with a reporting deadline of November 15 with the initial report covering the period of October 1, 2010 to September 30, 2011 will be due November 15, 2011. Subservicer will cause the Lockbox provider to provide a gap letter to address any changes from September 30 to December 31 each year, which is due by January 31 of the following year. The initial lockbox provider gap letter covering the period of October 1, 2011 to December 31, 2011 will be due January 31, 2012.

     As part of the initial year transfer of servicing from the Servicer to the Subservicer, the Subservicer will provide written representation to Servicer addressing any significant changes to systems and controls affecting the Mortgage Loans since December 31, 2010 through March 31, 2011 or note that there were no significant changes. Such representation letter is to be delivered by April 30, 2011. As a supplement to the initial USAP Report for 2010 to be delivered by March 30, 2011 as described above, the Subservicer at its expense shall cause to be delivered to the Servicer a letter of a firm of independent public accountants which is a member of the American Institute of Certified Public Accountants to the effect that such firm has examined certain documents and records relating to the Subservicer’s overall servicing of the Mortgage Loans through March 31, 2011 and, on the basis of such an examination conducted substantially in compliance with procedures to be mutually agreed upon between the Servicer, Subservicer and the firm of independent public accountants, to provide a report on the results of such examination. At a minimum the agreed upon procedures shall address transactional processes for payment processing, payoffs, adjustable rate mortgages, escrow balances, loan modifications, loan default processes, and REO management. Such report is to be delivered to Servicer by May 1, 2011. For the three months ended June 30, 2011, the Subservicer will provide written representation to Servicer addressing any significant changes to systems and controls affecting the Mortgage Loans since December 31, 2010 through June 30, 2011 or note that there were no significant changes. Such representation letter is to be delivered by July 31, 2011. For the three months ended September 30, 2011, the Subservicer will provide written representation to Servicer addressing any significant changes to systems and controls affecting the Mortgage Loans since December 31, 2010 through September 30, 2011 or note that there were no significant changes. Such representation letter is to be delivered by October 31, 2011.

     As part of Servicer’s review for Type II SAS 70 compliance, Servicer has conducted a security assessment review of Subservicer, as identified on Exhibit H. Subservicer agrees to take the necessary actions indicated “Remediation Required” within the times indicated on Exhibit H.

     Section 7.3 Reports of Foreclosures and Abandonment of Mortgaged Property.

     The Subservicer shall file, or cause to be filed, the information returns with respect to the receipt of mortgage interest received in a trade or business, the reports of foreclosures and abandonment of any Mortgaged Property and the information returns relating to cancellation of indebtedness income with respect to any Mortgaged Property required by Sections 6050H, 6050J, 6050P and any comparable or successor provisions of the Code, respectively. Such reports shall be in form and substance sufficient to meet the reporting requirements imposed by Sections 6050H, 6050J, 6050P of the Code and any comparable or successor provisions.

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     Section 7.4 Real Estate Owned Reports.

     Together with the statement furnished pursuant to Section 4.2, with respect to any REO Property, the Subservicer shall furnish to the Servicer a statement covering the Subservicer’s efforts in connection with the sale of such REO Property and any rental of such REO Property incidental to the sale thereof for the previous month, together with an operating statement.

     Section 7.5 Liquidation Reports.

     Upon the foreclosure sale of any Mortgaged Property or the acquisition thereof by the Owner Designee pursuant to a deed-in-lieu of foreclosure, the Subservicer shall submit to the Servicer a liquidation report with respect to such Mortgaged Property.

     Section 7.6 Compliance with Gramm-Leach-Bliley Act of 1999.

     With respect to each Mortgage Loan and related Mortgagor, the Subservicer shall comply with Title V of the Gramm-Leach-Bliley Act of 1999 and all applicable regulations promulgated thereunder, and shall provide all notices required thereunder with respect to the Subservicer and the Owner.

     Section 7.7 Reporting.

     The Subservicer shall prepare promptly each report required by applicable law including reports to be delivered to all governmental agencies having jurisdiction over the servicing of the Mortgage Loans and the Escrow Accounts, shall execute such reports or, if the Owner must execute such reports, shall deliver such reports to the Owner for execution prior to the date on which such reports are due and shall file such reports with the appropriate Persons. The Subservicer shall timely prepare and deliver to the appropriate Persons Internal Revenue Service forms 1098, 1099 and 1099A (or any similar replacement, amended or updated Internal Revenue Service forms) relating to any Mortgage Loan for the time period such Mortgage Loan has been serviced by the Subservicer. The Owner shall be solely responsible for filing any other forms including, without limitation and to the extent applicable, forms 1041 and K-1 or any similar replacement, amended or updated Internal Revenue Service forms. The reports to be provided under this subsection shall cover the period through the end of the month following the termination of this Agreement or, in the case of reports to be sent to the Internal Revenue Service, the end of the calendar year following termination of the Agreement. To the extent it is an Acceptable Servicing Practice, the Subservicer shall promptly prepare all reports or other information required to respond to any inquiry from, or give any necessary instructions to, any mortgage insurer, provider of hazard insurance or other insurer or guarantor, taxing authority, tax service, or the Mortgagor.

ARTICLE VIII
SUBSERVICER AND INDEMNIFICATION

     Section 8.1 Merger or Consolidation of the Subservicer.

     Notwithstanding anything herein to the contrary, any Person into which the Subservicer may be merged or consolidated, or any corporation resulting from any merger, conversion or

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consolidation to which the Subservicer shall be a party, or any Person succeeding to the business of the Subservicer, shall be the successor of the Subservicer hereunder, provided, however, that the successor or surviving Person must be an established housing and home finance institution, bank or other mortgage loan or equity servicer: (i) having a net worth of not less than $25 million, (ii) that is an FHA- Approved Mortgagee and a Freddie Mac or Fannie Mae approved servicer in good standing, and (iii) Owner in its sole discretion has approved as a Subservicer.

     Section 8.2 Limitation on Resignation.

     The Subservicer shall not resign from the obligations and duties hereby imposed on it except: (i) by mutual consent of the Subservicer and the Servicer, (ii) upon Subservicer’s good-faith determination that its duties hereunder are no longer permissible under applicable law and such incapacity cannot be cured by the Subservicer (including by hiring a subservicer for certain of the Mortgage Loans) or the Subservicer determines in good faith that curing such incapacity is not commercially reasonable, or (iii) upon not less than one hundred eighty (180) days’ prior written notice to Servicer. The Subservicer shall promptly notify the Servicer of any determination of the type described in clause (ii) above and provide an opinion of counsel acceptable to the Servicer to evidence such determination. In addition, the Subservicer shall use its best efforts to locate and engage a successor to it in the event of a resignation pursuant to clause (ii) above.

     Section 8.3 Subservicer Limitation on Liability and Indemnification.

     (a) Neither the Subservicer nor any of the directors, officers, agents or employees thereof shall be liable to the Owner for any action taken, or for refraining from the taking of any action, in good faith pursuant to this Agreement or for errors in judgment. The Subservicer and any director, officer, agent, or employee of the Subservicer may rely in good faith on any document of any kind which it reasonably believes has been properly executed and/or submitted by any appropriate Person respecting any matters arising hereunder.

     (b) Other than in connection with removing a Mortgage Loan from the MERS^® system pursuant to Section 4.2(g) or (k) hereof, the Subservicer does not assume any obligation to record the original Mortgage unless otherwise instructed to do so by the Servicer.

     (c) The Subservicer shall not be under any obligation to appear in, prosecute or defend any legal action that is not incidental to its duties hereunder and which in its opinion may involve it in any expenses or liability.

     (d) The Owner shall indemnify and hold harmless the Subservicer and its officers, employees, members, directors, Affiliates and representatives (collectively, the “Subservicer Indemnified Parties”) against any and all liability, cost and expense incurred by the Subservicer including, without limitation, all losses, damages, penalties, fines, forfeitures, reasonable legal fees and related costs and judgments resulting from any claim, demand, defense or assertion asserted against any Subservicer Indemnified Party in connection with: (i) any action with respect to the origination of a Mortgage Loan; (ii) any action of any originator, holder or servicer of the Mortgage Loans occurring prior to the related Servicing Transfer Date; (iii) a material breach by Owner of any representation, warranty, covenant, or obligation hereunder; (v)

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any document, instrument or any other information that is missing from the Servicing File on the Servicing Transfer Date that is necessary for the Subservicer to service the Mortgage Loans; (vi) lost or misplaced user ID or password by Owner (or Owner’s designee); (vii) following the directions and instructions of the Owner (or its designee); (viii) failure of Owner to repudiate all present or future unfunded portions of any HELOCs; (ix) any action or inaction taken in accordance with Accepted Servicing Practices and Legal Requirements by or on behalf of the Subservicer with respect to the termination, suspension or closing of a HELOC; or (x) any advances required on HELOCs; provided, however, that the Owner shall not be required to indemnify any Subservicer Indemnified Party against any such liability attributable to the willful misconduct, bad faith or negligence or reckless disregard of such Subservicer Indemnified Party or the failure of such Subservicer Indemnified Party to comply with any covenant or obligation applicable to it hereunder (unless such failure to comply is the result of a determination by the Subservicer that compliance with such covenant or obligation would not be permissible under applicable law). This indemnity shall survive the termination of this Agreement and the payment of the Mortgage Loans. The Subservicer shall promptly notify the Owner of any liability or claim for which the Subservicer expects to be indemnified pursuant to this Section.

     (e) The Owner shall be entitled to participate in and, upon notice to the Subservicer, assume the defense of any action or claim described in Section 8.3(d) in reasonable cooperation with, and with the reasonable cooperation of the Subservicer. The Subservicer shall have the right to employ its own counsel in any such action in addition to the counsel of the Owner, but the fees and expenses of such counsel shall be at the expense of the Subservicer, unless (i) the employment of counsel by the Subservicer at the Owner’s expense has been authorized in writing by the Owner, (ii) the Owner has not in fact employed counsel to assume the defense of such action within a reasonable time after receiving notice of the commencement of the action, or (iii) the named parties to any such action or proceeding (including any impleaded parties) include the Owner and the Subservicer, and the Subservicer has been advised by counsel that there may be one or more legal defenses available to it which are different from or additional to those available to the Owner. The Subservicer shall not be liable for any settlement of any such claim or action unless the Subservicer shall have consented thereto (which consent shall not be unreasonably conditioned, withheld or delayed). Any failure by the Subservicer to comply with the provisions of this Section shall relieve the Owner of liability only if such failure is materially prejudicial to the position of the Owner and then only to the extent of such prejudice.

     Section 8.4 Owner Limitation on Liability and Indemnification.

     (a) Neither the Owner, nor any of the directors, members, officers, agents or employees thereof shall be liable to the Subservicer for any action taken, or for refraining from the taking of any action, in good faith pursuant to this Agreement or for errors in judgment. The Owner and any director, member, officer, agent, or employee of the Owner may rely in good faith on any document of any kind, which it reasonably believes has been properly executed and/or submitted by any appropriate Person respecting any matters arising hereunder.

     (b) The Subservicer shall indemnify and hold harmless the Owner and its officers, employees, members, directors, Affiliates and representatives (collectively, the “Owner Indemnified Parties”) against any and all liability, cost and expense incurred by the Owner,

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including, without limitation, all losses, damages, penalties, fines, forfeitures, reasonable legal fees and related costs and judgments resulting from any claim, demand, defense or assertion asserted against any Owner Indemnified Party in connection with (i) the failure of the Subservicer to perform its duties and service the Mortgage Loans in compliance with the terms of the Agreement or (ii) a material breach of any representation, warranty, covenant or obligation made by the Subservicer hereunder; provided, however, that the Subservicer shall not be required to indemnify any Owner Indemnified Party against any such liability attributable to the willful misconduct, bad faith, negligence or reckless disregard of such Owner Indemnified Party or the failure of such Owner Indemnified Party to comply with any covenant or obligation applicable to it hereunder (unless such failure to comply is the result of a determination by the Owner that compliance with such covenant or obligation would not be permissible under applicable law). This indemnity shall survive the termination of this Agreement and the payment of the Mortgage Loans. The Owner shall promptly notify the Subservicer of any liability or claim for which the Owner expects to be indemnified pursuant to this Section.

     (c) The Subservicer shall be entitled to participate in and, upon notice to the Owner, assume the defense of any action or claim described in Section 8.4(b) in reasonable cooperation with, and with the reasonable cooperation of the Owner. The Owner shall have the right to employ its own counsel in any such action in addition to the counsel of the Subservicer, but the fees and expenses of such counsel shall be at the expense of the Owner, unless (i) the employment of counsel by the Owner at the Subservicer’s expense has been authorized in writing by the Subservicer, (ii) the Subservicer has not in fact employed counsel to assume the defense of such action within a reasonable time after receiving notice of the commencement of the action, or (iii) the named parties to any such action or proceeding (including any impleaded parties) include the Subservicer and the Owner, and the Owner has been advised by counsel that there may be one or more legal defenses available to it which are different from or additional to those available to the Subservicer. The Owner shall not be liable for any settlement of any such claim or action unless the Owner shall have consented thereto (which consent shall not be unreasonably conditioned, withheld or delayed). Any failure by the Owner to comply with the provisions of this Section shall relieve the Subservicer of liability only if such failure is materially prejudicial to the position of the Subservicer and then only to the extent of such prejudice.

     Section 8.5 Notice of Litigation.

     In the event of litigation with respect to the Mortgage Loans or any duty under this Agreement, the party being served shall notify the other party promptly, and, in any case, within ten (10) days of receipt of service. The parties will cooperate in the handling of such litigation.

ARTICLE IX
TERMINATION

     Section 9.1 Events of Default.

     The following events shall each constitute an “Event of Default” under this Agreement:

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     (a) Any failure by the Subservicer to deposit into the designated account or remit to the Owner any amount required to be so deposited or remitted under this Agreement on the date required under this Agreement within two days of the date such amount is due;

     (b) The Subservicer shall fail to provide to the Owner any report required by this Agreement to be provided to the Owner within three days of the date such report is due;

     (c) The entry against the Subservicer or the Owner of a decree or order of a court or agency or supervisory authority having jurisdiction in the premises for the appointment of a conservator, receiver, liquidator, trustee or similar official in any bankruptcy, insolvency, conservatorship, receivership, readjustment of debt, marshaling of assets and liabilities or similar proceedings, or for the winding-up or liquidation of its affairs, which decree or order shall have remained in force undischarged or unstayed for a period of sixty (60) consecutive days;

     (d) The Subservicer or the Owner shall consent to the appointment of a conservator, receiver, liquidator, trustee or similar official in any bankruptcy, insolvency, conservatorship, receivership, readjustment of debt, marshalling of assets and liabilities or similar proceedings of or relating to such party or of or relating to all or substantially all of the property of such party;

     (e) The Subservicer or the Owner shall admit in writing its inability to pay its debts generally as they become due, file a petition to take advantage of any applicable bankruptcy, insolvency or reorganization statute, make an assignment for the benefit of its creditors, voluntarily suspend payment of its obligations, or take any corporate action in furtherance of any of the foregoing;

     (f) The Subservicer shall be merged or consolidated into any Person or the Subservicer or the Owner shall assign or transfer or attempt to assign or transfer all or part of its rights and obligations hereunder, in each case except as permitted by this Agreement;

     (g) The Subservicer transfers or otherwise disposes of all or substantially all of its assets;

     (h) The inability of the Subservicer to, or the Subservicer loses its authority under any applicable government entity to, perform any material obligation hereunder;

     (i) The failure of the Subservicer to maintain its license to conduct business or service residential mortgages in any jurisdiction where the Mortgaged Properties are located;

     (j) Any breach by the Owner or the Subservicer of a representation or warranty made in Article III hereof (other than, in the case of the Owner, a representation or warranty set forth in Section 3.3(b) or Section 3.3(c) hereof) or any failure by the Owner or the Subservicer to perform any of their respective material obligations hereunder, which breach or failure continues unremedied for a period of thirty (30) days after the earlier of: (1) knowledge of such party of such breach or failure; and (2) the date on which written notice of such breach or failure requiring the same to be remedied shall have been given to such party; or

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     (k) In accordance with Section 4.19 (c) hereof, the failure of the Owner to pay to the Subservicer the amount of any shortfall within thirty (30) days of the related notification by the Subservicer to the Owner of such shortfall..

     The Owner may waive any default by the Subservicer in the performance of its obligations hereunder and its consequences. Upon any such waiver of a past default, such default shall cease to exist, and any Event of Default arising therefrom shall be deemed to have been remedied for every purpose of this Agreement. No such waiver shall extend to any subsequent or other default or impair any right consequent thereon except to the extent expressly so waived.

     Section 9.2 Termination of Agreement.

     (a) The obligations and responsibilities of the Subservicer shall terminate, with respect to any related Mortgage Loan(s) and/or REO Properties, upon the earliest of: (i) the final payment or other liquidation of the last Mortgage Loan and related REO Property and the remittance of all amounts due hereunder; (ii) the date designated by the Owner following the occurrence and during the continuance of an Event of Default with respect to the Subservicer (after giving effect to any applicable cure period), subject to compliance with the Legal Requirements for the transfer of the servicing of the Mortgage Loans; (iii) after ninety (90) days following the occurrence and during the continuance of an Event of Default with respect to the Owner (after giving effect to any applicable cure period), subject to compliance with the Legal Requirements for the transfer of the servicing of the Mortgage Loans; (iv) with respect to any Mortgage Loan or REO Property, the date on which the servicing of such Mortgage Loan or REO Property, as the case may be, has been transferred by the Owner to a successor servicer (or, in the case of a Pass-Through Transfer or Whole Loan Transfer, on the date on which such Mortgage Loan is to be serviced in accordance with the related reconstitution agreement); (v) the date specified in accordance with Section 8.2 above; (vi) at the sole discretion of Owner upon ninety (90) days notice to the Susbservicer (a “Termination for Convenience”), or (vii) with such other date as shall have been mutually agreed upon by the Subservicer and the Owner. Following the termination of the Subservicer, the Subservicer shall be paid all amounts due it under this Agreement in accordance with the terms of this Agreement.

     (b) In the event of a termination of this Agreement by the Owner in accordance with Section 9.2(a) above, upon receipt by the Subservicer of written notice of termination, all authority and power of the Subservicer under this Agreement, whether with respect to the Mortgage Loans or otherwise, shall pass to and be vested in a successor servicer appointed by the Owner at the time that the servicing functions are transferred from Subservicer to the successor servicer. The Subservicer shall cooperate with the Owner and successor servicer in effecting the termination of the Subservicer’s responsibilities and rights hereunder. In the event of a Termination for Convenience by the Owner, the Owner shall pay the applicable Deboarding Fee to the Subservicer in accordance with the terms of Exhibit D immediately upon such termination.

     (c) Upon written request from the Owner, the Subservicer shall (i) prepare, execute and deliver to the successor servicer all related Servicing Files; however, the Subservicer may retain copies of Servicing Files to the extent necessary to comply with the Legal

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Requirements and other laws; and (ii) be responsible for the costs of packaging and transferring all of the aforementioned materials to the Owner upon such termination. The Owner shall pay all reasonable shipping expenses associated with such transfer, unless Subservicer is terminated for an Event of Default or Subservicer resigns pursuant to Section 8.2(i) or (iii). Any remaining amounts pursuant to the preceding sentence shall be remitted by the Owner to the Subservicer no later than thirty (30) days after the Released Servicing Date. Subservicer shall do or cause to be done all other acts or things necessary or appropriate to affect the purposes of such notice of termination, including the transfer and endorsement or assignment of the Mortgage Loans and related documents.

     (d) Subservicer shall transfer to successor servicer for administration by it of all cash amounts which shall at the time be credited by the Subservicer to the P & I Custodial Account or T & I Escrow Accounts or thereafter received with respect to the Mortgage Loans. Notwithstanding any other term of this Agreement to the contrary and in all circumstances under which this Agreement is terminated, the Subservicer shall be entitled to offset against deposits in the P & I Custodial Account all unreimbursed Subservicing Fees, Servicing Advances and Pass-Through Expenses from any amounts due and owing to the Owner or successor servicer at the time of a corresponding servicing transfer.

     (e) This Section 9.2 shall survive any termination of this Agreement and any termination of this Agreement shall not prejudice the rights of Subservicer to recover any amounts due Subservicer under this Agreement.

ARTICLE X
MISCELLANEOUS PROVISIONS

     Section 10.1 Protection of Confidential and Proprietary Information.

     (a) The Subservicer shall keep confidential and shall not divulge to any party, without the Owner’s prior written consent, the terms and provisions of this Agreement, including, without limitation, the purchase price paid by the Owner for the Mortgage Loans, REO Properties and/or rights transferred pursuant to this Agreement and any information pertaining to such Mortgage Loans, REO Properties and/or rights, or any Mortgagor thereunder, except to the extent that it is appropriate for the Subservicer to do so in working with legal counsel, auditors, taxing authorities, or other governmental agencies, insurance carriers, any property inspector, or other Person necessary to fulfill the Subservicer’s obligations hereunder. Except as otherwise provided in this Agreement, including as specified in Section 10.1(j) with respect to the filing of a Form 8-K, the Owner shall keep confidential and shall not divulge to any party, without the Subservicer’s prior written consent, the terms and provisions of this Agreement, except to the extent that it is appropriate for the Owner to do so in working with legal counsel, auditors, taxing authorities, or other governmental agencies, insurance carriers, any property inspector, or other Person necessary to fulfill the Owner’s obligations hereunder. Notwithstanding any provision of this Agreement, the trademarks, trade secrets, know-how, business methods and practices, internal procedures and other intellectual property and confidential information of the Subservicer or the Owner, respectively (“Proprietary Information”) shall remain vested in the Subservicer and the Owner, respectively, and are not hereby transferred to the other party, and the Subservicer and the Owner shall have the right to

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take all actions necessary to protect their Proprietary Information. Notwithstanding the above, each party (and each employee, representative, or other agent of a party) may disclose to any and all persons, without limitation of any kind, the tax treatment and tax structure of the transaction and all materials of any kind (including opinions or other tax analyses) that are provided to it relating to such tax treatment and tax structure.

     (b) Except as otherwise set forth herein, the Subservicer agrees that it shall not refer to or use the Owner’s name or any derivation or significant portion of such name in any manner in any of its servicing, enforcement or collection activities with respect to any Mortgage Loan or in any advertising, printed material, electronic medium or other medium, without first obtaining the named party’s prior written consent, except to the extent that it is appropriate for the Subservicer to do so in working with legal counsel, auditors, taxing authorities, or other governmental agencies, insurance carriers, any property inspector, or other person necessary to fulfill the Subservicer’s obligations hereunder. The Subservicer shall inform its subservicers, contractors, advisors and agents of the restriction stated in this subparagraph (b) and shall take commercially reasonable steps to cause such parties to conduct their activities relating to the Mortgage Loans and REO Properties in compliance herewith. Except as required hereunder, no such named party shall have any obligation to give any such written consent and may withhold the same in its sole and absolute discretion.

     (c) All information of a non-public nature disclosed by Owner to Subservicer during the term of this Agreement (“Owner Proprietary Information”) (1) shall be deemed the property of Owner, (2) shall be used solely for the purposes of administering and otherwise implementing the terms of this Agreement, and (3) shall be protected by Subservicer in accordance with the terms of this Article X. Owner’s Proprietary Information shall also include all “non-public personal information” as defined in Title V of the Gramm-Leach-Bliley Act (15 U.S. C. Section 6801, et seq.) and the implementing regulations thereunder (collectively, the “GLB Act”), as the same may be amended from time to time, that Subservicer received from or at the direction of Owner and that concerns any of Owner’s “customers” and/or “consumers” (as defined in the GLB Act). Subservicer acknowledges that any Owner Proprietary Information being stored or processed by Subservicer is and shall remain the sole property of Owner and will take all such reasonable measures as may be necessary to protect the confidentiality of Owner Proprietary Information which comes into Subservicer’ possession, if any. Subservicer further agrees to observe complete confidentiality regarding all aspects of Owner Proprietary Information, including without limitation agreeing not to disclose or otherwise permit any other person or entity access to, in any manner, Owner Proprietary Information or any part thereof without Owner’s prior written consent, except that such disclosure or access shall be permitted to an employee of Subservicer requiring such access in the course of employment or a subcontractor of Subservicer. Subservicer shall not disclose or use Owner Proprietary Information for any purposes other than to carry out the purposes for which Owner disclosed the data to Subservicer, or as permitted by this Agreement. Notwithstanding the foregoing, Owner consents to the use by Subservicer of statistical data generated by Owner Proprietary Information provided that such use shall not result in the disclosure of Owner Proprietary Information which will directly or indirectly identify Owner or any specific individual. At the request of Owner, and upon payment to Subservicer of all undisputed monies due under the terms of this Agreement, Subservicer shall transfer any Owner Proprietary Information held by Subservicer to Owner. Upon termination of this Agreement, Subservicer’s rights to use or access Owner

55

Proprietary Information shall end immediately. In the event that Subservicer does not immediately return such Owner Proprietary Information to Owner, Subservicer agrees it will not access or use such Owner Proprietary Information in any manner and shall maintain such Owner Proprietary Information in a secure manner until its return to Owner. In the event that Owner desires for Subservicer to perform year-end IRS reporting or other services following deconversion from Subservicer’s system, Owner shall provide a written request for such services prior to the last week of deconversion activities. In such case, Owner acknowledges that Subservicer will retain a set of Owner’s Proprietary Information in order to perform such services. To the extent that Owner desires that Subservicer not retain Owner’s Proprietary Information in its secured, archived environment in accordance with its data retention policies, upon 1) written notice and instruction by Owner, 2) Subservicer’s receipt of all monies owed by Owner to Subservicer, and 3) Owner’s return of all Subservicer Proprietary Information to Subservicer, Subservicer shall destroy Owner’s Proprietary Information. Subservicer shall provide written certification of destruction within thirty (30) days following completion of such destruction. Owner shall be responsible for any regulatory or other concerns regarding retention of Owner Proprietary Information.

     (d) Subservicer presently maintains and will continue to maintain information security programs and measures designed to safeguard the security and confidentiality of Owner Proprietary Information. Such security programs and measures are and will be designed to identify and protect against reasonably foreseeable risks to (1) the security and confidentiality of Owner Proprietary Information, (2) the integrity of such information, and (3) unauthorized access to or use of such information that might result in substantial harm or inconvenience to any customer or consumer of Owner. Subservicer agrees to (1) periodically test the efficacy and appropriateness of such information security programs and (2) take reasonable measures to be able to detect and respond to security breaches, including widely known potential security failures that have been experienced by its vendors or others in the industry.

     (e) Subservicer will use commercially reasonable efforts to adhere to such additional security measures with respect to Owner’s Proprietary Information as may be reasonably imposed by Owner.

     (f) Subservicer also agrees to notify Owner, immediately following discovery, if any Owner Proprietary Information was, or is reasonably believed to have been, acquired by an unauthorized person. Notification required by this section may be delayed if a law enforcement agency determines that the notification of Owner will impede a criminal investigation. In such case, Subservicer shall notify Owner immediately after Subservicer has been notified that the law enforcement agency determines that it will not compromise the investigation. In the event of any such breach of security or unauthorized access, Subservicer agrees to use highest commercially reasonable efforts to cooperate with Owner to minimize the consequences of such security breach for Owner’s customers, and to provide all necessary information reasonably requested by Owner’s state and federal regulators.

     (g) Subservicer agrees to comply with any further notification requirements imposed from time to time by state and federal regulators with jurisdiction over the use of, and/or security relating to Owner’s Proprietary Information. Subject to the limitations of liability set forth in any other part of this Agreement, Subservicer expressly agrees that it will be

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responsible for all reasonable costs and expenses related to (i) an investigation and resolution of unauthorized access to Owner Proprietary Information while in Subservicer’s possession and (ii) notification of Owner’s customers affected by unauthorized access to such Owner Proprietary Information, in the event such notification is required by state or federal law or by Owner’s state and federal regulators.

     (h) Subservicer agrees to annually provide Owner with a written report assessing its vulnerability or potential vulnerability to security breaches, loss of data integrity, and threats to confidentiality.

     (i) Subservicer may disclose Owner Proprietary Information to third parties only after providing Owner with reasonable prior written notice (unless such notice is prohibited by law):

a)	to comply with a properly authorized civil, criminal, or regulatory investigation, subpoena or summons by Federal, State or local authorities; or
b)	to respond to judicial process or government regulatory authorities having jurisdiction over it for examination, compliance or other purposes.

     Upon receipt of such notice, Owner may seek an appropriate protective order. Subservicer shall use reasonable efforts to cooperate with Owner, at Owner’s sole cost, to pursue an appropriate protective order. It is further agreed that, if, in the absence of a protective order, Subservicer is legally compelled to disclose Owner Proprietary Information, Subservicer shall make commercially reasonable efforts to disclose only such portions of Owner Proprietary Information that are legally required to be disclosed. Except as set forth in this Section 10.1, Subservicer may disclose Owner Proprietary Information to third parties for any other purpose permitted by law, only after receiving prior written consent from Owner.

     (j) The parties acknowledge that this Agreement contains confidential information that may be considered proprietary by one or both of the parties, and agree to limit distribution of this Agreement to those individuals with a need to know the contents of this Agreement. In no event may this Agreement be reproduced or copies shown to any third parties (exclusive of contractors, subcontractors and agents who have a need for it) without the prior written consent of the other party, except as may be necessary by reason of legal, accounting, tax or regulatory requirements, in which event Owner and Subservicer agree to exercise reasonable diligence in limiting such disclosure to the minimum necessary under the particular circumstances. The parties further agree to seek commercial confidential status for this Agreement with any regulatory commission with which this Agreement must be filed, to the extent such a designation can be secured. Notwithstanding anything to the contrary in this Agreement, the Owner and its affiliates are allowed to disclose the Agreement as necessary to comply with any subpoena, order, regulation, ruling or request of any judicial, administrative or legislative body or committee or any self-regulatory body (including any securities body), including the filing of a Form 8-K with the Securities and Exchange Commission (with a copy of the Agreement) if they believe (in their sole discretion) that such a filing is necessary or appropriate; provided, however, in connection with any such filing the Owner and its affiliates shall request confidential treatment with respect to the pricing information set forth in Exhibit D of this Agreement.

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     (k) In addition, each party agrees to give notice to the other party of any demands to disclose or provide the Proprietary Information received from the other or any third party under lawful process prior to disclosing or furnishing Proprietary Information, and agrees to cooperate in seeking reasonable protective arrangements requested by the other party.

     Section 10.2 Notices.

     All demands, notices and communications hereunder shall be in writing and shall be deemed to have been duly given as of the next Business Day if sent by overnight courier, addressed as follows (or such other address as may hereafter be furnished to the other party by like notice):

a.	if to the Owner	American General Financial Services, Inc.
		601 N.W. Second Street
		Evansville, IN 47708
		Attention: General Counsel
b.	if to the Servicer	American General Financial Services, Inc.
		601 N.W. Second Street
		Evansville, IN 47708
		Attention: General Counsel
c.	if to the Subservicer	Nationstar Mortgage LLC
		350 Highland Drive
		Lewisville, Texas 75067
		Attention: Shawn Stone
d.	if to the Custodian	Wells Fargo Bank, N.A.
		751 Kasota Avenue
		Minneapolis, Minnesota 55414
		Attention: Document Custody

     Section 10.3 Severability Clause.

     Any part, provision, representation or warranty of this Agreement which is prohibited or which is held to be void or unenforceable shall be ineffective to the extent of such prohibition or unenforceability without invalidating the remaining provisions hereof. Any part, provision, representation or warranty of this Agreement which is prohibited or unenforceable or is held to be void or unenforceable in any jurisdiction shall be ineffective, as to such jurisdiction, to the extent of such prohibition or unenforceability without invalidating the remaining provisions hereof, and any such prohibition or unenforceability in any jurisdiction as to any Mortgage Loan

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shall not invalidate or render unenforceable such provision in any other jurisdiction. To the extent permitted by applicable law, the parties hereto waive any provision of law which prohibits or renders void or unenforceable any provision hereof. If the invalidity of any part, provision, representation or warranty of this Agreement shall deprive any party of the economic benefit intended to be conferred by this Agreement, the parties shall negotiate, in good-faith, to develop a structure the economic effect of which is as close as possible to the economic effect of this Agreement without regard to such invalidity.

     Section 10.4 Performance Audits.

     Subservicer will cooperate reasonably and in good faith with Owner or its auditors, internal or external, upon reasonable prior notice, for the purpose of inspecting, examining, and auditing the performance of the activities required by Subservicer of this Agreement provided, however, that any such inspection, examination and/or audit shall take place during normal business hours and shall not unreasonably interfere with the business operations of the Subservicer.

     Section 10.5 Counterparts.

     This Agreement may be executed simultaneously in any number of counterparts. Each counterpart shall be deemed to be an original, and all such counterparts shall constitute one and the same instrument.

     Section 10.6 Place of Delivery and Governing Law.

     The Agreement shall be construed in accordance with the laws of the State of New York and the obligations, rights and remedies of the parties hereunder shall be determined in accordance with the laws of the State of New York, except to the extent preempted by Federal law.

     Section 10.7 Waiver of Jury Trial.

     Each party hereby knowingly, voluntarily and intentionally, waives (to the extent permitted by applicable law) any right it may have to a trial by jury of any dispute arising under or relating to this Agreement and agrees that any such dispute shall be tried before a judge sitting without a jury.

     Section 10.8 Further Agreements.

     The Owner and the Subservicer agree to execute and deliver to the other such reasonable and appropriate additional documents, instruments or agreements as may be necessary or appropriate to effectuate the purposes of this Agreement.

     Section 10.9 Successors and Assigns; Assignment of Servicing Agreement.

     This Agreement shall bind and inure to the benefit of and be enforceable by the Subservicer and the Owner and the respective permitted successors and assigns of the Subservicer and the Owner. Except as contemplated by Section 8.1, the Subservicer shall not

59

assign this Agreement or sell or otherwise dispose of all or substantially all of its property or assets without the prior written consent of the Owner, which consent shall not be unreasonably withheld.

     Subject to the limitations set forth in Section 4.20 above, the Owner may assign its rights and obligations under this Agreement with respect to some or all of the related Mortgage Loans without the consent of the Subservicer. The Subservicer agrees to cooperate with the Owner in connection with any such assignment including, without limitation, executing such documents and entering into such agreements in order to give effect to such assignment. Except as otherwise provided in this Agreement, upon any such assignment and written notice thereof to the Subservicer, the Person to whom such assignment is made shall succeed to all rights and obligations of the Owner under this Agreement to the extent of the related Mortgage Loan or Mortgage Loans and this Agreement, to the extent of the related Mortgage Loan or Mortgage Loans, shall be deemed to be a separate and distinct Agreement between the Subservicer and the assignee of the related Mortgage Loan or Loans.

     Notwithstanding any other provision of this Agreement, Subservicer shall have the right following thirty (30) days’ notice to the Owner to assign, transfer and pledge any right Subservicer has to receive payment under this Agreement without the consent of the Owner.

     Section 10.10 Amendments, Etc.

     No term or provision of this Agreement may be amended, waived or modified unless such amendment, waiver or modification is in writing and signed and delivered by each of the parties hereto.

     Section 10.11 Exhibits.

     The exhibits to this Agreement are hereby incorporated and made a part hereof and are an integral part of this Agreement.

     Section 10.12 General Interpretive Principles.

     For purposes of this Agreement, except as otherwise expressly provided or unless the context otherwise requires:

     (a) The terms defined in this Agreement have the meanings assigned to them in this Agreement and include the plural as well as the singular, and the use of any gender herein shall be deemed to include the other gender;

     (b) Accounting terms not otherwise defined herein have the meanings assigned to them in accordance with generally accepted accounting principles;

     (c) References herein to “Articles,” “Sections,” “Subsections,” “Paragraphs,” and other subdivisions without reference to a document are to designated Articles, Sections, Subsections, Paragraphs and other subdivisions of this Agreement;

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     (d) A reference to a Subsection without further reference to a Section is a reference to such Subsection as contained in the same Section in which the reference appears, and this rule shall also apply to Paragraphs and other subdivisions;

     (e) The words “herein,” “hereof,” “hereunder,” and other words of similar import refer to this Agreement as a whole and not to any particular provision;

     (f) The term “include” or “including” shall mean “including without limitation”; and

     (g) The terms “best efforts” or “reasonable efforts” shall not be interpreted to require the Owner or the Subservicer, as the case may be, to initiate or participate in any litigation, arbitration or proceeding or to incur expenses in excess of those explicitly set forth in this Agreement or as are otherwise commercially reasonable.

     Section 10.13 Reproduction of Documents.

     This Agreement and all documents relating thereto, including: (a) consents, waivers and modifications which may hereafter be executed, (b) documents received by any party at the closing, and (c) financial statements, certificates and other information previously or hereafter furnished, may be reproduced by any photographic, photostatic, microfilm, micro-card, miniature photographic or other similar process. The parties agree that any such reproduction shall be admissible in evidence as the original itself in any judicial or administrative proceeding, whether or not the original is in existence and whether or not such reproduction was made by a party in the regular course of business, and that any enlargement, facsimile or further reproduction of such reproduction shall likewise be admissible in evidence.

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     In Witness Whereof, the Subservicer, the Servicer and the Owner have caused their names to be signed to this Subservicing Agreement by their respective officers duly authorized as of the date first above written.

SERVICING AGREEMENT — Signature Page

OWNERS:

MOREQUITY, INC.
 

By:  

Name:  

Title:  

AMERICAN GENERAL FINANCIAL
SERVICES OF ARKANSAS, INC.
 

By:  

Name:  

Title:  

AMERICAN GENERAL HOME EQUITY, INC.
 

By:  

Name:  

Title:  

SERVICER

MOREQUITY, INC.
 

By:  

Name:  

Title:  

AMERICAN GENERAL FINANCIAL
SERVICES OF ARKANSAS, INC.
 

By:  

Name:  

Title:  

SERVICING AGREEMENT – Signature Page

AMERICAN GENERAL HOME EQUITY, INC.
 

By:  

Name:  

Title:  

SUBSERVICER


NATIONSTAR MORTGAGE LLC
 

By:  

Name:  

Title:  

SERVICING AGREEMENT – Signature Page

EXHIBIT A

MORTGAGE LOAN DATA FIELD REQUEST SCHEDULE

Exhibit A-Mortgage Loan Data Field Request

Please refer to the schedule below for Mortgage Loan Data Requirements.

	Refer Page # in
	Servicing Transfer
Mortgage Data Related To:	Instructions
LOAN LEVEL DATA FILE		5
CONVERSION REPORTS		6
Trial Balance Report		6
ACH Report		7
System Codes and Data Dictionary Report		7
Transaction and Disbursement History Report		7
Odd Due Date Loan Report		8
Second Liens Report		8
Non-Solicitation Report		8
Outstanding Trailing Docs Report		8
Escrow Analysis History Report		8
Adjustable Rate Mortgages		8
Payment Option ARMs		9
Interest Only Loans		10
Balloon Loans		10
Buydown Loans		10
LOAN TYPE OR PLAN INFORMATION		11
ESCROWED LOAN INFORMATION		15
INSURANCE (HAZARD, FLOOD, ETC...)		17
REAL ESTATE TAXES		21
PENDING TAX SALES		21
TAX		21
MORTGAGE INSURANCE		23
VENDOR REQUIREMENTS		24
CREDIT LIFE AND OTHER OPTIONAL PRODUCTS		26
CLAIMS PROCESS		26
SOLDIER’S AND SAILOR’S CIVIL RELIEF ACT OF 1940 (SSCRA)		31
LOSS MITIGATION AND COLLECTION ACTIVITY		32
BANKRUPTCY		35
FORECLOSURE		37
REO		40
HAMP REQUIREMENTS		47
HAFA REQUIREMENTS		57

EXHIBIT B

SERVICING TRANSFER INSTRUCTIONS

EXHIBIT B

Nationstar Mortgage LLC — Servicing Transfer Instructions

EXHIBIT B

SERVICING TRANSFER INSTRUCTIONS
TABLE OF CONTENTS

Introduction
Important Servicing Transfer Dates
Secured Data Transmission
Loan Level Data File
Loan Level Data File Specifications
Conversion Reports
Loan Type or Plan Information
Investor Reporting and Remittance Requirements
Balance Settlement
Mortgagor Notification
Escrowed Loan Information
Escrow Procedures
Escrowed Loan Report
Hazard Insurance
Real Estate Taxes
Mortgage Insurance
Vendor Requirements
Tax
Insurance (Flood and Hazard)
Flood
Credit Life and Other Optional Products
Claims Process
Records and Files
MERS Notification
IRS Reporting
Litigation (This is covered in the Transfer Letter) / Update to show pre&post
Partial Releases
Subordinations
Qualified Written Requests (RESPA)
Mortgagor Name Changes
Soldier’s and Sailor’s Civil Relief Act of 1940 (SSCRA)
Loss Mitigation and Collection Activity
Bankruptcy
Foreclosure File Report
REO
Mortgagor Recoverable Corporate Advances                                                            
Release of Title, Payoff Requests and Payoff Funds Received After Transfer
Automatic Payment Plans, Mortgage Payments or other checks received after Transfer
Dishonored Payments after Transfer and Misapplied payments
Correspondence Received After Transfer
HAMP Requirements
HAFA Requirements

© 2008 Nationstar Mortgage LLC. “The information within this document is confidential and provided solely for the internal use of Nationstar Mortgage LLC. This document is an intellectual property of Nationstar Mortgage LLC, and is protected under copyright laws of the United States. This material should not be released to any third party supplier without the Previous written approval Nationstar Mortgage LLC.”

Page 1

EXHIBIT B

Introduction

The Previous Servicer agrees to coordinate with Nationstar Mortgage LLC (the “Servicer”) to affect an efficient and orderly Servicing Transfer. On the Servicing Transfer Date Previous Servicer shall deliver to Servicer with respect to all Mortgage Loans all records, files and information required to complete the Servicing Transfer.

The Previous Servicer agrees to provide the Servicer with preliminary data files and reports prior to the Servicing Transfer Date as specified on Important Servicing Transfer Dates schedule and Servicing Transfer Timeline. Unless otherwise specified all reports will be in an electronic format acceptable to the Servicer.

The Previous Servicer agrees to use all reasonable efforts to comply with the requirements set forth herein. The Servicer acknowledges, however, that in some instances the Previous Servicer’s systems may not permit such compliance. In such event, the Servicer agrees to work with the Previous Servicer in good faith to accommodate the Previous Servicer’s systems’ limitations.

Any questions regarding the Servicing Transfer Instructions/Servicing Transfer should be directed to Scott Tenery, contact information listed below. Nationstar and the Previous Servicer will exchange functional and department level contact information no later than 30 days prior to the servicing Transfer Date.

Scott Tenery
Vice President
Nationstar Mortgage LLC
350 Highland Drive
Lewisville, Texas 75067
Phone: 469-549-6405
Scott.Tenery@nationstarmail.com

Unless directed otherwise within the Servicing Transfer Instructions, all data files and reports should be directed to:

Nationstar Mortgage LLC
Attn: Jennifer Dancer
350 Highland Drive
Lewisville, Texas 75067
Phone: 469-549-2110
Email: Jennifer.Dancer@nationstarmail.com

Unless directed otherwise, herein, all documents, records, files, notices and other communications must be directed to:

Nationstar Mortgage LLC, File Services
Attn: Keenan Cain
350 Highland Drive
Lewisville, Texas 75067

© 2008 Nationstar Mortgage LLC. “The information within this document is confidential and provided solely for the internal use of Nationstar Mortgage LLC. This document is an intellectual property of Nationstar Mortgage LLC, and is protected under copyright laws of the United States. This material should not be released to any third party supplier without the Previous written approval Nationstar Mortgage LLC.”

Page 2

EXHIBIT B

Phone: 469-549-3241
Email: Keenan.Cain@nationstarmail.com

© 2008 Nationstar Mortgage LLC. “The information within this document is confidential and provided solely for the internal use of Nationstar Mortgage LLC. This document is an intellectual property of Nationstar Mortgage LLC, and is protected under copyright laws of the United States. This material should not be released to any third party supplier without the Previous written approval Nationstar Mortgage LLC.”

Page 3

EXHIBIT B

Important Servicing Transfer Dates

Dates for this Servicing Transfer are set as follows:

Servicing Transfer Date:	XX/XX/XXXX
Delivery of Preliminary Loan Level Data & Reports:	XX/XX/XXXX
Goodbye Letter Deadline Date:	XX/XX/XXXX
Servicing Transfer Cutoff Date (close of business)	XX/XX/XXXX
Delivery of Final Loan Level Data & Reports:	XX/XX/XXXX
Servicing Transfer Settlement	XX/XX/XXXX

© 2008 Nationstar Mortgage LLC. “The information within this document is confidential and provided solely for the internal use of Nationstar Mortgage LLC. This document is an intellectual property of Nationstar Mortgage LLC, and is protected under copyright laws of the United States. This material should not be released to any third party supplier without the Previous written approval Nationstar Mortgage LLC.”

Page 4

EXHIBIT B

Secured Data Transmission

All data transmissions to Servicer should be through a secure FTP site with PGP encryption. To set up the FTP data transmission, contact:

Davis Kersey
Nationstar Mortgage LLC
469-549-2444
Davis.Kersey@nationstarmail.com

© 2008 Nationstar Mortgage LLC. “The information within this document is confidential and provided solely for the internal use of Nationstar Mortgage LLC. This document is an intellectual property of Nationstar Mortgage LLC, and is protected under copyright laws of the United States. This material should not be released to any third party supplier without the Previous written approval Nationstar Mortgage LLC.”

Page 5

EXHIBIT B

Loan Level Data File

The Previous Servicer agrees to provide all necessary Loan Level Data and Conversion Reports in a file format agreed upon by all parties. Nationstar’s preferred format is noted below in the Loan Level Data File Specifications section. The Previous Servicer agrees to support the Servicer in data mapping and testing prior to the Servicing Transfer Date. The Final Data Tapes & Conversion Reports should be prepared as of the Servicing Transfer Cutoff Date.

Loan Level Data File Specifications

The Loan Level Data Files should be provided in a fixed width format (ASCII TXT) or a comma delimited format (ASCII CSV). If the fixed width format is provided, then a detailed File Layout should accompany each file with the following:

Ø	Field name
Ø	Type/Attribute (to include decimal precision and implicit/explicit decimal point representation)
Ø	Starting position
Ø	Ending position

If a comma delimited format is provided, then a detailed File Layout should accompany each file with the following:

Ø	Field name
Ø	Field Type: include decimal precision and non-numeric fields should be delimited with double quotes (“ ”)

Loan Level Data Requirements:

The Previous Servicer will provide loan level data on all loans to including but not limited to the following items:

Ø	Loan Master File
Ø	Borrower Information (Names, Address, Note Relationship, all Secondary Info, Contact & Employment info, etc.)
Ø	Property Information (Legal Description, Address, Property Type, Occupancy Status, etc)
Ø	Loan Characteristics (term, payment amounts, interest rate, lien position, channel or land home, etc.)
Ø	Unpaid Principal Balance and other loan level balances (e.g., Corporate Balances, Corporate Expenses, Suspense, Fees, Escrow, etc.)
Ø	Dates (first payment due date, next payment due date, etc.)
Ø	Corporate Advance Detail (e.g., need breakdown by attorney fees, BPO, Inspections, Recording Fees, Bankruptcy, Foreclosure, etc.)
Ø	Corporate Expense Detail
Ø	Escrow Advance Detail
Ø	Suspense Detail (e.g., need breakdown by Pre-Petition, Post-Petition, Forbearance, etc.)
Ø	Fee Details
Ø	ACH Data (Routing Number, Account Number, Last Draft Date, etc.)
Ø	Escrow Information (Escrow Pmt, Tax Lines — including installments, Hazard Insurance Lines, MIP/PMI, etc.)
Ø	Pending ARM Rate/Payment Changes
Ø	Pending Escrow Payment Changes
Ø	Interest Only Data
Ø	Balloon Data
Ø	Buydown/Subsidy Data

© 2008 Nationstar Mortgage LLC. “The information within this document is confidential and provided solely for the internal use of Nationstar Mortgage LLC. This document is an intellectual property of Nationstar Mortgage LLC, and is protected under copyright laws of the United States. This material should not be released to any third party supplier without the Previous written approval Nationstar Mortgage LLC.”

Page 6

EXHIBIT B

Ø	ARM Specifications/Change File
Ø	Flood Determination
Ø	Collection and Customer Service Comments
Ø	MERS and MIN information
Ø	Transaction History
Ø	Escrow Analysis History
Ø	ARM history
Ø	Second Lien indicator
Ø	Payment Option Specifications (Option terms, caps, ceilings, floors, change dates, etc.)
Ø	Origination Data (Original LTV, Originator, Original Occupancy Status, etc.)
Ø	Foreclosure Data (e.g. Demand Date, FC Sale Date, Attorney, etc.)
Ø	Bankruptcy Data (e.g. Chapter, Filed Date, POC, Attorney, etc.)
Ø	REO Data (e.g. Occupancy Status, Eviction Status, Eviction Date, etc.)
Ø	Loss Mitigation Data (e.g. status, type, approval date, updated values, borrower financials, # of previous workouts, HAMP/HAFA solicited, etc.)
Ø	Skip Trace Information
Ø	HAMP Data (e.g. Required Treasury Reporting)
Ø	Loss Mitigation Indicator (e.g. Workout, Pending Short Sale, Forbearance, etc.)
Ø	Modification Flag and Type (e.g. HAMP, Cap Mod, etc.)

Conversion Reports

Each Conversion Report and other reports requested throughout the Servicing Transfer Instructions should be provided electronically in Excel format. Please include loan number and mortgagor name along with the additional data elements requested in all reports. Each report is required pre-transfer with an updated report provided post-transfer. The pre-transfer report needs to be provided as part of the preliminary data with the final report provided as defined under Delivery of Final Loan Level Data & Reports.

The Previous Servicer shall provide the following Conversion Reports:

     1. Trial Balance Report

          A Trial Balance Report as of the Servicing Transfer Cutoff Date with the following required data:

Ø	Previous Servicer loan number
Ø	Mortgagor Last name
Ø	Mortgagor First Name
Ø	Mortgagor Middle Name
Ø	Interest rate
Ø	Service fee rate
Ø	Unpaid principal balance
Ø	Escrow balance
Ø	Escrow advance balance
Ø	Next due date
Ø	P&I payment
Ø	Total monthly payment
Ø	Unapplied/suspense funds balance, including breakdown of the type of unapplied/suspense funds balance

© 2008 Nationstar Mortgage LLC. “The information within this document is confidential and provided solely for the internal use of Nationstar Mortgage LLC. This document is an intellectual property of Nationstar Mortgage LLC, and is protected under copyright laws of the United States. This material should not be released to any third party supplier without the Previous written approval Nationstar Mortgage LLC.”

Page 7

EXHIBIT B

Ø	Accrued interest
Ø	Interest on escrow accrual
Ø	Recoverable corporate advance amount, including breakdown of the type of corporate advance
Ø	Accrued late charges
Ø	Deferred late charges
Ø	Hazard expense
Ø	Escrow payment

2. Data Balancing Report

A Data Balancing Report including loan level detail with the following required data:

Ø	Previous Servicer loan number
Ø	Mortgagor name
Ø	Unpaid principal balance
Ø	Escrow balance
Ø	Escrow advance balance
Ø	P&I payment
Ø	Escrow payment
Ø	A&H payment amount
Ø	Credit life payment amount
Ø	Total monthly payment
Ø	Next due date
Ø	Interest rate
Ø	Interest on escrow accrual
Ø	Recoverable corporate advance amount, including breakdown of the type of corporate advance
Ø	Unapplied/suspense funds balance, including breakdown of the type of unapplied/suspense funds balance
Ø	Buydown subsidy balance (replacement reserve)
Ø	Pending escrow payment
Ø	Pending escrow payment effective date

3. ACH Report

An ACH report including loan level detail with the following required data:

Ø	Previous Servicer loan number
Ø	Mortgagor Last name
Ø	Routing Number
Ø	Account Number
Ø	Account Type (checking or savings)
Ø	Last Draft Date
Ø	Next Draft Date
Ø	Draft Day
Ø	Draft Frequency (e.g. monthly, weekly, biweekly, etc.)

© 2008 Nationstar Mortgage LLC. “The information within this document is confidential and provided solely for the internal use of Nationstar Mortgage LLC. This document is an intellectual property of Nationstar Mortgage LLC, and is protected under copyright laws of the United States. This material should not be released to any third party supplier without the Previous written approval Nationstar Mortgage LLC.”

Page 8

EXHIBIT B

Ø	Draft Amount
Ø	Additional Principle Amount
Ø	Total Draft Amount

4. System Codes and Data Dictionary Report

A report detailing all system code descriptions required to analyze and load the loan data including file names, field names, field descriptions, valid values and field sizes for each field within each file.

5. Transaction and Disbursement History Report

A loan level report listing all available transaction and disbursement history from loan Origination Date to the Transfer Date should be provided. An electronic version of the transaction history report should also be provided in a flat file ‘as-is’ with carriage control characters. If hardcopy is only possible, one copy should be provided in the servicing file and a second copy sent to the address provided on page 1. Transaction balances on the loan histories must agree with the balances on the final trial balance report.

6. Master Vendor List Report

A report of all vendors used for tax service, hazard insurance, flood insurance, force-placed insurance and taxing authorities that are not serviced by a tax service, including loan number, property address, vendor name, vendor address, vendor id, vendor.

7. Odd Due Date Loan Report

A report of all loans with odd due dates (not on the first of the month), including payment history for the life of the loan.

8. Second Liens Report

A report of second lien loans, including name/address/phone number of holder of the first lien.

9. Non-Solicitation Report

A report of loans for which the borrower has requested no solicitation include a list of each product for which solicitation is not allowed and the solicitation method prohibited (telephone, fax, email, etc.).

10. Outstanding Trailing Documents Report

A report of all outstanding trailing documents, including the date sent for recording/filing.

11. Escrow Analysis History Report

© 2008 Nationstar Mortgage LLC. “The information within this document is confidential and provided solely for the internal use of Nationstar Mortgage LLC. This document is an intellectual property of Nationstar Mortgage LLC, and is protected under copyright laws of the United States. This material should not be released to any third party supplier without the Previous written approval Nationstar Mortgage LLC.”

Page 9

EXHIBIT B

An electronic version of the escrow analysis history report should be provided in a flat file ‘as-is’ with carriage control characters. If hardcopy is only possible, one copy should be provided in the servicing file and a second copy sent to the address provided on page 2.

12. Adjustable Rate Mortgages/Interest Only/Balloon/Buydowns Report

The Previous Servicer shall provide five examples in printed form of the Note and ARM rider for each ARM plan in the service transfer and a loan level report listing the following information for all ARM, Interest Only and Balloon loans and

Adjustable Rate Mortgages

Ø	All ARM Mortgage loans
Ø	Individual loan historical rate and P&I changes
Ø	Due date
Ø	Current interest rate
Ø	Current P&I
Ø	Unpaid Principal Balance
Ø	All ARM Mortgage Loans with pending interest rate and or P&I change dates
Ø	Any ARM Mortgage Loans with pending effective interest rate or payment changes dates equal to or within ninety (90) days before the Transfer Date
Ø	Pending interest rate
Ø	Pending P&I
Ø	Pending effective date
Ø	ARM plan identifier (2/28, 3/27, etc.)
Ø	ARM Plan ID/ Product Code
Ø	ARM Plan Definition
Ø	Plan Code/Product Type
Ø	First Payment Date
Ø	Margin
Ø	Max Rate
Ø	Min Rate
Ø	Period Caps – Up at 1st change
Ø	Period Caps – Down at 1st change
Ø	Period Caps – Up at Subsequent changes
Ø	Period Caps – Down at Subsequent changes
Ø	First interest change date
Ø	Month between changes thereafter
Ø	Index being used
Ø	Index History
Ø	Look Back Period
Ø	Rounding
Ø	Interest Only loan indicator (Y/N)
Ø	Interest Only period
Ø	Upcoming ARM changes

Payment Option ARMs

© 2008 Nationstar Mortgage LLC. “The information within this document is confidential and provided solely for the internal use of Nationstar Mortgage LLC. This document is an intellectual property of Nationstar Mortgage LLC, and is protected under copyright laws of the United States. This material should not be released to any third party supplier without the Previous written approval Nationstar Mortgage LLC.”

Page 10

EXHIBIT B

Ø	Original UPB
Ø	Current UPB
Ø	Due Date
Ø	Original Minimum Payment
Ø	Current Minimum Payment
Ø	Current Payment Options
Ø	Original Interest Rate
Ø	Current Interest Rate
Ø	Historical Rate Changes
Ø	Historical P&I Changes
Ø	All Pending Interest Rate Changes and/or P&I Changes
Ø	POA Plan Type
Ø	POA Plan Definition
Ø	POA Plan Payment Options
Ø	Current Index
Ø	Index History
Ø	Look Back Period
Ø	Round Factor
Ø	Minimum Rate
Ø	Maximum Rate
Ø	Interest Only Indicator (Y/N)
Ø	Interest Only Period
Ø	First Interest Adjustment Date
Ø	Next Interest Adjustment Date
Ø	Interest Adjustment Frequency
Ø	Interest Adjustment Period Caps
Ø	First Payment Adjustment Date
Ø	Next Payment Adjustment Date
Ø	Payment Adjustment Frequency
Ø	Payment Adjustment Period Caps
Ø	Maximum Payment Cap
Ø	Maximum Principal Balance %
Ø	Current Principal Balance %
Ø	Loan amortizing at P&I due to exceeding max prin bal (Y/N)
Ø	Required Fully Amortized Payment Frequency
Ø	Months between Subsequent Fully Amortized Payment Changes
Ø	Negative Amortization Balance
Interest Only Loans
Ø	All Interest Only loans

© 2008 Nationstar Mortgage LLC. “The information within this document is confidential and provided solely for the internal use of Nationstar Mortgage LLC. This document is an intellectual property of Nationstar Mortgage LLC, and is protected under copyright laws of the United States. This material should not be released to any third party supplier without the Previous written approval Nationstar Mortgage LLC.”

Page 11

EXHIBIT B

Ø	Interest Only expiration date
Ø	Interest Only term (in months)
Ø	Reset option regarding curtailments during the interest only period (Y/N)
Ø	Interest only payment type (recast or fixed)

Balloon Loans

Ø	All Balloon loans
Ø	Reset option indicator
Ø	Current interest rate
Ø	Due date
Ø	Maturity date
Ø	Amortization term
Ø	Unpaid Principal Balance
Ø	Reset option (Y/N)
Ø	Reset option in process (Y/N)
Ø	Daily Simple Interest
Ø	Servicer shall provide a listing of all daily simple interest loans and the interest calculation method (e.g. 360, 365)

Buydown Loans

Ø	All buydown subsidy loans
Ø	Due date
Ø	Total monthly payment
Ø	Monthly buydown subsidy amount
Ø	Remaining buydown balance
Ø	Schedule of future monthly buydown payments
Ø	Effective dates of buydown payment changes
Ø	Buydown terms
Ø	Buydown calculation
Ø	SSCRA Loan (Y/N)
Ø	CORP Subsidy Loan (Y/N)

Loan Type or Plan Information

The Previous Servicer shall provide a listing of all ARM Plan Codes and ARM Index Code Definitions as well as a sample Note and Interest Only addendum for each ARM, Balloon and Interest Only product plans and definitions for loans being transferred with the Preliminary Data. All codes and definitions shall be provided 30 days prior to transfer.

All applicable ARM Specifications and Rate and Payment Change Histories should be provided electronically for any loan that has gone through an ARM change.

At time of the Servicing Transfer, please provide a listing of loans that were not adjusted due to the release of the index (e.g., 11^th district COFI).

© 2008 Nationstar Mortgage LLC. “The information within this document is confidential and provided solely for the internal use of Nationstar Mortgage LLC. This document is an intellectual property of Nationstar Mortgage LLC, and is protected under copyright laws of the United States. This material should not be released to any third party supplier without the Previous written approval Nationstar Mortgage LLC.”

Page 12

EXHIBIT B

Investor Reporting and Remittance Requirements

Investor Cutoff

The Previous Servicer agrees to schedule an Investor Cutoff (including all monetary activity) as of the Servicing Transfer Cutoff Date so that all standard cutoff and remittance reports are produced. Previous Servicer should not adjust any reporting or remitting to backdate payoffs occurring after the Investor Cutoff into the prior cutoff period. The Previous Servicer is responsible for any required reporting and remitting, as is normally completed, on all Investor Cutoffs prior to the Servicing Transfer Date. This includes remittance of guaranty fees related to the cutoff date immediately preceding the Servicing Transfer Date. Adjustments to over and under collateralized pools should be limited to those in excess of $5,000.

Cutoff & Remittance Reports

The Previous Servicer agrees to provide the following cutoff and remittance reports in an electronic format (Excel) acceptable to Servicer within 10 days subsequent to the Servicing Transfer Date.

• Report of Pending Transfer loans by old and new investor

• Report of loan level and pool level security balances reported at investor cutoff, including adjustments done for over and under collateralization and for partial pool transfers

• List and supporting documentation for all manual and systematic adjustments completed post cutoff, including documentation before and after adjustment

• List of all Pool to Security differences, with explanations for those greater than $1,000

• List of all loan level rejects for the investor cutoff immediately preceding Transfer Date

• Monthly ARM reset report –includes new P&I payment and interest rate

The Previous Servicer will provide a contact that will assist with requests resulting from customer inquiries related to outstanding and canceled check copies.

The above investor reports should be provided to:

Nationstar Mortgage LLC
Attn: Investor Reporting/Juanita Gomez
350 Highland Drive
Lewisville, Texas 75067
469-549-6296
Juanita.Gomez@nationstarmail.com

© 2008 Nationstar Mortgage LLC. “The information within this document is confidential and provided solely for the internal use of Nationstar Mortgage LLC. This document is an intellectual property of Nationstar Mortgage LLC, and is protected under copyright laws of the United States. This material should not be released to any third party supplier without the Previous written approval Nationstar Mortgage LLC.”

Page 13

EXHIBIT B

Balance Settlement

Escrow funds for tax and insurance as of the Servicing Transfer Cutoff Date should be wire transferred to the Servicer on or before the Servicing Transfer Settlement Date along with all other positive balance information. Loan level detail on how the wire should be applied must be provided to both Nationstar and the controlling party.

Servicer’s wiring instructions are:

JPM Chase
Dallas, Texas 75201
ABA#: 111000614
ACCT#: 1563367653
For further credit to: Nationstar Mortgage LLC, Payment Clearing
Attn: Service Transfer Balances / Juanita Gomez

Loan Level Data Requirements

• Prior Servicer Loan Number

• Escrow Balance

• Suspense (e.g. borrower suspense, pre or post petition money, subsidy, forbearance, etc.)

• Hazard Loss Suspense

• Sale Proceeds

© 2008 Nationstar Mortgage LLC. “The information within this document is confidential and provided solely for the internal use of Nationstar Mortgage LLC. This document is an intellectual property of Nationstar Mortgage LLC, and is protected under copyright laws of the United States. This material should not be released to any third party supplier without the Previous written approval Nationstar Mortgage LLC.”

Page 14

EXHIBIT B

Mortgagor Notification

The Previous Servicer shall mail the mortgagor notifications at least 15 days prior to the Servicing Transfer Date. In addition, the Previous Servicer must provide the Servicer with a copy of the Goodbye Letter for review and approval at least two days prior to the mailing date.

Immediately after mailing the Goodbye Letters, the Previous Servicer will provide Servicer with the electronic mailing manifest used for the letters. This must include all variable fields such as mortgagor name, mailing address, property address, loan number, letter date and transfer date. In addition, electronic files must be provided within 24 hours of mailing or hard copies of the Goodbye Letters should be retained in the servicing file to be transferred to the Servicer.

The following Nationstar Mortgage LLC contact information must be provided in the Combined RESPA compliant Goodbye Letter:

Customer Service Hours of Operation:

Monday through Thursday 8:00 am to 8:00 pm Central Standard Time,
Friday 8:00 am to 5:00 pm Central Standard Time

Customer Service Toll Free Number:

1-877-372-0512 extension 25

Correspondence Address:

Nationstar Mortgage LLC
Attn: Customer Service
350 Highland Drive
Lewisville, Texas 75067

Payment Address:

Nationstar Mortgage LLC
Attn: Payment Processing
P. O. Box 650783
Dallas, Texas 75265-0783

The Goodbye Letter must also advise the Mortgagor that any existing Optional Insurance with the Previous Servicer will be discontinued on or before the Servicing Transfer Date. The Mortgagor may contact the Servicer to obtain the Servicer’s available options.

In the event a Goodbye Letter is sent to a Mortgagor in error (i.e., the servicing for the related Mortgage Loan is not transferred to the Servicer), then the Previous Servicer shall immediately send (on behalf of itself and Servicer) a second letter to such Mortgagor advising such Mortgagor that the servicing transfer will not take place.

© 2008 Nationstar Mortgage LLC. “The information within this document is confidential and provided solely for the internal use of Nationstar Mortgage LLC. This document is an intellectual property of Nationstar Mortgage LLC, and is protected under copyright laws of the United States. This material should not be released to any third party supplier without the Previous written approval Nationstar Mortgage LLC.”

Page 15

EXHIBIT B

Escrowed Loan Information

The Previous Servicer should provide the following information for all escrowed loans

Escrow Procedures

Within 25 days prior to transfer the Previous Servicer will discuss procedures as it relates to the following to allow for a smooth transfer:

• History Lender Forced Placed Insurance letters

• Escrow Analysis Schedule

• Interest on Escrow Schedule

• Blanket policies for REO loans (as applicable)

• Blanket policies for non first lien and REOs (as applicable)

• Escrow Advances: How reconciled and recovered

• Payment policies for delinquent taxes

Escrowed Loan Report

The Previous Servicer shall provide a loan level Excel report listing the following information for all loans with Escrow and/or Partial Escrow. Each report is required pre-transfer with an updated report provided post-transfer. The pre-transfer report needs to be provided as part of the preliminary data with the final report provided as defined under Delivery of Final Loan Level Data & Reports.

Ø	Escrow Type (tax, insurance or both)
Ø	Escrow payment type (escrowed, lender forced place, non-escrowed)
Ø	Date of Last Escrow Analysis
Ø	Escrow Analysis History
Ø	Escrow Analysis Schedule
Ø	Escrow Advances
Ø	Interest on Escrow Schedule

Hazard Insurance
Ø	Agent and Insurance Company payee codes
Ø	Expiration date
Ø	Due date
Ø	Payment Term
Ø	Payment or accrual amount
Ø	Coverage amount
Ø	Coverage Type (force-placed or borrower paid)
Ø	Coverage types (wind, hazard, flood)
Ø	Policy Number(s)
Ø	File representing all corporate advances relating to insurance
Ø	Reporting on REO coverage (as applicable)
Ø	Blanket policies for non first liens and REO (as applicable)

© 2008 Nationstar Mortgage LLC. “The information within this document is confidential and provided solely for the internal use of Nationstar Mortgage LLC. This document is an intellectual property of Nationstar Mortgage LLC, and is protected under copyright laws of the United States. This material should not be released to any third party supplier without the Previous written approval Nationstar Mortgage LLC.”

Page 16

EXHIBIT B

Ø Indicator by Escrow/Coverage Type to determine escrowed or non-escrowed

Flood Determination
Ø	Evidence of Flood contract (certification number)
Ø	Determination date
Ø	Contract type
Ø	Community Number
Ø	Panel
Ø	Suffix
Ø	Flood zone
Ø	Program status
Ø	Map Date

Other Escrow Related Items
Ø	Escrow Analysis has not been performed within the last twelve (12) months
Ø	Explanation for non-compliance of Escrow Analysis guidelines
Ø	Pending Escrow Analysis
Ø	Escrow Analysis history for the last two years
Ø	Escrow disbursement stops
Ø	Explanation for the escrow stop
Ø	Date of escrow stop
Ø	Escrow stop expiration date
Ø	Interest on escrow paid
Ø	Loan level percentage of interest on escrow paid
Ø	Stale escrow refund checks
Ø	Amount of stale escrow refund
Ø	Date of stale escrow refund transaction
Ø	Vendor name of stale escrow refund check
Ø	Form ME-2 New Jersey Escrow Account Transaction Notice must be filed
Ø	Insurance or tax expiration date within30 days after the Transfer Date
Ø	List of all outstanding research cases with current service level agreement and Mortgagor’s expectations
Ø	Property Type
Ø	Suspense Items and audit/reconciliation post transfer

Escrowed Loan Requirements

With respect to the Mortgage Loans the Previous Servicer shall pay all hazard and flood insurance premiums which become due prior to and within thirty (30) days following the Servicing Transfer Date, and all real estate taxes for which the economic loss date is within thirty (30) days following the Servicing Transfer Date, assuming the bills are available for payment, and shall indemnify the Servicer against any tax penalties incurred prior to the Servicing Transfer Date or uninsured losses due to the non-payment of premiums or policy cancellation.

The Previous Servicer shall credit all accrued interest due on escrow to the individual accounts prior to the Servicing Transfer Date and provide confirmation of such to the Servicer.

© 2008 Nationstar Mortgage LLC. “The information within this document is confidential and provided solely for the internal use of Nationstar Mortgage LLC. This document is an intellectual property of Nationstar Mortgage LLC, and is protected under copyright laws of the United States. This material should not be released to any third party supplier without the Previous written approval Nationstar Mortgage LLC.”

Page 17

EXHIBIT B

All Escrow Analysis reports or statement copies should be forwarded to:

Nationstar Mortgage LLC
Attn: Escrow Administration/Sharon Goody
350 Highland Drive
Lewisville, Texas 75067
469-549-2005
Sharon.Goody@nationstarmail.com

Hazard Insurance

The Previous Servicer shall provide a loan level Excel report listing the following information for all loans. Each report is required pre-transfer and post-transfer. The pre-transfer report needs to be provided as part of the preliminary data with the final report provided as defined under Delivery of Final Loan Level Data & Reports.

Ø	Hazard insurance flag
Ø	Flood insurance flag
Ø	Agent and Insurance Company payee codes with full descriptions
Ø	Expiration date
Ø	Due date
Ø	Payment type escrowed or non-escrowed for each line (hazard, flood, etc.)
Ø	Payment term
Ø	Payment amount
Ø	Coverage amount
Ø	Coverage types with descriptions
Ø	Policy Number
Ø	Loans with Force Placed Insurance policy in effect
Ø	Indication of binder or policy for Force Placed Insurance
Ø	Force Placed Insurance payment method (monthly/annual)
Ø	Terms of Force Placed Insurance
Ø	Loans with damaged property
Ø	Hazard loss claims in process
Ø	Interest on Hazard Loss Schedule
Ø	Date of last property inspection
Ø	Detail on Inspection frequency for Hazard Loss — draw schedule/disbursement procedures
Ø	Maintenance results
Ø	BPO or appraisal results
Ø	Loans with an open insurance loss claim
Ø	Insurance Agent name
Ø	Insurance Agent contact number
Ø	Date claim opened
Ø	Date settled

© 2008 Nationstar Mortgage LLC. “The information within this document is confidential and provided solely for the internal use of Nationstar Mortgage LLC. This document is an intellectual property of Nationstar Mortgage LLC, and is protected under copyright laws of the United States. This material should not be released to any third party supplier without the Previous written approval Nationstar Mortgage LLC.”

Page 18

EXHIBIT B

Ø	Insurance proceeds received
Ø	Insurance proceeds available
Ø	Type of loss
Ø	Status of repairs
Ø	Loans affected by Hurricane Katrina
Ø	Hurricane Katrina total hazard loss amount
Ø	Hurricane Katrina hazard loss funds deposit date
Ø	Hurricane Katrina hazard loss funds disbursement date
Ø	Hurricane Katrina claim type (hazard, flood, wind)
Ø	Hurricane Katrina total number of days funds in hazard loss
Ø	Hurricane Katrina interest paid on hazard loss funds (Y/N)
Ø	If yes, interest rate and schedule
Ø	Hurricane Katrina general comments
Ø	MS and LA Road Home Program
Ø	Loans in Federally Declared Disaster Areas (FDDA)
Ø	FDDA refund amount
Ø	FDDA deposit date
Ø	Loans with Flood Insurance and all Flood Insurance data
Ø	Flood Insurance vendor name
Ø	Life of Loan status
Ø	Determination date
Ø	Certificate number
Ø	Open Flood zone disputes
Ø	Reporting on Vacant Properties — Active Claims

The Previous Servicer shall provide the following information:

Ø	Evidence that the Flood Contract Vendor(s) have been notified to transfer Life of Loan Flood Contracts to Nationstar Mortgage LLC.
Ø	Vendor Name, contact information, website access, if applicable.
Ø	Vendor issued compliance data file to include: Determination Date, Certificate Number, Contract Type, Community Number, Panel, Suffix, Flood Zone, Program Status, and Map Date.

Cancellation of Forced Placed Insurance

As of the Servicing Transfer Date the Previous Servicer must cancel any Force Placed Hazard or Flood coverage in effect.

Insurance Loss Draft Handling

The Previous Servicer must provide a properly documented file for each Mortgage Loan with an insurance loss draft claim. This file shall include the following information:

Ø	Date claim filed
Ø	Cause
Ø	State
Ø	Delinquent amount
Ø	Amount of the loss

© 2008 Nationstar Mortgage LLC. “The information within this document is confidential and provided solely for the internal use of Nationstar Mortgage LLC. This document is an intellectual property of Nationstar Mortgage LLC, and is protected under copyright laws of the United States. This material should not be released to any third party supplier without the Previous written approval Nationstar Mortgage LLC.”

Page 19

EXHIBIT B

Ø	Amount of insurance proceeds received to date
Ø	Date hazard funds deposited
Ø	Hazard loss funds disbursement date
Ø	Amount of available hazard loss funds
Ø	Hazard/claim type (hazard, flood, wind)
Ø	Hurricane Katrina (Y/N)
Ø	Notes from conversations with or information received from contractors
Ø	Correspondence to or from insurance companies and/or Mortgagor
Ø	Status of the repairs
Ø	Inspection reports
Ø	Report of expected future proceeds
Ø	Total number of days hazard loss funds held
Ø	Detailed listing of all funds received and disbursed to date

The Loss Draft file must be provided within five (5) business days of the Servicing Transfer and delivered to:

Nationstar Mortgage LLC
Attn: Escrow Administration/Sharon Goody
350 Highland Drive
Lewisville, Texas 75067
469-549-2005

Sharon.Goody@nationstarmail.com

Insurance Agent Notification of Servicing Transfer

With respect to the Mortgage Loans, the Previous Servicer shall transmit to the applicable insurance companies or agents, notification of the transfer of the servicing to the Servicer and instructions to deliver all notices and insurance statements, as the case may be, to the Servicer from and after the Transfer Date. Such notices shall specify the new mortgagee clause. The Previous Servicer shall provide the Servicer with copies of all such notices (at the address below) or shall provide an Officer’s Certification that such notices were produced and transmitted as specified herein and within five days of the Transfer Date.

Servicer Insurance Mortgagee Clause

The new mortgagee clause applicable to all hazard, flood and miscellaneous (i.e., wind, earthquake, mine, etc.) will read as follows:

Nationstar Mortgage LLC
Its successors and/ or assigns
P.O. Box 7729
Springfield, Ohio 45501-7729
Toll Free Number: (866) 825-9267

Mississippi & Louisiana Road Home Program Loans

© 2008 Nationstar Mortgage LLC. “The information within this document is confidential and provided solely for the internal use of Nationstar Mortgage LLC. This document is an intellectual property of Nationstar Mortgage LLC, and is protected under copyright laws of the United States. This material should not be released to any third party supplier without the Previous written approval Nationstar Mortgage LLC.”

Page 20

EXHIBIT B

The Previous Servicer shall also provide loan files currently participating in the Mississippi and Louisiana “Road Home” programs (via LA File Zilla report or excel spreadsheet). Include the unpaid principal balance, loan detail, total funds in hazard loss and rebuild or payoff option.

Transfer of Life of Loan Flood Contracts

The Previous Servicer shall affect the transfer of Life of Loan Flood Contracts/Data to Servicer

• The Previous Servicer shall notify Nationstar Mortgage LLC of existing Life of Loan (LOL) transferable contracts and the current vendor (Second liens must be assigned their own Flood Contract).

• Fifteen (15) days prior to Servicing Transfer:

s	Contact your Flood Insurance representative to request that all LOL contracts are transferred to Nationstar Mortgage LLC. Provide your contact with a loan level listing of transferring loans including Previous Servicer’s loan number, name, and property address of the borrower.
s	Previous Servicer will confirm to Servicer that pre- Servicing Transfer processing is complete.

• Within at least five (5) business days after the Servicing Transfer date:

Ø	Evidence that the Flood Contract Vendor(s) have been notified to transfer Life of Loan Flood Contracts to Nationstar Mortgage LLC.
Ø	Vendor Name, contact information, website access, if applicable.
Ø	Vendor issued compliance data file to include: Determination Date, Certificate Number, Contract Type, Community Number, Panel, Suffix, Flood Zone, Program Status, and Map Date.

Should you have specific questions regarding the transfer of flood data, you may contact a member of the Servicer’s Flood Compliance Team.

Nationstar Mortgage LLC, Flood Compliance
Attn: Sharon Goody
350 Highland Drive
Lewisville, Texas 75067
469-549-2005
Sharon.Goody@nationstarmail.com

Please include the following individual(s) in any email correspondence to the Vendor or for any Post-Service Transfer Flood issues:

Sharon.Goody@nationstarmail.com

Physical Hazard loss files should be sent to:

© 2008 Nationstar Mortgage LLC. “The information within this document is confidential and provided solely for the internal use of Nationstar Mortgage LLC. This document is an intellectual property of Nationstar Mortgage LLC, and is protected under copyright laws of the United States. This material should not be released to any third party supplier without the Previous written approval Nationstar Mortgage LLC.”

Page 21

EXHIBIT B

James Stauffer/Nationstar Team Manager
One Assurant Way
Springfield OH 45505

© 2008 Nationstar Mortgage LLC. “The information within this document is confidential and provided solely for the internal use of Nationstar Mortgage LLC. This document is an intellectual property of Nationstar Mortgage LLC, and is protected under copyright laws of the United States. This material should not be released to any third party supplier without the Previous written approval Nationstar Mortgage LLC.”

Page 22

EXHIBIT B

Real Estate Taxes

The Previous Servicer shall provide a loan level report listing the following information for all loans. Each report is required pre-transfer and post-transfer. The pre-transfer report needs to be provided as part of the preliminary data with the final report provided as defined under Delivery of Final Loan Level Data & Reports.

Ø	Real Estate taxes
Ø	Taxing Jurisdiction Name(s) (Tax payee)
Ø	Tax parcel or Tax ID Number
Ø	Due dates
Ø	Escrowed or non-escrowed flag for each line (City, State, County, etc.)
Ø	Payment term (annual, quarterly, etc.)
Ø	Accrual (full year payment amount)
Ø	Parcel number(s)
Ø	Next tax due date
Ø	Economic loss date
Ø	Unpaid tax and items
Ø	Loans that do not have an escrow record established for taxes
Ø	Open or unpaid tax installments for current and prior tax cycle
Ø	Open tax issues
Ø	Pending tax refunds from tax collectors
Ø	Description of the issue
Ø	Name of the tax collector
Ø	Amount of the expected refund
Ø	Taxes due and paid for Ground Rents
Ø	Taxes due and paid for Homeowner association fees
Ø	Taxes due and paid for Sewer lines
Ø	Taxes due and paid for miscellaneous fees (drainage, front foot, assessments, etc.)
Ø	All other taxes due and paid along with tax type
Ø	Property legal description
Ø	Name/address/phone of entity to whom these fees/taxes are due
Ø	Next tax payment due date
Ø	Liens assessed for taxes
Ø	Loans exempt from taxes
Ø	Reason for exemption
Ø	Name/address/phone of taxing authority
Ø	Tax Vendor, tax type and full description
Ø	REO properties (as applicable)
Ø	Identification of states with annual or semi-annual payments
Ø	File Representing corporate advances for taxes
Ø	Pending Tax Research Items

Pending Tax Sales

The Previous Servicer agrees to provide information regarding a pending tax sale within 12 months of the Servicing Transfer Date on a property if available at the time of transfer. This file shall include the following information and be provided within 10 days prior to transfer.

© 2008 Nationstar Mortgage LLC. “The information within this document is confidential and provided solely for the internal use of Nationstar Mortgage LLC. This document is an intellectual property of Nationstar Mortgage LLC, and is protected under copyright laws of the United States. This material should not be released to any third party supplier without the Previous written approval Nationstar Mortgage LLC.”

Page 23

EXHIBIT B

Ø	State
Ø	Redemption amount
Ø	Redemption date
Ø	Total funds already corporate advanced
Ø	Tax Sale (loss) date
Ø	Current redemption in process
Ø	Non-redeemable properties

Unpaid Property Taxes

The Previous Servicer must provide a listing of all unpaid taxes including the reason the taxes remain unpaid. In addition, the Previous Servicer must provide to the Servicer all due and unpaid tax bills in their possession as of the Transfer Date and shall forward all stub bills in its possession and tax sale property files to the following address five (5) days prior to the Servicing Transfer Date.

Nationstar Mortgage LLC
Attn: Escrow Administration
350 Highland Drive
Lewisville, Texas 75067

Transfer of Life of Loan (“LOL”) Tax Contracts

For all loans where a Life of Loan Tax Contract exists, the Previous Servicer shall cooperate with the transfer of the life of loan contracts to the Servicer within five (5) days after the Servicing Transfer Date.

In connection with the transfer of the servicing for any Mortgage Loans, within fifteen (15) days prior to transfer, Previous Servicer shall provide written notice to tax bill services or tax authorities (as applicable) of the future transfer and assignment of the Mortgage Loans. Copies of all such notices shall be provided to Servicer within five (5) days after the Servicing Transfer Date.

     Tax Information Prior to and After Transfer:

Nationstar Mortgage LLC
Attn: Sharon Goody
350 Highland Drive
Lewisville, Texas 75067
469-549-2005
Sharon.Goody@nationstarmail.com

Tax Litigation Report

© 2008 Nationstar Mortgage LLC. “The information within this document is confidential and provided solely for the internal use of Nationstar Mortgage LLC. This document is an intellectual property of Nationstar Mortgage LLC, and is protected under copyright laws of the United States. This material should not be released to any third party supplier without the Previous written approval Nationstar Mortgage LLC.”

Page 24

EXHIBIT B

The Previous Servicer must also provide an electronic report of all loans fifteen (15) days prior to the Servicing Transfer Date in which taxes are in litigation status, including loan number, borrower name, property address and an explanation of the type of litigation.

© 2008 Nationstar Mortgage LLC. “The information within this document is confidential and provided solely for the internal use of Nationstar Mortgage LLC. This document is an intellectual property of Nationstar Mortgage LLC, and is protected under copyright laws of the United States. This material should not be released to any third party supplier without the Previous written approval Nationstar Mortgage LLC.”

Page 25

EXHIBIT B

Mortgage Insurance

The Previous Servicer shall provide a loan level report listing the following information for all loans with Private Mortgage Insurance or HUD Mortgage Insurance Premium. Report is required pre-transfer and post-transfer. The pre-transfer report needs to be provided as part of the preliminary data with the final report provided as defined under Delivery of Final Loan Level Data & Reports.

Ø Loans with PMI/MIP

• Borrower Paid Indicator

• Lender Paid Indicator

• Investor Paid Indicator

Ø	Insurance company
Ø	Policy/Certificate number
Ø	Effective/Expiration Date
Ø	Coverage Amount
Ø	% Covered
Ø	Premium Amount
Ø	Payment amount
Ø	Payment term
Ø	Due date
Ø	Payment status (borrower paid vs. lender paid)
Ø	Outstanding MI claim (Y/N)
Ø	Cancellations

• In process

• Borrower cancelled

• Cancelled as a result of non-payment

With respect to the Mortgage Loans, the Previous Servicer shall ensure all Mortgage Insurance premiums due up to and including the Transfer Date are paid, including lender paid mortgage insurance premiums. In addition, the Previous Servicer shall transmit to the applicable private mortgage insurance companies, notification of the transfer of the servicing to the Servicer and instructions to deliver all notices and insurance statements, as the case may be, to the Servicer from and after the Transfer Date. In addition, the Previous Servicer shall notify HUD of the change in servicer information within fifteen days after the Transfer Date. Nationstar Mortgage LLC’s HUD ID number is 26450-0000-1.

Further, the Previous Servicer will be responsible for correcting errors on the HUD 92080 Reject Report prior to the Servicing Transfer Date. Prior Servicer will be held responsible for any outstanding MI items as of the Servicing Transfer Cutoff Date to include late and interest due on FHA loans, past due premiums and disclosure issues.

Nationstar Mortgage LLC
Attn: PMI/MIP Unit /Sharon Goody
350 Highland Drive
Lewisville, Texas 75067
469-549-2005
Sharon.Goody@nationstarmail.com

Nationstar Mortgage LLC
Attn: FHA Unit /Sharon Goody

© 2008 Nationstar Mortgage LLC. “The information within this document is confidential and provided solely for the internal use of Nationstar Mortgage LLC. This document is an intellectual property of Nationstar Mortgage LLC, and is protected under copyright laws of the United States. This material should not be released to any third party supplier without the Previous written approval Nationstar Mortgage LLC.”

Page 26

EXHIBIT B

350 Highland Drive
Lewisville, Texas 75067
469-549-2005
Sharon.Goody@nationstarmail.com

Vendor Requirements

Tax

The Nationstar Tax Vendor is First American: Customer Numbers: 10578 and 10904 Name: Homeselect Settlement Solutions, LLC.

The Nationstar Contact at First American is TJ Douglas: 817-699-3587 tjdouglas@firstam.com.

For loans to bene change from one First American client to Nationstar/Homeselect, the prior Servicer will submit a spreadsheet from Nationstar with the following information:

Ø	Prior lender’s loan number (preferably just one column/one loan # string)
Ø	Name of prior lender and/or their FA customer number(s)
Ø	FA contract number on all loan numbers

For loans to be boarded on First American’s system as an Acquired loan (loans NOT currently under service with First American), the prior Servicer will provide to Nationstar a spreadsheet/ with the following info:

Ø	Borrower Name (2 columns — first/last)
Ø	Borrower Address (preferably 5 columns — street #, street name, city, state, zip)
Ø	Tax authority/agency (preferably FA’s payee # or at least something we can cross reference)
Ø	Tax id/parcel number
Ø	Service Type (escrow/C or non-escrow/B)
Ø	Term of contract
Ø	Amount of Mortgage/Loan
Ø	If loans are coming from Land America: their ‘reverse adds’ file

Insurance (Flood and Hazard)

The Nationstar Insurance Vendor is Assurant:

The Nationstar Contact at Assurant is Kathy Ward: kathyward@mindspring.com

Office: 281.346.2008.

The prior Servicer will submit an Excel file to Nationstar with the following information:

Ø Prior Servicer Loan #

© 2008 Nationstar Mortgage LLC. “The information within this document is confidential and provided solely for the internal use of Nationstar Mortgage LLC. This document is an intellectual property of Nationstar Mortgage LLC, and is protected under copyright laws of the United States. This material should not be released to any third party supplier without the Previous written approval Nationstar Mortgage LLC.”

Page 27

EXHIBIT B

Ø	Borrower Name
Ø	Property Address, City, State, Zip
Ø	Insurance Carrier
Ø	Policy Number
Ø	Effective date and Expiration Date
Ø	Coverage Amount
Ø	Premium Amount
Ø	If policy is currently in a cancellation status, the cancellation effective date

Flood

The Flood Vendor for Nationstar is First American:

The Nationstar Contact at First American Flood is Cynthia Fresch: cfresch@firstam.com Office Phone: 800.447.1772 ext. 3112, Cell: 512.689.5239

The prior Servicer will submit an Excel file to Nationstar with the following information:

Ø	Prior Servicer Loan #
Ø	Borrower Name (First and Last)
Ø	Property Address, City, State, Zip
Ø	Certification Number

© 2008 Nationstar Mortgage LLC. “The information within this document is confidential and provided solely for the internal use of Nationstar Mortgage LLC. This document is an intellectual property of Nationstar Mortgage LLC, and is protected under copyright laws of the United States. This material should not be released to any third party supplier without the Previous written approval Nationstar Mortgage LLC.”

Page 28

EXHIBIT B

Credit Life and Other Optional Products

The Previous Servicer must provide the appropriate written instructions to the Mortgagor related to the discontinuation of any optional products prior to the Servicing Transfer Date within the RESPA good-bye letter. The Previous Servicer will remove the premium amount(s) from the Mortgagor’s total monthly payment and disburse any and all premiums to the product vendor or the Mortgagor prior to the Servicing Transfer Date.

Claims Process

Loan Level Detail containing the following items listed below. This report is required pre-transfer and post-transfer. The pre-transfer report needs to be provided as part of the preliminary data with the final report provided as defined under Delivery of Final Loan Level Data & Reports.

Ø	How many open claims — broken down by pre and post foreclosure status
Ø	Type of claim (MI, FNMA 571, etc)
Ø	Date claim filed
Ø	Beginning claim amount, funds received, remaining balance
Ø	Current disposition status of REO properties
Ø	Record for any loans previously where claims closed in last 90 days including denied claims
Ø	Break down of claims process
Ø	Claims closed in last 90 days including denied claims
Ø	Loans where recourse / indemnification agreements are in place
Ø	Loans where recourse / indemnification — repurchase / payout in process
Ø	Identify claims in dispute and the disputed item
Ø	Corporate Advance Detail broken down by type and loan level

© 2008 Nationstar Mortgage LLC. “The information within this document is confidential and provided solely for the internal use of Nationstar Mortgage LLC. This document is an intellectual property of Nationstar Mortgage LLC, and is protected under copyright laws of the United States. This material should not be released to any third party supplier without the Previous written approval Nationstar Mortgage LLC.”

Page 29

EXHIBIT B

Records and Files

File Delivery

The Previous Servicer must deliver the Servicing Files to the Servicer within five business days after the Servicing Transfer Date. If images are available, Previous Servicer shall provide an example of the format fourteen days prior to the Servicing Transfer Date. The Servicing Files must contain copies of all the documents delivered to the Document Custodian in the Collateral Files and all other documents and information relating to the origination and servicing of the Mortgage Loans through the date on which the files are delivered to the Servicer.

Arrangements shall be made for an inside delivery of the Servicing Files. The Previous Servicer agrees to coordinate the file delivery with the Servicer. The Previous Servicer agrees to the best of its ability remove any files for loans that pay off prior to the Transfer Date.

The files shall be placed in a box in the Previous Servicer’s loan number order. Transmittals shall be attached to each box listing contents by loan number. Each box must be labeled as follows:

<NEW CLIENT NAME>//____<NAME OF SELLER>___//__<DATE OF TRANSFER>___//BOX 1 OF___

(Example: Nationstar Mortgage LLC/PREVIOUS SERVICER NAME/07.05.07/BOX 5 of 32).

An electronic master manifest in Excel containing prior servicer loan number and box number is required prior to Shipment.

File Delivery Address:

Nationstar Mortgage LLC
Attn: File Services/ Keenan Cain
350 Highland Drive
Lewisville, Texas 75067
469-549-3241
Keenan.Cain@nationstarmail.com

Preferred Format of Images

• Group 4 TIFF, Single page TIFF

Electronic Image Requirements

• Electronic cumulative manifest of each image provided. The manifest should include but is not limited to previous servicer loan number and document/index type.

• Electronic cumulative list of document/index types and corresponding user friendly description.

Trailing Documents (Non-collateral documents)

© 2008 Nationstar Mortgage LLC. “The information within this document is confidential and provided solely for the internal use of Nationstar Mortgage LLC. This document is an intellectual property of Nationstar Mortgage LLC, and is protected under copyright laws of the United States. This material should not be released to any third party supplier without the Previous written approval Nationstar Mortgage LLC.”

Page 30

EXHIBIT B

Please send trailing original collateral documents to the address above. Write the Previous Servicer’s loan number on each document.

MERS Notification

If any loans are registered with MERS the Previous Servicer must create a TOB (Transfer of Beneficial Rights) and/or TOS (Transfer of Servicing) batch for any active loan in the transfer. This shall be done either through the Previous Servicer’s servicing system, if allowable or through the MERS Online System on the Transfer Date. The Previous Servicer must determine the correct MERS ORG ID for the investor.

The Org ID for Nationstar Mortgage LLC as sub-servicer is 1003972.

1. Move the MERS loans to the correct Org ID to coincide with the transfer.

2. Enter the Sale Date, Transfer Date applicable to the Transfer and the MERS quality review flag.

3. Enter the Recording Information and that the loan servicing has been transferred to Nationstar Mortgage LLC

4. Provide Nationstar Mortgage LLC with the MIN and batch numbers for all loans transferred on MERS.

Contact Information:

Nationstar Mortgage LLC
Attn: MERS/ Keenan Cain
350 Highland Drive
Lewisville, Texas 75067
469-549-3241
Keenan.Cain@nationstarmail.com

© 2008 Nationstar Mortgage LLC. “The information within this document is confidential and provided solely for the internal use of Nationstar Mortgage LLC. This document is an intellectual property of Nationstar Mortgage LLC, and is protected under copyright laws of the United States. This material should not be released to any third party supplier without the Previous written approval Nationstar Mortgage LLC.”

Page 31

EXHIBIT B

IRS Reporting

For any period prior to the Servicing Transfer Cutoff Date, Previous Servicer must prepare, report to the Internal Revenue Service and provide to Mortgagors, all in accordance the applicable law, rules and regulations, any and all tax information required to be provided with respect the Mortgage Loans for that period. The Previous Servicer shall provide to the Servicer confirmation when and by whom Social Security Number validation has been completed on the Mortgage Loans.

© 2008 Nationstar Mortgage LLC. “The information within this document is confidential and provided solely for the internal use of Nationstar Mortgage LLC. This document is an intellectual property of Nationstar Mortgage LLC, and is protected under copyright laws of the United States. This material should not be released to any third party supplier without the Previous written approval Nationstar Mortgage LLC.”

Page 32

EXHIBIT B

Litigation (This is covered in the Transfer Letter) / Update to show pre&post

In the event the Previous Servicer receives notification of Litigation being issued in conjunction with any Mortgage Loan the Previous Servicer will give written notification to the Servicer within five (5) business days. In the event time does not permit prior approval by the Servicer, Previous Servicer will retain counsel to represent the Servicer’s interests and obtain said approval as soon thereafter as possible. The costs incurred in providing legal representation in conjunction with any such Mortgage Loan serviced hereunder will be borne by the Servicer.

The Previous Servicer must provide the Servicer with a listing of any loans with open litigation, including an explanation for each case . This report is required pre-transfer and post-transfer. The pre-transfer report needs to be provided as part of the preliminary data with the final report provided as defined under Delivery of Final Loan Level Data & Reports.

Partial Releases

The Previous Servicer must provide the Servicer with a listing of any loans on which a partial release is pending, including an explanation for each case and all documentation received as defined under Delivery of Final Loan Level Data & Reports.

Subordinations

The Previous Servicer must provide the Servicer with a listing of any loans on which a Subordination requests are pending, including an explanation for each case, any subordination in the Mississippi Grant Program and all documentation received as defined under Delivery of Final Loan Level Data & Reports.

Qualified Written Requests (RESPA)

The Previous Servicer must provide the Servicer with a listing of any loans on which a Qualified Written Request has been received and is pending, including an explanation for each case and all documentation received as defined under Delivery of Final Loan Level Data & Reports. The Previous Servicer must provide the Servicer with all research backup and written explanation of the issue.

Mortgagor Name Changes

The Previous Servicer must provide to the Servicer in the servicing file backup for each pending legal name change along with the appropriate documentation (i.e., quit claims, death certificates, divorce decrees, etc.) as defined under Delivery of Final Loan Level Data & Reports.

© 2008 Nationstar Mortgage LLC. “The information within this document is confidential and provided solely for the internal use of Nationstar Mortgage LLC. This document is an intellectual property of Nationstar Mortgage LLC, and is protected under copyright laws of the United States. This material should not be released to any third party supplier without the Previous written approval Nationstar Mortgage LLC.”

Page 33

EXHIBIT B

Soldier’s and Sailor’s Civil Relief Act of 1940 (SSCRA)

The Previous Servicer shall provide a loan level report listing the following information for all loans under SSCRA. This report is required pre-transfer and post-transfer. The pre-transfer report needs to be provided as part of the preliminary data with the final report provided as defined under Delivery of Final Loan Level Data & Reports.

Ø	Loan Number for loans in which relief has been requested under the Soldier’s and Sailor’s Civil Relief Act of 1940, as amended
Ø	Mortgagor’s Name
Ø	Period of Reduced Payment (mm/yy to mm/yy)
Ø	Loan has received reduced payments thru mm/yy
Ø	Effective date of the subsidy
Ø	Subsidy method (buydown subsidized or 6% interest rate)
Ø	If buydown subsidy method, how was loan funded
Ø	Calculation method of the reduced payment
Ø	Active duty start date
Ø	Active duty termination date
Ø	Complete copy of the customer’s Military Orders
Ø	Copy of ARM adjustment notification letter(s) during SSCRA period
Ø	Additional comments or notes

Please forward one report for each SSCRA loan to:

Nationstar Mortgage LLC
Attn: SSCRA/Marina Reyes
350 Highland Drive
Lewisville, Texas 75067
469-549-2014
Marina.Reyes@nationstarmail.com

© 2008 Nationstar Mortgage LLC. “The information within this document is confidential and provided solely for the internal use of Nationstar Mortgage LLC. This document is an intellectual property of Nationstar Mortgage LLC, and is protected under copyright laws of the United States. This material should not be released to any third party supplier without the Previous written approval Nationstar Mortgage LLC.”

Page 34

EXHIBIT B

Loss Mitigation and Collection Activity

The Previous Servicer shall make available any written procedures for loss mitigation alternatives and share with Nationstar to ensure a smooth transfer. An electronic report in Excel format is required for each report defined in this section. . Each report in this section should be delivered as defined under Delivery of Final Loan Level Data & Reports.

1. Pending Checks Report

Ø	All loans with pending checks
Ø	Date of Pending Check
Ø	Amount of Pending Check

2. Open Research Item Report

Ø	All loans with open research items
Ø	Missing Payments
Ø	Payment Corrections
Ø	Date of Research Item
Ø	Amount of Research Item
Ø	Type of research item (i.e. western union, moneygram, check) as outlined in the Qualified Written Request section.
Ø	Status

3. Repayment Plan Report

Ø All loans with active repayment plan

© 2008 Nationstar Mortgage LLC. “The information within this document is confidential and provided solely for the internal use of Nationstar Mortgage LLC. This document is an intellectual property of Nationstar Mortgage LLC, and is protected under copyright laws of the United States. This material should not be released to any third party supplier without the Previous written approval Nationstar Mortgage LLC.”

Page 35

EXHIBIT B

Ø	Loans for which repayment plan activity has been initiated
Ø	Detail of the terms and conditions of the repayment plan
Ø	Status

4. Pending Short Sale Report

Ø	All loans with an active short sale
Ø	All short sales with an offer outstanding
Ø	All short sales with an active sales contract
Ø	Approved Short Sales
Ø	Approved Short Sales awaiting claims to be filed
Ø	Outstanding Short Sale claims
Ø	Recent property valuation

5. Pending Non-HAMP Loan Modification Report

Ø	All Loans Pending Modification
Ø	Trial period information if applicable
Ø	Recent property valuation
Ø	Title search
Ø	Modification terms

• Permanent/Temporary (Expiration Date)

• Rate Reduction Only/Capitalization

Ø	Document/Title company contact information
Ø	Documentation collected from borrower (Y/N)
Ø	Identification of any funds collected in conjunction with the modification
Ø	Modification subordination date
Ø	Modification record date

6. Pending Deed-in-Lieu Report

Ø	All loans pending deed-in-lieu of foreclosure
Ø	Recent property valuation
Ø	Title search
Ø	Status

7. Charged-off Loan Report

Ø	All loans charged-off
Ø	Lien

© 2008 Nationstar Mortgage LLC. “The information within this document is confidential and provided solely for the internal use of Nationstar Mortgage LLC. This document is an intellectual property of Nationstar Mortgage LLC, and is protected under copyright laws of the United States. This material should not be released to any third party supplier without the Previous written approval Nationstar Mortgage LLC.”

Page 36

EXHIBIT B

Ø	Date of charge-off
Ø	Amount charged-off

Loss Mitigation Servicing File Documentation Requirements

In addition to the data requirements the following Loss Mitigation documents are required. If Loss Mitigation documents are not imaged then physical documents will need to be delivered within five (5) days of after the Transfer Date to the loss mitigation contact in addition to being in the servicing file,

Ø Copies of all written correspondence regarding delinquencies

Ø Written agreements entered into with the Mortgagor including any modification documents, repayment plans, stipulated repayment plans, or any other document that constitutes approval of the loss mitigation workout or alternative.

Pending Short Sale Doc Requirements

Ø	Sales contract
Ø	HUD-I Settlement Statement, estimated
Ø	Realtor/Broker contact information
Ø	Mortgagor financials
Ø	Mortgagor hardship letter
Ø	Approval letter (if approved and not closed prior to transfer date)
Ø	Appraisal and/or Title Search Performed

Pending Loan Modification Doc Requirements

Ø	Mortgagor financials
Ø	Mortgagor hardship letter
Ø	Hard copy of the Modification Agreement
Ø	Copy of the Modification Approval

Pending Deed-in-Lieu Doc Requirements

Ø	Deed-in-Lieu agreement
Ø	Document/Title company contact information
Ø	Mortgagor financials
Ø	Mortgagor hardship letter
Ø	Appraisal and/or Title Search Performed

If Loss Mitigation documents are not imaged then deliver hard copies to:

Nationstar Mortgage LLC
Attn: Loss Mitigation Department/Bryan Minassian

© 2008 Nationstar Mortgage LLC. “The information within this document is confidential and provided solely for the internal use of Nationstar Mortgage LLC. This document is an intellectual property of Nationstar Mortgage LLC, and is protected under copyright laws of the United States. This material should not be released to any third party supplier without the Previous written approval Nationstar Mortgage LLC.”

Page 37

EXHIBIT B

350 Highland Drive
Lewisville, Texas 75067
469-549-2
Bryan.Minassian@Nationstarmail.com

Please refer to the Records and Files section regarding the forwarding of documents and/or files

Bankruptcy

The Previous Servicer shall provide a loan level report listing the following information for loans with Bankruptcy. This report is required pre-transfer and post-transfer. The pre-transfer report needs to be provided as part of the preliminary data with the final report provided as defined under Delivery of Final Loan Level Data & Reports.

Ø	Loan Number
Ø	Mortgagor’s Name
Ø	Name of Filer
Ø	Lien
Ø	Filing date
Ø	Chapter
Ø	Case number
Ø	Bankruptcy State/District
Ø	Bankruptcy status
Ø	Post-petition due date
Ø	Contractual due date at the time of filing
Ø	Date file referred to Attorney
Ø	Previous Servicer’s Attorney name
Ø	Previous Servicer’s Attorney address
Ø	Previous Servicer’s Attorney phone number

© 2008 Nationstar Mortgage LLC. “The information within this document is confidential and provided solely for the internal use of Nationstar Mortgage LLC. This document is an intellectual property of Nationstar Mortgage LLC, and is protected under copyright laws of the United States. This material should not be released to any third party supplier without the Previous written approval Nationstar Mortgage LLC.”

Page 38

EXHIBIT B

Ø	Mortgagor’s Attorney name
Ø	Mortgagor’s Attorney address
Ø	Mortgagor’s Attorney phone number
Ø	Trustee name
Ø	Trustee address
Ø	Trustee phone number
Ø	Trustee website
Ø	Trustee date
Ø	Mortgagor’s Suspense Balance
Ø	Trustee Suspense Balance
Ø	Suspense Balance of any Stipulated Agreement
Ø	Has Proof of Claim been filed (Y/N)
Ø	Confirmed Proof of Claim
Ø	Amount with Breakdown
Ø	Amount Paid to Date from Trustee for Claim
Ø	Litigation Status (Motion for Relief Filed, Cramdown, etc.)
Ø	If Litigation, by whom
Ø	Stipulated agreement (Y/N)
Ø	Which post-petition payments are included
Ø	What post-petition payments have been paid by the debtor

The Previous Servicer shall provide a loan level report listing the following information for all loans that are in an active Chapter 7 Bankruptcy:

Ø	Date of Discharge
Ø	Date of Reaffirmation
Ø	Date Filed
Ø	Case #
Ø	State Filed
Ø	District Filed
Ø	Name of Filer
Ø	Dismissal Date
Ø	Motion for Relief Obtained Date

© 2008 Nationstar Mortgage LLC. “The information within this document is confidential and provided solely for the internal use of Nationstar Mortgage LLC. This document is an intellectual property of Nationstar Mortgage LLC, and is protected under copyright laws of the United States. This material should not be released to any third party supplier without the Previous written approval Nationstar Mortgage LLC.”

Page 39

EXHIBIT B

The Previous Servicer shall provide a loan level report listing the following information for loans with active Chapter 11, 12 and 13 Bankruptcies:

Ø	Complete Payment History for both pre and post petition payments
Ø	Original confirmed claim amount
Ø	Breakdown of all amounts included in the claim.

The Previous Servicer shall provide Bankruptcy files for each loan to contain the following information:

Ø	Mortgage
Ø	Note
Ø	Title Policy
Ø	Breakdown of trustee money received and how it was applied
Ø	Breakdown of all payments received from debtor and how it was applied
Ø	Copies of all invoices
Ø	Any pending relief of stay hearings within 60 days of the transfer
Ø	Bank’s attorney and contact information
Ø	Debtor’s attorney and contact information
Ø	Bankruptcy petition
Ø	Proof of claim
Ø	If arrearages included in proof of claim, please provide breakdown
Ø	Reorganization plan
Ø	Copies of stipulation/agreed orders (details of payment plan)
Ø	Foreclosure information prior to bankruptcy filing (if applicable)
Ø	Information of prior bankruptcy filings (multi-filers)
Ø	APO or RFS order
Ø	RFS motion
Ø	Dismissal/discharge order and/or a list of loans that have been dismissed/discharged
Ø	Contractual Payment History
Ø	Stipulated Agreement

The Previous Servicer shall provide a report of all attorneys used for bankruptcy, including the full firm name, contact name, address, phone number and tax identification number (TIN). Previous Servicer shall also provide copies of attorney standards and fee schedules.

The Previous Servicer shall provide written notice, in accordance with applicable court procedures, to bankruptcy trustees and debtor attorneys with respect to the assignment of any Bankruptcy Loans. Such notices shall be mailed to the bankruptcy trustees and debtor attorneys prior to the respective Transfer Date. Copies of all such notices shall be provided to Servicer within five (5) days after the Transfer Date.

Nationstar Mortgage LLC
Attn: Bankruptcy Department/Matthew Barrett

© 2008 Nationstar Mortgage LLC. “The information within this document is confidential and provided solely for the internal use of Nationstar Mortgage LLC. This document is an intellectual property of Nationstar Mortgage LLC, and is protected under copyright laws of the United States. This material should not be released to any third party supplier without the Previous written approval Nationstar Mortgage LLC.”

Page 40

EXHIBIT B

350 Highland Drive
Lewisville, Texas 75067
469-549-2234
Matthew.Barrett@nationstarmail.com

Please refer to the Records and Files section regarding the forwarding of documents and/or files.

Foreclosure File Report

The Previous Servicer shall provide a loan level report listing the following information for any loan in which foreclosure actions have been initiated. This report is required pre-transfer and post-transfer. The pre-transfer report needs to be provided as part of the preliminary data with the final report provided as defined under Delivery of Final Loan Level Data & Reports.

Ø	Loans in foreclosure
Ø	Legal specifics/process by state
Ø	Foreclosure status
Ø	Date referred to foreclosure
Ø	Attorney or firm assigned
Ø	Attorney phone number
Ø	Date of first legal action
Ø	Date of Demand/Breach Letter sent to borrower
Ø	Date the service was completed
Ø	Date the judgment was ordered
Ø	Scheduled Sale Date / Actual Sale Date (if applicable)
Ø	Any information related to holds during the process
Ø	Lien Position
Ø	If second lien, need 1st lien holder name, status, and contact information

Foreclosure File Requirements

The Previous Servicer shall provide Foreclosure files for each loan to contain the following information:

Ø	Copy of the demand/breach letter
Ø	Bid instructions for any loans with a sale date occurring within 15 days after the Transfer Date must be provided upon transfer.
Ø	Trustee/attorney names and contact information
Ø	Referral letter
Ø	Copies of all invoices, paid and due
Ø	NOD/Complaint
Ø	Foreclosure title report
Ø	Foreclosure bid worksheet (if available)
Ø	Actual/projected foreclosure sale date
Ø	Foreclosure review committee packet (not referred to attorney but recommended for foreclosure).
Ø	Bankruptcy information prior to foreclosure action (if applicable)
Ø	Mark the outside of the file for any exception loans (e.g., SEIZED, DEMOLITION; MOBILE HOMES AND MANUFACTURED HOUSING)

© 2008 Nationstar Mortgage LLC. “The information within this document is confidential and provided solely for the internal use of Nationstar Mortgage LLC. This document is an intellectual property of Nationstar Mortgage LLC, and is protected under copyright laws of the United States. This material should not be released to any third party supplier without the Previous written approval Nationstar Mortgage LLC.”

Page 41

EXHIBIT B

Foreclosure File Handling

Loan files for loans scheduled for sale within two (2) weeks after the Servicing Transfer Date are to be received on the Servicing Transfer Date. These files are to contain a payoff statement good through cutoff date (or a total amount due statement), and the recent BPO/Appraisal. Hard copy screen prints may be substituted for the electronic reports, but must contain the required information.

The Previous Servicer shall provide a report of all attorneys used for foreclosure litigation fifteen (15) days prior to the Transfer Date, including the full firm name, contact name, address, phone number and tax identification number (TIN). Please advise your foreclosure attorneys of the servicing transfer thirty (30) days prior and advise to proceed with the foreclosure process.

For all loans facing a foreclosure sale date within thirty (30) days before or after the Transfer Date, the Controlling Party requests a report forty-five (45) days prior to the Transfer Date and again fifteen (15) days prior to the Transfer Date summarizing the following loan-level information:

Ø	Loan number
Ø	Scheduled foreclosure sale date
Ø	Scheduled foreclosure bid amount · Property state
Ø	Property city
Ø	Origination value
Ø	Updated property valuation
Ø	Attorney name
Ø	Attorney contact information

In addition to the items above please provide information regarding the following on all loans:

Ø	Lenstar History
Ø	Appraisal/Values
Ø	If government loans — case #’s
Ø	Maintenance/Inspection Records — What loans were winterized?

Comprehensive List of loans with:

Ø	Sale Dates
Ø	Redemptions
Ø	Projected Sale Dates

Vendor Information for:

Ø	Inspections
Ø	Demands
Ø	Appraisals
Ø	Billing
Ø	Any other outsourcer/system
Ø	Attorney Fee Schedule
Ø	Attorney timeline/production reports
Ø	List of Aged Inventory with Chronological Events

© 2008 Nationstar Mortgage LLC. “The information within this document is confidential and provided solely for the internal use of Nationstar Mortgage LLC. This document is an intellectual property of Nationstar Mortgage LLC, and is protected under copyright laws of the United States. This material should not be released to any third party supplier without the Previous written approval Nationstar Mortgage LLC.”

Page 42

EXHIBIT B

A foreclosure should not be put on hold without the prior written approval or email confirmation from the controlling party.

Nationstar Mortgage LLC
Attn: Foreclosure Department/Mike Hansen
350 Highland Drive
Lewisville, Texas 75067
469-549-3096
Mike.Hansen@nationstarmail.com

Please refer to the Records and Files section regarding the forwarding of documents and/or files.

© 2008 Nationstar Mortgage LLC. “The information within this document is confidential and provided solely for the internal use of Nationstar Mortgage LLC. This document is an intellectual property of Nationstar Mortgage LLC, and is protected under copyright laws of the United States. This material should not be released to any third party supplier without the Previous written approval Nationstar Mortgage LLC.”

Page 43

EXHIBIT B

REO

In the event a Mortgage Loan goes to foreclosure sale and the redemption period expires or the Loan is currently in REO the Previous Servicer shall provide a pre-transfer and post-transfer electronic report in Excel format to the Servicer containing the data points listed below. The pre-transfer report needs to be provided as part of the preliminary data with the final report provided as defined under Delivery of Final Loan Level Data & Reports.

Ø	Loans in REO
Ø	Foreclosure and eviction attorney contact information
Ø	Foreclosure Sale Date
Ø	Successful Bidder
Ø	Confirmation/Ratification/Redemption Date (if Applicable)
Ø	Offers and counter-offers and amounts received
Ø	Agent contact information (name, company, phone, fax, email)
Ø	Contact information for any other third party vendors involved
Ø	Under contract flag
Ø	Closing date
Ø	Force placed insurance information
Ø	Taxes due
Ø	Taxes Paid
Ø	Code Violations
Ø	Open Legal files
Ø	Closing status
Ø	Closing contact information (Title company, closer, agent)
Ø	Occupancy status
Ø	Eviction status
Ø	Cash for keys offered/accepted/denied
Ø	Title work completed
Ø	All interior values
Ø	Amount of REO repairs made to property
Ø	If Third Party Sale — Date Proceeds Received
Ø	If Third Party Sale — Amount
Ø	If Redeemed — Date Proceeds Received
Ø	If Redeemed — Amount
Ø	REO Closing Attorney Contact Information (Name, Address, phone, fax, email)
Ø	Party Marketing the Property
Ø	Date Property Sold
Ø	Initial Investor Claim-Date Filed
Ø	Investor Name Claim Sent to and Contact Information
Ø	Investor Claim Amount
Ø	Investor Claim Date Paid
Ø	Investor Claim Status
Ø	MI Claim-Date Filed
Ø	MI Name Claim Sent to and Contact Information
Ø	MI Claim Amount
Ø	MI Claim Date Paid
Ø	Other Claim-Date Filed (i.e. Secondary etc.)
Ø	Other Name Claim Sent to and Contact Information

© 2008 Nationstar Mortgage LLC. “The information within this document is confidential and provided solely for the internal use of Nationstar Mortgage LLC. This document is an intellectual property of Nationstar Mortgage LLC, and is protected under copyright laws of the United States. This material should not be released to any third party supplier without the Previous written approval Nationstar Mortgage LLC.”

Page 44

EXHIBIT B

Ø	Other Claim Amount
Ø	Other Claim Date Paid
Ø	Identification of a redemption loan that have not confirmed

The Previous Servicer shall provide a pre-transfer and post-transfer electronic report in Excel format to the Servicer and controlling party documenting REOs with offers, sales, or closings pending. The pre-transfer report needs to be provided no later than 20 days prior to the transfer date, updated report 5 days prior to transfer and the final report provided as defined under Delivery of Final Loan Level Data & Reports. An REO offer should not be put on hold without the prior written approval or email confirmation from the controlling party

In addition to the data requirements the following REO documents are required. If REO documents are not imaged then physical REO files will need to be delivered no later than 5 days post transfer.

Ø	Foreclosure deed
Ø	Foreclosure bid worksheet with supporting BPO’s or APO’s attached
Ø	Property inspection reports
Ø	Listing agreements including initial list price and date, current list price and all list reductions and dates.
Ø	Listing activity reports
Ø	Rehabilitation work orders and/or contractor invoices
Ø	All Closing documents (contract, title work, etc.), closing attorney contact information, scheduled closing date, etc.
Ø	Executed contracts
Ø	Preliminary/Final HUD

The file shall be organized so that all documents pertaining to the REO are together and in chronological order, including a copy of any claims filed, the Foreclosure and or Sheriff’s Deed and foreclosure attorney information; eviction attorney information, if applicable, and any other attorney correspondence; copies of all invoices paid; hard copy REO notes, if not provided electronically. If the REO file is delivered to the Servicer prior to the Transfer Date the Previous Servicer shall work with the Servicer to determine how best to transfer the loan record data. Please forward current vendor, vendor system information and contact information to our contact below. REO files and unpaid invoices shall be delivered to:

REO Files and Invoices:

Nationstar Mortgage LLC
Attn: REO Department/Kevin Friday
350 Highland Drive
Lewisville, Texas 75067
469-549-2271
Kevin.Friday@Nationstarmail.com

© 2008 Nationstar Mortgage LLC. “The information within this document is confidential and provided solely for the internal use of Nationstar Mortgage LLC. This document is an intellectual property of Nationstar Mortgage LLC, and is protected under copyright laws of the United States. This material should not be released to any third party supplier without the Previous written approval Nationstar Mortgage LLC.”

Page 45

EXHIBIT B

Mortgagor Recoverable Corporate Advances

The Previous Servicer shall provide a loan-level, itemized accounting of all expenses, to date, for all mortgagor recoverable expenses. This itemized accounting shall include supporting documentation of all recoverable expenses disbursed from escrow accounts or any other account. Copies of all property inspections, property preservation, and invoices for all loans, including bankruptcy and foreclosure, shall be provided in a format agreed upon by all parties.

The Previous Servicer shall provide a loan level report listing the following information for any loan with an advance. The detail of the advance amount should tie back to the cumulative balance provided in the trial balance. This report is required pre-transfer and post-transfer. The pre-transfer report needs to be provided as part of the preliminary data with the final report provided as defined under Delivery of Final Loan Level Data & Reports.

Ø	Loans with advance
Ø	Advance Type and Amount: (attorney fee, BPO, Inspections, Recording Fees, Bankruptcy, Foreclosure, etc.)
Ø	Corporate Expense Detail
Ø	Debit/Credit Indicator
Ø	Recoverable, Non-Recoverable, or Third Party Indicator

© 2008 Nationstar Mortgage LLC. “The information within this document is confidential and provided solely for the internal use of Nationstar Mortgage LLC. This document is an intellectual property of Nationstar Mortgage LLC, and is protected under copyright laws of the United States. This material should not be released to any third party supplier without the Previous written approval Nationstar Mortgage LLC.”

Page 46

EXHIBIT B

Release of Title, Payoff Requests and Payoff Funds Received After Transfer

The Previous Servicer is responsible for, and must send for recordation, all Mortgage Loan satisfactions for all Mortgage Loans that pay in full prior to the Transfer Date.

The Previous Servicer must wire transfer any payoff funds that are received by the Previous Servicer after the Servicing Transfer Date on the same day of receipt. Payoff wiring instructions:

Bank: JPM Chase
City, State, Zip: Dallas, Texas 75201
RT# : 111000614
ACCT# : 1563367653
For further credit to: Nationstar Mortgage LLC, Payment Clearing
Customer’s Name ___________________
Customer’s Loan Acct # ______________
Customer’s Address _________________
Sender’s Name and Phone #____________

The Previous Servicer shall reimburse the Servicer for additional per diem interest on any payoff check that is not received by the Servicer on the day of its receipt by the Previous Servicer. The Previous Servicer will forward the Servicer a check in the appropriate amount upon receipt of a properly documented request. Payoff mailing instructions:

Nationstar Mortgage LLC, Payment Processing — Service Transfer Payoffs
Attn: Marina Reyes
Address: 350 Highland Drive
City, State, Zip: Lewisville, Texas 75067
Phone: 469-549-2014
Email: Marina.Reyes@nationstarmail.com

All requests for a payoff statement should be faxed to 469-549-2455.

The Previous Servicer shall provide a loan level report listing all of the loans for which the Prepayment Penalty has been waived and any pending payoff requests that have not been fulfilled. The following information should be included in this report:

Ø	Prepayment Penalty Term
Ø	Prepayment Penalty Calculation
Ø	Payoff Request Date

© 2008 Nationstar Mortgage LLC. “The information within this document is confidential and provided solely for the internal use of Nationstar Mortgage LLC. This document is an intellectual property of Nationstar Mortgage LLC, and is protected under copyright laws of the United States. This material should not be released to any third party supplier without the Previous written approval Nationstar Mortgage LLC.”

Page 47

EXHIBIT B

Automatic Payment Plans, Mortgage Payments or other checks received after Transfer

The Previous Servicer shall provide an example of their current payment coupon and a loan level report as defined under Conversion Reports.

Any mortgage payments received by Previous Servicer after the Servicing Transfer Date must be forwarded to Servicer on a daily basis and be clearly identified with the Previous Servicer’s loan number in upper right corner of check. All checks should be date-stamped and endorsed as follows:

Pay to the order of Nationstar Mortgage LLC without recourse.

By

(Name of Signer) (Title of Signer) (Name of Company)

Previous Servicer agrees to forward on a daily basis all payments received after the Transfer Date via overnight delivery to:

Nationstar Mortgage LLC
Attn: Service Transfer Payments/Payment Processing
350 Highland Drive
Lewisville, Texas 75067

NSF & Stop Payment Handling

The following procedures shall apply to checks other than payments, NSFs or stop payments received by the Previous Servicer after the Servicing Transfer Date:

1.	Checks shall be clearly identified with Previous Servicer’s loan number in the upper right-hand corner.
2.	Checks that include funds for two or more accounts should be accompanied by a detailed listing providing Previous Servicer’s loan number and amount due each account.
3.	Checks should be properly endorsed as noted above.
4.	The purpose of check shall be identified and grouped accordingly (i.e., tax refund, loss draft, payment of special insurance, principal payment, etc.).
5.	Checks shall be forwarded via overnight delivery to the address above.

© 2008 Nationstar Mortgage LLC. “The information within this document is confidential and provided solely for the internal use of Nationstar Mortgage LLC. This document is an intellectual property of Nationstar Mortgage LLC, and is protected under copyright laws of the United States. This material should not be released to any third party supplier without the Previous written approval Nationstar Mortgage LLC.”

Page 48

EXHIBIT B

Dishonored Payments after Transfer and Misapplied payments

The Previous Servicer will ensure the returned check has been presented twice to the bank for good funds prior to requesting reimbursement from Nationstar Mortgage LLC. The Previous Servicer will submit the following applicable documentation related to a dishonored payment which was not reversed by Previous Servicer before the Servicing Transfer Cutoff Date:

1.	Original returned or dishonored payment, along with a copy of the debit advice, should be provided and clearly reflect the reason the payment was dishonored (e.g. NSF, stop payment, etc.). In the case of a dishonored draft, adequate proof should be provided indicating the bank rejected the draft.
2.	Payment history from point of the dishonored payment to the Transfer Cutoff Date
3.	Nationstar Mortgage LLC shall reimburse Previous Servicer the dishonored payment funds within twenty (20) days of receipt of applicable documentation.

Misapplied Payments

A “misapplied payment” shall mean a Mortgagor payment for which funds have been deposited in an incorrect Escrow Account or applied to an incorrect Mortgagor’s account. The existence of a canceled Mortgagor payment bearing the endorsement of Previous Servicer, for which funds have not been allocated to the proper Escrow Accounts, shall be considered conclusive evidence of a misapplied payment. Misapplied payments shall be processed as follows:

1.	Both parties shall cooperate in correcting misapplication errors by providing the payment history from point of error to the Transfer Cutoff Date and a copy of the canceled check bearing the endorsement of the Previous Servicer responsible for the posting of the missing funds.
2.	The party receiving notice of a misapplied payment occurring to the Transfer Date and discovered after the Transfer Date shall immediately notify the other party.
3.	If a misapplied payment cannot be identified by either party and said misapplied payment has resulted in a shortage in a Mortgage account, Previous Servicer shall be liable for the amount of such shortage. Previous Servicer shall reimburse Nationstar Mortgage LLC for the amount of such shortage within twenty (20) days after receipt of written demand from Nationstar Mortgage LLC.
4.	Any check issued under the provisions of this paragraph shall be accompanied by a statement indicating the purpose of the check, the mortgagor and property address involved, and the corresponding Previous Servicer and/or Nationstar Mortgage LLC account number.

Please forward all documentation regarding dishonored and/or misapplied payments to:

Nationstar Mortgage LLC
Attn: Service Transfer NSF Returns/ Payment Processing
350 Highland Drive
Lewisville, Texas 75067

© 2008 Nationstar Mortgage LLC. “The information within this document is confidential and provided solely for the internal use of Nationstar Mortgage LLC. This document is an intellectual property of Nationstar Mortgage LLC, and is protected under copyright laws of the United States. This material should not be released to any third party supplier without the Previous written approval Nationstar Mortgage LLC.”

Page 49

EXHIBIT B

Correspondence Received After Transfer

All correspondence, insurance renewals, cancellation notices, customer inquiries, etc., received by Previous Servicer after the Servicing Transfer Date shall be identified with the Previous Servicer’s loan number and forwarded via overnight delivery on a daily basis to the Servicer:

Nationstar Mortgage LLC
Attn: Service Transfer Correspondence / Austin Cobb
350 Highland Drive
Lewisville, Texas 75067
469-549-2284
Austin.Cobb@nationstarmail.com

© 2008 Nationstar Mortgage LLC. “The information within this document is confidential and provided solely for the internal use of Nationstar Mortgage LLC. This document is an intellectual property of Nationstar Mortgage LLC, and is protected under copyright laws of the United States. This material should not be released to any third party supplier without the Previous written approval Nationstar Mortgage LLC.”

Page 50

EXHIBIT B

HAMP Requirements

The Previous Servicer must complete all HAMP Reporting Transfer Process requirements posted by Fannie Mae 30 to 60 days prior to the servicing transfer date.

1. Fill out and submit the HAMP Reporting Transfer Request Form

2. Fill out and submit the HAMP Reporting Transfer Loan List form with all HAMP loans transferring

3. If transferring non-GSE loans the Assignment and Assumption Agreement must be filled out and submitted to FNMA

The following HAMP electronic reports are required for transferring loans that have been solicited, currently in a trial period, failed, denied, or have been successfully modified. Each report is required pre-transfer and post-transfer. The pre-transfer report needs to be provided as part of the preliminary data with the final report provided as defined under Delivery of Final Loan Level Data & Reports.

1.	List of all loans that have been solicited.
2.	Report outlining where each loan is in the process, payments received, and payment received date. If the process has been completed then provide the new modification terms.
3.	Report providing which documents have been received and if incomplete, what is still missing. Will need copies of all documents received.
4.	Report outlining any loans that previously failed (no longer eligible for the HAMP program) or were turned down.
5.	Copies of any Treasury reporting A, B, C, and/or D.

In addition to the reports, the previous servicer will provide HAMP loan level data electronically on all loans to include the following items pre-transfer and post-transfer. The pre-transfer report needs to be provided as part of the preliminary data with the final report provided as defined under Delivery of Final Loan Level Data & Reports.

Data Elements Required for HAMP Loans

# of units
Current Collateral Value

© 2008 Nationstar Mortgage LLC. “The information within this document is confidential and provided solely for the internal use of Nationstar Mortgage LLC. This document is an intellectual property of Nationstar Mortgage LLC, and is protected under copyright laws of the United States. This material should not be released to any third party supplier without the Previous written approval Nationstar Mortgage LLC.”

Page 51

EXHIBIT B

HAMP Terms

HAMP Type (Imminent Default or Default)
Trial Period Payment Dates
Trial Period Payment Amount
Trial Period Payment History
Trial Period Completion/End Date
Amortization Duration
Maturity Date
Beginning Unpaid Principal Balance (at the start of the trial period)
Forbearance Amount at Trial Period
Reset ARM Identifier (Y/N)
Reset Interest Rate
Reset Payment Amount
Eligibility Payment Amount Indicator (will need to calc this in house — current pmt vs. reset pmt)
Date Executed Trial Period Documents Received
Date Trial Period Qualifying Documents Received
Extended Trial Period Payment Date (if applicable)

HAMP Modification Terms

HAMP Type (Imminent Default or Default)
Freddie Weekly Survey Rate (used to determine mod terms)
Step Modification Rates
Step Modification Dates
Final Modification Rate
Modification Effective Date
Final Forbearance Amount
Ending Unpaid Principal Balance (at the end of the trial period)

Hardship Affidavit Information

Borrower First Name
Borrower Middle Name
Borrower Last Name
Borrower Date of Birth
Co-Borrower First Name
Co-Borrower Middle Name
Co-Borrower Last Name
Co-Borrower Date of Birth
Borrower Default Reason
Co-Borrower Default Reason
Borrower Ethnicity
Borrower Race
Borrower Sex
Borrower Info Not Provided
Co-Borrower Ethnicity
Co-Borrower Race
Co-Borrower Sex
Co-Borrower Info Not Provided

FNMA NPV Results

Date

© 2008 Nationstar Mortgage LLC. “The information within this document is confidential and provided solely for the internal use of Nationstar Mortgage LLC. This document is an intellectual property of Nationstar Mortgage LLC, and is protected under copyright laws of the United States. This material should not be released to any third party supplier without the Previous written approval Nationstar Mortgage LLC.”

Page 52

EXHIBIT B

De Minimis Test
Value No Mod
NPV Test
Error Code
Waterfall Test
Forbearance Flag
Value Mod
NPV Test Successful?

Hope for Homeowners (H4H)

H4H Lead Eligible?
H4H Offered?

Income

Verified Borrower Income Type
Verified Borrower Gross Income
Verified Borrower Net Income
Verified Borrower Rental Income
Verified Borrower Pension
Verified Borrower Alimony/Child Support
Verified Borrower Misc Amount
Verified Borrower Misc Type
Verified Borrower Checking Account
Verified Borrower Savings/Money Market Account
Verified Borrower 401K/ESOP/IRA/Keogh
Verified Borrower Stocks/Bonds/CD’s/Other
Verified Co-Borrower Income Type
Verified Co-Borrower Gross Income
Verified Co-Borrower Net Income
Verified Co-Borrower Rental Income
Verified Co-Borrower Pension
Verified Co-Borrower Alimony/Child Support
Verified Co-Borrower Misc Amount
Verified Co-Borrower Misc Type
Verified Co-Borrower Checking Account
Verified Co-Borrower Savings/Money Market Account
Verified Co-Borrower 401K/ESOP/IRA/Keogh
Verified Co-Borrower Stocks/Bonds/CD’s/Other
Stated Borrower Income Type
Stated Borrower Gross Income
Stated Borrower Net Income
Stated Borrower Rental Income
Stated Borrower Pension
Stated Borrower Alimony/Child Support
Stated Borrower Misc Amount
Stated Borrower Misc Type
Stated Borrower Checking Account
Stated Borrower Savings/Money Market Account
Stated Borrower 401K/ESOP/IRA/Keogh
Stated Borrower Stocks/Bonds/CD’s/Other

© 2008 Nationstar Mortgage LLC. “The information within this document is confidential and provided solely for the internal use of Nationstar Mortgage LLC. This document is an intellectual property of Nationstar Mortgage LLC, and is protected under copyright laws of the United States. This material should not be released to any third party supplier without the Previous written approval Nationstar Mortgage LLC.”

Page 53

EXHIBIT B

Stated Co-Borrower Income Type
Stated Co-Borrower Gross Income
Stated Co-Borrower Net Income
Stated Co-Borrower Rental Income
Stated Co-Borrower Pension
Stated Co-Borrower Alimony/Child Support
Stated Co-Borrower Misc Amount
Stated Co-Borrower Misc Type
Stated Co-Borrower Checking Account
Stated Co-Borrower Savings/Money Market Account
Stated Co-Borrower 401K/ESOP/IRA/Keogh
Stated Co-Borrower Stocks/Bonds/CD’s/Other

Expenses

First Lien Mortgage P&I
Other Mortgage(s)
Property Taxes
Home Owners Insurance
Home Owners Association
Mortgage Insurance
Car Payment (1)
Car Payment (2)
Auto Insurance
Charge Account (1)
Charge Account (2)
Charge Account (3)
Student Loan
Bank/Finance Loans
Medical Bills
Health Insurance
Child Care
Gas
Auto Maintenance
Public Trans
Gas (Natural/Propane)
Electric
Garbage P/U
Water & Sewer
Home Phone
Cell Phone
Cable TV
Home Maintenance
Food
Child Support
Alimony
Camper, Boat, Motorocycle
Personal/Life Insurance
Club/Union Dues
Religious Contributions
Dry Cleaning

© 2008 Nationstar Mortgage LLC. “The information within this document is confidential and provided solely for the internal use of Nationstar Mortgage LLC. This document is an intellectual property of Nationstar Mortgage LLC, and is protected under copyright laws of the United States. This material should not be released to any third party supplier without the Previous written approval Nationstar Mortgage LLC.”

Page 54

EXHIBIT B

Clothing
Entertainment
School Tuition
Rent Expense
Other Expenses

Appendix Data Requirements

Ref ID	Name of Data Point	Description
1	GSE Servicer Number	The Fannie Mae or Freddie Mac unique Servicer identifier.
2	Servicer Loan Number	The unique (for the lender) identifier assigned to the loan by the lender that is servicing the loan.
3	HAMP Servicer Number	A unique identifier assigned to each Servicer that is participating in the HAMP program.
4	GSE Loan Number	A unique identifier assigned to each loan by a GSE (Fannie or Freddie).
5	Underlying Trust Identifier	This is the shelf and series security identifier associated with the underlying security. A shelf offering is an SEC provision allowing an issuer to register a new issue security without selling the entire issue at once. Additionally, this may be the CUSIP identifier associated with the security. The CUSIP number is the identification number assigned to a security by CUSIP (Committee on Uniform Security Identification Procedures) for trading.
6	Program Type/Campaign ID	A new program type that will identify campaign types. The unique identifier of a Loan Workout Campaign.
7	Investor Code	Owner of the mortgage.
8	Borrower Last Name	The last name of the Borrower. This is also known as the family name or surname.
9	Borrower First Name	First Name of the Borrower of record
10	Borrower Social Security Number	The Social Security Number of the Borrower
11	Co-Borrower Last name	Last Name of the co- Borrower of record
12	Co-Borrower First Name	First Name of the co-Borrower of record
13	Co-Borrower Social Security Number	The Social Security Number of the Co-borrower
14	Borrower Execution Date	For trial loan submission, this is the date that the borrower executed (signed) the trial documents if available. Otherwise it is the date of the first payment (through check, wire, or credit card).
		For official loan submission, this is the date that the borrower signed the official loan modification documents.
15	Submission Status	Status of loan data being submitted.
16	Date of Original Note	The date the mortgage note was signed.
17	Unpaid Principal Balance Before Modification	The total principal amount outstanding as of the end of the month. The UPB should not reflect any accounting based write-downs and should only be reduced to zero when the loan has been liquidated – either paid-in-full, charged-off, REO sold or Service transferred (before modification)

© 2008 Nationstar Mortgage LLC. “The information within this document is confidential and provided solely for the internal use of Nationstar Mortgage LLC. This document is an intellectual property of Nationstar Mortgage LLC, and is protected under copyright laws of the United States. This material should not be released to any third party supplier without the Previous written approval Nationstar Mortgage LLC.”

Page 55

EXHIBIT B

Ref ID	Name of Data Point	Description
18	Loan Mortgage Type Code	The code that specifies the type of mortgage being applied for or that has been granted.
19	Last Paid Installment Date Before Modification	The due date of the last paid installment of the loan.
20	First Lien Indicator	Indicates if loan is first lien.
21	Foreclosure Referral Date	Provide the date that the mortgage was referred to an attorney for the purpose of initiating foreclosure proceedings. This date should reflect the referral date of currently active foreclosure process. Loans cured from foreclosure should not have a referral date.
22	Projected Foreclosure Sale Date	Projected date for foreclosure sale of subject property
23	Hardship Reason Code	Identifies the reason for the borrower’s hardship, on their mortgage payment obligations.
24	Monthly Gross Income	Total monthly income in dollars for all borrowers on the loan. This is the gross income for all borrowers.
25	Monthly Debt Payments excluding PITIA	Total amount of monthly debt payments excluding Principal, Interest, Taxes, Insurance and Association Dues (PITIA)
26	NPV Date	This is the date that the NPV model is run using stated income (or verified income if available).
27	NPV Model Result Amount Pre-mod	Net Present Value amount generated from the model before modification
28	NPV Model Result Amount Post-mod	Net Present Value amount generated from the model after modification
29	Amortization Term Before Modification	Represents the number of months on which installment payments are based. Example: Balloon loans have a seven year life (Loan Term = 84) but a 30 year amortization period (Amortization Term = 360). Installment payments are determined based on the 360 month
30	Interest Rate Before Modification	The interest rate in the month prior to loan modification. Please report as rounded to nearest 8th. (e.g. 4.125)
31	Principal and Interest Payment Before Modification	The scheduled principal and interest amount in the month prior to loan modification.
32	Escrow Payment Before Modification	Report the escrow amount in the month prior to loan modification. The amount of money that is collected from [added on to] the regular monthly mortgage payment to cover periodic payments of property taxes, private mortgage insurance and hazard insurance by the servicer on behalf of the mortgagee. Depending on the mortgage terms, this amount may or may not be collected. Generally, if the down payment is less than 20%, then these amounts are collected by the servicer.
33	Association Dues/Fees Before Modification	Existing monthly payment for association dues/fees before modification
34	Principal Payment	Principal portion of the P&I remitted
35	Interest Payment	Interest portion of the P&I
36	Principal Payment Owed or Not Reported	If borrower has contributed any cash or amounts in suspense
37	Other Contributions	If there are any amounts contributed by the borrower due to Hazard Claims
38	Attorney Fees Not in Escrow	Estimated legal fee not in escrow for advances capitalization and liquidation expense calculation
39	Escrow Shortage for Advances	Any Escrow advance amounts to be capitalized

© 2008 Nationstar Mortgage LLC. “The information within this document is confidential and provided solely for the internal use of Nationstar Mortgage LLC. This document is an intellectual property of Nationstar Mortgage LLC, and is protected under copyright laws of the United States. This material should not be released to any third party supplier without the Previous written approval Nationstar Mortgage LLC.”

Page 56

EXHIBIT B

Ref ID	Name of Data Point	Description
40	Other Advances	Other capitalized advance amounts excluding escrow. Example: field inspections or title costs associated with recording the modification.
41	Borrower Contributions	If the borrower is contributing any amounts, they must be reported here
42	Modified Loan Term-Officer Signature Date	Servicer sign off at the officer level for the loan modification. This is the date the servicer’s officer approved the loan modification. This column will be populated for modification cases that need reclassification. There is no conversion needed for existing cases
43	Disbursement Forgiven	If there are any Forgiven disbursement for advances capitalization
44	Monthly Housing Expense Before Modification	The dollar amount per month of the borrowers housing expense of the subject property before modification .May be used for their primary residence. This must be Principal, Interest, Taxes, Insurance and Association Dues (PITIA).
45	Delinquent Interest	Delinquent interest for interest capitalization. It is the amount of delinquent interest from the delinquent loan’s LPI date to the workout execution date.
46	Interest Owed Or Payment Not Reported	If there is Interest owed/received but not reported for interest capitalization, this field must be populated.
47	Servicing Fee Percent, After Modification	Percentage of servicing Fee after loan modification ( e.g. 0.25)
48	Product Before Modification	The mortgage product of the loan, before the modification.
49	Maturity Date Before Modification	The date on which the mortgage obligation is scheduled to be paid off, according to the mortgage note. Maturity Date is commonly called Balloon Date for balloon loans, for which scheduled amortization does not pay off the balance of the loan, so that there is a final, large “balloon” payment at the end.
50	Remaining Term Before Modification	The remaining number of months until the loan will be paid off, assuming that scheduled payments are made. This will equal lesser of 1. the number of months until the actual balance of the loan will amortize to zero; or 2. the number of months difference between the LPI date and the Maturity Date.
51	Front Ratio Before Modification	The refreshed Front-end DTI (Principal, Interest, Taxes, Insurance and Association Dues (PITIA)) housing ratio.
52	Back Ratio Before Modification	Percentage of borrower’s PITIA plus debts to income ratio. Borrower Total Debt To Income Ratio Percent. The monthly expenses divided by the total monthly income for the Borrower. (e.g. 30.25)
53	Principal and Interest Payment at 31% DTI	Principal and Interest payable for a 31% Debt to Income ratio
54	Principal and Interest Payment at 38% DTI	Principal and Interest payable for a 38% Debt to Income ratio
55	Property Number of Units	Number of units in subject property (Valid values are 1, 2, 3 or 4)
56	Property Street Address	The street address of the subject property
57	Property City	The name of the city where the subject property is located.
58	Property State	The 2-character postal abbreviation of the state, province, or region of the subject property.

© 2008 Nationstar Mortgage LLC. “The information within this document is confidential and provided solely for the internal use of Nationstar Mortgage LLC. This document is an intellectual property of Nationstar Mortgage LLC, and is protected under copyright laws of the United States. This material should not be released to any third party supplier without the Previous written approval Nationstar Mortgage LLC.”

Page 57

EXHIBIT B

Ref ID	Name of Data Point	Description
59	Property Zip Code	The code designated by the postal service to direct the delivery of physical mail or which corresponds to a physical location. In the USA, this can take either a 5 digit form (ZIP Code) or a 9-digit form (ZIP + 4).
60	Property Valuation Method	Type of value analysis.
61	Property Valuation Date	The date the property value analysis was performed.
62	Property Valuation As is Value	Property as-is value determined by the property valuation
63	Property Condition Code	A code denoting the condition of the subject property.
64	Property Occupancy Status Code	A code identifying the occupancy by the borrower of the subject property.
65	Property Usage Type Code	A code identifying the intended use by the borrower of the property.
66	Modification Effective Date	For Trial, this is the anticipated Modification Effective Date of the official loan modification. This is the first day of the month following the month when the last trial payment is due. For Official, this is the actual Modification Effective Date of the official loan modification. This is the first day of the month following the month when the last trial payment is due. The Modification Effective Date on the official loan submission must be less than the submission date.
67	Product After Modification	The mortgage product of the loan, after the modification (Allowable values are Fixed or Step).
68	Amortization Term After Modification	The number of months used to calculate the periodic payments of both principal and interest that will be sufficient to retire a mortgage obligation.
69	Unpaid Principal Balance After Modification	The unpaid principal balance of a loan after the loan modification. The unpaid principal balance after modification excludes any applicable forbearance amount and can also be referred to as Net UPB Amount.
70	Last Paid Installment Date After Modification	For Trial, this is the anticipated LPI Date after modification. It should be one month before the anticipated Modification Effective Date. For Official, This is the actual LPI Date after Modification. It must be one month before the Modification Effective Date.
71	Interest Rate After Modification	The interest rate in the month after loan modification.
72	Interest Rate Lock Date for Modification	The date that the rate lock was applied — in reference to modification of loan terms
		For Trial Loan Submission, this is a projection of the first payment due date after modification. First Payment Due Date After Modification should be the same as the anticipated Modification Effective Date.
		For Official Loan Submission , this is the actual first payment due date.
73	First Payment Due Date After Modification	First Payment Due Date After Modification should be the same as the actual Modification Effective Date.
74	Principal and Interest Payment After Modification	The P&I amount after modification
75	Escrow Payment After Modification	Existing monthly payment to escrow-after modification

© 2008 Nationstar Mortgage LLC. “The information within this document is confidential and provided solely for the internal use of Nationstar Mortgage LLC. This document is an intellectual property of Nationstar Mortgage LLC, and is protected under copyright laws of the United States. This material should not be released to any third party supplier without the Previous written approval Nationstar Mortgage LLC.”

Page 58

EXHIBIT B

Ref ID	Name of Data Point	Description
76	Monthly Housing Expense After Modification	The dollar amount per month of the borrowers housing expense of the subject property after modification .May be used for their primary residence. This must be Principal, Interest, Taxes, Insurance and Association Dues (PITIA).
77	Maturity Date After Modification	The maturity date of the loan after modification
78	Principal Forbearance Amount	The total amount in dollars of the principal that was deferred through loss mitigation.
79	Term After Modification	The remaining number of months until the loan will be paid off, assuming that scheduled payments are made. This will equal lesser of 1. the number of months until the actual balance of the loan will amortize to zero; or 2. the number of months difference between the LPI date and the Maturity Date. In this case, the Maturity Date is the Maturity Date after the modification and may be different from the original Maturity Date (before the modification).
80	Front Ratio After Modification	Percentage of borrower’s PITIA to income ratio
81	Back Ratio After Modification	Percentage of borrower’s PITIA plus debts to income ratio
82	Principal Write-down (Forgiveness)	Amount of principal written-down or forgiven
83	Paydown or Payoff of Subordinate Liens	Have subordinate liens been paid off or paid down?
84	Paydown or Payoff of Subordinate Liens Amount	Amount of paydown or payoff of subordinate liens
85	Action Code	A code reported by the lender to update the loan that indicates the action that occurred during the reporting period
86	Action Code Date	The effective date of the action associated with the action code specified on the incoming LPC Transaction by the Servicer. The action date is required for certain action codes.
87	Max Interest Rate After Modification	Interest rate cap for the loan.
88	Trial Payment Number	The number of the trial payment being reported. The code that is used to define a single payment number that will be one of a series of payments that together will complete a loan trial payment period.
89	Trial Payment Received Amount	The actual dollar amount of the payment received from the borrower to the servicer for the trial payment.
90	Trial Payment Posted Date	The date the payment was posted during the Trial period
91	1st Trial Payment Due Date	This is the date that the first trial payment is due. It is also the trial modification effective date. This date must be less than the trial loan submission date.
92	1st Trial Payment Posted Date	The date the first payment posted during the Trial period
93	1st Trial Payment Received Amount	This is the actual amount of the Payment received from the Borrower to the Servicer for the 1st Trial payment.
94	Length of Trial Period	The length of the trial period
95	Step — Interest Rate Step Number	The sequence is used to uniquely identify and order Loan Interest Rate Adjustment schedule records specific to the loans step rate schedule.
96	Step — Payment Effective Date	The date the payment will be effective.
97	Step — Note Rate	The interest rate in the month after loan modification.
98	Step — New Interest Rate — Step Duration	After modification step duration in months. If this step is the last step and will be the rate and payment effective for the life of the loan, then duration is not required.

© 2008 Nationstar Mortgage LLC. “The information within this document is confidential and provided solely for the internal use of Nationstar Mortgage LLC. This document is an intellectual property of Nationstar Mortgage LLC, and is protected under copyright laws of the United States. This material should not be released to any third party supplier without the Previous written approval Nationstar Mortgage LLC.”

Page 59

EXHIBIT B

Ref ID	Name of Data Point	Description
99	Step — Principal and Interest Payment	P&I Amount — The amount of the principal and/or interest payment due on the loan for each installment, beginning on the effective date.
100	Servicer TARP Contract Number	Servicer contract number with Treasury (TARP)
101	Fee Cap at Servicer Level	Max amount that will be paid to Servicer for loan modification
102	Servicer Primary Contact First Name	The first name of the Person.
103	Servicer Primary Contact Last Name	The last name of the Person.
104	Servicer Primary Contact Phone Number	The entire sequence of digits required to initiate a call from a standard phone to this number. It should include the area code or, for overseas numbers, the full country and city codes as they would be dialed.
105	Servicer Primary Contact Email	Servicer contact email address
106	Servicer Secondary Contact First Name	The first name of the Person.
107	Servicer Secondary Contact Last Name	The last name of the Person.
108	Servicer Secondary Contact Phone Number	The entire sequence of digits required to initiate a call from a standard phone to this number. It should include the area code or, for overseas numbers, the full country and city codes as they would be dialed.
109	Servicer Secondary Contact Email	Servicer contact email address
110	Servicer Street Address Line 1	The street address that denotes the location where mail is delivered for the Servicer.
111	Servicer City Name	The name of the city to which physical mail is directed for the Servicer.
112	Servicer State	The 2-character postal abbreviation of the state, province, or region to which physical mail is directed or which corresponds to a physical location.
113	Servicer Postal Code	The code designated by the postal service to direct the delivery of physical mail or which corresponds to a physical location. In the USA, this can take either a 5 digit form (ZIP Code) or a 9-digit form (ZIP + 4).
114	Servicer Technical Point of Contact Name	Person we can contact at servicer to set up B2B interactions
115	Servicer Technical Point of Contact Email	Email address of servicer technical point of contact.
116	Servicer Technical Point of Contact Phone	Phone number of servicer technical point of contact
117	Servicer Data Return URL	URL to which we will connect to send data and reports directly to the servicer. For example https://servicer.com/prevention
118	Servicer Data Return Port Number	Port number associated with the URL
119	Servicer Data Exchange Protocol	B2B protocol to be used to exchange data with a servicer. Must be one of the following: AS2, Connect:Direct, or SFTP.
120	Disbursement Type	This describes the bank account type to which the disbursements will be paid
121	Servicer Routing (ABA) Number	The transit number devised by the American Bankers Association (ABA). A routing transit number (RTN) or ABA number is a nine digit code, used in the United States, which for instance appears on the bottom of negotiable instruments such as checks that identifies which financial institution it is drawn upon.-WIRE Transfer
122	Servicer Bank Account Number	A bank account is a monetary account with a banking institution recording the balance of money for a customer.-Wire Transfer

© 2008 Nationstar Mortgage LLC. “The information within this document is confidential and provided solely for the internal use of Nationstar Mortgage LLC. This document is an intellectual property of Nationstar Mortgage LLC, and is protected under copyright laws of the United States. This material should not be released to any third party supplier without the Previous written approval Nationstar Mortgage LLC.”

Page 60

EXHIBIT B

Ref ID	Name of Data Point	Description
123	Servicer Bank Name	The name of the bank that receives the funds.
124	Servicer Bank Street Address Line 1	The unparsed street address that denotes the location where mail is delivered.
125	Servicer Bank City Name	The name of the city to which physical mail is directed.
126	Servicer Bank State	The 2-character postal abbreviation of the state, province, or region to which physical mail is directed or which corresponds to a physical location.
127	Servicer Bank Postal Code	The code designated by the postal service to direct the delivery of physical mail or which corresponds to a physical location. In the USA, this can take either a 5 digit form (ZIP Code) or a 9-digit form (ZIP + 4).

© 2008 Nationstar Mortgage LLC. “The information within this document is confidential and provided solely for the internal use of Nationstar Mortgage LLC. This document is an intellectual property of Nationstar Mortgage LLC, and is protected under copyright laws of the United States. This material should not be released to any third party supplier without the Previous written approval Nationstar Mortgage LLC.”

Page 61

EXHIBIT B

HAFA Requirements

The Previous Servicer must provide HAFA document and data requirements as posted in Supplemental Directive 09-09 on March 26, 2010.

A copy of each executed document must be provided based on document requirements outlined under section ‘Records and Files’. An electronic report in Excel format is required for each report defined in this section. Each report in this section should be delivered as defined under Delivery of Final Loan Level Data & Reports.

Data Elements Required for HAFA Loans

1. Reporting based on HAFA letter being sent on a loan.

• Each loan that did meet HAMP eligibility but did not fulfill HAMP obligations

• Reason code/reason for HAMP fall out

• Date Letter Sent

• Type of HAFA Letter Sent (e.g. Solicitation Letter or SSA, RASS, ALT Rass, or DIL agreement)

• If postpone foreclosure for the 14 day solicitation letter, need date foreclosure postponed

2. Reporting based on response to HAFA letter.

• Each loan that responded to the letter

• Date responded to letter

• Which alternative borrower agreed to fulfill (short sale and/or deed-in-lieu)

• Executed documents received by Servicer(Y/N Flag)

• Status of Request (e.g. Talked to borrower about alternatives, borrower is interested and documents sent but not received, documents sent by servicer, executed documents in mail, etc...)

• Date foreclosure was postponed

• Any completed request for Approval of Short Sale (RASS) or Alt Request for Approval of Short Sale (Alt Rass)

3. Treasury Reporting Requirements

Logical Data Element	Description
HAMP Registration Number	The unique identifier for the servicer participating in the HAMP program
HAMP Servicer Number	A unique identifier assigned to each servicer that is participating in the HAMP program
Servicer Loan Number	The unique identifier assigned to the loan by the lender that is servicing the loan for the first lien

© 2008 Nationstar Mortgage LLC. “The information within this document is confidential and provided solely for the internal use of Nationstar Mortgage LLC. This document is an intellectual property of Nationstar Mortgage LLC, and is protected under copyright laws of the United States. This material should not be released to any third party supplier without the Previous written approval Nationstar Mortgage LLC.”

Page 62

EXHIBIT B

Logical Data Element	Description
GSE Servicer Number	The Fannie Mae or Freddie Mac unique servicer identifier
GSE Loan Number	A unique identifier assigned to each loan by a GSE
Investor Code	Owner of the Mortgage
Borrower Last Name
Borrower First Name
Borrower SSN
Co-Borrower Last name
Co-Borrower First Name
Co-Borrower SSN
Program Type/Campaign ID	A new program type that will identify campaign types. The unique identifier of a Loan Workout Campaign.
Submission Status	Status of loan data being submitted
Property Street Address
Property City
Property State
Property Zip Code
Date of original Note
Front Ratio Before Modification	The front-end DTI (principal, interest, taxes, insurance and association dues) housing ratio as of the HAMP modification evaluation.
Property usage type code	A code identifying the use by the borrower of the property
Loan Status type code	A code specifying whether the loan is in default, imminent default, or current status as of the HAMP modification evaluation.
Borrower execution date	This is the date that the borrower signed the SPO agreement or DIL agreement
Agreement issue Date	This is the date that the SPO agreement or the DIL agreement was issued
agreement experiation date	The expiration date of the SPO agreement or DIL agreement.

© 2008 Nationstar Mortgage LLC. “The information within this document is confidential and provided solely for the internal use of Nationstar Mortgage LLC. This document is an intellectual property of Nationstar Mortgage LLC, and is protected under copyright laws of the United States. This material should not be released to any third party supplier without the Previous written approval Nationstar Mortgage LLC.”

Page 63

EXHIBIT B

Logical Data Element	Description
SPO or DIL reason code	A field identifying the reason for the borrower entering into a SPO or DIL transaction
SPO or DIL Reason date	For loans that do not qualify for a HAMP trial modification or the borrower declines a mod, this is the date that a trial mod was not offered to the borrower or was not accepted by the borrower. For a borrower who did not successfullly complete a trial p
Property List Price	At notification this is the original list price of the property. At extension or correction, it is the latest list price of the property as of the extension or correction. At loan set up, it is the ending list price of the property as of the transaction
Property Vacancy Date	The SPO agreement or DIL agreement will state the date by which the property must be cacated, which in no event will be less than 30 calendar days from expeiration day of the SPO agreement (or any exstension thereof) or the date of a separate DIL agreement
Minimum net return to investor amount	The mimimum net return is the minimum acceptable net proceeds that the investor will accept from the transaction. The minimum net return must be reported as a dollar amount.
Mortgage insurance waiver approval indicator	For loans with MI coverage, this attribute indicates whether the MI provided delegations of authority to execute a SPO or DIL in accordance with the forreclosure alternative guidelines and waives any right to collect additional sums from the borrower.
UPB amount	The UPB of a loan as of the time of the SPO or DIL

© 2008 Nationstar Mortgage LLC. “The information within this document is confidential and provided solely for the internal use of Nationstar Mortgage LLC. This document is an intellectual property of Nationstar Mortgage LLC, and is protected under copyright laws of the United States. This material should not be released to any third party supplier without the Previous written approval Nationstar Mortgage LLC.”

Page 64

EXHIBIT B

Logical Data Element	Description
Property sale or transaction amount	The sale or transfer price of the property.
Total Allowable Costs	The total allowable costs associated with selling the property that can be deducted from the gross sale price at closing. Allowable costs may include subordinate lien release amount, borrower relocation assistance, sales commission, closing costs for tax
Transaction Closing Date	the date on which the SPO or DIL transaction is closed
Subordinate Lien release reimbursement amount	The total amount of reimbursement paid by the ser4vicer to subordinate lien holder to secure release of subordinate lien. This amount may not exceed $3000
SPO or DIL cancellation reason code	A field indicating the reason why a SPO or DIL transaction was cancelled.

© 2008 Nationstar Mortgage LLC. “The information within this document is confidential and provided solely for the internal use of Nationstar Mortgage LLC. This document is an intellectual property of Nationstar Mortgage LLC, and is protected under copyright laws of the United States. This material should not be released to any third party supplier without the Previous written approval Nationstar Mortgage LLC.”

Page 65

EXHIBIT C

LIMITED POWER OF ATTORNEY

EXHIBIT C

LIMITED POWER OF ATTORNEY

     KNOW ALL MEN BY THESE PRESENTS, that Nationstar Mortgage LLC in order to carry out the intent and purposes of that certain Subservicing Agreement (“Agreement”) executed _____________ between Nationstar Mortgage LLC and ____________________ (“Owner”), and in accordance with the provisions of said Agreement, Owner does hereby appoint Nationstar Mortgage LLC and any of its affiliates, and the officers, employees and agents of each (“NSM”), as its true and lawful attorney-in-fact, with full power of substitution:

     a. to endorse the name of ___________________, without recourse, upon any and all notes, checks, drafts or other instruments and vehicles of the payment of money received or to be received by or on behalf of NSM in payment of or on any Mortgage Loan serviced by NSM or insurance proceeds resulting from any insurance on the Mortgaged Property, and to take any and all action necessary to perfect the interest of Owner in any Mortgaged Loan serviced by NSM pursuant to the Agreement;

     b. to endorse or cause to be endorsed any security instrument, assignment, release (full or partial) or any other documents necessary to establish and protect all rights, title and interest of Owner in, to and under such Mortgage Loan, including, but not limited to foreclosure proceedings;

     c. to take such other action as may be necessary to properly service the Mortgage Loan and to execute any other documents referred to in the above-mentioned documents or that are ancillary or related thereto or contemplated by the provisions thereof..

     Capitalized terms used herein and not otherwise defined shall have the meanings assigned to them in the above referenced Agreement.

     This Limited Power of Attorney shall be binding upon Owner and its successors and assigns, and shall inure to the benefit of NSM, and its successors and assigns. It shall be effective so long as the Agreement is in effect and NSM has not been terminated under the Agreement.

     This Limited Power of Attorney shall be governed by, and construed in accordance with, the laws of the State of New York without regard to its conflicts of law principles.

     IN WITNESS WHEREOF, Owner has caused its name to be subscribed hereto by its authorized officer and its seal is to be affixed by its Secretary, this _______ day of ________, 20_.

Signed and Acknowledged In the presence of the following witnesses:	Owner
Witness	Authorized Officer
Witness	Secretary

STATE OF                                         

COUNTY OF                                         

     Subscribed and acknowledged before me, a Notary Public in and for said county and state this                      day of                     , 20__ by                                           , an authorized officer of Owner and attested by                                         , Secretary of Owner.

Notary Public 

EXHIBIT D

PRICING SCHEDULE

Exhibit D

Nationstar Special Servicing Pricing — American General

	Pricing		Description
	Base Fee	•	Loans less than 30 days delinquent	[*]
		•	Loans 30-59 days delinquent	[*]
		•	Loans 60-89 days delinquent	[*]
		•	Loans >= 90 days delinquent	[*]
	Boarding Fee	•	Fee + actual out of pocket expenses (tax, flood, mers, assignments)	[*]
	DeBoarding Fee	•	Fee + actual out of pocket expenses (shipping, tax, flood, mers, assignments, etc)	[*]0-12 mos[*]> 12 mos
	Collections/Loss Mitigation Incentives:		If Opting into Treasury MHA Program	[*]
•	Qualified Modifications	•	Payable to subservicer under Federal Program Workout Activity
•	Qualified Short Sales	•	Payable to subservicer under Federal Program Workout Activity
•	Qualified Deed in Lieus	•	Payable to subservicer under Federal Program Workout Activity
•	Qualified H4H	•	Payable to subservicer under Federal Program Workout Activity
	Collection/Loss Mitigation Incentives:		Eligible for accounts greater than or equal to 60 days delinquent — Non Treasury MHA:	Incentive Fee:
•	Reinstatement via lump-sum or repayment plan	•	Full reinstatement of all past due amounts as a result of collections, loss mitigation or other negotiation methods	[*]
•	Paid in full	•	Pay-off of all amounts due under the then existing note terms as a result of collections, loss mitigation or other negotiation methods	[*]
•	Third Party Sales	•	Asset sold to third party at foreclosure sale	[*]
•	Redemption	•	Borrwer exercises right of redemption according to state specific guideline	[*]
•	Deed-in-Lieu	•	Property deeded over to Asset owner	[*]
•	Short Sales	•	Receipt of funds pursuant to client approved plan	[*]

* [Confidential treatment requested]

	Pricing		Description
•	Note Sales	•	Receipt of funds pursuant to client approved plan	[*]
•	Modifications — < 60 Days Delinquent	•	Receipt of funds pursuant to client approved modification; requires AmGen pre-approval	[*]
•	Modifications — 60+ Days Delinquent	•	Receipt of funds pursuant to client approved modification	[*]
	REO Sale Fee		Liquidation of REO Asset	Incentive Fee:
•	Referral Fee	•	HSSS will negotiate and earn a referral fee of 1% or $1,250 from the real estate transaction	[*]
	Recovery Incentive	•	Collection of charged-off deficiency balance	[*]
	delinquencies are reflected using MBA delinquency method

* [Confidential treatment requested]

EXHIBIT E

[RESERVED]

EXHIBIT F

TAX AND FLOOD LIST OF PREFERRED VENDORS

EXHIBIT F

Tax and Flood List of Preferred Vendors

First American Real Estate Tax Service, LLC (Tax)

First American Flood Data Services, a division of First American Real Estate Solutions of Texas, L.P. (Flood)

EXHIBIT G-1 and EXHIBIT G-2

MONTHLY AND DAILY REPORTS AND FILES

EXHIBIT G-1 and EXHIBIT G-2

		Expected
		Delivery Time
G-1 Monthly Reports		(CST)	Report Group	AGF Report Names
Appendix A HAMP INITIAL LOAN SETUP DATA — Split by Securitizations & Unencumbered	Existing	8:00 am (2)	BI	Hamp
Appendix B HAMP LOAN TRIAL PERIOD PAYMENTS — Split by Securitizations & Unencumbered	Existing	8:00 am (2)	BI	Hamp
Appendix C HAMP LOAN SETUP DATA FOR OFFICIAL MOD - Split by Securitizations & Unencumbered	Existing	8:00 am (2)	BI	Hamp
Appendix D HAMP LOAN PAYMENTS FOR OFFICIAL MODS - Split by Securitizations & Unencumbered	Existing	8:00 am (2)	BI	Hamp
HAMP Master Recon	New	Midnight (3)	BI	Hamp Master Recon File
SR410UR-02 TRIAL BALANCE	Existing	8:00 am (1)	LSAMS	P139
SR410UR-03 CUTOFF TRANSACTION JOURNAL	Existing	8:00 am (1)	LSAMS	S215
SR410UR-05 CURTAILMENTS / PREPAYMENTS	Existing	8:00 am (1)	LSAMS	S213 and S212
SR410UR-06 LOANS REMOVED	Existing	8:00 am (1)	LSAMS	S214
SRV120C-01 MONTHLY ACCRUED INTEREST	New	8:00 am (1)	LSAMS	New — Mortgage accruals
SRV126C-01 ACCRUED INTEREST TRIAL BALANCE	New	8:00 am (1)	LSAMS	S2TT and T3TQ
IR Reporting Package with Latitude Reports	Existing	Midnight (2)	Investor Reporting	IR reports/latitude - P4CG, P4CQ and Escrow Advances. Must contain a new Daily Remittance Tie Out Report and HAMP Cash Recon.
Custom File	New	6:00 am (1)	BI	Custom
LPMA File For 2010-1 Portfolio	New	Midnight (3)	BI	12 Oversight Reports
Securitization remittance files for 2010-1 and 2006-1	New	Midnight (3)	BI & Investor Reporting	Remittance 06 & 10 deal
Monthly modification data file for 2010-1	New	Midnight (3)	BI & Investor Reporting	Compliment for 2010 securitization remittance
REO Monthly Client Package	New	Midnight (3)	BI & Investor Reporting	LPS Monthly Client Package
Annual LSAM’s Masterfile Extract for 2010-1	New	Midnight (4)	BI & Investor Reporting	Oversight Report

G-2 Daily Reports	Expected Delivery Time (CST)		Report Group	AGF Report Names
SRV105C-01 LOAN TRANSFER REPORT	Existing	8:00 am (1)	LSAMS	P129 and P130
SRV111C-01 ACCRUED INTEREST REPORT	Existing	8:00 am (1)	LSAMS	S2TT
SRV403C INVESTOR REMITTANCE DAILY PAYOFF REPORT	Existing	8:00 am (1)	LSAMS	P110
SRV511C-01 DAILY TRANSACTION JOURNAL	Existing	8:00 am (1)	LSAMS	P102 and HELOC Advances
SRV583AR-01 DETAIL MORTGAGE TRIAL BALANCE	Existing	8:00 am (1)	LSAMS	P181 detail
SRV583AR-02 SUMMARY MORTGAGE TRIAL BALANCE	Existing	8:00 am (1)	LSAMS	P181 summary
LPMA Portfolio Oversight Files for Total Portfolio	Existing	6:00 am (1)	BI	Oversight
Custom File	New	6:00 am (1)	BI	Custom
Daily ACCRUED INTEREST	New	6:00 am (1)	BI	New “SRV120 Daily Like”
REO Reporting Detail	New	6:00 am (1)	BI	REO
HELOC Reporting Detail	New	6:00 am (1)	BI	FM’s, Applied/unapplied and trend report

(1)	Delivered Tuesday through Saturday, except company holidays, or in more general terms - available the morning following ENDDAY, if month end falls on a Saturday or Sunday and additional ENDDAY is ran — reports would be provided the next morning; Delivery method = SFTP
(2)	Delivered by the end of business on the 3rd business day of the month. Delivery method = secure email
(3)	Delivered by the end of business on the 5th calendar day of the month. Delivery method = secure email
(4)	Delivered annually by the end of business on the 5th calendar day of April. Delivery method = secure email. Starting April 2011.

EXHIBIT H

SECURITY ASSESSMENT

EXHIBIT H — Security Assessment — Nationstar

The AGFS Security Office has completed a review of Nationstar Security Assessment Questionnaire responses and conducted an onsite assessment for physical and information security on December 8, 2010. Based on the observations from the review, the Security Office has concluded that the following actions are required within the next 12 months.

				Date
Number	Control Category	Issue Description	Remediation Required	Remediated
1	Access Controls	a) Sufficient controls are not currently in place to ensure that access to premises and systems by terminated employees is revoked in a timely fashion. The following action items must be completed.	a) Implement controls to integrate the termination process across HR, management, and IT / Security to provide timely removal of physical and logical user access rights for all terminated employees. Termination processing should be weekly at a minimum. Application and system access should be recertified by management on an annual basis at minimum.
		b) Contractors are currently not reviewed for access termination	b) Implement a formal review / recertification process for contractors. Review and renewal of access rights should be performed by management on a quarterly interval at minimum.
2	Access Controls	Personally identifiable information (PII) is not comprehensively scrubbed in test / development environments.	All sensitive data in test / development should be scrubbed.
3	Access Controls	Currently, Nationstar technical staff have open access to production data	Access to production data by technical support staff should only be granted upon appropriate management approval, limited in scope to the specified purpose, and revoked when no longer justified. Access to production data should be reviewed and recertified quarterly.
4	Access Controls	All developers have read / update access to all source code.	Access to source code for each application should be restricted to only those employees assigned to an application. A formal process for approvals and promotion of changes from development to separate and controlled QA and production environments should be implemented.

				Date
Number	Control Category	Issue Description	Remediation Required	Remediated
5	Network Security Controls	The Nationstar network is protected by a single Nokia Checkpoint firewall and configured with 2 zones, core and external DMZ. A project is in place to create an additional DMZ zone to house the ecommerce application servers. The plan is to utilize the existing firewall for the new zone in addition to the current zone in place. Completion is scheduled for end of January 2011. While this offers greater protection and controls than currently in place, a vulnerability exploit in the Nokia Checkpoint would expose Nationstar to data compromise within both DMZ’s and the core.	A second firewall from another vendor should be implemented to strengthen protection of sensitive data.
6	Network Security Controls	Remote access by employees is allowed through the Nationstar VPN from non-company owned devices with no checks for patch levels, virus scanning, or firewall. Dual factor authentication is not deployed.	Deploy dual factor authentication for remote users. Implement remote device scanning and block utilization of devices that do not meet minimum security requirements for antivirus, firewall, and operating system patch levels.
7	Policy/Governance	Application updates for Remedy are currently released on an ad hoc basis as updates become available. Consistent change management controls are not in place for all applications.	Change management processes for all applications need to be formalized to scheduled, controlled release cycles and incorporate a formal QA process.
8	Policy/Governance	Use of USB devices for removable media is permitted by exception approval only. Although a corporate, encrypted thumb drive is issued, there is no facility to prevent approved employees from using their own non-company devices.	Policy should be clearly defined and protection should be deployed to limit USB devices to company-issued only.
9	Policy/Governance	No retention policy for personally identifiable information (PII) or business confidential data is currently defined and documented.	A policy governing retention guidelines should be created and enforced.
10	Policy/Governance	Passwords are not allowed to repeat within the last 5 passwords used.	Increase the threshold on re-use of passwords to prevent repeating within the last 12 passwords used.

				Date
Number	Control Category	Issue Description	Remediation Required	Remediated
11	Policy/Governance	Data owners are not currently identified to approve creation, access rights, or classification of data groups. No formal process exists for classification of data, structured or un-structured. Policies and procedures are defined but execution is ad hoc.	Ownership of data groups should be documented and a formal process established to classify company and customer confidential (sensitive) data. Formal processes for new data group creation, annual review, and recertification of access to sensitive data should be implemented.
12	Disaster Recovery/Business Continuity	BIA’s have not been completed with the business areas. Business Continuity is not currently integrated into the disaster recovery testing process to ensure that all business critical applications and resources are included and successfully tested on an annual basis.	Complete BIA’s for all critical business areas. Document business continuity plans for each business area and ensure that all critical personnel and applications are included in annual testing. Table-top exercises should be completed fro each business area in scope.
13	Disaster Recovery/Business Continuity	The disaster recovery site is located within 21 miles from the Nationstar data center.	An alternate location within a different region of the US should be established to decrease the probability of losing both primary and secondary locations during a catastrophic event.
14	External Audit/Certification	A SAS 70 audit or equivalent has not been performed for Nationstar.	A SAS 70 audit or equivalent should be performed to assess overall Nationstar security posture.

EXHIBIT I

APPROVAL MATRIX

EXHIBIT I

Approval Matrix

		Servicer Approval
Action	Delegated Authority	Required	Terms and Conditions
Modified Payment Logic			Process Payments by requiring Principal, Interest and Escrow portions of the payment before calling it a contractual payment and rolling the due date subject to the below exceptions. Exception for if an Escrowed loan, allow a $50 shortage and pull the shortage out of Escrow.
	X		Exception for if not an Escrowed loan, allow a $5 shortage and pull the shortage out of Recoverable Corporate Advance. Followed Servicer Guidelines for Payment Overages.
Paid In Full Loans with Balances	X		If paid in full loan has a remaining balance of Escrow or Suspense, hold funds for 30 days to ensure any returned payments are received and netted out of the refund.
Pre-Payment Penalty (PPP) Waivers	X		Subservicer may waive the application of any related PPP if Subservicer reasonably believes doing so would maximize proceeds for the account.
Releasing Liens	X		Subservicer will release liens in accordance with the state requirements on paid in full and short sale loans.
Servicemembers Civil Relief Act	X		Subservicer will service loans qualified for the Servicemembers Civil Relief Act in accordance with the provisions of the law.

		Servicer Approval
Action	Delegated Authority	Required	Terms and Conditions
Subordinations	X		Subservicer will consider a customer’s request for a Subordination of a Second Lien base upon the below criteria. Must have a current Interior Appraisal — Appraisal from Lender acceptable. CLTV must be less than 80% if greater than $1,000 Cash Out or between 80 — 95% with less than $1,000 Cash Out.
			CLTV calculated by (the Good Faith Estimate Loan Amount + the Second Credit Limit) divided by the As Is Appraisal Value. Based upon Subservicer judgment, the customer must have good pay history on the Second lien and on the credit bureau. Based upon Subservicer judgment, Subservicer can also approve Subordination with the stipulation of closing the line of credit.
Responding to Disputes and Written Complaints	X		Subservicer will respond promptly to any written inquiry from any Federal, State, County or City Agency or Organization as well as the Better Business Bureau with a copy to Servicer. Subservicer will follow all applicable laws, Subservicer’s written Complaint Resolution Process and good servicing practices as it relates to customer written complaints and disputes.
Credit Bureau reporting	X		Subservicer will report loans in compliance with the Fair Credit Reporting Act.
Setting Up Escrow	X		Subservicer will set up Escrow for customers who make the request. Subservicer will set up Escrow for customers who are not set up for Escrow but are modified under the HAMP program. Subservicer will set up Escrow for customers who are not set up for Escrow but Subservicer has had to pay delinquent taxes or establish a Creditor Placed Insurance Policy. Subservicer will follow all RESPA Requirements in relation to servicing Escrow Loans on behalf of Servicer.
Dissolving an Escrow Account	X		Subservicer will use its best judgment when a customer requests to dissolve an Escrow Account. At a minimum, customer should have a perfect pay history (0 x 30) for the past 24 months and the LTV should not be greater than 80%.
Interest on Escrow	X		Subservicer will follow all state requirements when by paying Interest On Escrow on a quarterly basis.

		Servicer Approval
Action	Delegated Authority	Required	Terms and Conditions
Creditor Placed Insurance	X		For loans that are not set up for Escrow on Insurance, Subservicer will annually receive proof that the customers have a valid and paid for Hazard Insurance Policy. If the customers do not provide proof, Subservicer will set up a Creditor Placed Insurance Policy to cover the principal balance of the loan. Subservicer will set up an Escrow Account so Advance can be repaid over 12 months.
Payment of Delinquent Real Estate Taxes	X		As a rule of thumb, Subservicer should only pay delinquent taxes on behalf of a customer only if there is a risk of a Tax Sale within the next year (High Severity). However, Subservicer should use good business judgment when paying delinquent taxes on loans that are not Escrowed for Taxes. For example, if the delinquent taxes are given to a private company to collect with a high interest rate, it would be prudent to go ahead and pay those taxes even though they might not go to a Tax Sale. Would want to look at value of property and Balance as well. Subservicer will set up an Escrow Account so Advance can be repaid over 12 months.
Release of Hazard Insurance proceeds	X		Consistent with Subservicer Servicing Guidelines.
Applicable 1098, 1099A and 1099C IRS Reporting	X		Subservicer will provide customers and appropriate end of year reporting as required by law. This would include, but not be limited to, 1098, 1099A and 1099C reporting.
Hardship / Disaster		X	Servicer must be informed and approve approach / arrangements.

		Servicer Approval
Action	Delegated Authority	Required	Terms and Conditions
Collections Efforts	X		Subservicer will follow all applicable collections laws including, but not limited to, FDCPA. Subservicer will have a dedicated staff assigned to Servicer Loans. Subservicer will staff with low spans of control for each delinquency bucket of Servicer Loans. Subservicer will make at least 1 collection phone attempt every 3 days on Servicer Loans. Subservicer will make multiple phone attempts using different strategies to contact customer beginning when a loan is 1 — 29 days past due. Subservicer will start collections attempts no later than 16 days past due (as early as 5 days past due for higher risk loans). Upon contact, Subservicer will ascertain reason for delinquency and ask for payment. Subservicer will continue to make collection calls for payments even if loan is in Foreclosure and/or Loss Mitigation. Subservicer will utilize a letter strategy that is consistent with Subservicer Guidelines.
Timing of Breach Notice	X		Typically at day 45 or at day 35 for loans in states that have implemented laws that require longer timeframes for NOI Letters. Consistent with Subservicer Servicing Guidelines.
			After 2 consecutive monthly contractual payments and no deferment in the last 12 months, deferment can be offered.
Delinquent Loans Deferment Plans for	X		Must collect the Escrow and Principal portions of the delinquent and current month payments in order to roll to the Next Due Date to Current (due for the next month). Exception, Deferments as described above are not approved for the Servicer Mortgage Loan Trust 2010-1 Securitization loans.
			Loan must be greater than or equal to 30 days delinquent. 1/2 of arrears should be collected prior to the forbearance, if possible.
Repayment Plans for	X		Remaining arrears to be collected over a 3 — 6 month period. 6 month max repayment plan term.
			Follow all HAMP rules / process / reporting / guidelines including new required Directives.
HAMP Modification	X		Participate in only the required programs unless approved by Servicer. Principal reductions not approved unless approved by Servicer at loan level.

		Servicer Approval
Action	Delegated Authority	Required	Terms and Conditions
HAFA Short Sale/DIL	X		Follow all HAFA rules/process/reporting/guidelines including new required Directives. Subservicer must use the Minimum Net Proceeds calculation Approved by Servicer.
HAUP Program	X		Follow all HAUP (Unemployment) rules / process / reporting / guidelines including new required Directives.
Custom Modification	X X X	X	HAMP must always be the first alternative for Loan Modifications. For loans less than 90 days past due and not eligible for HAMP, Subservicer will submit all Loan Modification packages to Servicer for approval. Loans greater than or equal to 90 days past due and not eligible for HAMP, a minimum of a 3 month Forbearance Plan is required before loan can be modified. NPV must exceed Foreclosure / REO, Short Sale and DIL best case.
Forgiveness of principal, interest or other amounts outstanding / owed		X	All debt forgiveness of principal, interest or other outstanding arrears must be approved Servicer.
Short Sale	X X X X X X	X X	HAFA always the first alternative for Short Sales. Interior Appraisal Value less than 60 days old is required along with Hardship Letter from Customer. NPV must exceed Foreclosure / REO, Loan Modification and DIL base case. Realtor commissions not to exceed 5%. No cash out to seller. Sale Amount is compared to Appraisal to ensure value received. Servicer approval required on loans less than 90 Days past due. Servicer approval required on loans greater than or equal to 90 Days past due where Expected Loss exceeds $125,000.
Deed — in — Lieu (DIL)	X X X X		HAFA always the first alternative for DIL. Interior Appraisal Value less than 60 days old is required along with Hardship Letter from Customer. Updated Title required. NPV must exceed Foreclosure / REO, Loan Modification and Short Sale base case.

		Servicer Approval
Action	Delegated Authority	Required	Terms and Conditions
		X X	Servicer approval required on loans less than 90 Days past due. Servicer approval required on loans greater than or equal to 90 Days past due where Expected Loss exceeds $125,000.
			Delegated authority up to 3 monthly payments or 1% of the Unpaid Principal Balance, whichever is greater.
Cash for Keys — DIL	X		Property must be left vacant and broom swept clean. Customer must permit an Interior Appraisal or BPO and execute DIL before receiving Proceeds.
Recoverable Corporate Advances	X		As allowed by law, Subservicer will charge any legal foreclosure or bankruptcy attorney cost or expense to the loan in the Recoverable Corporate Advance bucket so that the borrower will be responsible for paying these amounts back.
Foreclosure Referral 1st Liens	X		1st liens will be referred within 3 days upon expiration of demand notice and no longer active in HAMP.
2nd Liens		X X	1st liens with Principal Balances less than $60,000 or recent Interior Appraised/BPO Value of less than $15,000 must be approved by Servicer. Servicer to approve all 2nd lien referrals based on equity analysis.
HELOCs	X		For any Advance that is presented for payment of $10,000 or more, Subservicer will do a Signature Verification prior to acceptance of the advance. For any Advance that is presented for payment that is in the form of a Draft, Subservicer will decline payment and not post the transaction to the loan. For any Advance that is presented for payment less than $100, Subservicer will decline the payment and not post the transaction to the loan. If a HELOC loan that is still in the Draw Period goes 60 days past due, the line of credit will be shut down and an Adverse Action Notice will be sent to the customer.
Securitized Loans	X		For loans in the two Securitized Pools — 2006-1 and 2010-1, prior to the initiation of a Foreclosure Action, Subservicer will perform all actions necessary to transfer ownership of such Mortgage Loan to the appropriate Owner or Owner Designee Name.

		Servicer Approval
Action	Delegated Authority	Required	Terms and Conditions
MERS	X		Prior to initiation of a Foreclosure Action, Subservicer will perform all actions necessary to transfer ownership of such Mortgage Loan from MERS to the appropriate Owner or Owner Designee Name.
Foreclosure Valuations	X		Within 180 days of Foreclosure Sale, an Interior Appraisal (if Vacant, Short Sale or DIL) is required or a BPO (prefer this to be done within 2 months of the Foreclosure Sale date if possible for the most current value).
			Upon Completion of Foreclosure Sale, an Interior Appraisal (if Vacant, Short Sale or DIL) is required if the last Interior Appraisal is older than 180 days. If property occupied, a BPO is required if previous BPO is older than 180 days.
Foreclosure Bidding Instructions	X	X	85% of the most recent Interior Appraisal (vacant property) or BPO or the Pay-off, whichever is lower. Foreclosure Bids with Estimated Loss greater than $125,000 should be approved by Servicer.
Property Preservation	X		Delegated authority up to a cumulative $10,000 for each property.
Foreclosure and Bankruptcy Fees and Costs	X		Must comply with most recent FNMA Fee Matrix.
Bankruptcy	X X	X	Subservicer will file for Motion For Relief after 2 missed payments on bankrupt loans. Subservicer will solicit all Active Bankruptcy Chapter 7 loans for Reaffirmations and will receive court approval. Subservicer cannot approve principal reductions on bankrupt loans without prior approval from Servicer.
Charge-off Approval	X X	X	Accounts should be charged-off in the month in which the loan is 180 days past due and the lien is determined to no longer be valid. (e.g. senior lien foreclosure, third party sale foreclosure (3rd party outbids Servicer) or short sale completed). Subservicer has the authority to make charge-off decisions on 2nd liens with less than $30,000 equity. Charge-offs greater than $125,000 should be approved by Servicer.

		Servicer Approval
Action	Delegated Authority	Required	Terms and Conditions
Registering of REO Properties	X		Subservicer will follow all local jurisdiction property registering requirements as required by local ordinances and statutes.
Dwelling Insurance	X		Subservicer will adequately provide for dwelling insurance of all REO properties up to and including the value of the property.
Relocation Assistance to shorten Eviction - Cash For Keys	X		Limit of $2,000 for First Attempt. Second and greater Attempts limit is $2,500 for most recent Value of $0 — $250,000 or 1% of the most recent Value greater than $250,000. Property must be left in broom swept condition to receive proceeds.
REO List Price	X		An Interior Appraisal is required either for the Foreclosure Bid process, the Foreclosure Sale process or upon Vacancy once in REO. A BPO should also be received from the Real Estate Agent who is assigned the property to sell. REO Initial List Price should be set at the higher of the Interior Appraisal or BPO “As Is” value. If property being repaired, list using the “Repaired” value vs. the “As Is” value is acceptable. At 1 year and every year thereafter from the last Interior Appraisal Date, order a new Interior Appraisal unless the property is under contract.

		Every 30 Days. After 60 Days, use best judgment.
		Property Value	30 Day Reduction			60 Day Reduction
		$0 — $24.9k		18	%		14	%
REO List Price Reductions	X	$25 — $49.9k		14	%		12	%
		$50 — $99.9k		8	%		6	%
		$100k+		5	%		5	%

		Servicer Approval
Action	Delegated Authority	Required	Terms and Conditions
REO Repairs / Improvements	X		Delegated authority up to cumulative $10,000 for each property. Rule of thumb should be that the repair should increase the selling price by two times the expense.
Property Preservation /Emergency Repairs	X		Delegated authority up to cumulative $10,000 for each property. Rule of thumb should be that the repair should increase the selling price by two times the expense.
Acceptance of REO Sales Offer	X X	X	Offer must be greater than or equal to 92% of current list price. All other offers less than 92% will require Servicer approval. All REO Sales Contracts should be executed “As Is” and “Final”.
Settlement of Litigated Accounts		X	Subservicer will provide monthly updates to Servicer as the status of any litigation loan in process. Servicer to approve all litigated files (initiated from outside party) based on recommendation by Subservicer and outside counsel.
Approval of any Form Letters	X		Subservicer will have Legal Approval of all Form Letters being sent to customers for any servicing reasons.
Regulatory Requests for Information or Exams	X		If Servicer receives data and/or exam requests from a State Regulatory Agency (for example: A Bureau of Financial Institutions), the request will be sent to Subservicer to retrieve data and/or provide answers and, with timely prior approval from Servicer, will provide the data or complete the exam or will send the information to Servicer for their response (Servicer decision). If Subservicer receives data and/or exam requests from a State Regulatory Agency on American General loans (for example: VA Bureau of Financial Institutions), Subservicer will notify American General within 10 days, will retrieve the data and/or complete the exam and, with timely prior approval from Servicer, will provide the data or exam to the requesting agency.
Solicitation of Customers		X	Subservicer will seek approval of any offer of any third party product or origination offer from Servicer prior to solicitation. In the event that Servicer approves of a Solicitation, Subservicer will eliminate any Do Not Solicit loans.

This Approval Matrix may have items added to it, items revised or items deleted at any time with mutual consent of both Subservicer and Servicer.

EX-10.6

Exhibit 10.6

EXECUTED

(CONFIDENTIAL TREATMENT OF CERTAIN DESIGNATED PORTIONS OF THIS AGREEMENT HAVE BEEN REQUESTED BY NATIONSTAR MORTGAGE LLC, SUCH CONFIDENTIAL PORTIONS HAVE BEEN OMITTED, AS INDICATED BY AN [*] IN THE TEXT, AND SUBMITTED TO THE SECURITIES AND EXCHANGE COMMISSION).

SUBSERVICING AGREEMENT
(AMERICAN GENERAL MORTGAGE LOAN TRUST 2006-1)

Effective as of February 1, 2011

Between

MorEquity, Inc.
as Servicer

and

Nationstar Mortgage LLC
as Subservicer

RESIDENTIAL MORTGAGE LOANS

Table of Contents

	Page
Article I definitions		1
Section 1.1 Defined Terms		1
Article II Engagement of Subservicer		11
Section 2.1 Servicing; Possession of Servicing Files		11
Section 2.2 Books and Records		13
Section 2.3 Custodial Agreement		13
Section 2.4 Limitation on Scope of Servicing Obligation		14
Section 2.5 Loss Mitigation and Recovery Actions		14
Section 2.6 HMP Program		14
Section 2.7 Oversight Program		15
Article III Representations, Warranties and Covenants		15
Section 3.1 Subservicer Representations, Warranties and Covenants		15
Section 3.2 Servicer Representations, Warranties and Covenants		16
Section 3.3 Servicer’s Representations, Warranties and Covenants for Mortgage Loans		17
Article IV Servicing of the Mortgage Loans		18
Section 4.1 Standard and Scope of Service		18
Section 4.2 Authority of the Subservicer; Delinquencies		19
Section 4.3 Collection of Mortgage Loan Payments		21
Section 4.4 Notification of Adjustments		21
Section 4.5 Duties the Subservicer May Delegate		21
Section 4.6 Servicing Files		22
Section 4.7 Imaged Records		23
Section 4.8 Enforcement of Due-On-Sale Clause; Assumption		24
Section 4.9 Insurance		24
Section 4.10 Insurance Notices		26
Section 4.11 Tax and Flood Contracts		26
Section 4.12 Tax and Insurance Accounts; Tax Service		26
Section 4.13 Bankruptcies		28
Section 4.14 Foreclosure Procedures		28
Section 4.15 Reinstatement of Mortgage Loans		29
Section 4.16 Servicing REO Property		29
Section 4.17 Satisfactions		31
Section 4.18 Servicing Advances and Pass-Through Expenses		32
Section 4.19 Prepayment Penalties		33
Section 4.20 Restoration and Repair		33
Section 4.21 Subservicer Bond, Errors and Omissions Insurance		34
Section 4.22 Disaster Recovery		34
Section 4.23 High Cost Loans		35
Article V Compensation to the Subservicer		35
Section 5.1 Compensation to the Subservicer		35
Article VI Accounting		36
Section 6.1 General		36
Section 6.2 Account Maintenance		36

	Page
Section 6.3 P & I Custodial Account; Remittance		37
Section 6.4 T & I Escrow Accounts		38
Section 6.5 Interest on Tax and Insurance Reserves		39
Section 6.6 Access to Records		39
Article VII Reports to the Servicer		40
Section 7.1 Reports to the Servicer		40
Section 7.2 Annual Independent Certified Public Accountants’ Servicing Report		41
Section 7.3 Reports of Foreclosures and Abandonment of Mortgaged Property		42
Section 7.4 Real Estate Owned Reports		43
Section 7.5 Liquidation Reports		43
Section 7.6 Compliance with Gramm-Leach-Bliley Act of 1999		43
Section 7.7 Reporting		43
Article VIII Subservicer and Indemnification		43
Section 8.1 Merger or Consolidation of the Subservicer		43
Section 8.2 Limitation on Resignation		44
Section 8.3 Subservicer Limitation on Liability and Indemnification		44
Section 8.4 Servicer Limitation on Liability and Indemnification		45
Section 8.5 Notice of Litigation		46
Article IX Termination		46
Section 9.1 Events of Default		46
Section 9.2 Termination of Agreement		48
Article X Miscellaneous Provisions		49
Section 10.1 Protection of Confidential and Proprietary Information		49
Section 10.2 Notices		53
Section 10.3 Severability Clause		53
Section 10.4 Performance Audits		54
Section 10.5 Counterparts		54
Section 10.6 Place of Delivery and Governing Law		54
Section 10.7 Waiver of Jury Trial		54
Section 10.8 Further Agreements		54
Section 10.9 Successors and Assigns; Assignment of Servicing Agreement		54
Section 10.10 Amendments, Etc.		55
Section 10.11 Exhibits		55
Section 10.12 General Interpretive Principles		55
Section 10.13 Reproduction of Documents		56
Section 10.14 Conflicts		56

Exhibit A	Mortgage Loan Data Field Request
Exhibit B	Servicing Transfer Instructions
Exhibit C	[RESERVED]
Exhibit D	Pricing Schedule
Exhibit E	[RESERVED]
Exhibit F	Tax and Flood List of Preferred Vendors
Exhibit G-1	Monthly Reports and Files
Exhibit G-2	Daily Reports and Files
Exhibit H	Nationstar Security Assessment
Exhibit I	Approval Matrix

SUBSERVICING AGREEMENT

     This Subservicing Agreement is dated as of February 1, 2011 (the “Agreement”), by and among Nationstar Mortgage LLC, as subservicer of residential mortgage loans (the “Subservicer”), MorEquity, Inc., as servicer of residential mortgage loans (“Servicer”).

Recitals

     WHEREAS, as of January 1, 2006, the Servicer entered into a mortgage loan sale and servicing agreement (the “Servicing Agreement”) with Second Street Funding Corporation (the “Purchaser”) pursuant to which the Servicer is responsible for servicing the residential mortgage loans identified on Exhibit E thereto (the “Mortgage Loans”) for the benefit of the Purchaser;

     WHEREAS, as of February 1, 2006, the Purchaser entered into a pooling and servicing agreement (the “Pooling and Servicing Agreement”) with American General Finance Corporation, as Master Servicer, and JPMorgan Chase Bank, National Association, as trustee, pursuant to which the Master Servicer is responsible for master servicing the Mortgage Loans;

     WHEREAS, in connection with the Servicing Agreement, the Servicer is permitted to enter into subservicing arrangements to service the Mortgage Loans;

     WHEREAS, the Servicer and the Subservicer desire that the Subservicer subservice the Mortgage Loans pursuant to this Agreement;

     NOW, THEREFORE, in consideration of the mutual promises contained herein and for other good and valuable consideration the receipt and sufficiency of which are hereby acknowledged, the parties hereto hereby agree as follows:

ARTICLE I
DEFINITIONS

     Section 1.1 Defined Terms.

     For purposes of this Subservicing Agreement, all capitalized words and terms in this Agreement not otherwise defined herein shall have the respective meanings set forth in the Pooling and Servicing Agreement. The following capitalized terms, unless the context requires otherwise, shall have the respective meanings set forth below:

     Accepted Servicing Practices means, with respect to any Mortgage Loan, those mortgage servicing practices that comply with the terms of the Mortgage Loans, the Legal Requirements and the terms and conditions of this Agreement (including those requirements on Exhibit I of this Agreement), and consistent with the same standard of care, skill, prudence, and diligence with which the Subservicer services similar mortgage loans within its servicing portfolio, giving due consideration to (i) the customary and usual standards of practice of prudent institutional mortgage loan servicers that are utilized with respect to mortgage loans comparable to the Mortgage Loans and (ii) the objective of maximizing the timely recovery of principal and interest on the Mortgage Loans in the best interests of the Trust.

     Accounts mean the P & I Custodial Accounts and the T & I Escrow Accounts.

1

     Affiliate shall have the meaning set forth in the Pooling and Servicing Agreement.

     Agreement means this Subservicing Agreement and all written amendments hereof and supplements hereto.

     Ancillary Income means an amount equivalent to all income derived from the Mortgage Loans in accordance with Accepted Servicing Practices (other than Subservicing Fees and prepayment penalties) from Late Fees, phone pay fees, fees received with respect to checks or bank drafts returned by the related bank for non-sufficient funds, investment income on the Accounts, assumption fees and modification fees.

     Appraisal Report means a report setting forth the fair market value of a Mortgaged Property as determined by an appraiser and in compliance with applicable law. For appraisals conducted prior to the Servicing Transfer Date, such Appraisal Reports shall be in the form received by the Subservicer, and for appraisals conducted subsequent to the Servicing Transfer Date, such Appraisal Reports shall be in a form indicating that the related appraisals have been conducted in accordance with the Uniform Standards of Professional Appraisal Practice, provided in each case by an independent appraiser.

     Approval Matrix means the delegated authority to initiate loss mitigation or recovery actions within the agreed parameters set forth in Section 2.5.

     Assignment of Mortgage means an assignment of the Mortgage, notice of transfer or equivalent instrument in recordable form, sufficient under the laws of the jurisdiction wherein the related Mortgaged Property is located to reflect the transfer of the Mortgage to the party indicated therein.

     Broker Price Opinion (“BPO”) means an opinion of the fair market value of a Mortgaged Property given by a licensed real estate broker, which generally includes at least three comparable sales and three comparable listings.

     Business Day shall have the meaning set forth in the Pooling and Servicing Agreement.

     Code means the Internal Revenue Code of 1986, as amended.

     Condemnation Proceeds means all awards of settlements in respect of a Mortgaged Property, whether permanent or temporary, partial or entire, by exercise of the power of eminent domain or condemnation, to the extent the award of settlement is not required to be released to a Mortgagor in accordance with the terms of the related Mortgage Loan Documents.

     Custodial Agreement shall have the meaning set forth in the Pooling and Servicing Agreement.

     Custodian shall have the meaning set forth in the Pooling and Servicing Agreement.

     De-Boarding Fee means a fee paid by Servicer to Subservicer when a Mortgage Loan transfers from Subservicer to another servicer and in accordance with Exhibit D.

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     Defaulted Loan means a Mortgage Loan that is sixty (60) or more days Delinquent, or such other Mortgage Loan as may be agreed upon between Servicer and Subservicer.

     Delinquency or Delinquent shall have the meaning set forth in the Pooling and Servicing Agreement.

     Determination Date means, with respect to each Remittance Date, the last Business Day prior to that Remittance Date.

     Due Date shall have the meaning set forth in the Pooling and Servicing Agreement.

     Eligible Account shall have the meaning set forth in the Servicing Agreement.

     Eligible Investments means any one or more of the obligations and securities listed below acquired at a purchase price of not greater than par which investment provides for a date of maturity not later than the next succeeding Remittance Date.

     A. direct obligations of, or obligations fully guaranteed by, (i) the United States of America, or (ii) any agency or instrumentality of the United States of America, the obligations of which are backed by the full faith and credit of the United States of America;

     B. federal funds, demand and time deposits in, certificates of deposits of, or bankers’ acceptances issued by, any depository institution or trust company incorporated or organized under the laws of the United States of America or any state thereof and subject to supervision and examination by federal and/or state banking authorities, so long as at the time of such investment or contractual commitment providing for such investment the commercial paper or other short-term debt obligations of such depository institution or trust company (or, in the case of a depository institution or trust company which is a subsidiary of a holding company, the commercial paper or other short-term debt obligations of such holding company) are rated “P-1” by Moody’s Investors Service, Inc. and “A-1” by Standard & Poor’s Ratings Services, and the long-term debt obligations of such depository institution or trust company (or, in the case of a depository institution or trust company which is a subsidiary of a holding company, the long-term debt obligations of such holding company) are rated at least “Aa2” by Moody’s Investors Service, Inc. and “AA” by Standard & Poor’s Ratings Services and provided that each such investment has an original maturity of no more than 365 days; and

     C. any other demand, money market or time deposit account or obligation, or interest-bearing or other security or investment, acceptable to the Trustee as evidenced by previous confirmation in writing.

  Notwithstanding the foregoing, Eligible Investments shall not include “stripped securities” or any investments which contractually may return less than the unpaid principal balance therefore.

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     Escrow means all funds collected by the Subservicer and to be held in one or more T & I Escrow Accounts to cover expenses of the Mortgagor required to be paid under the Mortgage to third parties, including, without limitation, (i) taxes, special assessments, water, sewer and other governmental impositions or charges that are or may become liens on the Mortgaged Property prior to that of the Mortgage Loan, (ii) ground rents, and (iii) Hazard Insurance, Flood Insurance, and Private Mortgage Insurance and other insurance premiums.

     Escrow Payments means with respect to any Mortgage Loan amounts constituting ground rents, taxes, assessments, water rates, mortgage insurance premiums, fire and hazard insurance premiums and all other payments required to be escrowed by the Mortgagor with the mortgagee pursuant to the Mortgage or any other Mortgage Loan document.

     Event of Default means any event set forth in Section 9.1 hereof.

     Fannie Mae means the government sponsored entity organized or known as the Federal National Mortgage Association or any successor thereto.

     Fannie Mae Guidelines means the guidelines contained in the Fannie Mae Servicing Guide pertaining to one-to-four-family, first or junior lien, conventional single family mortgage loans, and all supplements, amendments or additions thereto, but only with respect to the practices set forth therein that are applicable to actions undertaken in connection with the delinquency, foreclosure, REO disposition, remedies for defaulted loans and property insurance procedures and claims.

     FDIC means the Federal Deposit Insurance Corporation.

     FHA means the Federal Housing Administration of the United States Department of Housing and Urban Development, or any successor thereto.

     First Lien Mortgage Loan means a Mortgage Loan secured by a first priority lien Mortgage on the related Mortgage Property.

     Flood Insurance or Flood Insurance Policy means an insurance policy insuring against loss or damage from flood hazards not typically covered within the scope of standard extended hazard coverage, together with all riders and endorsements thereto.

     Freddie Mac means the government sponsored entity organized or known as the Federal Home Loan Mortgage Corporation or any successor thereto.

     Freddie Mac Guidelines means the guidelines contained in the Freddie Mac Single-Family Seller/Servicer Guide and all supplements, amendments, or additions thereto, but only with respect to the practices set forth therein that are applicable to actions undertaken in connection with the delinquency, foreclosure, REO disposition, remedies for defaulted loans and property insurance procedures and claims.

     Hazard Insurance or Hazard Insurance Policy means a fire casualty extended coverage insurance policy insuring against loss or damage from fire hazard, wind, liability and other risks

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covered within the scope of standard extended hazard coverage, together with all riders and endorsements thereto.

     High Cost Loan means any Mortgage Loan, as specifically identified on the Mortgage Loan Schedule, classified at the time of its origination as (a) a “high cost” loan under HOEPA, or (b) a “high cost,” “threshold,” “covered” (provided however the “covered” classification does not apply to loans originated subject to the New Jersey Home Ownership Act of 2002 as a “covered home loan” which are not also high cost loans), “predatory” or similar loan under any other applicable state, federal or local law (or a similarly classified loan using different terminology under a law imposing heightened regulatory scrutiny or additional legal liability for residential mortgage loans having high interest rates, points and/or fees.

     HOEPA means the Home Ownership and Equity Protection Act of 1994.

     HMP Owner Payments means payments from the U.S. Treasury to an investor, as outlined under the heading “Lender/Investor Compensation” in the guidelines established under the HMP Program.

     HMP Program means the Home Affordable Modification Program as issued by the United States Treasury Department.

     HMP Servicer Payments means payments from the U.S. Treasury to a servicer, as outlined under the heading “Servicer Compensation” in the guidelines established under the HMP Program, including but not limited to any and all incentive payments due under the guidelines on and after the Transfer Date.

     Insurance Policy means any insurance policy issued for a Mortgage Loan, including any related Private Mortgage Insurance, Hazard Insurance, Flood Insurance, and Title Insurance, including all riders and endorsements thereto in effect, including any replacement policy or policies for any such Insurance Policies.

     Insurance Proceeds means proceeds received by the Subservicer from an Insurance Policy to the extent such proceeds are not applied to the restoration of the related Mortgaged Property or released to the related Mortgagor in accordance with the Subservicer’s normal servicing procedures.

     Insurer means an insurance company that provides an Insurance Policy.

     Late Fee means, as described in the Mortgage Note, any fee paid by or due from a Mortgagor as an additional payment in respect of Mortgagor’s making payment later than the Due Date thereof, after application of any applicable grace period.

     Legal Requirements means, with respect to the context in which this defined term is used herein, all applicable federal, state or local laws (including without limitation any Predatory Lending Law and anti-money laundering law) and any other applicable requirements of any government or any agency or instrumentality thereof, which involve or relate to the origination and servicing of a Mortgage Loan, the actions or interests of the lender or mortgagee of a Mortgage Loan, the management (including ownership, servicing, and disposition) of a

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Mortgaged Property or REO Property, and the performance of the servicing obligations by the Subservicer hereunder.

     Lender-Paid Mortgage Insurance means lender-paid mortgage insurance.

     LIBOR means, as of any date of determination, the rate per annum equal to the one-month LIBOR rate published by Bloomberg for such date or, if such rate is not available, the rate appearing at page 3750 of the Telerate Screen as one-month LIBOR for such date.

     Limited Power of Attorney means the power of attorney or other documentation to be agreed upon by the Trustee and the Subservicer.

     Liquidated Mortgage Loan shall have the meaning set forth in the Pooling and Servicing Agreement.

     Liquidation Proceeds shall have the meaning set forth in the Pooling and Servicing Agreement.

     MERS^® means the proprietary system of recording transfers of mortgages electronically, which was created and is maintained by Mortgage Electronic Registration Systems, Inc., a corporation organized and existing under the laws of the State of Delaware.

     Monthly Payment shall have the meaning set forth in the Pooling and Servicing Agreement.

     Mortgage shall have the meaning set forth in the Pooling and Servicing Agreement.

     Mortgage Interest Rate shall have the meaning set forth in the Pooling and Servicing Agreement

     Mortgage Loan means an individual mortgage loan which is the subject of this Agreement as a result of the Servicer’s identification of such Mortgage Loan and the delegation of the servicing thereof to the Subservicer pursuant to Section 2.1 hereof and which mortgage loan is included on the Mortgage Loan Schedule, and includes without limitation the Mortgage Loan Documents, the Monthly Payments, Principal Prepayments, Liquidation Proceeds, Condemnation Proceeds, Insurance Proceeds, REO Disposition Proceeds, Ancillary Income and all other rights, benefits, proceeds and obligations arising from or in connection with such Mortgage Loan. As applicable, “Mortgage Loan” shall be deemed to refer to the related REO Property or unsecured debt.

     Mortgage Loan Documents means all documents relating to a Mortgage Loan held by the Trustee, the Servicer, any Custodian, any Owner Designee and the Subservicer or its designee.

     Mortgage Loan Pool means each group of Mortgage Loans identified on a Mortgage Loan Schedule and made subject to this Agreement from time to time.

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     Mortgage Loan Schedule means a schedule of the Mortgage Loans prepared by the Servicer to be delivered by the Servicer as set forth in Section 2.1(a) of this Agreement.

     Mortgage Note shall have the meaning set forth in the Pooling and Servicing Agreement.

     Mortgaged Property shall have the meaning set forth in the Pooling and Servicing Agreement.

     Mortgagor shall have the meaning set forth in the Pooling and Servicing Agreement.

     Negative Environmental Condition means, with respect to any Mortgaged Property, a violation of any standards under applicable statutes, ordinances, rules, regulations, orders or decisions relating to pollution, protection of human health or the environment (including, without limitation, ambient air, surface water, ground water, land surface or subsurface strata and natural resources), including without limitation, applicable statutes, ordinances, rules, regulations, orders or decisions relating to emissions, discharges, releases or threatened releases of chemicals, pollutants, contaminants, wastes, toxic substances, petroleum and petroleum products, asbestos and asbestos-containing materials, polychlorinated biphenyls and lead and lead-containing materials, or otherwise relating to the manufacture, processing, distribution, use, treatment, storage, disposal, transport or handling of such items.

     Non-recoverable Servicing Advance means any Servicing Advance previously made or proposed to be made in respect of a Mortgage Loan or REO Property that, in the reasonable business judgment of the Subservicer, will not, or, in the case of a proposed Servicing Advance, would not be, ultimately recoverable from related late payments, Insurance Proceeds, Primary Insurance Proceeds, Condemnation Proceeds or Liquidation Proceeds on such Mortgage Loan or REO Property as provided herein.

     NPV Tool means the Fannie Mae approved Net Present Value calculator utilized pursuant to the HMP Program for determining whether foreclosure, a deed in lieu, short sale or a loan modification (or other loss mitigation treatment) results in the optimal economic outcome.

     Owner Designee means a Person designated by the Trustee or Servicer, as the case may be, pursuant to a written notice delivered to the Subservicer that identifies the full legal name and address of such Person and the purpose for which such Person has been designated to act or serve on behalf of the Trustee or Servicer, as the case may be.

     P & I Custodial Account means the separate account or accounts created and maintained pursuant to Article VI hereof.

     Paid-In-Full means with respect to a Mortgage Loan, the amount required to satisfy a Mortgage Loan in full, which amount includes the unpaid principal balance, interest due on account and, to the extent permitted by the Legal Requirements, any other funds to be collected at the time of payoff from the Mortgagor pursuant to the terms of such Mortgage Loan, such as recording fees, service fees, attorney fees, escrow advances, prepayment penalties and other costs as applicable.

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     Pass-Through Expense means all customary and reasonable costs and expenses incurred by the Subservicer, which pursuant to customary industry standards are due and payable to a Person other than the Subservicer, which are not reimbursable to the Subservicer from the Mortgagor or through the netting of proceeds from the related Mortgage Loan or Mortgaged Property, and which are in the nature of an expenditure that relates to establishing, maintaining or curing the right, title or interests of the mortgagee or lender of the Mortgage Loan; provided that such costs and expenses shall not include any allocation of overhead costs of the Subservicer. If not specifically listed in Exhibit I, such Pass-Through Expenses shall include, but are not limited to, each of the following items:

1.	The reasonable actual cost of research, recovery and locating any documents missing from the Mortgage Loan Documents.
2.	Payments for reasonable actual costs, fees and expenses incurred in perfecting, filing or recording documents evidencing the assignment, foreclosure, sale or mortgaging of any Mortgaged Property.
3.	Reasonable actual expenses incurred to resolve or cure a dispute or issue involving any failure of the Mortgage Loan to comply with any Legal Requirements or customary industry standards that is attributable to the Servicer, originator or any Person (other than the Subservicer).
4.	Actual expenses or costs incurred in connection with any proceeding, investigation, audit, request or other inquiry by any governmental regulatory agency or other instrumentality involving the compliance of any Mortgage Loans with the Legal Requirements relating to the origination or servicing prior to the Servicing Transfer Date of such Mortgage Loans.
5.	Prior Servicer Expenses — for the prior servicers’ failure to fund or offset the funding of the following; non-funded positive escrow, unapplied balances, non-documented corporate advances, monthly payments not forwarded to the Subservicer, and positive Lender-Paid Mortgage Insurance collected or advanced balances.
6.	Tax Penalties and Interest Expenses — incurred as a result of a prior servicer not disbursing property taxes in a timely manner as defined in the Servicing Transfer Procedures.
7.	Regulatory fines and or penalties associated with the Servicer’s or Owner Designee’s or Custodian’s failure to provide required documents in order to complete the timely satisfaction or release of the mortgage.
8.	Custodian expenses that are paid by the Subservicer.
9.	Set-up, transfer, and release fees for MERS® Mortgage Loans.

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     Payments for the cost of transfer and/or purchase of services, including such services for property taxes and flood insurance information.

     Person shall have the meaning set forth in the Pooling and Servicing Agreement.

     Pooling and Servicing Agreement shall mean the pooling and servicing agreement, dated February 1, 2006, among Second Street Funding Corporation, as depositor, American General Finance Corporation, as Master Servicer, and JPMorgan Chase Bank, National Association, as trustee.

     Predatory Lending Law means any Federal, state or local law relating to any predatory, High Cost Loan or abusive lending practices or transactions, which involve or govern single family mortgage loans, including without limitation any such law that provides for the assessment of liability against the purchaser or assignee of the mortgage loan for violations of such law.

     Pricing Schedule means the schedule attached hereto and incorporated herein by reference as Exhibit D, which sets forth certain pricing and compensation rates and amounts accruing and due to the Subservicer hereunder

     Principal Prepayment shall have the meaning set forth in the Pooling and Servicing Agreement.

     Private Mortgage Insurance or Private Mortgage Insurance Policy means insurance obtained from a Private Mortgage Insurer that insures the holder of the Mortgage Note against all or a portion of any loss incurred from a Mortgagor default under the Mortgage Note or the Mortgage, including all endorsements or riders thereto.

     Private Mortgage Insurer means, with respect to any Mortgage Loan, the entity that has provided Private Mortgage Insurance with respect to such Mortgage Loan.

     Proprietary Information has the meaning set forth in Section 11.1 hereof.

     Qualified Depository has the meaning set forth in Section 6.2 hereof.

     Released Servicing Date means, with respect to a Mortgage Loan, the date on which the servicing of such Mortgage Loan is released from this Agreement and which the servicing functions for such Mortgage Loan are transferred by the Subservicer to another Person.

     REMIC means a “real estate mortgage investment conduit” within the meaning of Section 860D of the Code.

     REMIC Provisions means provisions of the United States federal income tax law relating to real estate mortgage investment conduits which appear at Section 860A through 860G of Subchapter M of Chapter 1 of the Code, and related provisions, and regulations and rulings promulgated thereunder, as the foregoing may be in effect from time to time.

     Remittance Date means each Business Day of each month.

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     Reporting Date means the applicable date for reports and files as set forth on Exhibit G-1 and Exhibit G-2.

     REO Disposition shall have the meaning set forth in the Pooling and Servicing Agreement.

     REO Disposition Proceeds means all amounts received with respect to an REO Disposition.

     REO Property shall have the meaning set forth in the Pooling and Servicing Agreement.

     Servicing Advances shall have the meaning set forth in the Servicing Agreement.

     Servicing Fee shall have the meaning set forth in the Servicing Agreement.

     Servicing File means the applicable documents identified in Section 4.6 pertaining to a particular Mortgage Loan, and the computer files, data disks, books, records, data tapes, notes and additional documents generated in the course of servicing the Mortgage Loan, in paper or electronic form.

     Servicing Transfer Date means, with respect to a Mortgage Loan, February 1, 2011, unless otherwise agreed by the Servicer and the Subservicer.

     Servicing Transfer Procedures means the procedures for effecting servicing transfers to the Subservicer hereunder as set forth on Exhibit B attached hereto.

     Subsequent Recovery shall have the meaning set forth in the Pooling and Servicing Agreement.

     Subservicing Fees shall have the meaning set forth in Section 5.1 hereof.

     Subservicer means Nationstar Mortgage LLC, or its successor in interest or assigns or any successor to the Subservicer under this Agreement, as permitted pursuant to this Agreement.

     Subservicing Officer means any officer of the Subservicer involved in, or responsible for, the administration and servicing of Mortgage Loans, whose name and specimen signature appear on a list of servicing officers furnished by the Subservicer to the Servicer, the Trustee and the Custodian on the initial Servicing Transfer Date, as such list may be amended from time to time.

     T & I Advance has the meaning set forth in Section 4.12 hereof.

     T & I Escrow Account means the separate account or accounts defined in Section 6.1 and operated and maintained pursuant to Article VI hereof.

     Tax and Insurance Reserve means an accounting maintained by the Subservicer for tracking a Mortgagor’s Escrow Payments and Insurance Proceeds.

     Termination Fee has the meaning given in Section 9.2(b) hereof.

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     Termination for Convenience has the meaning given in Section 9.2(a) hereof.Title Insurance or Title Insurance Policy means an American Land Title Association or California Land Title Association lender’s title insurance policy issued by a title insurer qualified to do business in the jurisdiction where the Mortgaged Property is located.

     Trust shall have the meaning set forth in the Pooling and Servicing Agreement.

     Trustee shall have the meaning set forth in the Pooling and Servicing Agreement

     Valuation means an Appraisal Report or Broker’s Price Opinion of any Mortgaged Property.

ARTICLE II
ENGAGEMENT OF SUBSERVICER

     Section 2.1 Servicing; Possession of Servicing Files.

     (a) The Servicer shall transfer the servicing of the Mortgage Loans to the Subservicer on the Servicing Transfer Date. The procedures for affecting such transfer shall be as set forth on the Servicing Transfer Procedures schedule attached hereto as Exhibit B. The Servicer shall make reasonable efforts to provide the Subservicer with advance written or electronic notice of the expected mortgage loans for which servicing may be transferred on the Servicing Transfer Date. Prior to the Servicing Transfer Date, the Subservicer shall negotiate a Limited Power of Attorney with the Trustee in form and substance acceptable to the Subservicer and the Trustee authorizing Subservicer or its authorized agent to execute necessary loan and real estate documents on the Trust’s behalf; and the Subservicer shall deliver a list of its Subservicing Officers to the Servicer and the Trustee. Additionally, with respect to each Mortgage Loan to be serviced hereunder, the Servicer shall comply with the Servicing Transfer Procedures and deliver to the Subservicer the Mortgage Loan Data Field Request (in the form set forth on Exhibit A) for each related Mortgage Loan and, by computer readable electronic transmission, the related Mortgage Loan Schedule not later than five (5) Business Days after the Servicing Transfer Date.

     (b) No later than five (5) Business Days after the Servicing Transfer Date, the Servicer shall deliver or cause to be delivered to the Subservicer all of the documents, information and property that is required for the transfer and commencement of servicing for the related Mortgage Loans, including without limitation the Servicing File and all escrow balances (whether positive or negative), suspense balances, restricted escrow and other cash balances that exist in connection with the Mortgage Loans without offset or netting of any negative balances. In the event that the Subservicer reasonably incurs any cost or expenses because of the failure by the Servicer to deliver or cause the delivery of all such required documents, information and property (including without limitation any advances of funds for escrows or impounds), then the Subservicer shall be reimbursed any such amounts as Pass-Through Expenses pursuant to Section 6.3 hereof. Notwithstanding any provision in this Agreement to the contrary, this paragraph shall not be applicable with respect to any Mortgage Loans to the extent servicing of such Mortgage Loans was previously transferred by the prior servicer to the Subservicer prior to the Trust becoming owner of such Mortgage Loans.

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     (c) Nothing shall prohibit the Subservicer or any Affiliate of the Subservicer from taking applications from those Mortgagors who initiate action on their own, or in the case of Mortgage Loans for which default is reasonably foreseeable, from engaging in a program generally to encourage or recommend mortgage loan products provided by the Subservicer or such Affiliate; provided such refinancing is in accordance with Exhibit I. The Subservicer shall furnish to the Servicer all marketing materials at such time such items are provided to the Mortgagors, which materials shall be acceptable to the Servicer. To the extent consistent with Accepted Servicing Practices, as one of its loss mitigation options, the Subservicer shall consider the refinancing of an existing Mortgage Loan in accordance with Exhibit I and to the extent for which default is reasonably foreseeable, into a mortgage loan with a principal balance less than the principal balance of the Mortgage Loan to the extent necessary to qualify the Mortgagor for an FHA-insured mortgage loan.

     (d) The Subservicer shall service the Mortgage Loans as provided herein commencing on the related Servicing Transfer Dates. All servicing shall be conducted in the name of the Subservicer as servicing agent for the Servicer; provided, however, that the Subservicer shall conduct any foreclosure proceedings in the name of the Trust or an Owner Designee designated by the Trust, as provided above, and may complete and record any related Assignment of Mortgage in the name of the Trust, or Owner Designee, as applicable, in such proceedings. The Subservicer may enter into a commercially reasonable arrangement for certain functions relating to the servicing and administration of Mortgage Loans with any Person if such Person is in compliance with the laws of the state(s) necessary to enable it to perform its obligations under such servicing arrangement; provided, however, that pursuant to Section 4.5 the Subservicer shall not delegate the servicing responsibilities with respect to any Mortgage Loan to any subservicer without the prior written consent of the Servicer. Any such arrangement shall be consistent with and not violate the provisions of this Agreement and shall not constitute a “mortgage servicing transfer” within the meaning of Section 6 of the Real Estate Procedures Settlement Act, 12 U.S.C. §2605, (“RESPA”), without prior written approval of the Servicer. In each case, the Subservicer shall remain responsible for its obligations under this Agreement notwithstanding any such arrangement, the Subservicer shall be liable for all acts and omissions of such Person as fully as if such acts and omissions were those of the Subservicer, and the Subservicer shall pay all fees and expenses associated with such arrangement from the Subservicer’s own funds..

     (e) If permitted by the Limited Power of Attorney, the Subservicer, on behalf of the Trust, may sue to enforce or collect on any of the Mortgage Loans or any Insurance Policy covering a Mortgage Loan, as agent of the Trust.

     (f) The Subservicer shall hold each Servicing File in trust for the benefit of the Trust for the sole purpose of servicing the Mortgage Loans. The Subservicer’s possession of Servicing Files shall be for the sole purpose of facilitating servicing of the related Mortgage Loan pursuant to this Agreement, and the ownership of the Servicing Files shall remain vested in the Trust and Subservicer shall provide the Trust, Servicer and Owner Designee with full access to the Servicing Files. All records and documents with respect to the related Mortgage Loan prepared by or which come into the possession of the Subservicer shall become part of the Servicing Files. The ownership of each Mortgage Loan, including the Mortgage Note, the Mortgage, the Mortgage Loan Documents, the contents of the related Servicing File and all

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rights, benefits, proceeds and obligations arising therefrom or in connection therewith, is vested in the Trust. All rights arising out of the Mortgage Loans including, but not limited to, all funds received on or in connection with the Mortgage Loans and all records or documents with respect to the Mortgage Loans prepared by or which come into the possession of the Subservicer shall be received and held by the Subservicer in trust for the benefit of the Trust as the owner of the Mortgage Loans. Any portion of the Servicing Files held by the Subservicer shall be segregated from the other books and records of the Subservicer and shall be appropriately marked to clearly reflect the ownership of the Mortgage Loans by the Trust. The Subservicer shall release its custody of the contents of the Servicing Files only in accordance with written instructions of the Servicer, except when such release is required as incidental to the Subservicer’s servicing of the Mortgage Loans. Except as provided herein, the original Mortgage Loan Documents for each Mortgage Loan shall be retained by the Custodian pursuant to the Custodial Agreement. Except as set forth in Section 2.3(a), any fees and expenses of the Custodian shall not be payable by the Subservicer.

     Section 2.2 Books and Records.

     Unless otherwise specifically agreed by the Servicer, record title to each Mortgage and the related Mortgage Note shall remain (i) in blank, (ii) in the name of the Trust, or (iii) in the name of an Owner Designee. The Subservicer shall be responsible for maintaining, and shall maintain, a complete set of books and records for the Mortgage Loans which shall be clearly marked to reflect the ownership of the Mortgage Loans by the Trust. The Trustee, the Servicer and their agents may from time to time upon reasonable notice inspect any of the Subservicer’s books and records pertaining to this Agreement, including without limitation all Servicing Files, at reasonable times during the Subservicer’s normal business hours at the Subservicer’s offices; provided, that upon the occurrence and continuance of an Event of Default, only one (1) Business Day’s prior notice shall be required. At all times while a Mortgage Loan is being serviced hereunder, the beneficial ownership of such Mortgage Loan shall be vested and remain in the name of the Trust. All rights arising out of each Mortgage Loan shall be vested in the Trust and the Subservicer shall not assert any contrary interest therein.

     Section 2.3 Custodial Agreement.

     (a) On or prior to the Servicing Transfer Date, the Servicer shall use reasonable efforts to ensure that the Custodian has received all such Mortgage Loan Documents required to be delivered to it pursuant to the Custodial Agreement. The Servicer shall be responsible for maintaining the Custodial Agreement and shall pay fees and expenses as required under the Custodial Agreement. In the event that the Subservicer is required to pay any of the Custodian’s fees and expenses, the Subservicer shall notify the Servicer and if the Servicer instructs the Subservicer to pay such fees and expenses these shall be considered Pass-Through Expenses and the Subservicer shall be reimbursed pursuant to the terms of Section 6.3 hereof if not previously reimbursed by the Servicer.

     (b) The Subservicer shall forward to the Custodian original documents evidencing any assumption, modification, consolidation or extension of any Mortgage Loan entered into in accordance with this Agreement within ten (10) Business Days of the Subservicer’s receipt of an executed copy of such document; provided, however, that the

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Subservicer shall provide the Custodian with a certified true copy of any such document submitted for recordation within ten (10) Business Days of submission, and to provide the original of any document submitted for recordation or a copy of such document certified by the appropriate public recording office to be a true and complete copy of the original within ten (10) Business Days of receipt by Subservicer of the original recorded document.

     (c) If permitted by the Limited Power of Attorney, the Subservicer will be permitted to release any Liquidated Mortgage Loan or proceed with foreclosure actions.

     Section 2.4 Limitation on Scope of Servicing Obligation.

The Subservicer shall not be under any obligation to appear in, prosecute or defend any legal action that (i) is not incidental to its duties to service the Mortgage Loans in accordance with this Agreement, or (ii) exclusively involves allegations against the Trust, the Trustee, the Servicer or prior owners or prior servicers of the Mortgage Loan, including without limitation any allegation or claim involving a violation or breach of any Predatory Lending Law. Notwithstanding the forgoing, should Subservicer desire to undertake to appear in, prosecute or defend actions described in (i) or (ii) above, Subservicer shall obtain Servicer’s consent prior to appearing in, prosecuting or defending these actions. In such event, the reasonable legal expenses and costs of such action and any liability resulting therefrom shall be expenses, costs and liabilities for which the Servicer will be liable and the Servicer agrees to reimburse the Subservicer for any such expenses, costs and liabilities as Pass-Through Expenses under the terms of this Agreement, except with respect to any expenses, costs and liabilities that are incurred solely as a result of a material breach of this Agreement, the negligence or willful misconduct of the Subservicer that relate to actions pursuant to this Section.

     Section 2.5 Loss Mitigation and Recovery Actions.

     Consistent with Section 4.2 below, Subservicer shall have the delegated authority to initiate loss mitigation or recovery actions (e.g., forbearance plans, modifications and deeds in lieu of foreclosure, foreclosures and repossessions, as applicable) within the agreed upon parameters set forth on Exhibit I hereto (also known herein as the “Approval Matrix”). Subservicer will not engage in principal forgiveness without the prior written consent of the Servicer.

     Section 2.6 HMP Program.

     Subservicer shall implement the HMP Program with respect to the Mortgage Loans subserviced under the Agreement to the extent a Mortgage Loan is eligible for the HMP Program. Subservicer warrants that Subservicer is a servicer in good standing under the HMP. With regard to the Mortgage Loans, Subservicer will not participate in the HMP Principal Reduction Alternative program, the Second Lien Modification Program or the HFA Hardest-Hit Fund Program. Subservicer must obtain Servicer’s written approval with regard to Mortgage Loans to participate in any future optional HMP programs.

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     If required by FNMA, FHLMC or the U.S. Department of Treasury, Servicer and Subservicer will execute an Assignment and Assumption Agreement for the transfer of servicing of the Mortgage Loans.

     Section 2.7 Oversight Program.

     Subservicer shall provide to Servicer the ability to monitor Subservicer’s actions by:

     (a) Allowing ten (10) users of Servicer to have remote access to all of Subservicer’s systems that contain account notes, balances, and loan level data. These Subservicer systems include, but are not limited to, LSAMs, Foretracs, and Remedy, as well as other Subservicer systems for which remote access is available for use.

     (b) Subservicer will provide recordings of phone calls with Mortgagors with respect to Mortgage Loans as requested by Servicer not to exceed 10 recorded phone calls per week. Servicer will provide pertinent information needed for Subservicer to identify the requested recordings and Subservicer will send the requested recordings to Servicer on a weekly basis in the form of a .wav or equivalent file per recording. The Servicer and the Subservicer may also have regularly scheduled monitoring sessions on the premises of the Subservicer to listen to the requested phone calls with Mortgagors with respect to Mortgage Loans.

     (c) Subservicer will provide oversight specific reporting. Subservicer agrees to provide data files in formats agreed to with Servicer.

ARTICLE III
REPRESENTATIONS, WARRANTIES AND COVENANTS

     Section 3.1 Subservicer Representations, Warranties and Covenants.

     With respect to each Mortgage Loan, as of the related Servicing Transfer Date and as of each day thereafter during which such Mortgage Loan is serviced hereunder, the Subservicer represents, warrants and covenants to the Servicer as follows:

     (a) Due Organization and Authority. The Subservicer is a limited liability company duly organized, validly existing and in good standing under the laws of the State of Delaware and has the full power and authority to execute, deliver and perform this Agreement; the execution, delivery and performance of this Agreement by the Subservicer and the consummation of the transactions contemplated hereby have been duly and validly authorized and the Subservicer has duly executed and delivered this Agreement; and this Agreement evidences the valid and binding agreement of the Subservicer, enforceable in accordance with its terms, except as limited by applicable bankruptcy, insolvency, moratorium, reorganization or other similar laws affecting creditors’ rights generally or general equitable principles.

     (b) Ordinary Course of Business. The consummation of the transactions contemplated by this Agreement is in the ordinary course of business of the Subservicer.

     (c) No Conflicts. The execution, delivery and performance of this Agreement by the Subservicer will not: (i) conflict with or result in a material breach of any of the terms,

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conditions or provisions of the Subservicer’s organizational documents or any material agreement or instrument to which the Subservicer is now a party or by which it is bound, or (ii) result in the material violation of any law, rule, regulation, order, judgment or decree to which the Subservicer or its property is subject, which violations would have a material adverse effect on the Subservicer’s ability to perform its obligations hereunder.

     (d) Ability to Perform. The Subservicer does not believe, nor does it have any reason or cause to believe, that it cannot perform in all material respects each and every covenant of the Subservicer contained in this Agreement.

     (e) No Litigation Pending. There is no action, suit, proceeding or investigation pending or, to the Subservicer’s knowledge, threatened against the Subservicer which, either in any one instance or in the aggregate, is reasonably likely to result in any material adverse change in the business, operations, financial condition, properties or assets of the Subservicer, or in any material impairment of the right or ability of the Subservicer to carry on its business substantially as now conducted, or in any material liability on the part of the Subservicer, or which would draw into question the validity of this Agreement or of any action taken or to be taken in connection with the obligations of the Subservicer contemplated herein, or which would be likely to impair materially the ability of the Subservicer to perform under the terms of this Agreement.

     (f) No Consent Required. No material consent, approval, authorization or order of any court or governmental agency or body is required for the execution, delivery and performance by the Subservicer of this Agreement or the consummation of the transactions contemplated in the Agreement, except those that have been obtained and, to the extent required, remain in full force and effect.

     (g) Qualifications. The Subservicer is an FHA nonsupervised mortgagee.

     (h) Compliance. The Subservicer, its agents and employees, have, and will maintain at all times, all requisite licenses, permits, qualifications and approvals to perform its obligations hereunder in each jurisdiction in which any Mortgaged Property or REO Property is located and is in good standing in each such jurisdiction, except where the failure to possess any such license, permit, qualification or approval would not materially and adversely affect the ability of the Subservicer to conduct its business as it is presently conducted or the enforceability of the related Mortgage Note or Mortgage.

     Section 3.2 Servicer Representations, Warranties and Covenants.

     With respect to each Mortgage Loan, as of the related Servicing Transfer Date and as of each day thereafter during which such Mortgage Loan is serviced hereunder, the Servicer represents, warrants and covenants to the Subservicer as follows:

     (a) Due Organization and Authority. The Servicer is duly organized, validly existing and in good standing under the laws of the State of its organization; the Servicer has the full power and authority to execute, deliver and perform this Agreement; the execution, delivery and performance of this Agreement by the Servicer and the consummation of the transactions contemplated hereby have been duly and validly authorized and the Servicer has duly executed

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and delivered this Agreement; and this Agreement evidences the valid and binding agreement of the Servicer, enforceable in accordance with its terms, except as limited by applicable bankruptcy, insolvency, moratorium, reorganization or other similar laws affecting creditors’ rights generally or general equitable principles.

     (b) No Conflicts. The execution, delivery and performance of this Agreement by Servicer will not: (i) conflict with or result in a material breach of any of the terms, conditions or provisions of the Servicer’s organizational documents or any material agreement or instrument to which the Servicer is now a party or by which it is bound, or (ii) result in the material violation of any law, rule, regulation, order, judgment or decree to which the Servicer or its property is subject, which violations would have a material adverse effect on Servicer’s ability to perform its obligations hereunder or impair the value of the Mortgage Loans.

     (c) Ability to Perform. The Servicer does not believe, nor does it have any reason or cause to believe, that it cannot perform each and every covenant of the Servicer contained in this Agreement.

     (d) No Litigation Pending. There is no material action, suit, proceeding or investigation pending or, to the Servicer’s knowledge, threatened against the Servicer that, either in any one instance or in the aggregate, would draw into question the validity of this Agreement or of any action taken or to be taken in connection with the obligations of the Servicer contemplated herein, or which would be likely to impair materially the ability of the Servicer to perform under the terms of this Agreement.

     (e) No Consent Required. No material consent, approval, authorization or order of any court or governmental agency or body is required for the execution, delivery and performance by the Servicer of or compliance by the Servicer with this Agreement, or if required, such approval has been obtained prior to the date of this Agreement, including the approval of this Agreement by the appropriate examiners and supervisory agents.

     (f) Compliance. The Servicer has all requisite licenses, permits, qualifications and approvals to perform its obligations hereunder in each jurisdiction in which any Mortgaged Property is located, except where the failure to possess any such license, permit, qualification or approval would not materially and adversely affect the enforceability of the related Mortgage Note or Mortgage.

     Section 3.3 Servicer Representations, Warranties and Covenants for Mortgage Loans.

     Subject to any disclosures provided by the Servicer, with respect to each Mortgage Loan as of the related Servicing Transfer Date, the Servicer represents, warrants and covenants to the Subservicer as follows:

     (a) Rights to Transfer Servicing. The servicing responsibilities contracted for as of the Servicing Transfer Date have not been assigned or pledged, and the Servicer has full right to transfer the servicing responsibilities to the Subservicer and has full right and authority subject to no interest, or agreement with, any other party (other than any notice required by law, regulation or otherwise, to be delivered to the Mortgagors) to assign the servicing responsibilities

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pursuant to this Agreement. Upon execution of this Agreement by the parties, no right, title, and interest in and to the ownership of the servicing rights arising from or in connection with the Mortgage Loans shall transfer to the Subservicer.

     (b) Compliance; Enforceability. Except as previously disclosed to the Subservicer in writing: (i) to Servicer’s knowledge, each Mortgage Loan conforms in all material respects to the Legal Requirements; and (ii) to Servicer’s knowledge, the Servicer and each other originator or servicer, as applicable, have complied with all Legal Requirements, the related Mortgage Note and Mortgage and any applicable Insurance Policy with respect to the processing, origination and servicing of each Mortgage Loan.

     (c) Servicing Files and Related Materials. Servicer shall use commercially reasonable efforts to ensure the Servicing Files or Imaged Files provided to the Subservicer by or on behalf of the Servicer and its agent, if applicable, shall contain all documents, instruments and information necessary to service the Mortgage Loans in accordance with the Accepted Servicing Practices and the Mortgage Loan Documents, which may include copies thereof.

     (d) Assistance and Cooperation of Trustee. If any actions of the Trustee or any applicable Owner Designee are necessary or appropriate in connection with the servicing and administration of any Mortgage Loan hereunder, following request by the Subservicer the Servicer shall use its commercially reasonable efforts to cause the Trustee or Owner Designee to perform such actions in a timely manner and to cooperate with and assist the Subservicer in connection with such actions.

ARTICLE IV
SERVICING OF THE MORTGAGE LOANS

     Section 4.1 Standard and Scope of Service.

     On and after each Servicing Transfer Date, the Subservicer shall service each Mortgage Loan in accordance with the Accepted Servicing Practices, the Mortgage Loan Documents and the Legal Requirements and, to the extent applicable to any servicing actions undertaken in connection with the delinquency, foreclosure, REO disposition, remedies for defaulted Mortgage Loans and property insurance procedures and claims, generally in accordance with Accepted Servicing Practices. The Subservicer shall make all Servicing Advances as required pursuant to Section 4.18 and any other applicable provisions of this Agreement. The Subservicer shall not be required to take any action with respect to a Mortgage Loan if it determines in good faith that the action is not permitted by the Legal Requirements, any related Insurance Policy or the Mortgage Loan Documents; provided, however, that the Subservicer shall be entitled to assume that the Mortgage Note and Mortgage may be enforced in accordance with their respective terms. Notwithstanding any provision herein to the contrary, Subservicer shall cooperate with and assist the Servicer in the implementation of all servicing provisions of the Pooling and Servicing Agreement and the Servicing Agreement.

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     Section 4.2 Authority of the Subservicer; Delinquencies.

     (a) The Subservicer shall have the full power and authority acting alone to do or cause to be done any and all things in connection with the servicing and administration of the Mortgage Loans consistent with the Accepted Servicing Practices.

     (b) If agreed to by the Trustee, upon the request of the Subservicer, the Trustee will furnish the Subservicer with a sufficient quantity of Limited Powers of Attorney and other documents necessary or appropriate, as reasonably specified by Subservicer, to enable the Subservicer to carry out its servicing and administrative duties under this Agreement.

     (c) The Subservicer will conduct its activities hereunder with the goal of curing any Delinquencies in accordance with Accepted Servicing Practices, and in no case, less than in a commercially reasonable manner, including without limitation the pursuit of any remedy or recovery in a manner that has a reasonable likelihood of realizing a higher amount of net proceeds taking into consideration the costs and expenses of obtaining such realization, the probability or risks associated in obtaining such realization and the net present value of such amount based on the expected timing of such realization. The Subservicer’s initial discussions with the Mortgagor will cover the cause of the Delinquency and the time frame in which the Mortgagor believes the Delinquency will be cured. The Subservicer will, at its sole discretion, use notices, letters, telegrams, telephone calls, face-to-face contact and other responsible collection techniques consistent with the Accepted Servicing Practices to attempt to cure the Delinquency and will maintain collection records on all contacts with the Mortgagor. Subject to Legal Requirements and the Accepted Servicing Practices, the Subservicer shall have the right, at its sole discretion and without the approval of the Servicer, to:

     (i) determine the timing, manner and amount of contact the Subservicer makes with the Mortgagors, but contact attempts with Mortgagors must be initiated no more than sixteen (16) calendar days after each Mortgagor’s Due Date in the event of nonpayment by Mortgagors;

     (ii) negotiate with any Mortgagor a repayment plan of up to twelve (12) months duration; and

     (iii) determine the timing of any notice of intent to foreclose, posting of an account for foreclosure, commencement of foreclosure proceedings or the filing of any documents in connection therewith; provided, however, that the Subservicer shall follow Accepted Servicing Practices.

     (d) Consistent with the terms of this Agreement, the Subservicer may waive, modify or vary any term of any Mortgage Loan or consent to the postponement of strict compliance with any such term or in any manner grant indulgence to any Mortgagor if in the Subservicer’s reasonable and prudent determination such waiver, modification, postponement or indulgence is not materially adverse to the Trust; provided, however, that the Subservicer shall not permit any waiver or modification with respect to any Mortgage Loan that would change the Mortgage Interest Rate, defer or forgive the payment thereof of any principal or interest payments, reduce the outstanding principal amount (except for actual payments of principal),

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make any future advances, extend the final maturity date with respect to such Mortgage Loan, waive any prepayment penalty (other than accordance with Section 4.19) or any other act that could reasonably be expected to affect materially and adversely the Trust’s interest in the Mortgage Note, Mortgage Loan, Mortgage, Mortgaged Property, Mortgage Loan Documents or Mortgage Servicing File related to a Mortgage Loan.

     (e) Notwithstanding the foregoing, in the event that any Mortgage Loan is a Defaulted Loan or, in the judgment of the Subservicer, such default is imminent, the Subservicer, consistent with Accepted Servicing Practices, may also waive, modify or vary the following terms of such Mortgage Loan (including modifications that would change the Mortgage Interest Rate, forgive the payment of interest or extend the final maturity date of such Mortgage Loan), accept payment from the related Mortgagor of an amount less than the unpaid principal balance in final satisfaction of such Mortgage Loan, or consent to the postponement of strict compliance with any such term or otherwise grant indulgence to any Mortgagor (any and all such waivers, modifications, variances, forgiveness of principal or interest, postponements, or indulgences collectively referred to herein as “forbearance”), unless prohibited by Exhibit I.

     (f) As to any Mortgage Loan that becomes 180 days Delinquent, if the Subservicer, determines that the expected recovery through foreclosure or other liquidation of the Mortgaged Property will result in no or a de minimus amount of Liquidation Proceeds, then the Subservicer shall provide the Servicer at least four Business Days prior notice of the Subservicer’s intention to charge-off such Mortgage Loan. In the event that the Servicer does not respond within such period, then the parties agree that the Servicer consents to such action.

     (g) The Subservicer further is hereby authorized and empowered in its own name, when such Subservicer believes it is appropriate in its best judgment and in accordance with Accepted Servicing Practices, to cause the removal from the registration of any Mortgage Loan on the MERS® system and record the related Mortgage in the appropriate jurisdiction. Any expenses incurred in connection with the actions described in the preceding sentence shall be a Servicing Advance.

     (h) The Subservicer shall not consent to the placement of any lien on the Mortgaged Property or any REO Property that would impair the Trust’s lien position without notifying and obtaining the written consent of the Servicer.

     (i) Exhibit I (Approval Matrix) hereto provides an overview of the actions which may be taken by the Subservicer under the terms of this Agreement and the corresponding Servicer approval required for such actions.

     (j) Notwithstanding anything contained in this Section 4.2 to the contrary, the Subservicer shall apply the appropriate loss mitigation treatment as identified in and in compliance with Approval Matrix. Such treatments include, but are not limited to, the HMP Program. With respect to Mortgage Loans modified under the HMP Program, in the event of any conflict among the HMP Program, Exhibit I, and/or the Servicing Agreement, the Servicing Agreement will govern the servicing, and to the extent not in conflict with the Servicing Agreement, the HMP Program will govern the servicing, and to the extent not in conflict with the Servicing Agreement or the HMP Program, Exhibit I will govern the servicing. Notwithstanding

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anything to the contrary in this Agreement, Trust will be given credit for all HMP Owner Payments and the Subservicer will be given credit for all HMP Servicer Payments.; provided, however, the Subservicer shall pay to the Servicer fifty percent (50%) of all “Servicer Pay for Success Payments” received by the Subservicer pursuant to the HMP Program through and including January 31, 2012 within sixty (60) days of receipt thereof.

     (k) Prior to pursuing any foreclosure action hereunder with respect to a Mortgage Loan or if the related Mortgagor files for bankruptcy protection, Subservicer shall (i) if such Mortgage Loan is registered on the MERS® system, remove the related Mortgage from the MERS system and record the related Assignment of Mortgage in the name of the Trust in the applicable jurisdiction and (ii) if such Mortgage Loan is not registered on the MERS® system, record the related Assignment of Mortgage in the name of the Trust.

     Section 4.3 Collection of Mortgage Loan Payments.

     Continuously from each Servicing Transfer Date, in accordance with the Accepted Servicing Practices and this Agreement, the Subservicer shall diligently collect all payments due under each of the related Mortgage Loans and ascertain and estimate Escrow Payments with respect to escrowed Mortgage Loans and all other charges that will become due and payable with respect to the Mortgage Loans and each related Mortgaged Property such that the installments payable by the Mortgagors will be sufficient to pay such charges as and when they become due and payable.

     Section 4.4 Notification of Adjustments.

     With respect to each adjustable rate Mortgage Loan, the Subservicer shall adjust the Mortgage Interest Rate on the related interest rate adjustment date and shall adjust the Monthly Payment on the related mortgage payment adjustment date, if applicable, in compliance with the Legal Requirements and the related Mortgage and Mortgage Note. The Subservicer shall execute and deliver any and all necessary notices required under applicable law and the terms of the related Mortgage Note and Mortgage regarding the Mortgage Interest Rate and Monthly Payment adjustments.

     Section 4.5 Duties the Subservicer May Delegate.

     (a) Subject to the limitations set forth in Section 4.16(j) below, in the ordinary course of business, the Subservicer at any time may delegate any of its duties hereunder relating to the tracking of tax payments and insurance, collections agreements and the listing of REO Properties to any Person, including any of its Affiliates, who agrees to conduct such duties in accordance with the servicing standards set forth in Section 4.1 and pursuant to the terms of this Section 4.5.

     (b) The Subservicer shall use reasonable efforts to ensure that each such Person retained to provide any of the delegated services is fully licensed and holds all required governmental licenses, franchises, certificates, qualifications and permits necessary to provide, and that such Person is reputable and capable of providing, the services for which such Person is retained. Any such Person shall be retained solely for the Subservicer’s account and any servicing fees and compensation payable to the Person shall be at the sole expense of the

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Subservicer. The Subservicer shall remain liable to the Trust, Trustee, Master Servicer, Servicer, their successors and assigns for the performance of the Subservicer’s duties and obligations under this Agreement, notwithstanding the delegation of any servicing function pursuant to this Section 4.5.

     (c) The Subservicer shall indemnify and hold the Trust, Trustee, Master Servicer, Servicer and Owner Designee harmless from any and all claims, losses, expenses, costs, fees (including but not limited to attorney fees) and damages arising out of or relating to the delegation of any of its duties hereunder except where delegation by the Subservicer was at the request of the Servicer; provided, however, that this provision shall not protect the Subservicer against any liability which would be imposed on the Subservicer or any its directors, officers, agents or employees by reason of the Subservicer’s willful misconduct, bad faith, negligence or reckless disregard of its obligations hereunder in following such instructions.

     Section 4.6 Servicing Files.

     (a) Each Servicing File maintained by the Subservicer for each Mortgage Loan shall be clearly identified and marked to reflect the Trust’s ownership of the related Mortgage Loan, shall be kept in accordance with the Accepted Servicing Practices, and shall contain the following items, to the extent received by the Subservicer from the Servicer or its agent or photocopies or imaged copies of each:

     (i) a copy of the Mortgage Note bearing all intervening endorsements, endorsed “Pay to the order of “[Trust’s Name], without recourse”; or in blank and signed in the name of the previous endorsee by an authorized officer;

     (ii) a copy of the Mortgage, with evidence of recording thereon;

     (iii) a copy of all assumption, modification, consolidation or extension agreements, and if recorded, with evidence of recording thereof;

     (iv) evidence (which may be a certificate of insurance) of all insurance required by such Mortgage;

     (v) a copy of the Title Insurance Policy, or, if not yet issued, evidence of the title commitment;

     (vi) a copy of all intervening Assignments of Mortgage, if any, with evidence of recording thereof unless the applicable Assignment of Mortgage is held by the related public recording office or is registered on the MERS® system; and

     (vii) any other material documents (or copies thereof, as applicable).

     (b) Notwithstanding any provision herein to the contrary, blanket insurance policies may be kept by the Subservicer in a separate blanket file and need not be included in each Servicing File.

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     (c) Each Servicing File shall also contain the following documents or photocopies or imaged copies thereof, to the extent received by the Subservicer from the Servicer or its agent in connection with the Subservicer’s duties under this Agreement:

     (i) the Appraisal Report made at the time the Mortgage Loan was originated;

     (ii) the settlement statement for the purchase and financing or refinancing of the Mortgaged Property under the Mortgage Note and Mortgage;

     (iii) copies or originals of any tax service contract;

     (iv) documentation of all non-HMP modifications to the original Mortgage Loan Documents;

     (v) documentation, including appropriate approval by the Trustee, if required, relating to any releases of any collateral supporting the Mortgage Loan;

     (vi) the loan application, any credit reports, verification of employment, verification of any deposit, and tax returns;

     (vii) the originals of all RESPA and Truth in Lending Act disclosure statements executed by the Mortgagor; and

     (viii) all other Mortgage Loan Documents which are customarily maintained in a Mortgage Loan file in order to properly service a Mortgage Loan.

     (d) Foreclosure correspondence, and legal notifications, if applicable, as well as documentation of all HMP modifications to the original Mortgage Loan Documents, will be provided in separate electronic files.

     (e) Upon discovery by the Subservicer, the Trustee or the Servicer or upon the request of the Trustee or Servicer, the Subservicer will promptly deliver to the Custodian any original Mortgage Loan Document listed in Section 4.6(a) that comes into the Subservicer’s possession and shall retain a copy of any such Mortgage Loan Document in its Servicing File. Notwithstanding the foregoing, with respect to any document listed in clause (a)(iii) above, (1) within ten (10) Business Days of the execution of any such assumption, modification, consolidation or extension agreement, Subservicer shall provide a copy thereof to the Custodian; and (2) within sixty (60) days of the execution of any such assumption, modification, consolidation or extension agreement, Subservicer shall provide the original counterpart(s) thereof to the Custodian.

     Section 4.7 Imaged Records.

     The Subservicer, at its expense, may duplicate or image the Servicing Files on electronic media, but may not destroy hard copies of the documents required to be maintained in Servicing Files without the Servicer’s prior consent; provided, however, if Subservicer is under no legal, regulatory, administrative or similar obligation to maintain the original contents of the Servicing Files in hard format for at least seven (7) years after the last activity on the Mortgage Loan, and

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the Servicer does not consent to the destruction of such hard copies, the cost and responsibility of storing such hard copies shall be the cost and responsibility of Servicer.

     Section 4.8 Enforcement of Due-On-Sale Clause; Assumption.

     (a) Upon the transfer of title to the Mortgaged Property, the Subservicer, upon the earlier of notice or discovery, shall enforce the due-on-sale clause contained in any Mortgage Loan, unless (i) the Subservicer determines that the enforcement would not be permitted by the Legal Requirements; provided, however, that the Subservicer shall be entitled to assume that the Mortgage Note and Mortgage may be enforced in accordance with their respective terms, (ii) a Mortgage Note assumption rider relates to the Mortgage Loan, or (iii) the applicable Insurer advises that the enforcement of the due-on-sale clause will jeopardize the Private Mortgage Insurance coverage, if any, on such Mortgage Loan. Notwithstanding the foregoing, the Subservicer may, in its reasonable discretion, provide the Mortgagor notice of the Mortgagor’s breach of the due-on-sale clause and allow the Mortgagor to cure the breach within thirty (30) days of receipt of such notice. In all circumstances of unapproved transfer initiated by the Mortgagor, the Subservicer shall notify the Servicer (which notice may be pursuant to the reports to the Servicer required by this Agreement) and the Private Mortgage Insurer, if any, of such transfer and obtain written approval from the Private Mortgage Insurer before initiating enforcement proceedings.

     (b) Notwithstanding the preceding paragraph, the Subservicer may also in its discretion waive the due-on-sale clause on any Mortgage Loan and permit the assumption of such Mortgage Loan if the assumption is required by the Legal Requirements or by the terms of the Mortgage Loan Documents. Upon such approval and the execution by the new Mortgagor of an assumption agreement obligating the new Mortgagor to all of the terms of the related Mortgage Note and Mortgage, the Subservicer may approve such assumption in accordance with the Legal Requirements and the terms of the Mortgage Loan Documents, as applicable. Subsequent to the assumption, the new mortgagor shall be deemed to be Mortgagor under this Agreement. The Subservicer shall notify the Servicer of the completion of any approved assumption by the tenth (10th) day of the month following the month of completion. The Subservicer shall provide to the Custodian the original assumption agreement.

     (c) Subject to the Accepted Servicing Practices, the Subservicer may charge the related Mortgagor a reasonable and customary assumption fee and retain such fee.

     Section 4.9 Insurance.

     (a) Subject to reimbursement as a Servicing Advance under the terms of this Agreement, and subject to the Accepted Servicing Practices, the Subservicer shall cause each Mortgaged Property and REO Property to be covered at all times by Hazard Insurance in an amount at least equal to the lesser of (a) the full insurable value of the Mortgaged Property or (b) the greater of (i) the outstanding principal balance owing on the Mortgage Loan and (ii) an amount such that the proceeds of such insurance shall be sufficient to avoid the application to the Mortgagor or loss payee of any coinsurance clause under the policy equal to the lesser of (a) the full insurable value of the Mortgaged Property or (b) the greater of (i) the outstanding principal balance owing on the Mortgage Loan and (ii) an amount such that the proceeds of such insurance

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shall be sufficient to avoid the application to the Mortgagor or loss payee of any coinsurance clause under the policy. All Hazard Insurance Policies shall be underwritten by an Insurer which is rated A-/VIII or better in the current Best’s Key Rating Guide (“Best’s”), “A-” or better by S&P or “A3” or better by Moody’s. Subject to reimbursement under the terms of this Agreement, and subject to the Accepted Servicing Practices, the Subservicer shall ensure that Flood Insurance is maintained on each Mortgaged Property and REO Property located in an area that is identified in the Federal Register by the Federal Emergency Management Agency as having special flood hazards; provided, that Flood Insurance, as described below, is available on commercially reasonable terms. The Flood Insurance Policy shall be in an amount representing coverage equal to the lesser of: (i) the minimum amount required under the terms of the coverage to compensate for any damage or loss to the Mortgaged Property on a replacement-cost basis (or the outstanding principal balance of the Mortgage Loan if replacement-cost basis is not available), or (ii) the maximum amount of insurance available under the National Flood Insurance Program. All Flood Insurance Policies shall be underwritten by a federal government agency or by an Insurer that satisfies Fannie Mae Guidelines regarding the rating of the Insurer or the guarantee of the Insurer’s policies by the National Flood Insurance Program. Additionally, if a Mortgaged Property or REO Property that is not identified by the Federal Emergency Management Agency as having special flood hazards becomes so identified in the Federal Register, within a reasonable period of time after such identification, the Subservicer shall arrange for Flood Insurance to be obtained on the Mortgaged Property or REO Property in accordance with this Section 4.9. All such policies shall be endorsed with standard mortgagee clauses with loss payable to the Subservicer and shall provide for at least thirty (30) days prior written notice of any cancellation, reduction in the amount of or material change in coverage to the Subservicer. The Subservicer shall not interfere with the Mortgagor’s freedom of choice in selecting either his insurance carrier or agent, provided, however, that the Subservicer shall not accept any such insurance policies from insurance companies unless such companies are acceptable under the Fannie Mae Guidelines and are licensed to do business in the state wherein the Mortgaged Property is located.

     (b) The Subservicer shall prepare and present on behalf of the Servicer all claims under the Insurance Policies and take such actions (including the negotiation, settlement, compromise or enforcement of the insured’s claim) as shall be reasonably necessary to realize recovery under the Insurance Policies. Any proceeds disbursed to the Subservicer in respect of such Insurance Policies (other than amounts applied to the restoration and repair of the related Mortgaged Property or to be released to the related Mortgagor in accordance with the Subservicer’s normal servicing procedures) shall be promptly deposited in the P & I Custodial Account or the applicable T & I Escrow Account, as appropriate.

     (c) Subservicer may engage one or more insurance claim adjustors for the purpose of negotiating, settling, compromising, enforcing and otherwise managing insurance claims related to the Mortgage Loans and the REO Properties. In such event, the Servicer agrees to be responsible for all such fees.

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     Section 4.10 Insurance Notices.

     The Servicer shall arrange, or shall cause its Owner Designee to arrange, for all insurance drafts, notices, policies, invoices, and similar documents to be delivered directly to the Subservicer, to the extent permitted under the Insurance Policies and Legal Requirements.

     Section 4.11 Tax and Flood Contracts.

     With respect to each First Lien Mortgage Loan designated by Servicer, the Subservicer shall provide such real estate tax processing, delinquent tax control, tax status determination, and with respect to any first or junior lien, flood status determination, monitoring of flood insurance and customer support services (collectively the “Tax and Flood Services”) as the Subservicer typically provides for other escrowed and non-escrowed mortgage loans that it services. The purchase or transfer fees associated with the Tax and Flood Services shall be reimbursed by the Servicer to the Subservicer as Pass-Through Expenses in accordance with this Agreement. If the tax or flood data supplied to Subservicer has been prepared by a provider other than Subservicer’s primary Tax or Flood Services provider (as listed on Exhibit F hereto), any transfer fees assessed shall be reimbursed by the Servicer to the Subservicer as Pass-Through Expenses in accordance with this Agreement. The Subservicer shall request that the prior servicer, if any, provide Tax and Flood Services agreements and information with respect to each Mortgage Loan prior to procuring any new Tax and Flood Services. If such agreements and information are not provided by the Servicer or the prior servicer within fifteen (15) days the Servicing Transfer Date, then a tax and/or flood contract (as applicable) will be purchased by Subservicer. Notwithstanding the foregoing, the Subservicer shall have no obligation to obtain tax service contracts with respect to second lien Mortgage Loans.

     Section 4.12 Tax and Insurance Accounts; Tax Service.

     (a) All T & I Escrow Accounts shall be established and maintained in accordance with the Mortgage Loan Documents and Legal Requirements for those Mortgage Loans that provide for or otherwise require Escrow Payments. The Subservicer shall reflect in the Tax and Insurance Account the Escrow funds collected from the Mortgagor and deposited into the applicable T & I Escrow Account for the payment of real estate taxes, ground rents, Private Mortgage Insurance, Hazard Insurance and, if applicable, Flood Insurance premiums, assessments and other charges. If Escrow funds are being collected when the Servicer transfers servicing of the Mortgage Loan to the Subservicer, the Subservicer must establish a T & I Escrow Account (either a separate account or a sub account) for such Mortgage Loan and continue to collect 1/12 of the yearly charge for Escrow with each Monthly Payment. If a Mortgagor’s Escrow funds are insufficient to pay taxes, insurance premiums or other escrowed items, the Subservicer shall timely advance to the T & I Escrow Account from its own funds an amount sufficient to cover the shortage and reflect such advance in the Mortgagor’s Tax and Insurance Account (a “T & I Advance”). Whenever possible, these T & I Advances shall be recovered from the Mortgagor’s subsequent monthly Escrow Payments, Insurance Proceeds or Liquidation Proceeds with respect to the Mortgagor’s Mortgage Loan, pursuant to Section 6.4(b). Insurance premiums that are not Escrow items but that are collected and disbursed for payment, such as life, major medical, disability or other assessments not required as part of the Mortgagor’s monthly installments, should not be reflected in the Mortgagor’s Tax and Insurance

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Reserve. The Subservicer shall comply with all applicable Legal Requirements in connection with Escrow items, the analysis of the Mortgagor’s T & I Escrow Account and any reports to the Mortgagor related thereto. Without limiting the foregoing, the Subservicer shall comply with all requirements concerning the handling of escrow accounts contained in the federal Real Estate Settlement Procedures Act of 1974, as amended, and all regulations promulgated thereunder.

     (b) As outlined in Exhibit I, for any First Lien Mortgage Loan that is a non-escrowed loan, in the event that any real estate taxes or assessments in connection with a Mortgage Loan are or become delinquent, then the Subservicer shall effect payment thereof as appropriate and prior to the related tax sale foreclosure date, and any such payment shall be reimbursable as a Servicing Advance under the terms of this Agreement. The Subservicer shall pay, on behalf of the related Mortgagor, any penalties, fines, similar charges or interest resulting from such delinquency, and shall be entitled to reimbursement for any such penalties, fines, similar charges or interest that it may incur as Servicing Advances under the terms of this Agreement. Additionally, in the event that any Mortgagor fails to provide Subservicer with reasonable proof of hazard insurance in connection with a Mortgage Loan, the Subservicer shall promptly provide such insurance coverage until such time as the Mortgagor submits reasonable proof of Mortgagor’s own coverage. Any such payment of hazard insurance by Subservicer shall be reimbursable as a Servicing Advance under the terms of this Agreement.

     (c) For any Mortgage Loan with an established escrow account, in the event that any real estate taxes or assessments in connection with a Mortgage Loan are or become delinquent, then the Subservicer shall effect payment thereof as soon as reasonably possible and any such payment shall be reimbursable as a Servicing Advance under the terms of this Agreement. The Subservicer shall pay, on behalf of the related Mortgagor, any penalties, fines, or other charges or interest resulting from such delinquency and shall be entitled to reimbursement from the Servicer as Pass-Through Expenses, for any such expenses that it may incur, so long as such delinquency was within thirty (30) days after the Servicing Transfer Date. Any such fines, penalties, or other charges or interest incurred pursuant to this subsection after thirty (30) days following the Servicing Transfer Date shall be the responsibility of the Subservicer.

     (d) In the event that a Mortgaged Property has outstanding tax delinquencies prior to the Servicing Transfer Date that were not reported by the Servicer, a prior servicer or a prior tax service to the Subservicer, the Subservicer shall not be liable for a Mortgaged Property lost to a tax sale for a delinquency occurring prior to the Servicing Transfer Date; provided, however, that the Subservicer shall take all reasonable actions required to cure such tax delinquency in accordance with Accepted Servicing Practices and/or the reasonable instructions of the Servicer. If the Subservicer obtains prior year delinquency information from a prior servicer and/or owner, the Subservicer may find it necessary to perform a prior delinquency search in order to adequately service such loan. Subject to notice and prior approval by the Servicer, the cost of such search shall be reimbursed by the Servicer to the Subservicer as a Pass-Through Expense.

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     Section 4.13 Bankruptcies.

     The Subservicer will represent the Trust’s interest in any bankruptcy proceedings relating to the Mortgagor and follow the procedures set forth in Section 4.2(k) hereof. The associated costs of protecting the Trust’s interest in bankruptcy shall be paid as Servicing Advances in accordance with this Agreement. If the Mortgagor, a creditor, or a bankruptcy trustee proposes to reduce the unpaid principal balance of the Mortgage Note, reduce the Mortgage Interest Rate, or otherwise modify a Mortgagor’s obligations under a Mortgage Loan, the Subservicer shall use reasonable efforts to challenge any such modification on a timely basis if a commercially reasonable and valid legal basis exists for such challenge, unless the Servicer agrees to such reduction. Subservicer shall provide notice as provided in Exhibit I to Servicer of any reduction in unpaid principal balance prior to this reduction and obtain written approval of Servicer for the reduction.

     Section 4.14 Foreclosure Procedures.

     (a) In conjunction with loss mitigation efforts provided for in Exhibit I, in the event that any payment(s) due under any Mortgage Loan remains delinquent and Subservicer determines that such payment(s) are unlikely to be collected from the Mortgagor, the Subservicer shall order one or more Valuations or property inspections with respect to the related Mortgaged Property, and may commence foreclosure proceedings in accordance with Accepted Servicing Practices. In such connection, the Subservicer shall from its own funds, subject to reimbursement pursuant to Section 6.3, make all necessary and proper Servicing Advances; provided, however, that the Subservicer shall have no obligation to advance any amount that the Subservicer determines is likely to be a Non-Recoverable Servicing Advance.

     (b) As provided for in Exhibit I, the Subservicer shall initiate, carry out, complete or perform any foreclosure proceeding in the name of the Trust or Owner Designee. Immediately prior to the initiation of foreclosure of any Mortgage Loan by the Subservicer under this Agreement, the Subservicer shall perform all actions necessary to transfer ownership of such Mortgage Loan to the Trust or Owner Designee.

     (c) In connection with a foreclosure or other conversion, the Subservicer shall exercise such rights and powers vested in it hereunder and use the same degree of care and skill in its exercise as prudent mortgage servicers would exercise or use under the circumstances in the conduct of their own affairs and consistent with Accepted Servicing Practices with respect to mortgage loans in foreclosure or similar proceedings. In the event that foreclosure results in a deficiency and applicable law permits, the Subservicer shall continue to perform collection services in accordance with a receivable collection agreement to be negotiated with the Servicer.

     (d) Notwithstanding anything to the contrary contained in this Agreement, in connection with a foreclosure or acceptance of a deed in lieu of foreclosure, in the event the Subservicer has notice or knowledge that a Mortgaged Property has a Negative Environmental Condition or is otherwise contaminated by hazardous or toxic substances or wastes, or if the Servicer otherwise requests, an environmental inspection or review of such Mortgage Property conducted by a qualified inspector shall be arranged for by the Subservicer. Upon completion of the inspection, the Subservicer shall promptly provide the Servicer with a written report of

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environmental inspection. All costs incurred by the Subservicer pursuant to this paragraph shall constitute Servicing Advances.

     (e) In the event the environmental inspection report indicates that the Mortgaged Property has a Negative Environmental Condition or is otherwise contaminated by hazardous or toxic substances or wastes, the Subservicer (i) shall promptly notify the Servicer and (ii) shall not proceed with foreclosure or acceptance of a deed in lieu of foreclosure if the estimated costs of the environmental clean up, as estimated in the environmental inspection report, together with the Servicing Advances made by the Subservicer and the estimated costs of foreclosure or acceptance of a deed in lieu of foreclosure exceeds the estimated value of the Mortgaged Property based on a Valuation obtained by the Subservicer at such time. If, however, the aggregate of such clean up and foreclosure costs and Servicing Advances is less than the estimated value of the Mortgaged Property, then the Subservicer shall, in its reasonable judgment and in accordance with Accepted Servicing Practices, proceed with foreclosure or acceptance of a deed in lieu of foreclosure and the Subservicer shall be reimbursed for all reasonable costs associated with such foreclosure or acceptance of a deed in lieu of foreclosure and any related environmental clean up costs, as applicable. In the event the Subservicer does not proceed with foreclosure or acceptance of a deed in lieu of foreclosure pursuant to the first sentence of this paragraph, the Subservicer shall be reimbursed for all Servicing Advances and the Subservicer shall have no further obligation to service such Mortgage Loan under the provisions of this Agreement.

     Section 4.15 Reinstatement of Mortgage Loans.

     If the Mortgagor offers full reinstatement of the Mortgage Loan during the foreclosure process, the Subservicer shall accept the offer. Full reinstatement means: (i) payment of all amounts due in order to bring the Mortgage Loan current, including attorneys’ and trustees’ fees, any additional legal costs and any other expenditures or advances made by the Subservicer during the foreclosure process, and (ii) payments of all other amounts necessary to cure all other defaults under the Mortgage Loan Documents, including, without limitation, the payment of real property taxes due and owing. Upon accepting the reinstatement, the Subservicer will contact the attorney or trustee promptly to avoid incurring additional legal costs or fees. The Subservicer will apply the funds upon receipt. If the Mortgage Note and other Mortgage Loan related documents were delivered to the Subservicer by the Servicer or the Custodian in connection with the Mortgagor’s delinquency, the Subservicer will return the Mortgage Note and other Mortgage Loan related documents to the Servicer or the Custodian to be included in the Mortgage Loan Documents upon receipt of the reinstatement funds from the Mortgagor.

     Section 4.16 Servicing REO Property.

     (a) In the event that title to the Mortgaged Property is acquired by deed in lieu of foreclosure executed prior to the commencement of a foreclosure proceeding, then the deed or certificate of sale shall be issued in the name of the Trust or an Owner Designee for the benefit of the holders of the American General Mortgage Loan Trust 2006-1 certificates. In the event that title to the Mortgaged Property is acquired in foreclosure or prior to the completion of a foreclosure proceeding commenced by the Subservicer, then the deed shall be issued in the name of the Trust or the Owner Designee for the benefit of the holders of the American General

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Mortgage Loan Trust 2006-1 certificates. The Subservicer shall cooperate with the Trustee or the Owner Designee in connection with the transfer and assignment of title and ownership of REO Properties following foreclosure proceedings or the execution of deeds in lieu of foreclosure and shall ensure that the title to such REO Property references the Pooling and Servicing Agreement.

     (b) The Subservicer shall manage, conserve, protect, and operate each REO Property in accordance with Accepted Servicing Practices subject to the REMIC Provisions, either through itself or through an agent selected by the Subservicer, and in the manner that similar property in the same locality as the REO Property is managed. Consistent with the provisions of Exhibit I, if the Subservicer deems it advisable, the Subservicer may, in accordance with Accepted Servicing Practices, order one or more Valuations with respect to the REO Property. The Subservicer shall attempt to sell such REO Property on such terms and conditions as the Subservicer deems to be in the best interest of the Trust or the Owner Designee, as applicable. If permitted by the Limited Power of Attorney, the Subservicer shall be authorized to execute and deliver on behalf of the Trust or the Owner Designee, as applicable, all deeds, instruments of transfer and other closing documentation necessary and desirable to implement the disposition of REO Property.

     (c) The Subservicer shall also maintain on each REO Property fire and hazard insurance with extended coverage, liability insurance and, to the extent required and available under the National Flood Insurance Act of 1968, as amended, flood insurance, and all other insurance coverage required under Section 4.9.

     (d) Each REO Disposition shall be carried out by the Subservicer as provided in Exhibit I. If as of the date title to any REO Property was acquired by the Subservicer there were outstanding unreimbursed Servicing Advances with respect to the REO Property, the Subservicer, upon an REO Disposition of such REO Property, shall be entitled to reimbursement for any such unreimbursed Servicing Advances from proceeds received in connection with such REO Disposition. The proceeds from the REO Disposition, net of any payment to the Subservicer as provided above, shall be deposited within two (2) Business Days of receipt in the P&I Custodial Account following receipt thereof for distribution on the next Remittance Date.

     (e) The Subservicer shall cause each REO Property to be inspected promptly upon the acquisition of title thereto and shall cause each REO Property to be inspected at least annually thereafter. The Subservicer shall make or cause to be made an electronic report of each such inspection. Such reports shall be retained in the Mortgage Servicing File and copies thereof shall be forwarded by the Subservicer to the Servicer upon request. That statement shall be accompanied by such other information as the Servicer shall reasonably request.

     (f) Upon the foreclosure sale of any Mortgaged Property or the acquisition thereof by the Trust or the Owner Designee, as applicable, or pursuant to a deed in lieu of foreclosure, the Subservicer shall submit to the Servicer or the Owner Designee, as applicable, a liquidation report with respect to such Mortgaged Property.

     (g) Following the foreclosure sale or abandonment of any Mortgaged Property, the Subservicer shall report such foreclosure or abandonment to the Servicer and as required pursuant to Section 6050J of the Code or any successor provision thereof.

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     (h) In the event that Servicer or Trustee requests the transfer of a serviced REO Property from the Subservicer, all costs incurred by the Subservicer in marketing the subject REO Property (prior to the Servicer’s transfer request) shall be reimbursable as a Servicing Advance. Additionally, any costs and/or penalties payable by the Subservicer to a third party (to which Subservicer has delegated some or all of its duties with respect to such REO Property pursuant to Section 4.5) then-payable in connection with such REO Property shall be reimbursable as a Servicing Advance.

     (i) The Subservicer shall deposit or cause to be deposited, on a daily basis in the P & I Custodial Account, all revenues received, including revenues from rental of an REO Property and sale proceeds, with respect to each REO Property and shall withdraw therefrom funds necessary for the proper operation, management and maintenance of the REO Property, including the cost of maintaining any hazard insurance pursuant to Section 4.9 hereof and the fees of any managing agent acting on behalf of the Subservicer.

     (j) In accordance with, and subject to the limitations of Sections 4.5 and 4.16(j), the Subservicer may outsource the management, conservation, protection and operation of REO Property to a third party, which arrangement will result in fees to the Trust, provided that Subservicer shall seek written approval of Servicer of the third party and such fees to be charged. In such event, the Servicer agrees to be responsible for all such fees. Home Select Settlement Solutions, LLC is a third party of which Servicer approves.

     (k) In the event that the Trust acquires any REO Property as aforesaid or otherwise in connection with a default or imminent default on a Mortgage Loan, the Subservicer shall dispose of such REO Property before the end of the third taxable year beginning after the year of its acquisition by the Trust for purposes of Section 860G(a)(8) of the Code unless the Subservicer shall have applied for and received an extension of such period from the Internal Revenue Service, in which case the Trust may continue to hold such REO Property for the period of such extension. Notwithstanding any other provision of this Agreement, no REO Property acquired by the Trust shall be rented (or allowed to continue to be rented) or otherwise used for the production of income by or on behalf of the Trust in such a manner or pursuant to any terms that would (i) cause such REO Property to fail to qualify as “foreclosure property” within the meaning of Section 860G(a)(8) of the Code or (ii) subject the REMIC created hereunder to the imposition of any federal, state or local income taxes on the income earned from such Mortgaged Property under Section 860G(c) of the Code or otherwise, unless the Subservicer has agreed to indemnify and hold harmless the Trust with respect to the imposition of any such taxes.

     Section 4.17 Satisfactions.

     If permitted by the Limited Power of Attorney, the Subservicer will thereby be authorized and empowered to execute and deliver on behalf of itself and the Trust all instruments of satisfaction or of partial or full release and all other comparable instruments with respect to the Mortgage Loans and Mortgaged Properties. The Subservicer shall take all actions necessary to satisfy mortgages and release their liens in a timely manner. Once the required release or satisfaction documents are executed and recorded, if applicable, and the Mortgage Note is canceled, the Subservicer shall promptly send the canceled documents to the Mortgagor if state

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law requires such action or the Mortgagor specifically requests the return of the documents. In other instances, the Subservicer may either return the documents to the Mortgagor or retain them (as long as they are not destroyed until after the retention period required by applicable law). The Subservicer should also take any other steps required to release the lien and assure that no penalties are incurred because the actions were not performed in a timely manner. The Subservicer may not seek reimbursement from the Servicer, the Trust or the Mortgagor for any penalty fee that the Subservicer has to pay because the Subservicer failed to process any release or satisfaction documents within the required time frame. If the Trustee, the Servicer, or the Custodian fail to do so, the Subservicer may seek reimbursement from the Trust for any penalty that the Subservicer pays because the release or satisfaction was not processed in the required time frame as a result of Trustee’s failure, Servicer’s failure or the Custodian’s failure to act in a timely manner as a Servicing Advance under the terms of this Agreement. The Subservicer shall generally follow the procedures set forth in the Fannie Mae Guidelines regarding satisfactions of mortgages.

     Section 4.18 Servicing Advances and Pass-Through Expenses.

     (a) The Subservicer shall not have any obligation or duty hereunder to: (i) advance any amounts constituting delinquent principal and interest payments or (ii) advance any amounts that would otherwise constitute a Servicing Advance hereunder if the Subservicer reasonably determines that such amount is not likely to be recovered from late payments, insurance proceeds, liquidation proceeds, condemnation proceeds on the related Mortgage Loan or REO Property. Notwithstanding any provision to the contrary herein, including without limitation that any Servicing Advance is subsequently determined to be non-recoverable, the Subservicer shall be entitled to recover any Servicing Advance and any Pass-Through Expenses in accordance with the terms of Section 6.3 and Section 6.4(b)(iii).

     (b) The Subservicer shall provide and maintain appropriate procedures to ensure that each individual Servicing Advance and Pass-Through Expense is accounted for as a single item and amount without any duplication thereof.

     (c) Notwithstanding anything to the contrary contained herein, if at the end of any calendar month, the amount of unreimbursed Servicing Advances (excluding Non-recoverable Servicing advances) exceed the aggregate amount collected by the Subservicer during such calendar month in accordance with the provisions of this Agreement, the Subservicer shall so notify the Servicer and the Servicer shall remit the total amount of such shortfall plus accrued interest at the rate of LIBOR plus four percent (4%) to the Subservicer for each calendar day after the end of the calendar month until the day the payment is made, which shall be within seven (7) days of such notification. If the Servicer fails to pay to the Subservicer the amount of any such shortfall within thirty (30) days of the related notification by the Subservicer to the Servicer of such shortfall, such failure shall constitute an Event of Default under Section 9.1(k).

     (d) Without limiting any other provision of this Agreement, from the Servicing Transfer Date until the termination of this Agreement, with respect to each Mortgage Loan serviced pursuant to this Agreement, Subservicer shall not assume Servicer’s obligations to make Advances. Advances made by Subservicer shall be reimbursed by Servicer.

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     Section 4.19 Prepayment Penalties.

     (a) Upon receipt of a request for a payoff, if the information provided by the Servicer or the prior servicer to the Subservicer indicates that a prepayment penalty is applicable with respect to a Mortgage Loan, the Subservicer shall review the Mortgage Note to determine whether a prepayment penalty may be collected from the Mortgagor and shall be obligated to collect such prepayment penalty, if any. Notwithstanding anything herein to the contrary, the Subservicer shall have no obligation to collect, or make payments to the Servicer with respect to, any prepayment penalties, Late Fees, or other fees or items which are prohibited under applicable law for that Mortgage Loan. In addition, as long permissible under Exhibit I, the Subservicer may also waive, in whole or in part, any such fees mentioned in the preceding sentence if: (i) the enforceability thereof is limited (1) by bankruptcy, insolvency, moratorium, receivership or other similar laws relating to creditor’s rights or (2) due to acceleration in connection with a foreclosure or other involuntary payment or (ii) such waiver relates to a default or a reasonably foreseeable default and would, in the reasonable judgment of the Subservicer, maximize recovery of total proceeds taking into account the value of such fees and the related Mortgage Loan.

     (b) Upon transfer of servicing of a Mortgage Loan to the Subservicer, if the servicing transfer tape or data provided to the Subservicer indicates that such Mortgage Loan has a prepayment penalty, then the Subservicer shall flag its system to indicate that a prepayment penalty is applicable with respect to such Mortgage Loan.

     (c) Except as provided in this Section 4.19 in no event will the Subservicer waive a prepayment penalty in connection with a refinancing of a Mortgage Loan that is not related to a default or a reasonably foreseeable default without Servicer’s written approval. If the Subservicer waives or does not collect all or a portion of a prepayment penalty relating to a Principal Prepayment in full or in part due to any action or omission of the Subservicer, other than as permitted above, the Subservicer shall deposit from its own funds without any right of reimbursement therefore the amount of such prepayment penalty (or such portion thereof as had been waived for deposit) in the P & I Custodial Account for distribution in accordance with the terms of this Agreement.

     Section 4.20 Restoration and Repair.

     The Subservicer need not obtain the approval of the Servicer prior to releasing any Insurance Proceeds or Condemnation Proceeds to the Mortgagor to be applied to the restoration or repair of the Mortgaged Property or REO Property if such release is in accordance with Accepted Servicing Practices and the terms of this Agreement. If Insurance Proceeds or Condemnation Proceeds exceed $10,000, the Subservicer shall comply with the following conditions in connection with any such release :

     (i) the Subservicer shall receive satisfactory independent verification of completion of repairs and issuance of any required approvals with respect thereto;

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     (ii) the Subservicer shall take all steps necessary to preserve the priority of the lien of the Mortgage, including, but not limited to requiring waivers with respect to mechanics’ and material men’s liens;

     (iii) the Subservicer shall verify that the Mortgage Loan is not in default; and

     (iv) pending repairs or restoration, the Subservicer shall place the Insurance Proceeds or Condemnation Proceeds in the Escrow Account.

     If the Servicer is named as an additional loss payee, the Subservicer is hereby empowered to endorse any loss draft issued in respect of such a claim in the name of the Servicer.

     The Subservicer shall inspect the Mortgaged Property as often as is deemed necessary by the Subservicer to assure itself that the value of the Mortgaged Property is being preserved. In addition, if any Mortgage Loan is more than ninety (90) days Delinquent, the Subservicer shall immediately inspect the Mortgaged Property and shall conduct subsequent inspections in accordance with Accepted Servicing Practices. The Subservicer shall keep a written report of each such inspection.

     Section 4.21 Subservicer Bond, Errors and Omissions Insurance.

     The Subservicer shall maintain, at its own expense, a blanket Subservicer Bond and an errors and omissions insurance policy, with broad coverage with a Qualified Insurer on all officers, employees or other Persons acting in any capacity with regard to the Mortgage Loans to handle funds, money, documents and papers relating to the Mortgage Loans. The Subservicer Bond shall be in the form of the Mortgage Banker’s Blanket Bond and shall protect and insure the Subservicer against losses, including forgery, theft, embezzlement, misrepresentation and fraud. The errors and omissions insurance policy shall protect and insure the Subservicer against losses due to errors and omissions and negligent acts of such Persons. Such errors and omissions insurance policy shall also protect and insure the Subservicer against losses in connection with the failure to maintain any insurance policies required pursuant to this Agreement and the release or satisfaction of a Mortgage Loan without having obtained payment in full of the indebtedness secured thereby. No provision of this Section 4.21 requiring the Subservicer Bond and errors and omissions insurance policy shall diminish or relieve the Subservicer from its duties and obligations as set forth in this Agreement. The minimum coverage under any such bond and insurance policy shall be at least equal to the corresponding amounts required by Fannie Mae in the Fannie Mae MBS Selling and Servicing Guide. Upon request of the Servicer, the Subservicer shall cause to be delivered to the Servicer a certified true copy of the Subservicer Bond and errors and omissions insurance policy and a statement from the surety and the insurer that such Subservicer Bond and errors and omissions insurance policy shall in no event be terminated or materially modified without thirty (30) days’ prior written notice to the Servicer.

     Section 4.22 Disaster Recovery.

     The Subservicer will maintain disaster recovery services at a dedicated facility which is equipped to handle Subservicer’s data center processing in the event disaster recovery is needed. Throughout the term of this Agreement, Subservicer shall maintain in effect contracts and/or arrangements which are substantially equivalent to those that are currently in effect.

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     Subservicer will test its disaster recovery capabilities at least once per calendar year and provide the results of each such test to Servicer. Subservicer will notify Servicer within one (1) hour of an event occurring that will likely result in service interruption in excess of forty-eight (48) hours. Following such a communication, Subservicer will provide updates on an hourly basis as to whether or not a disaster will be declared.

     Subservicer will provide off-site storage for Servicer’s data files so that they can be reconstructed in the event of loss or destruction of Servicer’s processing files at Subservicer’s location.

     Section 4.23 High Cost Loans.

     To the extent any Mortgage Loan is discovered to be a High Cost Loan, the Subservicer shall continue to service such High Cost Loan provided that the unpaid principal balance of all High Cost Loans that the Subservicer is subservicing under this Agreement with Servicer, as of any date of determination, is not more than one million ($1,000,000) dollars (or such other amount as mutually agreed upon by the Subservicer and the Servicer); provided that, in the event the addition of any High Cost Loan(s) results in the unpaid principal balance of all High Cost Loans that the Subservicer is servicing pursuant to this Agreement with Servicer, as of such date of determination, becomes greater than one million ($1,000,000) dollars (or such other amount as mutually agreed upon by the Subservicer and the Servicer), the Subservicer shall promptly notify the Servicer of such event and shall service transfer one or more High Cost Loans within one-hundred eighty (180) calendars days of Servicer’s receipt of such notice such that, after the date of such service transfer, the unpaid principal balance of all High Cost Loans that the Subservicer is servicing pursuant to this Agreement with Servicer, as of such date of determination, is less than one million ($1,000,000) dollars (or such other amount as mutually agreed upon by the Subservicer and the Servicer); provided further that the specific High Cost Loans to be serviced transferred shall be selected by the Servicer in its sole discretion. The Subservicer shall not have any affirmative obligation to determine whether a Mortgage Loan is a High Cost Loan or satisfies the document disclosure or other requirements applicable to High Cost Loans.

ARTICLE V
COMPENSATION TO THE SUBSERVICER

     Section 5.1 Compensation to the Subservicer.

     With respect to each Mortgage Loan, as compensation for its services under this Agreement the Subservicer shall be entitled to withdraw from the P & I Custodial Account when earned the fees (collectively, the “Subservicing Fees”) set forth on the Pricing Schedule attached hereto as Exhibit D. As additional servicing compensation, the Subservicer shall be entitled to receive an amount equivalent to all Ancillary Income (except as otherwise described in Section 4.2(j)) with respect to the Mortgage Loans.

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ARTICLE VI
ACCOUNTING

     Section 6.1 General.

     Upon the initial Servicing Transfer Date, the Subservicer shall establish one or more escrow accounts (including subaccounts) for the deposit of Escrow funds collected (each a “T & I Escrow Account”) and one or more custodial accounts for the deposit of funds collected in connection with the Mortgage Loans for principal and interest (each a “P & I Custodial Account”). All of the foregoing accounts shall be maintained in accordance with sound and controlled practices and the Subservicer shall segregate and hold all funds collected and received separate and apart from any of its own funds and general assets. The funds in the T & I Escrow Accounts and the P & I Custodial Accounts may not be commingled with any other funds, including the proceeds of any other mortgage loans or with funds serviced for other investors or for the Subservicer’s own portfolio.

     Section 6.2 Account Maintenance.

     Each P & I Custodial Account and T & I Escrow Account shall be an Eligible Account.

     (a) The accounts shall be an account or accounts maintained with a federal or state chartered depository institution or trust company the short-term unsecured debt obligations of which (or, in the case of a depository institution or trust company that is the principal subsidiary of a holding company, the short-term unsecured debt obligations of such holding company) are rated “A-1” by S&P and “P-1” by Moody’s at the time any amounts are held on deposit therein, (ii) an account or accounts the deposits in which are fully insured by the FDIC, (iii) a trust account or accounts maintained with the trust department of a federal or state chartered depository institution, national banking association or trust company acting in its fiduciary capacity or (iv) an account otherwise acceptable to Moody’s and S&P without reduction or withdrawal of their then current ratings of the Certificates as evidenced by a letter from each Rating Agency to the trustee of such securitization (each a “Qualified Depository”).

     (b) The name of each P & I Custodial Account and T & I Escrow Account shall be designated as:

     (i) T & I Escrow Account: “Nationstar Mortgage LLC, in trust for Second Street Funding Corporation, as Purchaser of Mortgage Loans and various Mortgagors - T&I Account”; and

     (ii) P & I Custodial Account: “Nationstar Mortgage LLC, in trust for Second Street Funding Corporation, as Purchaser of Mortgage Loans and various Mortgagors - P&I Account”

     (c) The Subservicer shall provide a reconciliation of each P & I Custodial Account to the Servicer within 30 days after each month end. Subservicer shall provide for on-line view access to custodial accounts or PDF transmissions of transactions in lieu of on-line access.

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     (d) All collections on the Mortgage Loans with posting instructions shall be deposited to the P & I Custodial Account no later than two (2) Business Days following the day on which good funds are received by the Subservicer.

     (e) Each T & I Escrow Account will be maintained at the expense of the Subservicer. Such accounts may be interest-bearing accounts; provided, however, that such accounts shall comply with the Legal Requirements and all local, state and federal laws and regulations governing interest-bearing accounts and borrower escrow accounts.

     (f) If the Subservicer elects or is required by law to deposit a Mortgagor’s Escrow funds into an interest-bearing account, the Subservicer shall remain obligated to pay the Mortgagor’s taxes and insurance premiums when due, even if the Mortgagor’s Escrow funds are not subject to withdrawal on demand. Any amounts held in the P & I Custodial Account may be, but are not required to be, invested, and if invested by the Subservicer, such funds will be invested in Eligible Investments. Other than interest or other income received on Eligible Investments, which shall belong to the Subservicer and which may be withdrawn by the Subservicer from the P & I Custodial Account in accordance with Section 6.3 hereof, no other amounts may be commingled in the P & I Custodial Account. The Subservicer shall promptly deposit in the P & I Custodial Account from its own funds, without any right of reimbursement, the full amount of any losses on its investment of funds in the P & I Custodial Account.

     Section 6.3 P & I Custodial Account; Remittance.

     (a) The following funds received with respect to the Mortgage Loans shall be transferred into the P & I Custodial Account within two (2) Business Days of the receipt of good funds (together with information sufficient to identify the Mortgage Loan to which such funds relate). The Subservicer shall maintain separate accounting for each category of funds. Such funds may be net of reimbursements for any unreimbursed Servicing Advances and Pass-Through Expenses and any unpaid Subservicing Fees pursuant to Section 5.1 hereof:

     (i) principal collections (including prepayments and curtailments);

     (ii) interest collections;

     (iii) Liquidation Proceeds, Subsequent Recoveries and Insurance Proceeds (except as set forth in Section 6.4(a) hereof);

     (iv) the net proceeds of any sale of an REO Property pursuant to Section 4.16 hereof;

     (v) prepayment penalties, if any; and

     (vi) any amounts deposited in accordance with the last sentence of Section 6.2 hereof.

     (b) The Subservicer may from time to time withdraw funds from the P & I Custodial Account for the following reasons:

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     (i) to reimburse itself for any unreimbursed Pass-Through Expenses and unreimbursed Servicing Advances, and any unpaid Subservicing Fees pursuant to Section 5.1 (and Subservicer shall prepare and deliver to Servicer, a report detailing the reimbursement of any Servicing Advances, Pass-Through Expenses and Subservicing Fees from the P & I Custodial Account);

     (ii) to reimburse itself for Non-recoverable Servicing Advances;

     (iii) to pay itself Ancillary Income, to the extent not retained or previously paid to Subservicer;

     (iv) to make remittances to the Servicer, as set forth in subsection (c);

     (v) to clear and terminate the P & I Custodial Account;

     (vi) to transfer funds in any P & I Custodial Account to another P & I Custodial Account maintained by a Qualified Depository;

     (vii) to remove any deposits made in error; and

     (viii) to cover non-sufficient funds.

     (c) On each Remittance Date, the Subservicer shall remit all amounts in the P & I Custodial Account as of the close of business on the related Determination Date, net of allowable withdrawals under subsection (b), to the Servicer by wire transfer of immediately available funds to the account designated in writing by the Servicer.

     (d) With respect to any remittance received by the Servicer after the Business Day on which such payment was due, the Subservicer shall pay to the Servicer interest on any such late payment at LIBOR, plus two (2) percentage points but in no event greater than the maximum amount permitted by applicable law. Such interest shall be paid by the Subservicer to the Servicer on the date such late payment is made and shall cover the period commencing with the Business Day on which such payment was due and ending with the Business Day on which such payment is made, both inclusive. Such interest shall be remitted along with such late payment. The payment by the Subservicer of any such interest shall not be deemed an extension of time for payment or a waiver by the Servicer of any Subservicer Event of Default.

     Section 6.4 T & I Escrow Accounts.

     (a) The following funds shall be deposited into the applicable T & I Escrow Account promptly after the Subservicer’s receipt and verification of such amounts and the Subservicer shall maintain separate accountings for each of these types of funds:

     (i) Mortgagors’ Escrow Payments;

     (ii) Loss drafts;

     (iii) Unapplied funds; and

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     (iv) Liquidation Proceeds that offset a deficit balance in a Mortgagor’s Tax and Insurance Reserve.

     (b) The Subservicer may make withdrawals from the applicable T & I Escrow Account for the following:

     (i) timely payment of Mortgagors’ taxes and insurance premiums;

     (ii) refunds to Mortgagors of excess Escrow funds collected;

     (iii) reimbursement to itself for all T & I Advances made by the Subservicer with respect to the related Mortgage Loan;

     (iv) pay interest, if required, to Mortgagors on funds in the T & I Accounts;

     (v) removal of any deposits made in error;

     (vi) termination of the account;

     (vii) disburse loss drafts to contractors for repairs to Mortgaged Property damaged by hazard losses;

     (viii) pay loss drafts to Mortgagors to the extent a loss draft exceeds total hazard loss repair charges and the Tax & Insurance Reserve deficiency; and

     (ix) cover non-sufficient funds.

     (c) The Subservicer shall not allow the T & I Escrow Accounts to become overdrawn. If there are insufficient funds in an account, the Subservicer will make a Servicing Advance which shall be reimbursable pursuant to the terms of this Agreement.

     (d) Each T & I Escrow Account is to be designated in the name of the Subservicer acting as an agent for the applicable Mortgagors in order to show that the account is custodial in nature. The Subservicer is required to keep records identifying each Mortgagor’s payment deposited into the account.

     Section 6.5 Interest on Tax and Insurance Reserves.

     If the law requires payment of interest on Tax and Insurance Reserves to the Mortgagor, the Subservicer is solely and fully responsible for payment of such interest. Payment of such interest on Tax and Insurance Reserves shall not be reflected in the Subservicer’s accounting for principal and interest.

     Section 6.6 Access to Records.

     (a) The Subservicer will establish and maintain a system of: (i) records of operational information relating to the collection of Mortgage Loans, the conduct of default management services and the administration, management, servicing, repair, maintenance, rental, sale, or other disposition of Mortgage Loans and Mortgaged Property and (ii) books and

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accounts, which shall be maintained in accordance with customary business practices, of financial information relating to the Mortgage Loans and the Mortgaged Properties. Information may be maintained on a computer or electronic system.

     (b) The Trustee, Servicer and their accountants, attorneys, agents, or designees may at their expense upon reasonable prior written notice and at reasonable times during the Subservicer’s regular business hours, examine the Subservicer’s books and records relating to the Mortgage Loans and the Mortgaged Properties. Such records shall not include any proprietary or confidential information, as reasonably determined by the Subservicer. In addition, the Subservicer may provide to Servicer at Servicer’s expense, any other information reasonably requested by the Servicer related to the Mortgage Loans and Mortgaged Properties, subject to compliance by the Subservicer and Servicer with the Legal Requirements, including without limitation, the Gramm-Leach-Bliley Act.

ARTICLE VII
REPORTS TO THE SERVICER

     Section 7.1 Reports to the Servicer.

     (a) The Subservicer shall prepare and deliver to the Servicer the reports and files identified on Exhibit G-1 and Exhibit G-2 in accordance with the time frames set forth thereon; provided, however, that in the event the Subservicer fails to provide such reports and files within such time frames, the Subservicer shall submit to the Servicer within ten (10) Business Days of such failure a written report detailing the reason for such failure and its recommended plan to overcome such failure in the future.

     (b) The Subservicer shall deliver to the Servicer a written remittance advice on each Remittance Date.

     (c) With respect to each Reporting Date, the corresponding individual loan accounting report shall be received by the Servicer no later than the next calendar date, which report shall contain the following:

     (i) with respect to each Monthly Payment, the amount of such remittance allocable to principal (including a separate breakdown of any Principal Prepayment, including the date of such prepayment, and any prepayment penalties or premiums, along with a detailed report of interest on principal prepayment amounts);

     (ii) with respect to each Monthly Payment, the amount of such remittance allocable to interest;

     (iii) the amount of servicing compensation received by the Subservicer since the preceding Remittance Date;

     (iv) the aggregate outstanding principal balance of the Mortgage Loans;

     (v) the aggregate of any expenses reimbursed to the Subservicer during the prior distribution period;

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     (vi) a listing of (a) the paid-through date of each Mortgage Loan, (b) the Mortgage Loans as to which foreclosure has commenced, which foreclosure shall be carried out in the name of the Trust or the Owner Designee, (c) the Mortgage Loans with respect to which the related Mortgagors that have declared bankruptcy; and (d) the Mortgage Loans as to which REO Property has been acquired; and

     (vii) a trial balance, sorted in the Servicer’s assigned loan number order.

     (d) The Servicer shall pay the Subservicer for any additional servicing reports, that are not customary in the mortgage servicing industry and for which the Subservicer would undertake significant expense to prepare. The cost for such reports or modification to existing reports, including reports or data in electronic form, shall be agreed to by the parties before Subservicer shall be obligated to produce such reports. Notwithstanding the previous sentence, if a requested report pertains to an Event of Default or other breach of this Agreement by the Subservicer, the cost of such report or reports shall be borne by the Subservicer. Notwithstanding anything else stated previously in this subsection, Servicer shall have sixty days after the effective date of this Agreement to review the reports required by this Section and determine what, if any other reports Servicer will require, and Subservicer shall provide these reports requested by Servicer without additional cost, with delivery time of these reports to be as mutually agreed by Servicer and Subservicer.

     Section 7.2 Annual Independent Certified Public Accountants’ Servicing Report.

     On or before March 30 of each year, beginning with March 30, 2011 (with respect to calendar year 2010), the Subservicer at its expense shall cause to be delivered to the Servicer a letter or letters of a firm of independent public accountants which is a member of the American Institute of Certified Public Accountants to the effect that such firm has examined certain documents and records relating to the Subservicer’s overall servicing operations and that on the basis of such an examination conducted substantially in compliance with the Uniform Single Attestation Program for Mortgage Bankers (the “Standards”), such firm confirms that such servicing has been conducted in compliance with the Standards, except for such significant exceptions or errors in the records that, in the opinion of such firm, the Uniform Single Attestation Program for Mortgage Bankers requires it to report.

     Subservicer will at its expense cause to be delivered to Servicer an initial SSAE 16 Type 2 report (formerly, through June 15, 2011, a Type II SAS 70 report) prepared by a firm of independent public accountants which is a member of the American Institute of Certified Public Accountants covering the period of April 1, 2011 to September 30, 2011, with a reporting deadline of November 15, 2011. Subservicer will provide a gap letter by January 31, 2012 to address any changes from September 30, 2011 to December 31, 2011. Thereafter, Subservicer will, at its expense, cause to be delivered to Servicer a SSAE 16 Type 2 report prepared by a firm of independent public accountants which is a member of the American Institute of Certified Public Accountants covering the annual periods of October 1 to September 30 each year with a reporting deadline of November 15. Subservicer will provide a gap letter to address any changes from September 30 to December 31 each year, which is due by January 31 of the following year. The scope of such SSAE 16 Type 2 reports shall be limited to documentation and testing of those areas directly affecting the servicing of the Mortgage Loans. Subservicer will also obtain a

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SSAE 16 Type 2 report as described above for its lockbox provider covering the annual periods of October 1 to September 30 each year with a reporting deadline of November 15 with the initial report covering the period of October 1, 2010 to September 30, 2011 will be due November 15, 2011. Subservicer will cause the Lockbox provider to provide a gap letter to address any changes from September 30 to December 31 each year, which is due by January 31 of the following year. The initial lockbox provider gap letter covering the period of October 1, 2011 to December 31, 2011 will be due January 31, 2012.

     As part of the initial year transfer of servicing from the Servicer to the Subservicer, the Subservicer will provide written representation to Servicer addressing any significant changes to systems and controls affecting the Mortgage Loans since December 31, 2010 through March 31, 2011 or note that there were no significant changes. Such representation letter is to be delivered by April 30, 2011. As a supplement to the initial USAP Report for 2010 to be delivered by March 30, 2011 as described above, the Subservicer at its expense shall cause to be delivered to the Servicer a letter of a firm of independent public accountants which is a member of the American Institute of Certified Public Accountants to the effect that such firm has examined certain documents and records relating to the Subservicer’s overall servicing of the Mortgage Loans through March 31, 2011 and, on the basis of such an examination conducted substantially in compliance with procedures to be mutually agreed upon between the Servicer, Subservicer and the firm of independent public accountants, to provide a report on the results of such examination. At a minimum the agreed upon procedures shall address transactional processes for payment processing, payoffs, adjustable rate mortgages, escrow balances, loan modifications, loan default processes, and REO management. Such report is to be delivered to Servicer by May 1, 2011. For the three months ended June 30, 2011, the Subservicer will provide written representation to Servicer addressing any significant changes to systems and controls affecting the Mortgage Loans since December 31, 2010 through June 30, 2011 or note that there were no significant changes. Such representation letter is to be delivered by July 31, 2011. For the three months ended September 30, 2011, the Subservicer will provide written representation to Servicer addressing any significant changes to systems and controls affecting the Mortgage Loans since December 31, 2010 through September 30, 2011 or note that there were no significant changes. Such representation letter is to be delivered by October 31, 2011.

     As part of Servicer’s review for Type II SAS 70 compliance, Servicer has conducted a security assessment review of Subservicer, as identified on Exhibit H. Subservicer agrees to take the necessary actions indicated as “Remediation Required” within the times indicated on Exhibit H.

     Section 7.3 Reports of Foreclosures and Abandonment of Mortgaged Property.

     The Subservicer shall file, or cause to be filed, the information returns with respect to the receipt of mortgage interest received in a trade or business, the reports of foreclosures and abandonment of any Mortgaged Property and the information returns relating to cancellation of indebtedness income with respect to any Mortgaged Property required by Sections 6050H, 6050J, 6050P and any comparable or successor provisions of the Code, respectively. Such reports shall be in form and substance sufficient to meet the reporting requirements imposed by Sections 6050H, 6050J, 6050P of the Code and any comparable or successor provisions.

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     Section 7.4 Real Estate Owned Reports.

     Together with the statement furnished pursuant to Section 4.2, with respect to any REO Property, the Subservicer shall furnish to the Servicer a statement covering the Subservicer’s efforts in connection with the sale of such REO Property and any rental of such REO Property incidental to the sale thereof for the previous month, together with an operating statement.

     Section 7.5 Liquidation Reports.

     Upon the foreclosure sale of any Mortgaged Property or the acquisition thereof by the Servicer Designee pursuant to a deed-in-lieu of foreclosure, the Subservicer shall submit to the Servicer a liquidation report with respect to such Mortgaged Property.

     Section 7.6 Compliance with Gramm-Leach-Bliley Act of 1999.

     With respect to each Mortgage Loan and related Mortgagor, the Subservicer shall comply with Title V of the Gramm-Leach-Bliley Act of 1999 and all applicable regulations promulgated thereunder, and shall provide all notices required thereunder with respect to the Subservicer and the Servicer.

     Section 7.7 Reporting.

     The Subservicer shall prepare promptly each report required by applicable law including reports to be delivered to all governmental agencies having jurisdiction over the servicing of the Mortgage Loans and the Escrow Accounts, shall execute such reports or, if the Servicer must execute such reports, shall deliver such reports to the Servicer for execution prior to the date on which such reports are due and shall file such reports with the appropriate Persons. The Subservicer shall timely prepare and deliver to the appropriate Persons Internal Revenue Service forms 1098, 1099 and 1099A (or any similar replacement, amended or updated Internal Revenue Service forms) relating to any Mortgage Loan for the time period such Mortgage Loan has been serviced by the Subservicer. The Servicer shall be solely responsible for filing any other forms including, without limitation and to the extent applicable, forms 1041 and K-1 or any similar replacement, amended or updated Internal Revenue Service forms. The reports to be provided under this subsection shall cover the period through the end of the month following the termination of this Agreement or, in the case of reports to be sent to the Internal Revenue Service, the end of the calendar year following termination of the Agreement. To the extent it is an Acceptable Servicing Practice, the Subservicer shall promptly prepare all reports or other information required to respond to any inquiry from, or give any necessary instructions to, any mortgage insurer, provider of hazard insurance or other insurer or guarantor, taxing authority, tax service, or the Mortgagor.

ARTICLE VIII
SUBSERVICER AND INDEMNIFICATION

     Section 8.1 Merger or Consolidation of the Subservicer.

     Notwithstanding anything herein to the contrary, any Person into which the Subservicer may be merged or consolidated, or any corporation resulting from any merger, conversion or

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consolidation to which the Subservicer shall be a party, or any Person succeeding to the business of the Subservicer, shall be the successor of the Subservicer hereunder, provided, however, that the successor or surviving Person must be an entity: (i) having a net worth of not less than $25 million, (ii) that is an FHA- Approved Mortgagee and a Freddie Mac or Fannie Mae approved servicer in good standing, and (iii) Servicer in its sole discretion has approved as a Subservicer.

     Section 8.2 Limitation on Resignation.

     The Subservicer shall not resign from the obligations and duties hereby imposed on it except: (i) by mutual consent of the Subservicer and the Servicer, (ii) upon Subservicer’s good-faith determination that its duties hereunder are no longer permissible under applicable law and such incapacity cannot be cured by the Subservicer (including by hiring a subservicer for certain of the Mortgage Loans) or the Subservicer determines in good faith that curing such incapacity is not commercially reasonable, or (iii) upon not less than one hundred eighty (180) days’ prior written notice to Servicer. The Subservicer shall promptly notify the Servicer of any determination of the type described in clause (ii) above and provide an opinion of counsel acceptable to the Servicer to evidence such determination. In addition, the Subservicer shall use its best efforts to locate and engage a successor to it in the event of a resignation pursuant to clause (ii) above.

     Section 8.3 Subservicer Limitation on Liability and Indemnification.

     (a) Neither the Subservicer nor any of the directors, officers, agents or employees thereof shall be liable to the Servicer for any action taken, or for refraining from the taking of any action, in good faith pursuant to this Agreement or for errors in judgment. The Subservicer and any director, officer, agent, or employee of the Subservicer may rely in good faith on any document of any kind which it reasonably believes has been properly executed and/or submitted by any appropriate Person respecting any matters arising hereunder.

     (b) Other than in connection with removing a Mortgage Loan from the MERS^® system pursuant to Section 4.2(g) or (k) hereof, the Subservicer does not assume any obligation to record the original Mortgage unless otherwise instructed to do so by the Servicer.

     (c) The Subservicer shall not be under any obligation to appear in, prosecute or defend any legal action that is not incidental to its duties hereunder and which in its opinion may involve it in any expenses or liability.

     (d) The Servicer shall indemnify and hold harmless the Subservicer and its officers, employees, members, directors, Affiliates and representatives (collectively, the “Subservicer Indemnified Parties”) against any and all liability, cost and expense incurred by the Subservicer including, without limitation, all losses, damages, penalties, fines, forfeitures, reasonable legal fees and related costs and judgments resulting from any claim, demand, defense or assertion asserted against any Subservicer Indemnified Party in connection with: (i) any action with respect to the origination of a Mortgage Loan; (ii) any action of any originator, holder or servicer of the Mortgage Loans occurring prior to the related Servicing Transfer Date; (iii) a material breach by Servicer of any representation, warranty, covenant, or obligation hereunder; (v) any document, instrument or any other information that is missing from the Servicing File on

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the Servicing Transfer Date that is necessary for the Subservicer to service the Mortgage Loans; (vi) lost or misplaced user ID or password by Servicer (or Servicer’s designee); (vii) following the directions and instructions of the Servicer (or its designee);; provided, however, that the Servicer shall not be required to indemnify any Subservicer Indemnified Party against any such liability attributable to the willful misconduct, bad faith or negligence or reckless disregard of such Subservicer Indemnified Party or the failure of such Subservicer Indemnified Party to comply with any covenant or obligation applicable to it hereunder (unless such failure to comply is the result of a determination by the Subservicer that compliance with such covenant or obligation would not be permissible under applicable law). This indemnity shall survive the termination of this Agreement and the payment of the Mortgage Loans. The Subservicer shall promptly notify the Servicer of any liability or claim for which the Subservicer expects to be indemnified pursuant to this Section.

     (e) The Servicer shall be entitled to participate in and, upon notice to the Subservicer, assume the defense of any action or claim described in Section 8.3(d) in reasonable cooperation with, and with the reasonable cooperation of the Subservicer. The Subservicer shall have the right to employ its own counsel in any such action in addition to the counsel of the Servicer, but the fees and expenses of such counsel shall be at the expense of the Subservicer, unless (i) the employment of counsel by the Subservicer at the Servicer’s expense has been authorized in writing by the Servicer, (ii) the Servicer has not in fact employed counsel to assume the defense of such action within a reasonable time after receiving notice of the commencement of the action, or (iii) the named parties to any such action or proceeding (including any impleaded parties) include the Servicer and the Subservicer, and the Subservicer has been advised by counsel that there may be one or more legal defenses available to it which are different from or additional to those available to the Servicer. The Subservicer shall not be liable for any settlement of any such claim or action unless the Subservicer shall have consented thereto (which consent shall not be unreasonably conditioned, withheld or delayed). Any failure by the Subservicer to comply with the provisions of this Section shall relieve the Servicer of liability only if such failure is materially prejudicial to the position of the Servicer and then only to the extent of such prejudice.

     Section 8.4 Servicer Limitation on Liability and Indemnification.

     (a) Neither the Servicer, nor any of the directors, members, officers, agents or employees thereof shall be liable to the Subservicer for any action taken, or for refraining from the taking of any action, in good faith pursuant to this Agreement or for errors in judgment. The Servicer and any director, member, officer, agent, or employee of the Servicer may rely in good faith on any document of any kind, which it reasonably believes has been properly executed and/or submitted by any appropriate Person respecting any matters arising hereunder.

     (b) The Subservicer shall indemnify and hold harmless the Servicer and its officers, employees, members, directors, Affiliates and representatives (collectively, the “Servicer Indemnified Parties”) against any and all liability, cost and expense incurred by the Servicer, including, without limitation, all losses, damages, penalties, fines, forfeitures, reasonable legal fees and related costs and judgments resulting from any claim, demand, defense or assertion asserted against any Servicer Indemnified Party in connection with (i) the failure of the Subservicer to perform its duties and service the Mortgage Loans in compliance with the

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terms of this Agreement, or (ii) a material breach of any representation, warranty, covenant or obligation made by the Subservicer hereunder; provided, however, that the Subservicer shall not be required to indemnify any Servicer Indemnified Party against any such liability attributable to the willful misconduct, bad faith, negligence or reckless disregard of such Servicer Indemnified Party or the failure of such Servicer Indemnified Party to comply with any covenant or obligation applicable to it hereunder (unless such failure to comply is the result of a determination by the Servicer that compliance with such covenant or obligation would not be permissible under applicable law). This indemnity shall survive the termination of this Agreement and the payment of the Mortgage Loans. The Servicer shall promptly notify the Subservicer of any liability or claim for which the Servicer expects to be indemnified pursuant to this Section.

     (c) The Subservicer shall be entitled to participate in and, upon notice to the Servicer, assume the defense of any action or claim described in Section 8.4(b) in reasonable cooperation with, and with the reasonable cooperation of the Servicer. The Servicer shall have the right to employ its own counsel in any such action in addition to the counsel of the Subservicer, but the fees and expenses of such counsel shall be at the expense of the Servicer, unless (i) the employment of counsel by the Servicer at the Subservicer’s expense has been authorized in writing by the Subservicer, (ii) the Subservicer has not in fact employed counsel to assume the defense of such action within a reasonable time after receiving notice of the commencement of the action, or (iii) the named parties to any such action or proceeding (including any impleaded parties) include the Subservicer and the Servicer, and the Servicer has been advised by counsel that there may be one or more legal defenses available to it which are different from or additional to those available to the Subservicer. The Servicer shall not be liable for any settlement of any such claim or action unless the Servicer shall have consented thereto (which consent shall not be unreasonably conditioned, withheld or delayed). Any failure by the Servicer to comply with the provisions of this Section shall relieve the Subservicer of liability only if such failure is materially prejudicial to the position of the Subservicer and then only to the extent of such prejudice.

     Section 8.5 Notice of Litigation.

     In the event of litigation with respect to the Mortgage Loans or any duty under this Agreement, the party being served shall notify the other party promptly, and, in any case, within ten (10) days of receipt of service. The parties will cooperate in the handling of such litigation.

ARTICLE IX
TERMINATION

     Section 9.1 Events of Default.

     The following events shall each constitute an “Event of Default” under this Agreement:

     (a) Any failure by the Subservicer to deposit into the designated account or remit to the Servicer any amount required to be so deposited or remitted under this Agreement on the date required under this Agreement within two days of the date such amount is due;

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     (b) The Subservicer shall fail to provide to the Servicer any report required by this Agreement to be provided to the Servicer within three days of the date such report is due;

     (c) The entry against the Subservicer or the Servicer of a decree or order of a court or agency or supervisory authority having jurisdiction in the premises for the appointment of a conservator, receiver, liquidator, trustee or similar official in any bankruptcy, insolvency, conservatorship, receivership, readjustment of debt, marshaling of assets and liabilities or similar proceedings, or for the winding-up or liquidation of its affairs, which decree or order shall have remained in force undischarged or unstayed for a period of sixty (60) consecutive days;

     (d) The Subservicer or the Servicer shall consent to the appointment of a conservator, receiver, liquidator, trustee or similar official in any bankruptcy, insolvency, conservatorship, receivership, readjustment of debt, marshalling of assets and liabilities or similar proceedings of or relating to such party or of or relating to all or substantially all of the property of such party;

     (e) The Subservicer or the Servicer shall admit in writing its inability to pay its debts generally as they become due, file a petition to take advantage of any applicable bankruptcy, insolvency or reorganization statute, make an assignment for the benefit of its creditors, voluntarily suspend payment of its obligations, or take any corporate action in furtherance of any of the foregoing;

     (f) The Subservicer shall be merged or consolidated into any Person or the Subservicer or the Servicer shall assign or transfer or attempt to assign or transfer all or part of its rights and obligations hereunder, in each case except as permitted by this Agreement;

     (g) The Subservicer transfers or otherwise disposes of all or substantially all of its assets;

     (h) The inability of the Subservicer to, or the Subservicer loses its authority under any applicable government entity to, perform any material obligation hereunder;

     (i) The failure of the Subservicer to maintain its license to conduct business or service residential mortgages in any jurisdiction where the Mortgaged Properties are located;

     (j) Any breach by the Servicer or the Subservicer of a representation or warranty made in Article III hereof (other than, in the case of the Servicer, a representation or warranty set forth in Section 3.3(b) or Section 3.3(c) hereof) or any failure by the Servicer or the Subservicer to perform any of their respective material obligations hereunder, which breach or failure continues unremedied for a period of thirty (30) days after the earlier of: (1) knowledge of such party of such breach or failure; and (2) the date on which written notice of such breach or failure requiring the same to be remedied shall have been given to such party; or

     (k) In accordance with Section 4.18(c) hereof, the failure of the Servicer to pay to the Subservicer the amount of any shortfall within thirty (30) days of the related notification by the Subservicer to the Servicer of such shortfall.

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     The Servicer may waive any default by the Subservicer in the performance of its obligations hereunder and its consequences. Upon any such waiver of a past default, such default shall cease to exist, and any Event of Default arising therefrom shall be deemed to have been remedied for every purpose of this Agreement. No such waiver shall extend to any subsequent or other default or impair any right consequent thereon except to the extent expressly so waived.

     Section 9.2 Termination of Agreement.

     (a) The obligations and responsibilities of the Subservicer shall terminate, with respect to any related Mortgage Loan(s) and/or REO Properties, upon the earliest of: (i) the final payment or other liquidation of the last Mortgage Loan and related REO Property and the remittance of all amounts due hereunder; (ii) the date designated by the Servicer following the occurrence and during the continuance of an Event of Default with respect to the Subservicer (after giving effect to any applicable cure period), subject to compliance with the Legal Requirements for the transfer of the servicing of the Mortgage Loans; (iii) after ninety (90) days following the occurrence and during the continuance of an Event of Default with respect to the Servicer (after giving effect to any applicable cure period) and subject to compliance with the Legal Requirements for the transfer of the servicing of the Mortgage Loans; (iv) the date specified in accordance with Section 8.2 above; (v) upon the Optional Termination Date (as defined in the Pooling and Servicing Agreement); (vi) at the sole discretion of Servicer upon ninety (90) days notice to the Subservicer (a “Termination for Convenience”), or (vii) with such other date as shall have been mutually agreed upon by the Subservicer and the Servicer. Following the termination of the Subservicer, the Subservicer shall be paid all amounts due the Subservicer in accordance with the terms of this Agreement. Notwithstanding the foregoing, upon a termination pursuant to clause (v) above, the Servicer and the Subservicer agree that the servicing of the remaining Mortgage Loans and related REO Property shall be governed by the terms of the Subservicing Agreement, dated as of February 1, 2011, among the Subservicer, the Servicer, American General Financial Services of Arkansas, Inc. and American General Home Equity, Inc.

     (b) In the event of a termination of this Agreement by the Servicer in accordance with Section 9.2(a) above, upon receipt by the Subservicer of written notice of termination, all authority and power of the Subservicer under this Agreement, whether with respect to the Mortgage Loans or otherwise, shall pass to and be vested in a successor servicer appointed by the Servicer at the time that the servicing functions are transferred from Subservicer to the successor servicer. The Subservicer shall cooperate with the Servicer and successor servicer in effecting the termination of the Subservicer’s responsibilities and rights hereunder. In the event of a Termination for Convenience by the Servicer, the Servicer shall pay the applicable termination fee (the “Termination Fee”) to the Subservicer in accordance with the terms of Exhibit D immediately upon such termination.

     (c) Upon written request from the Servicer, the Subservicer shall (i) prepare, execute and deliver to the successor servicer all related Servicing Files; however, the Subservicer may retain copies of Servicing Files to the extent necessary to comply with the Legal Requirements and other laws; and (ii) be responsible for the costs of packaging and transferring all of the aforementioned materials to the Servicer upon such termination. The Servicer shall pay

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all reasonable shipping expenses associated with such transfer, unless Subservicer is terminated for an Event of Default or Subservicer resigns pursuant to Section 8.2 (iii). Any remaining amounts pursuant to the preceding sentence shall be remitted by the Servicer to the Subservicer no later than thirty (30) days after the Released Servicing Date. Subservicer shall do or cause to be done all other acts or things necessary or appropriate to affect the purposes of such notice of termination, including the transfer and endorsement or assignment of the Mortgage Loans and related documents.

     (d) Subservicer shall transfer to successor servicer for administration by it of all cash amounts which shall at the time be credited by the Subservicer to the P & I Custodial Account or T & I Escrow Accounts or thereafter received with respect to the Mortgage Loans. Notwithstanding any other term of this Agreement to the contrary and in all circumstances under which this Agreement is terminated, the Subservicer shall be entitled to offset against deposits in the P & I Custodial Account all unreimbursed Subservicing Fees, Servicing Advances and Pass-Through Expenses from any amounts due and owing to the Servicer or successor servicer at the time of a corresponding servicing transfer.

     (e) This Section 9.2 shall survive any termination of this Agreement and any termination of this Agreement shall not prejudice the rights of Subservicer to recover any amounts due Subservicer under this Agreement.

ARTICLE X
MISCELLANEOUS PROVISIONS

     Section 10.1 Protection of Confidential and Proprietary Information.

     (a) The Subservicer shall keep confidential and shall not divulge to any party, without the Servicer’s prior written consent, the terms and provisions of this Agreement, including, without limitation, the purchase price paid by the Servicer for the Mortgage Loans, REO Properties and/or rights transferred pursuant to this Agreement and any information pertaining to such Mortgage Loans, REO Properties and/or rights, or any Mortgagor thereunder, except to the extent that it is appropriate for the Subservicer to do so in working with legal counsel, auditors, taxing authorities, or other governmental agencies, insurance carriers, any property inspector, or other Person necessary to fulfill the Subservicer’s obligations hereunder. Except as otherwise provided in this Agreement, including as specified in Section 10.1(j) with respect to the filing of a Form 8-K, the Servicer shall keep confidential and shall not divulge to any party, without the Subservicer’s prior written consent, the terms and provisions of this Agreement, except to the extent that it is appropriate for the Servicer to do so in working with legal counsel, auditors, taxing authorities, or other governmental agencies, insurance carriers, any property inspector, or other Person necessary to fulfill the Servicer’s obligations hereunder. Notwithstanding any provision of this Agreement, the trademarks, trade secrets, know-how, business methods and practices, internal procedures and other intellectual property and confidential information of the Subservicer or the Servicer, respectively (“Proprietary Information”) shall remain vested in the Subservicer and the Servicer, respectively, and are not hereby transferred to the other party, and the Subservicer and the Servicer shall have the right to take all actions necessary to protect their Proprietary Information. Notwithstanding the above, each party (and each employee, representative, or other agent of a party) may disclose to any and

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all persons, without limitation of any kind, the tax treatment and tax structure of the transaction and all materials of any kind (including opinions or other tax analyses) that are provided to it relating to such tax treatment and tax structure.

     (b) Except as otherwise set forth herein, the Subservicer agrees that it shall not refer to or use the Servicer’s name or any derivation or significant portion of such name in any manner in any of its servicing, enforcement or collection activities with respect to any Mortgage Loan or in any advertising, printed material, electronic medium or other medium, without first obtaining the named party’s prior written consent, except to the extent that it is appropriate for the Subservicer to do so in working with legal counsel, auditors, taxing authorities, or other governmental agencies, insurance carriers, any property inspector, or other person necessary to fulfill the Subservicer’s obligations hereunder. The Subservicer shall inform its subservicers, contractors, advisors and agents of the restriction stated in this subparagraph (b) and shall take commercially reasonable steps to cause such parties to conduct their activities relating to the Mortgage Loans and REO Properties in compliance herewith. Except as required hereunder, no such named party shall have any obligation to give any such written consent and may withhold the same in its sole and absolute discretion.

     (c) All information of a non-public nature disclosed by Servicer to Subservicer during the term of this Agreement (“Servicer Proprietary Information”) (1) shall be deemed the property of Servicer, (2) shall be used solely for the purposes of administering and otherwise implementing the terms of this Agreement, and (3) shall be protected by Subservicer in accordance with the terms of this Article X. Servicer’s Proprietary Information shall also include all “non-public personal information” as defined in Title V of the Gramm-Leach-Bliley Act (15 U.S. C. Section 6801, et seq.) and the implementing regulations thereunder (collectively, the “GLB Act”), as the same may be amended from time to time, that Subservicer received from or at the direction of Servicer and that concerns any of Servicer’s “customers” and/or “consumers” (as defined in the GLB Act). Subservicer acknowledges that any Servicer Proprietary Information being stored or processed by Subservicer is and shall remain the sole property of Servicer and will take all such reasonable measures as may be necessary to protect the confidentiality of Servicer Proprietary Information which comes into Subservicer’ possession, if any. Subservicer further agrees to observe complete confidentiality regarding all aspects of Servicer Proprietary Information, including without limitation agreeing not to disclose or otherwise permit any other person or entity access to, in any manner, Servicer Proprietary Information or any part thereof without Servicer’s prior written consent, except that such disclosure or access shall be permitted to an employee of Subservicer requiring such access in the course of employment or a subcontractor of Subservicer. Subservicer shall not disclose or use Servicer Proprietary Information for any purposes other than to carry out the purposes for which Servicer disclosed the data to Subservicer, or as permitted by this Agreement. Notwithstanding the foregoing, Servicer consents to the use by Subservicer of statistical data generated by Servicer Proprietary Information provided that such use shall not result in the disclosure of Servicer Proprietary Information which will directly or indirectly identify Servicer or any specific individual. At the request of Servicer, and upon payment to Subservicer of all undisputed monies due under the terms of this Agreement, Subservicer shall transfer any Servicer Proprietary Information held by Subservicer to Servicer. Upon termination of this Agreement, Subservicer’s rights to use or access Servicer Proprietary Information shall end immediately. In the event that Subservicer does not immediately return such Servicer

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Proprietary Information to Servicer, Subservicer agrees it will not access or use such Servicer Proprietary Information in any manner and shall maintain such Servicer Proprietary Information in a secure manner until its return to Servicer. In the event that Servicer desires for Subservicer to perform year-end IRS reporting or other services following deconversion from Subservicer’s system, Servicer shall provide a written request for such services prior to the last week of deconversion activities. In such case, Servicer acknowledges that Subservicer will retain a set of Servicer’s Proprietary Information in order to perform such services. To the extent that Servicer desires that Subservicer not retain Servicer’s Proprietary Information in its secured, archived environment in accordance with its data retention policies, upon 1) written notice and instruction by Servicer, 2) Subservicer’s receipt of all monies owed by Servicer to Subservicer, and 3) Servicer’s return of all Subservicer Proprietary Information to Subservicer, Subservicer shall destroy Servicer’s Proprietary Information. Subservicer shall provide written certification of destruction within thirty (30) days following completion of such destruction. Servicer shall be responsible for any regulatory or other concerns regarding retention of Servicer Proprietary Information.

     (d) Subservicer presently maintains and will continue to maintain information security programs and measures designed to safeguard the security and confidentiality of Servicer Proprietary Information. Such security programs and measures are and will be designed to identify and protect against reasonably foreseeable risks to (1) the security and confidentiality of Servicer Proprietary Information, (2) the integrity of such information, and (3) unauthorized access to or use of such information that might result in substantial harm or inconvenience to any customer or consumer of Servicer. Subservicer agrees to (1) periodically test the efficacy and appropriateness of such information security programs and (2) take reasonable measures to be able to detect and respond to security breaches, including widely known potential security failures that have been experienced by its vendors or others in the industry.

     (e) Subservicer will use commercially reasonable efforts to adhere to such additional security measures with respect to Servicer’s Proprietary Information as may be reasonably imposed by Servicer.

     (f) Subservicer also agrees to notify Servicer, immediately following discovery, if any Servicer Proprietary Information was, or is reasonably believed to have been, acquired by an unauthorized person. Notification required by this section may be delayed if a law enforcement agency determines that the notification of Servicer will impede a criminal investigation. In such case, Subservicer shall notify Servicer immediately after Subservicer has been notified that the law enforcement agency determines that it will not compromise the investigation. In the event of any such breach of security or unauthorized access, Subservicer agrees to use highest commercially reasonable efforts to cooperate with Servicer to minimize the consequences of such security breach for Servicer’s customers, and to provide all necessary information reasonably requested by Servicer’s state and federal regulators.

     (g) Subservicer agrees to comply with any further notification requirements imposed from time to time by state and federal regulators with jurisdiction over the use of, and/or security relating to Servicer’s Proprietary Information. Subject to the limitations of liability set forth in any other part of this Agreement, Subservicer expressly agrees that it will be responsible for all reasonable costs and expenses related to (i) an investigation and resolution of

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unauthorized access to Servicer Proprietary Information while in Subservicer’s possession and (ii) notification of Servicer’s customers affected by unauthorized access to such Servicer Proprietary Information, in the event such notification is required by state or federal law or by Servicer’s state and federal regulators.

     (h) Subservicer agrees to annually provide Servicer with a written report assessing its vulnerability or potential vulnerability to security breaches, loss of data integrity, and threats to confidentiality.

     (i) Subservicer may disclose Servicer Proprietary Information to third parties only after providing Servicer with reasonable prior written notice (unless such notice is prohibited by law):

(a) to comply with a properly authorized civil, criminal, or regulatory investigation, subpoena or summons by Federal, State or local authorities; or

(b) to respond to judicial process or government regulatory authorities having jurisdiction over it for examination, compliance or other purposes.

     Upon receipt of such notice, Servicer may seek an appropriate protective order. Subservicer shall use reasonable efforts to cooperate with Servicer, at Servicer’s sole cost, to pursue an appropriate protective order. It is further agreed that, if, in the absence of a protective order, Subservicer is legally compelled to disclose Servicer Proprietary Information, Subservicer shall make commercially reasonable efforts to disclose only such portions of Servicer Proprietary Information that are legally required to be disclosed. Except as set forth in this Section 10.1, Subservicer may disclose Servicer Proprietary Information to third parties for any other purpose permitted by law, only after receiving prior written consent from Servicer.

     (j) The parties acknowledge that this Agreement contains confidential information that may be considered proprietary by one or both of the parties, and agree to limit distribution of this Agreement to those individuals with a need to know the contents of this Agreement. In no event may this Agreement be reproduced or copies shown to any third parties (exclusive of contractors, subcontractors and agents who have a need for it) without the prior written consent of the other party, except as may be necessary by reason of legal, accounting, tax or regulatory requirements, in which event Servicer and Subservicer agree to exercise reasonable diligence in limiting such disclosure to the minimum necessary under the particular circumstances. The parties further agree to seek commercial confidential status for this Agreement with any regulatory commission with which this Agreement must be filed, to the extent such a designation can be secured. Notwithstanding anything to the contrary in this Agreement, the Servicer and its affiliates are allowed to disclose the Agreement as necessary to comply with any subpoena, order, regulation, ruling or request of any judicial, administrative or legislative body or committee or any self-regulatory body (including any securities body), including the filing of a Form 8-K with the Securities and Exchange Commission (with a copy of the Agreement) if they believe (in their sole discretion) that such a filing is necessary or appropriate; provided, however, in connection with any such filing the Servicer and its affiliates

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shall request confidential treatment with respect to the pricing information set forth in Exhibit D of this Agreement.

     (k) In addition, each party agrees to give notice to the other party of any demands to disclose or provide the Proprietary Information received from the other or any third party under lawful process prior to disclosing or furnishing Proprietary Information, and agrees to cooperate in seeking reasonable protective arrangements requested by the other party.

     Section 10.2 Notices.

     All demands, notices and communications hereunder shall be in writing and shall be deemed to have been duly given as of the next Business Day if sent by overnight courier, addressed as follows (or such other address as may hereafter be furnished to the other party by like notice):

a.	if to the Servicer	American General Financial Services, Inc.
		601 N.W. Second Street
		Evansville, IN 47708
		Attention: General Counsel
b.	if to the Subservicer	Nationstar Mortgage LLC
		350 Highland Drive
		Lewisville, Texas 75067
		Attention: Shawn Stone
c.	if to the Custodian	The Bank of New York Mellon Trust Company,
		N.A.
		2220 Chemsearch Blvd., Suite 150
		Irving, Texas, 75062

     Section 10.3 Severability Clause.

     Any part, provision, representation or warranty of this Agreement which is prohibited or which is held to be void or unenforceable shall be ineffective to the extent of such prohibition or unenforceability without invalidating the remaining provisions hereof. Any part, provision, representation or warranty of this Agreement which is prohibited or unenforceable or is held to be void or unenforceable in any jurisdiction shall be ineffective, as to such jurisdiction, to the extent of such prohibition or unenforceability without invalidating the remaining provisions hereof, and any such prohibition or unenforceability in any jurisdiction as to any Mortgage Loan shall not invalidate or render unenforceable such provision in any other jurisdiction. To the extent permitted by applicable law, the parties hereto waive any provision of law which prohibits or renders void or unenforceable any provision hereof. If the invalidity of any part, provision, representation or warranty of this Agreement shall deprive any party of the economic benefit

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intended to be conferred by this Agreement, the parties shall negotiate, in good-faith, to develop a structure the economic effect of which is as close as possible to the economic effect of this Agreement without regard to such invalidity.

     Section 10.4 Performance Audits.

     Subservicer will cooperate reasonably and in good faith with Servicer or its auditors, internal or external, upon reasonable prior notice, for the purpose of inspecting, examining, and auditing the performance of the activities required by Subservicer of this Agreement provided, however, that any such inspection, examination and/or audit shall take place during normal business hours and shall not unreasonably interfere with the business operations of the Subservicer.

     Section 10.5 Counterparts.

     This Agreement may be executed simultaneously in any number of counterparts. Each counterpart shall be deemed to be an original, and all such counterparts shall constitute one and the same instrument.

     Section 10.6 Place of Delivery and Governing Law.

     The Agreement shall be construed in accordance with the laws of the State of New York and the obligations, rights and remedies of the parties hereunder shall be determined in accordance with the laws of the State of New York, except to the extent preempted by Federal law.

     Section 10.7 Waiver of Jury Trial.

     Each party hereby knowingly, voluntarily and intentionally, waives (to the extent permitted by applicable law) any right it may have to a trial by jury of any dispute arising under or relating to this Agreement and agrees that any such dispute shall be tried before a judge sitting without a jury.

     Section 10.8 Further Agreements.

     The Servicer and the Subservicer agree to execute and deliver to the other such reasonable and appropriate additional documents, instruments or agreements as may be necessary or appropriate to effectuate the purposes of this Agreement.

     Section 10.9 Successors and Assigns; Assignment of Subservicing Agreement.

     This Agreement shall bind and inure to the benefit of and be enforceable by the Subservicer and the Servicer and the respective permitted successors and assigns of the Subservicer and the Servicer. Except as contemplated by Section 8.1, the Subservicer shall not assign this Agreement or sell or otherwise dispose of all or substantially all of its property or assets without the prior written consent of the Servicer, which consent shall not be unreasonably withheld.

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     The Servicer may assign its rights and obligations under this Agreement with respect to some or all of the related Mortgage Loans without the consent of the Subservicer. The Subservicer agrees to cooperate with the Servicer in connection with any such assignment including, without limitation, executing such documents and entering into such agreements in order to give effect to such assignment. Except as otherwise provided in this Agreement, upon any such assignment and written notice thereof to the Subservicer, the Person to whom such assignment is made shall succeed to all rights and obligations of the Servicer under this Agreement to the extent of the related Mortgage Loan or Mortgage Loans and this Agreement, to the extent of the related Mortgage Loan or Mortgage Loans, shall be deemed to be a separate and distinct Agreement between the Subservicer and the assignee of the related Mortgage Loan or Loans.

     Notwithstanding any other provision of this Agreement, Subservicer shall have the right following thirty (30) days’ notice to the Servicer to assign, transfer and pledge any right Subservicer has to receive payment under this Agreement without the consent of the Servicer.

     Section 10.10 Amendments, Etc.

     No term or provision of this Agreement may be amended, waived or modified unless such amendment, waiver or modification is in writing and signed and delivered by each of the parties hereto.

     Section 10.11 Exhibits.

     The exhibits to this Agreement are hereby incorporated and made a part hereof and are an integral part of this Agreement.

     Section 10.12 General Interpretive Principles.

     For purposes of this Agreement, except as otherwise expressly provided or unless the context otherwise requires:

     (a) The terms defined in this Agreement have the meanings assigned to them in this Agreement and include the plural as well as the singular, and the use of any gender herein shall be deemed to include the other gender;

     (b) Accounting terms not otherwise defined herein have the meanings assigned to them in accordance with generally accepted accounting principles;

     (c) References herein to “Articles,” “Sections,” “Subsections,” “Paragraphs,” and other subdivisions without reference to a document are to designated Articles, Sections, Subsections, Paragraphs and other subdivisions of this Agreement;

     (d) A reference to a Subsection without further reference to a Section is a reference to such Subsection as contained in the same Section in which the reference appears, and this rule shall also apply to Paragraphs and other subdivisions;

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     (e) The words “herein,” “hereof,” “hereunder,” and other words of similar import refer to this Agreement as a whole and not to any particular provision;

     (f) The term “include” or “including” shall mean “including without limitation”; and

     (g) The terms “best efforts” or “reasonable efforts” shall not be interpreted to require the Servicer or the Subservicer, as the case may be, to initiate or participate in any litigation, arbitration or proceeding or to incur expenses in excess of those explicitly set forth in this Agreement or as are otherwise commercially reasonable.

     Section 10.13 Reproduction of Documents.

     This Agreement and all documents relating thereto, including: (a) consents, waivers and modifications which may hereafter be executed, (b) documents received by any party at the closing, and (c) financial statements, certificates and other information previously or hereafter furnished, may be reproduced by any photographic, photostatic, microfilm, micro-card, miniature photographic or other similar process. The parties agree that any such reproduction shall be admissible in evidence as the original itself in any judicial or administrative proceeding, whether or not the original is in existence and whether or not such reproduction was made by a party in the regular course of business, and that any enlargement, facsimile or further reproduction of such reproduction shall likewise be admissible in evidence.

     Section 10.14 Conflicts.

     Following the Servicing Transfer Date, if the Servicer discovers a conflict between the terms of this Agreement and the Pooling and Servicing Agreement and the Servicing Agreement and notifies the Subservicer of such conflict, and, such conflict, in the reasonable judgment of the Servicer, could result in a Servicer Event of Default under the Pooling and Servicing Agreement or an Event of Default under the Servicing Agreement if not remedied, the Subservicer and the Servicer agree to use their respective best efforts to modify the applicable term or terms of this Agreement to conform to the Pooling and Servicing Agreement and the Servicing Agreement.

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     In Witness Whereof, the Subservicer and the Servicer have caused their names to be signed to this Subservicing Agreement by their respective officers duly authorized as of the date first above written.

SERVICER: MOREQUITY, INC.
By:
	Name:
	Title:

SUBSERVICER NATIONSTAR MORTGAGE LLC
By:
	Name:
	Title:

SERVICING AGREEMENT — Signature Page

EXHIBIT A

MORTGAGE LOAN DATA FIELD REQUEST SCHEDULE

Exhibit A-Mortgage Loan Data Field Request

Please refer to the schedule below for Mortgage Loan Data Requirements.

	Refer Page # in
	Servicing Transfer
Mortgage Data Related To:	Instructions
LOAN LEVEL DATA FILE	5
CONVERSION REPORTS	6
Trial Balance Report	6
ACH Report	7
System Codes and Data Dictionary Report	7
Transaction and Disbursement History Report	7
Odd Due Date Loan Report	8
Second Liens Report	8
Non-Solicitation Report	8
Outstanding Trailing Docs Report	8
Escrow Analysis History Report	8
Adjustable Rate Mortgages	8
Payment Option ARMs	9
Interest Only Loans	10
Balloon Loans	10
Buydown Loans	10
LOAN TYPE OR PLAN INFORMATION	11
ESCROWED LOAN INFORMATION	15
INSURANCE (HAZARD, FLOOD, ETC...)	17
REAL ESTATE TAXES	21
PENDING TAX SALES	21
TAX	21
MORTGAGE INSURANCE	23
VENDOR REQUIREMENTS	24
CREDIT LIFE AND OTHER OPTIONAL PRODUCTS	26
CLAIMS PROCESS	26
SOLDIER’S AND SAILOR’S CIVIL RELIEF ACT OF 1940 (SSCRA)	31
LOSS MITIGATION AND COLLECTION ACTIVITY	32
BANKRUPTCY	35
FORECLOSURE	37
REO	40
HAMP REQUIREMENTS	47
HAFA REQUIREMENTS	57

EXHIBIT B

SERVICING TRANSFER INSTRUCTIONS

EXHIBIT B

Nationstar Mortgage LLC — Servicing
Transfer Instructions

EXHIBIT B

SERVICING TRANSFER INSTRUCTIONS
TABLE OF CONTENTS

Introduction
Important Servicing Transfer Dates
Secured Data Transmission
Loan Level Data File
Loan Level Data File Specifications
Conversion Reports
Loan Type or Plan Information
Investor Reporting and Remittance Requirements
Balance Settlement
Mortgagor Notification
Escrowed Loan Information
Escrow Procedures
Escrowed Loan Report
Hazard Insurance
Real Estate Taxes
Mortgage Insurance
Vendor Requirements
Tax
Insurance (Flood and Hazard)
Flood
Credit Life and Other Optional Products
Claims Process
Records and Files
MERS Notification
IRS Reporting
Litigation (This is covered in the Transfer Letter) / Update to show pre&post
Partial Releases
Subordinations
Qualified Written Requests (RESPA)
Mortgagor Name Changes
Soldier’s and Sailor’s Civil Relief Act of 1940 (SSCRA)
Loss Mitigation and Collection Activity
Bankruptcy
Foreclosure File Report
REO
Mortgagor Recoverable Corporate Advances
Release of Title, Payoff Requests and Payoff Funds Received After Transfer
Automatic Payment Plans, Mortgage Payments or other checks received after Transfer
Dishonored Payments after Transfer and Misapplied payments
Correspondence Received After Transfer
HAMP Requirements
HAFA Requirements

© 2008 Nationstar Mortgage LLC. “The information within this document is confidential and provided solely for the internal use of Nationstar Mortgage LLC. This document is an intellectual property of Nationstar Mortgage LLC, and is protected under copyright laws of the United States. This material should not be released to any third party supplier without the Previous written approval Nationstar Mortgage LLC.”

Page 1

EXHIBIT B

Introduction

The Previous Servicer agrees to coordinate with Nationstar Mortgage LLC (the “Servicer”) to affect an efficient and orderly Servicing Transfer. On the Servicing Transfer Date Previous Servicer shall deliver to Servicer with respect to all Mortgage Loans all records, files and information required to complete the Servicing Transfer.

The Previous Servicer agrees to provide the Servicer with preliminary data files and reports prior to the Servicing Transfer Date as specified on Important Servicing Transfer Dates schedule and Servicing Transfer Timeline. Unless otherwise specified all reports will be in an electronic format acceptable to the Servicer.

The Previous Servicer agrees to use all reasonable efforts to comply with the requirements set forth herein. The Servicer acknowledges, however, that in some instances the Previous Servicer’s systems may not permit such compliance. In such event, the Servicer agrees to work with the Previous Servicer in good faith to accommodate the Previous Servicer’s systems’ limitations.

Any questions regarding the Servicing Transfer Instructions/Servicing Transfer should be directed to Scott Tenery, contact information listed below. Nationstar and the Previous Servicer will exchange functional and department level contact information no later than 30 days prior to the servicing Transfer Date.

Scott Tenery
Vice President
Nationstar Mortgage LLC
350 Highland Drive
Lewisville, Texas 75067
Phone: 469-549-6405
Scott.Tenery@nationstarmail.com

Unless directed otherwise within the Servicing Transfer Instructions, all data files and reports should be directed to:

Nationstar Mortgage LLC
Attn: Jennifer Dancer
350 Highland Drive
Lewisville, Texas 75067
Phone: 469-549-2110
Email: Jennifer.Dancer@nationstarmail.com

Unless directed otherwise, herein, all documents, records, files, notices and other communications must be directed to:

Nationstar Mortgage LLC, File Services
Attn: Keenan Cain
350 Highland Drive
Lewisville, Texas 75067
Phone: 469-549-3241
Email: Keenan.Cain@nationstarmail.com

© 2008 Nationstar Mortgage LLC. “The information within this document is confidential and provided solely for the internal use of Nationstar Mortgage LLC. This document is an intellectual property of Nationstar Mortgage LLC, and is protected under copyright laws of the United States. This material should not be released to any third party supplier without the Previous written approval Nationstar Mortgage LLC.”

Page 2

EXHIBIT B

Important Servicing Transfer Dates

Dates for this Servicing Transfer are set as follows:

Servicing Transfer Date:	XX/XX/XXXX
Delivery of Preliminary Loan Level Data & Reports:	XX/XX/XXXX
Goodbye Letter Deadline Date:	XX/XX/XXXX
Servicing Transfer Cutoff Date (close of business)	XX/XX/XXXX
Delivery of Final Loan Level Data & Reports:	XX/XX/XXXX
Servicing Transfer Settlement	XX/XX/XXXX

© 2008 Nationstar Mortgage LLC. “The information within this document is confidential and provided solely for the internal use of Nationstar Mortgage LLC. This document is an intellectual property of Nationstar Mortgage LLC, and is protected under copyright laws of the United States. This material should not be released to any third party supplier without the Previous written approval Nationstar Mortgage LLC.”

Page 3

EXHIBIT B

Secured Data Transmission

All data transmissions to Servicer should be through a secure FTP site with PGP encryption. To set up the FTP data transmission, contact:

Davis Kersey
Nationstar Mortgage LLC
469-549-2444
Davis.Kersey@nationstarmail.com

© 2008 Nationstar Mortgage LLC. “The information within this document is confidential and provided solely for the internal use of Nationstar Mortgage LLC. This document is an intellectual property of Nationstar Mortgage LLC, and is protected under copyright laws of the United States. This material should not be released to any third party supplier without the Previous written approval Nationstar Mortgage LLC.”

Page 4

EXHIBIT B

Loan Level Data File

The Previous Servicer agrees to provide all necessary Loan Level Data and Conversion Reports in a file format agreed upon by all parties. Nationstar’s preferred format is noted below in the Loan Level Data File Specifications section. The Previous Servicer agrees to support the Servicer in data mapping and testing prior to the Servicing Transfer Date. The Final Data Tapes & Conversion Reports should be prepared as of the Servicing Transfer Cutoff Date.

Loan Level Data File Specifications

The Loan Level Data Files should be provided in a fixed width format (ASCII TXT) or a comma delimited format (ASCII CSV). If the fixed width format is provided, then a detailed File Layout should accompany each file with the following:

Ø	Field name
Ø	Type/Attribute (to include decimal precision and implicit/explicit decimal point representation)
Ø	Starting position
Ø	Ending position

If a comma delimited format is provided, then a detailed File Layout should accompany each file with the following:

Ø Field name

Ø Field Type: include decimal precision and non-numeric fields should be delimited with double quotes (“ “)

Loan Level Data Requirements:

The Previous Servicer will provide loan level data on all loans to including but not limited to the following items:

Ø	Loan Master File
Ø	Borrower Information (Names, Address, Note Relationship, all Secondary Info, Contact & Employment info, etc.)
Ø	Property Information (Legal Description, Address, Property Type, Occupancy Status, etc)
Ø	Loan Characteristics (term, payment amounts, interest rate, lien position, channel or land home, etc.)
Ø	Unpaid Principal Balance and other loan level balances (e.g., Corporate Balances, Corporate Expenses, Suspense, Fees, Escrow, etc.)
Ø	Dates (first payment due date, next payment due date, etc.)
Ø	Corporate Advance Detail (e.g., need breakdown by attorney fees, BPO, Inspections, Recording Fees, Bankruptcy, Foreclosure, etc.)
Ø	Corporate Expense Detail
Ø	Escrow Advance Detail
Ø	Suspense Detail (e.g., need breakdown by Pre-Petition, Post-Petition, Forbearance, etc.)
Ø	Fee Details
Ø	ACH Data (Routing Number, Account Number, Last Draft Date, etc.)
Ø	Escrow Information (Escrow Pmt, Tax Lines — including installments, Hazard Insurance Lines, MIP/PMI, etc.)
Ø	Pending ARM Rate/Payment Changes
Ø	Pending Escrow Payment Changes
Ø	Interest Only Data
Ø	Balloon Data

© 2008 Nationstar Mortgage LLC. “The information within this document is confidential and provided solely for the internal use of Nationstar Mortgage LLC. This document is an intellectual property of Nationstar Mortgage LLC, and is protected under copyright laws of the United States. This material should not be released to any third party supplier without the Previous written approval Nationstar Mortgage LLC.”

Page 5

EXHIBIT B

Ø	Buydown/Subsidy Data
Ø	ARM Specifications/Change File
Ø	Flood Determination
Ø	Collection and Customer Service Comments
Ø	MERS and MIN information
Ø	Transaction History
Ø	Escrow Analysis History
Ø	ARM history
Ø	Second Lien indicator
Ø	Payment Option Specifications (Option terms, caps, ceilings, floors, change dates, etc.)
Ø	Origination Data (Original LTV, Originator, Original Occupancy Status, etc.)
Ø	Foreclosure Data (e.g. Demand Date, FC Sale Date, Attorney, etc.)
Ø	Bankruptcy Data (e.g. Chapter, Filed Date, POC, Attorney, etc.)
Ø	REO Data (e.g. Occupancy Status, Eviction Status, Eviction Date, etc.)
Ø	Loss Mitigation Data (e.g. status, type, approval date, updated values, borrower financials, # of previous workouts, HAMP/HAFA solicited, etc.)
Ø	Skip Trace Information
Ø	HAMP Data (e.g. Required Treasury Reporting)
Ø	Loss Mitigation Indicator (e.g. Workout, Pending Short Sale, Forbearance, etc.)
Ø	Modification Flag and Type (e.g. HAMP, Cap Mod, etc.)

Conversion Reports

Each Conversion Report and other reports requested throughout the Servicing Transfer Instructions should be provided electronically in Excel format. Please include loan number and mortgagor name along with the additional data elements requested in all reports. Each report is required pre-transfer with an updated report provided post-transfer. The pre-transfer report needs to be provided as part of the preliminary data with the final report provided as defined under Delivery of Final Loan Level Data & Reports.

The Previous Servicer shall provide the following Conversion Reports:

    1.   Trial Balance Report

          A Trial Balance Report as of the Servicing Transfer Cutoff Date with the following required data:

Ø	Previous Servicer loan number
Ø	Mortgagor Last name
Ø	Mortgagor First Name
Ø	Mortgagor Middle Name
Ø	Interest rate
Ø	Service fee rate
Ø	Unpaid principal balance
Ø	Escrow balance
Ø	Escrow advance balance
Ø	Next due date
Ø	P&I payment
Ø	Total monthly payment

© 2008 Nationstar Mortgage LLC. “The information within this document is confidential and provided solely for the internal use of Nationstar Mortgage LLC. This document is an intellectual property of Nationstar Mortgage LLC, and is protected under copyright laws of the United States. This material should not be released to any third party supplier without the Previous written approval Nationstar Mortgage LLC.”

Page 6

EXHIBIT B

Ø	Unapplied/suspense funds balance, including breakdown of the type of unapplied/suspense funds balance
Ø	Accrued interest
Ø	Interest on escrow accrual
Ø	Recoverable corporate advance amount, including breakdown of the type of corporate advance
Ø	Accrued late charges
Ø	Deferred late charges
Ø	Hazard expense
Ø	Escrow payment

2.	Data Balancing Report
	A Data Balancing Report including loan level detail with the following required data:

Ø	Previous Servicer loan number
Ø	Mortgagor name
Ø	Unpaid principal balance
Ø	Escrow balance
Ø	Escrow advance balance
Ø	P&I payment
Ø	Escrow payment
Ø	A&H payment amount
Ø	Credit life payment amount
Ø	Total monthly payment
Ø	Next due date
Ø	Interest rate
Ø	Interest on escrow accrual
Ø	Recoverable corporate advance amount, including breakdown of the type of corporate advance
Ø	Unapplied/suspense funds balance, including breakdown of the type of unapplied/suspense funds balance
Ø	Buydown subsidy balance (replacement reserve)
Ø	Pending escrow payment
Ø	Pending escrow payment effective date

3.	ACH Report
	An ACH report including loan level detail with the following required data:

Ø	Previous Servicer loan number
Ø	Mortgagor Last name
Ø	Routing Number
Ø	Account Number
Ø	Account Type (checking or savings)
Ø	Last Draft Date
Ø	Next Draft Date

© 2008 Nationstar Mortgage LLC. “The information within this document is confidential and provided solely for the internal use of Nationstar Mortgage LLC. This document is an intellectual property of Nationstar Mortgage LLC, and is protected under copyright laws of the United States. This material should not be released to any third party supplier without the Previous written approval Nationstar Mortgage LLC.”

Page 7

EXHIBIT B

Ø	Draft Day
Ø	Draft Frequency (e.g. monthly, weekly, biweekly, etc.)
Ø	Draft Amount
Ø	Additional Principle Amount
Ø	Total Draft Amount

4.	System Codes and Data Dictionary Report
	A report detailing all system code descriptions required to analyze and load the loan data including file names, field names, field descriptions, valid values and field sizes for each field within each file.
5.	Transaction and Disbursement History Report
	A loan level report listing all available transaction and disbursement history from loan Origination Date to the Transfer Date should be provided. An electronic version of the transaction history report should also be provided in a flat file ‘as-is’ with carriage control characters. If hardcopy is only possible, one copy should be provided in the servicing file and a second copy sent to the address provided on page 1. Transaction balances on the loan histories must agree with the balances on the final trial balance report.
6.	Master Vendor List Report
	A report of all vendors used for tax service, hazard insurance, flood insurance, force-placed insurance and taxing authorities that are not serviced by a tax service, including loan number, property address, vendor name, vendor address, vendor id, vendor.
7.	Odd Due Date Loan Report
	A report of all loans with odd due dates (not on the first of the month), including payment history for the life of the loan.
8.	Second Liens Report
	A report of second lien loans, including name/address/phone number of holder of the first lien.
9.	Non-Solicitation Report
	A report of loans for which the borrower has requested no solicitation include a list of each product for which solicitation is not allowed and the solicitation method prohibited (telephone, fax, email, etc.).
10.	Outstanding Trailing Documents Report
	A report of all outstanding trailing documents, including the date sent for recording/filing.

© 2008 Nationstar Mortgage LLC. “The information within this document is confidential and provided solely for the internal use of Nationstar Mortgage LLC. This document is an intellectual property of Nationstar Mortgage LLC, and is protected under copyright laws of the United States. This material should not be released to any third party supplier without the Previous written approval Nationstar Mortgage LLC.”

Page 8

EXHIBIT B

11.	Escrow Analysis History Report
	An electronic version of the escrow analysis history report should be provided in a flat file ‘as-is’ with carriage control characters. If hardcopy is only possible, one copy should be provided in the servicing file and a second copy sent to the address provided on page 2.
12.	Adjustable Rate Mortgages/Interest Only/Balloon/Buydowns Report

The Previous Servicer shall provide five examples in printed form of the Note and ARM rider for each ARM plan in the service transfer and a loan level report listing the following information for all ARM, Interest Only and Balloon loans and

Adjustable Rate Mortgages

Ø	All ARM Mortgage loans
Ø	Individual loan historical rate and P&I changes
Ø	Due date
Ø	Current interest rate
Ø	Current P&I
Ø	Unpaid Principal Balance
Ø	All ARM Mortgage Loans with pending interest rate and or P&I change dates
Ø	Any ARM Mortgage Loans with pending effective interest rate or payment changes dates equal to or within ninety (90) days before the Transfer Date
Ø	Pending interest rate
Ø	Pending P&I
Ø	Pending effective date
Ø	ARM plan identifier (2/28, 3/27, etc.)
Ø	ARM Plan ID/ Product Code
Ø	ARM Plan Definition
Ø	Plan Code/Product Type
Ø	First Payment Date
Ø	Margin
Ø	Max Rate
Ø	Min Rate
Ø	Period Caps — Up at 1st change
Ø	Period Caps — Down at 1st change
Ø	Period Caps — Up at Subsequent changes
Ø	Period Caps — Down at Subsequent changes
Ø	First interest change date
Ø	Month between changes thereafter
Ø	Index being used
Ø	Index History
Ø	Look Back Period
Ø	Rounding
Ø	Interest Only loan indicator (Y/N)
Ø	Interest Only period
Ø	Upcoming ARM changes

© 2008 Nationstar Mortgage LLC. “The information within this document is confidential and provided solely for the internal use of Nationstar Mortgage LLC. This document is an intellectual property of Nationstar Mortgage LLC, and is protected under copyright laws of the United States. This material should not be released to any third party supplier without the Previous written approval Nationstar Mortgage LLC.”

Page 9

EXHIBIT B

Payment Option ARMs

Ø	Original UPB
Ø	Current UPB
Ø	Due Date
Ø	Original Minimum Payment
Ø	Current Minimum Payment
Ø	Current Payment Options
Ø	Original Interest Rate
Ø	Current Interest Rate
Ø	Historical Rate Changes
Ø	Historical P&I Changes
Ø	All Pending Interest Rate Changes and/or P&I Changes
Ø	POA Plan Type
Ø	POA Plan Definition
Ø	POA Plan Payment Options
Ø	Current Index
Ø	Index History
Ø	Look Back Period
Ø	Round Factor
Ø	Minimum Rate
Ø	Maximum Rate
Ø	Interest Only Indicator (Y/N)
Ø	Interest Only Period
Ø	First Interest Adjustment Date
Ø	Next Interest Adjustment Date
Ø	Interest Adjustment Frequency
Ø	Interest Adjustment Period Caps
Ø	First Payment Adjustment Date
Ø	Next Payment Adjustment Date
Ø	Payment Adjustment Frequency
Ø	Payment Adjustment Period Caps
Ø	Maximum Payment Cap
Ø	Maximum Principal Balance %
Ø	Current Principal Balance %
Ø	Loan amortizing at P&I due to exceeding max prin bal (Y/N)
Ø	Required Fully Amortized Payment Frequency
Ø	Months between Subsequent Fully Amortized Payment Changes
Ø	Negative Amortization Balance

© 2008 Nationstar Mortgage LLC. “The information within this document is confidential and provided solely for the internal use of Nationstar Mortgage LLC. This document is an intellectual property of Nationstar Mortgage LLC, and is protected under copyright laws of the United States. This material should not be released to any third party supplier without the Previous written approval Nationstar Mortgage LLC.”

Page 10

EXHIBIT B

Interest Only Loans

Ø	All Interest Only loans
Ø	Interest Only expiration date
Ø	Interest Only term (in months)
Ø	Reset option regarding curtailments during the interest only period (Y/N)
Ø	Interest only payment type (recast or fixed)

Balloon Loans

Ø	All Balloon loans
Ø	Reset option indicator
Ø	Current interest rate
Ø	Due date
Ø	Maturity date
Ø	Amortization term
Ø	Unpaid Principal Balance
Ø	Reset option (Y/N)
Ø	Reset option in process (Y/N)
Ø	Daily Simple Interest
Ø	Servicer shall provide a listing of all daily simple interest loans and the interest calculation method (e.g. 360, 365)

Buydown Loans

Ø	All buydown subsidy loans
Ø	Due date
Ø	Total monthly payment
Ø	Monthly buydown subsidy amount
Ø	Remaining buydown balance
Ø	Schedule of future monthly buydown payments
Ø	Effective dates of buydown payment changes
Ø	Buydown terms
Ø	Buydown calculation
Ø	SSCRA Loan (Y/N)
Ø	CORP Subsidy Loan (Y/N)

Loan Type or Plan Information

The Previous Servicer shall provide a listing of all ARM Plan Codes and ARM Index Code Definitions as well as a sample Note and Interest Only addendum for each ARM, Balloon and Interest Only product plans and definitions for loans being transferred with the Preliminary Data. All codes and definitions shall be provided 30 days prior to transfer.

All applicable ARM Specifications and Rate and Payment Change Histories should be provided electronically for any loan that has gone through an ARM change.

At time of the Servicing Transfer, please provide a listing of loans that were not adjusted due to the release of the index (e.g., 11^th district COFI).

© 2008 Nationstar Mortgage LLC. “The information within this document is confidential and provided solely for the internal use of Nationstar Mortgage LLC. This document is an intellectual property of Nationstar Mortgage LLC, and is protected under copyright laws of the United States. This material should not be released to any third party supplier without the Previous written approval Nationstar Mortgage LLC.”

Page 11

EXHIBIT B

Investor Reporting and Remittance Requirements

Investor Cutoff

The Previous Servicer agrees to schedule an Investor Cutoff (including all monetary activity) as of the Servicing Transfer Cutoff Date so that all standard cutoff and remittance reports are produced. Previous Servicer should not adjust any reporting or remitting to backdate payoffs occurring after the Investor Cutoff into the prior cutoff period. The Previous Servicer is responsible for any required reporting and remitting, as is normally completed, on all Investor Cutoffs prior to the Servicing Transfer Date. This includes remittance of guaranty fees related to the cutoff date immediately preceding the Servicing Transfer Date. Adjustments to over and under collateralized pools should be limited to those in excess of $5,000.

Cutoff & Remittance Reports

The Previous Servicer agrees to provide the following cutoff and remittance reports in an electronic format (Excel) acceptable to Servicer within 10 days subsequent to the Servicing Transfer Date.

• Report of Pending Transfer loans by old and new investor

• Report of loan level and pool level security balances reported at investor cutoff, including adjustments done for over and under collateralization and for partial pool transfers

• List and supporting documentation for all manual and systematic adjustments completed post cutoff, including documentation before and after adjustment

• List of all Pool to Security differences, with explanations for those greater than $1,000

• List of all loan level rejects for the investor cutoff immediately preceding Transfer Date

• Monthly ARM reset report —includes new P&I payment and interest rate

The Previous Servicer will provide a contact that will assist with requests resulting from customer inquiries related to outstanding and canceled check copies.

The above investor reports should be provided to:

Nationstar Mortgage LLC
Attn: Investor Reporting/Juanita Gomez
350 Highland Drive
Lewisville, Texas 75067
469-549-6296
Juanita.Gomez@nationstarmail.com

© 2008 Nationstar Mortgage LLC. “The information within this document is confidential and provided solely for the internal use of Nationstar Mortgage LLC. This document is an intellectual property of Nationstar Mortgage LLC, and is protected under copyright laws of the United States. This material should not be released to any third party supplier without the Previous written approval Nationstar Mortgage LLC.”

Page 12

EXHIBIT B

Balance Settlement

Escrow funds for tax and insurance as of the Servicing Transfer Cutoff Date should be wire transferred to the Servicer on or before the Servicing Transfer Settlement Date along with all other positive balance information. Loan level detail on how the wire should be applied must be provided to both Nationstar and the controlling party.

Servicer’s wiring instructions are:

JPM Chase
Dallas, Texas 75201
ABA#: 111000614
ACCT#: 1563367653
For further credit to: Nationstar Mortgage LLC, Payment Clearing
Attn: Service Transfer Balances / Juanita Gomez

Loan Level Data Requirements

• Prior Servicer Loan Number

• Escrow Balance

• Suspense (e.g. borrower suspense, pre or post petition money, subsidy, forbearance, etc.)

• Hazard Loss Suspense

• Sale Proceeds

© 2008 Nationstar Mortgage LLC. “The information within this document is confidential and provided solely for the internal use of Nationstar Mortgage LLC. This document is an intellectual property of Nationstar Mortgage LLC, and is protected under copyright laws of the United States. This material should not be released to any third party supplier without the Previous written approval Nationstar Mortgage LLC.”

Page 13

EXHIBIT B

Mortgagor Notification

The Previous Servicer shall mail the mortgagor notifications at least 15 days prior to the Servicing Transfer Date. In addition, the Previous Servicer must provide the Servicer with a copy of the Goodbye Letter for review and approval at least two days prior to the mailing date.

Immediately after mailing the Goodbye Letters, the Previous Servicer will provide Servicer with the electronic mailing manifest used for the letters. This must include all variable fields such as mortgagor name, mailing address, property address, loan number, letter date and transfer date. In addition, electronic files must be provided within 24 hours of mailing or hard copies of the Goodbye Letters should be retained in the servicing file to be transferred to the Servicer.

The following Nationstar Mortgage LLC contact information must be provided in the Combined RESPA compliant Goodbye Letter:

Customer Service Hours of Operation:

Monday through Thursday 8:00 am to 8:00 pm Central Standard Time,
Friday 8:00 am to 5:00 pm Central Standard Time

Customer Service Toll Free Number:

1-877-372-0512 extension 25

Correspondence Address:

Nationstar Mortgage LLC
Attn: Customer Service
350 Highland Drive
Lewisville, Texas 75067

Payment Address:

Nationstar Mortgage LLC
Attn: Payment Processing
P. O. Box 650783
Dallas, Texas 75265-0783

The Goodbye Letter must also advise the Mortgagor that any existing Optional Insurance with the Previous Servicer will be discontinued on or before the Servicing Transfer Date. The Mortgagor may contact the Servicer to obtain the Servicer’s available options.

In the event a Goodbye Letter is sent to a Mortgagor in error (i.e., the servicing for the related Mortgage Loan is not transferred to the Servicer), then the Previous Servicer shall immediately send (on behalf of itself and Servicer) a second letter to such Mortgagor advising such Mortgagor that the servicing transfer will not take place.

© 2008 Nationstar Mortgage LLC. “The information within this document is confidential and provided solely for the internal use of Nationstar Mortgage LLC. This document is an intellectual property of Nationstar Mortgage LLC, and is protected under copyright laws of the United States. This material should not be released to any third party supplier without the Previous written approval Nationstar Mortgage LLC.”

Page 14

EXHIBIT B

Escrowed Loan Information

The Previous Servicer should provide the following information for all escrowed loans

Escrow Procedures

Within 25 days prior to transfer the Previous Servicer will discuss procedures as it relates to the following to allow for a smooth transfer:

• History Lender Forced Placed Insurance letters

• Escrow Analysis Schedule

• Interest on Escrow Schedule

• Blanket policies for REO loans (as applicable)

• Blanket policies for non first lien and REOs (as applicable)

• Escrow Advances: How reconciled and recovered

• Payment policies for delinquent taxes

Escrowed Loan Report

The Previous Servicer shall provide a loan level Excel report listing the following information for all loans with Escrow and/or Partial Escrow. Each report is required pre-transfer with an updated report provided post-transfer. The pre-transfer report needs to be provided as part of the preliminary data with the final report provided as defined under Delivery of Final Loan Level Data & Reports.

Ø	Escrow Type (tax, insurance or both)
Ø	Escrow payment type (escrowed, lender forced place, non-escrowed)
Ø	Date of Last Escrow Analysis
Ø	Escrow Analysis History
Ø	Escrow Analysis Schedule
Ø	Escrow Advances
Ø	Interest on Escrow Schedule

Hazard Insurance

Ø	Agent and Insurance Company payee codes
Ø	Expiration date
Ø	Due date
Ø	Payment Term
Ø	Payment or accrual amount
Ø	Coverage amount
Ø	Coverage Type (force-placed or borrower paid)
Ø	Coverage types (wind, hazard, flood)
Ø	Policy Number(s)
Ø	File representing all corporate advances relating to insurance
Ø	Reporting on REO coverage (as applicable)
Ø	Blanket policies for non first liens and REO (as applicable)

© 2008 Nationstar Mortgage LLC. “The information within this document is confidential and provided solely for the internal use of Nationstar Mortgage LLC. This document is an intellectual property of Nationstar Mortgage LLC, and is protected under copyright laws of the United States. This material should not be released to any third party supplier without the Previous written approval Nationstar Mortgage LLC.”

Page 15

EXHIBIT B

Ø Indicator by Escrow/Coverage Type to determine escrowed or non-escrowed

Flood Determination

Ø	Evidence of Flood contract (certification number)
Ø	Determination date
Ø	Contract type
Ø	Community Number
Ø	Panel
Ø	Suffix
Ø	Flood zone
Ø	Program status
Ø	Map Date

Other Escrow Related Items

Ø	Escrow Analysis has not been performed within the last twelve (12) months
Ø	Explanation for non-compliance of Escrow Analysis guidelines
Ø	Pending Escrow Analysis
Ø	Escrow Analysis history for the last two years
Ø	Escrow disbursement stops
Ø	Explanation for the escrow stop
Ø	Date of escrow stop
Ø	Escrow stop expiration date
Ø	Interest on escrow paid
Ø	Loan level percentage of interest on escrow paid
Ø	Stale escrow refund checks
Ø	Amount of stale escrow refund
Ø	Date of stale escrow refund transaction
Ø	Vendor name of stale escrow refund check
Ø	Form ME-2 New Jersey Escrow Account Transaction Notice must be filed
Ø	Insurance or tax expiration date within 30 days after the Transfer Date
Ø	List of all outstanding research cases with current service level agreement and Mortgagor’s expectations
Ø	Property Type
Ø	Suspense Items and audit/reconciliation post transfer

Escrowed Loan Requirements

With respect to the Mortgage Loans the Previous Servicer shall pay all hazard and flood insurance premiums which become due prior to and within thirty (30) days following the Servicing Transfer Date, and all real estate taxes for which the economic loss date is within thirty (30) days following the Servicing Transfer Date, assuming the bills are available for payment, and shall indemnify the Servicer against any tax penalties incurred prior to the Servicing Transfer Date or uninsured losses due to the non-payment of premiums or policy cancellation.

The Previous Servicer shall credit all accrued interest due on escrow to the individual accounts prior to the Servicing Transfer Date and provide confirmation of such to the Servicer.

© 2008 Nationstar Mortgage LLC. “The information within this document is confidential and provided solely for the internal use of Nationstar Mortgage LLC. This document is an intellectual property of Nationstar Mortgage LLC, and is protected under copyright laws of the United States. This material should not be released to any third party supplier without the Previous written approval Nationstar Mortgage LLC.”

Page 16

EXHIBIT B

All Escrow Analysis reports or statement copies should be forwarded to:

Nationstar Mortgage LLC
Attn: Escrow Administration/Sharon Goody
350 Highland Drive
Lewisville, Texas 75067
469-549-2005
Sharon.Goody@nationstarmail.com

Hazard Insurance

The Previous Servicer shall provide a loan level Excel report listing the following information for all loans. Each report is required pre-transfer and post-transfer. The pre-transfer report needs to be provided as part of the preliminary data with the final report provided as defined under Delivery of Final Loan Level Data & Reports.

Ø	Hazard insurance flag
Ø	Flood insurance flag
Ø	Agent and Insurance Company payee codes with full descriptions
Ø	Expiration date
Ø	Due date
Ø	Payment type escrowed or non-escrowed for each line (hazard, flood, etc.)
Ø	Payment term
Ø	Payment amount
Ø	Coverage amount
Ø	Coverage types with descriptions
Ø	Policy Number
Ø	Loans with Force Placed Insurance policy in effect
Ø	Indication of binder or policy for Force Placed Insurance
Ø	Force Placed Insurance payment method (monthly/annual)
Ø	Terms of Force Placed Insurance
Ø	Loans with damaged property
Ø	Hazard loss claims in process
Ø	Interest on Hazard Loss Schedule
Ø	Date of last property inspection
Ø	Detail on Inspection frequency for Hazard Loss — draw schedule/disbursement procedures
Ø	Maintenance results
Ø	BPO or appraisal results
Ø	Loans with an open insurance loss claim
Ø	Insurance Agent name
Ø	Insurance Agent contact number
Ø	Date claim opened
Ø	Date settled

© 2008 Nationstar Mortgage LLC. “The information within this document is confidential and provided solely for the internal use of Nationstar Mortgage LLC. This document is an intellectual property of Nationstar Mortgage LLC, and is protected under copyright laws of the United States. This material should not be released to any third party supplier without the Previous written approval Nationstar Mortgage LLC.”

Page 17

EXHIBIT B

Ø	Insurance proceeds received
Ø	Insurance proceeds available
Ø	Type of loss
Ø	Status of repairs
Ø	Loans affected by Hurricane Katrina
Ø	Hurricane Katrina total hazard loss amount
Ø	Hurricane Katrina hazard loss funds deposit date
Ø	Hurricane Katrina hazard loss funds disbursement date
Ø	Hurricane Katrina claim type (hazard, flood, wind)
Ø	Hurricane Katrina total number of days funds in hazard loss
Ø	Hurricane Katrina interest paid on hazard loss funds (Y/N)
Ø	If yes, interest rate and schedule
Ø	Hurricane Katrina general comments
Ø	MS and LA Road Home Program
Ø	Loans in Federally Declared Disaster Areas (FDDA)
Ø	FDDA refund amount
Ø	FDDA deposit date
Ø	Loans with Flood Insurance and all Flood Insurance data
Ø	Flood Insurance vendor name
Ø	Life of Loan status
Ø	Determination date
Ø	Certificate number
Ø	Open Flood zone disputes
Ø	Reporting on Vacant Properties — Active Claims

The Previous Servicer shall provide the following information:

Ø	Evidence that the Flood Contract Vendor(s) have been notified to transfer Life of Loan Flood Contracts to Nationstar Mortgage LLC.
Ø	Vendor Name, contact information, website access, if applicable.
Ø	Vendor issued compliance data file to include: Determination Date, Certificate Number, Contract Type, Community Number, Panel, Suffix, Flood Zone, Program Status, and Map Date.

Cancellation of Forced Placed Insurance

As of the Servicing Transfer Date the Previous Servicer must cancel any Force Placed Hazard or Flood coverage in effect.

Insurance Loss Draft Handling

The Previous Servicer must provide a properly documented file for each Mortgage Loan with an insurance loss draft claim. This file shall include the following information:

Ø	Date claim filed
Ø	Cause
Ø	State
Ø	Delinquent amount
Ø	Amount of the loss

© 2008 Nationstar Mortgage LLC. “The information within this document is confidential and provided solely for the internal use of Nationstar Mortgage LLC. This document is an intellectual property of Nationstar Mortgage LLC, and is protected under copyright laws of the United States. This material should not be released to any third party supplier without the Previous written approval Nationstar Mortgage LLC.”

Page 18

EXHIBIT B

Ø	Amount of insurance proceeds received to date
Ø	Date hazard funds deposited
Ø	Hazard loss funds disbursement date
Ø	Amount of available hazard loss funds
Ø	Hazard/claim type (hazard, flood, wind)
Ø	Hurricane Katrina (Y/N)
Ø	Notes from conversations with or information received from contractors
Ø	Correspondence to or from insurance companies and/or Mortgagor
Ø	Status of the repairs
Ø	Inspection reports
Ø	Report of expected future proceeds
Ø	Total number of days hazard loss funds held
Ø	Detailed listing of all funds received and disbursed to date

The Loss Draft file must be provided within five (5) business days of the Servicing Transfer and delivered to:

Nationstar Mortgage LLC
Attn: Escrow Administration/Sharon Goody
350 Highland Drive
Lewisville, Texas 75067
469-549-2005
Sharon.Goody@nationstarmail.com

Insurance Agent Notification of Servicing Transfer

With respect to the Mortgage Loans, the Previous Servicer shall transmit to the applicable insurance companies or agents, notification of the transfer of the servicing to the Servicer and instructions to deliver all notices and insurance statements, as the case may be, to the Servicer from and after the Transfer Date. Such notices shall specify the new mortgagee clause. The Previous Servicer shall provide the Servicer with copies of all such notices (at the address below) or shall provide an Officer’s Certification that such notices were produced and transmitted as specified herein and within five days of the Transfer Date.

Servicer Insurance Mortgagee Clause

The new mortgagee clause applicable to all hazard, flood and miscellaneous (i.e., wind, earthquake, mine, etc.) will read as follows:

Nationstar Mortgage LLC
Its successors and/ or assigns
P.O. Box 7729
Springfield, Ohio 45501-7729
Toll Free Number: (866) 825-9267

Mississippi & Louisiana Road Home Program Loans

© 2008 Nationstar Mortgage LLC. “The information within this document is confidential and provided solely for the internal use of Nationstar Mortgage LLC. This document is an intellectual property of Nationstar Mortgage LLC, and is protected under copyright laws of the United States. This material should not be released to any third party supplier without the Previous written approval Nationstar Mortgage LLC.”

Page 19

EXHIBIT B

The Previous Servicer shall also provide loan files currently participating in the Mississippi and Louisiana “Road Home” programs (via LA File Zilla report or excel spreadsheet). Include the unpaid principal balance, loan detail, total funds in hazard loss and rebuild or payoff option.

Transfer of Life of Loan Flood Contracts

The Previous Servicer shall affect the transfer of Life of Loan Flood Contracts/Data to Servicer

§	The Previous Servicer shall notify Nationstar Mortgage LLC of existing Life of Loan (LOL) transferable contracts and the current vendor (Second liens must be assigned their own Flood Contract).
§	Fifteen (15) days prior to Servicing Transfer:

t	Contact your Flood Insurance representative to request that all LOL contracts are transferred to Nationstar Mortgage LLC. Provide your contact with a loan level listing of transferring loans including Previous Servicer’s loan number, name, and property address of the borrower.
t	Previous Servicer will confirm to Servicer that pre- Servicing Transfer processing is complete.

§ Within at least five (5) business days after the Servicing Transfer date:

Ø	Evidence that the Flood Contract Vendor(s) have been notified to transfer Life of Loan Flood Contracts to Nationstar Mortgage LLC.
Ø	Vendor Name, contact information, website access, if applicable.
Ø	Vendor issued compliance data file to include: Determination Date, Certificate Number, Contract Type, Community Number, Panel, Suffix, Flood Zone, Program Status, and Map Date.

Should you have specific questions regarding the transfer of flood data, you may contact a member of the Servicer’s Flood Compliance Team.

Nationstar Mortgage LLC, Flood Compliance
Attn: Sharon Goody
350 Highland Drive
Lewisville, Texas 75067
469-549-2005
Sharon.Goody@nationstarmail.com

Please include the following individual(s) in any email correspondence to the Vendor or for any Post-Service Transfer Flood issues:

Sharon.Goody@nationstarmail.com

Physical Hazard loss files should be sent to:

James Stauffer/Nationstar Team Manager
One Assurant Way
Springfield OH 45505

© 2008 Nationstar Mortgage LLC. “The information within this document is confidential and provided solely for the internal use of Nationstar Mortgage LLC. This document is an intellectual property of Nationstar Mortgage LLC, and is protected under copyright laws of the United States. This material should not be released to any third party supplier without the Previous written approval Nationstar Mortgage LLC.”

Page 20

EXHIBIT B

Real Estate Taxes

The Previous Servicer shall provide a loan level report listing the following information for all loans. Each report is required pre-transfer and post-transfer. The pre-transfer report needs to be provided as part of the preliminary data with the final report provided as defined under Delivery of Final Loan Level Data & Reports.

Ø	Real Estate taxes
Ø	Taxing Jurisdiction Name(s) (Tax payee)
Ø	Tax parcel or Tax ID Number
Ø	Due dates
Ø	Escrowed or non-escrowed flag for each line (City, State, County, etc.)
Ø	Payment term (annual, quarterly, etc.)
Ø	Accrual (full year payment amount)
Ø	Parcel number(s)
Ø	Next tax due date
Ø	Economic loss date
Ø	Unpaid tax and items
Ø	Loans that do not have an escrow record established for taxes
Ø	Open or unpaid tax installments for current and prior tax cycle
Ø	Open tax issues
Ø	Pending tax refunds from tax collectors
Ø	Description of the issue
Ø	Name of the tax collector
Ø	Amount of the expected refund
Ø	Taxes due and paid for Ground Rents
Ø	Taxes due and paid for Homeowner association fees
Ø	Taxes due and paid for Sewer lines
Ø	Taxes due and paid for miscellaneous fees (drainage, front foot, assessments, etc.)
Ø	All other taxes due and paid along with tax type
Ø	Property legal description
Ø	Name/address/phone of entity to whom these fees/taxes are due
Ø	Next tax payment due date
Ø	Liens assessed for taxes
Ø	Loans exempt from taxes
Ø	Reason for exemption
Ø	Name/address/phone of taxing authority
Ø	Tax Vendor, tax type and full description
Ø	REO properties (as applicable)
Ø	Identification of states with annual or semi-annual payments
Ø	File Representing corporate advances for taxes
Ø	Pending Tax Research Items

Pending Tax Sales

© 2008 Nationstar Mortgage LLC. “The information within this document is confidential and provided solely for the internal use of Nationstar Mortgage LLC. This document is an intellectual property of Nationstar Mortgage LLC, and is protected under copyright laws of the United States. This material should not be released to any third party supplier without the Previous written approval Nationstar Mortgage LLC.”

Page 21

EXHIBIT B

The Previous Servicer agrees to provide information regarding a pending tax sale within 12 months of the Servicing Transfer Date on a property if available at the time of transfer. This file shall include the following information and be provided within 10 days prior to transfer.

Ø	State
Ø	Redemption amount
Ø	Redemption date
Ø	Total funds already corporate advanced
Ø	Tax Sale (loss) date
Ø	Current redemption in process
Ø	Non-redeemable properties

Unpaid Property Taxes

The Previous Servicer must provide a listing of all unpaid taxes including the reason the taxes remain unpaid. In addition, the Previous Servicer must provide to the Servicer all due and unpaid tax bills in their possession as of the Transfer Date and shall forward all stub bills in its possession and tax sale property files to the following address five (5) days prior to the Servicing Transfer Date.

Nationstar Mortgage LLC
Attn: Escrow Administration
350 Highland Drive
Lewisville, Texas 75067

Transfer of Life of Loan (“LOL”) Tax Contracts

For all loans where a Life of Loan Tax Contract exists, the Previous Servicer shall cooperate with the transfer of the life of loan contracts to the Servicer within five (5) days after the Servicing Transfer Date.

In connection with the transfer of the servicing for any Mortgage Loans, within fifteen (15) days prior to transfer, Previous Servicer shall provide written notice to tax bill services or tax authorities (as applicable) of the future transfer and assignment of the Mortgage Loans. Copies of all such notices shall be provided to Servicer within five (5) days after the Servicing Transfer Date.

     Tax Information Prior to and After Transfer:

Nationstar Mortgage LLC
Attn: Sharon Goody
350 Highland Drive
Lewisville, Texas 75067
469-549-2005
Sharon.Goody@nationstarmail.com

Tax Litigation Report

© 2008 Nationstar Mortgage LLC. “The information within this document is confidential and provided solely for the internal use of Nationstar Mortgage LLC. This document is an intellectual property of Nationstar Mortgage LLC, and is protected under copyright laws of the United States. This material should not be released to any third party supplier without the Previous written approval Nationstar Mortgage LLC.”

Page 22

EXHIBIT B

The Previous Servicer must also provide an electronic report of all loans fifteen (15) days prior to the Servicing Transfer Date in which taxes are in litigation status, including loan number, borrower name, property address and an explanation of the type of litigation.

© 2008 Nationstar Mortgage LLC. “The information within this document is confidential and provided solely for the internal use of Nationstar Mortgage LLC. This document is an intellectual property of Nationstar Mortgage LLC, and is protected under copyright laws of the United States. This material should not be released to any third party supplier without the Previous written approval Nationstar Mortgage LLC.”

Page 23

EXHIBIT B

Mortgage Insurance

The Previous Servicer shall provide a loan level report listing the following information for all loans with Private Mortgage Insurance or HUD Mortgage Insurance Premium. Report is required pre-transfer and post-transfer. The pre-transfer report needs to be provided as part of the preliminary data with the final report provided as defined under Delivery of Final Loan Level Data & Reports.

Ø Loans with PMI/MIP

t	Borrower Paid Indicator
t	Lender Paid Indicator
t	Investor Paid Indicator

Ø	Insurance company
Ø	Policy/Certificate number
Ø	Effective/Expiration Date
Ø	Coverage Amount
Ø	% Covered
Ø	Premium Amount
Ø	Payment amount
Ø	Payment term
Ø	Due date
Ø	Payment status (borrower paid vs. lender paid)
Ø	Outstanding MI claim (Y/N)
Ø	Cancellations

t	In process
t	Borrower cancelled
t	Cancelled as a result of non-payment

With respect to the Mortgage Loans, the Previous Servicer shall ensure all Mortgage Insurance premiums due up to and including the Transfer Date are paid, including lender paid mortgage insurance premiums. In addition, the Previous Servicer shall transmit to the applicable private mortgage insurance companies, notification of the transfer of the servicing to the Servicer and instructions to deliver all notices and insurance statements, as the case may be, to the Servicer from and after the Transfer Date. In addition, the Previous Servicer shall notify HUD of the change in servicer information within fifteen days after the Transfer Date. Nationstar Mortgage LLC’s HUD ID number is 26450-0000-1.

Further, the Previous Servicer will be responsible for correcting errors on the HUD 92080 Reject Report prior to the Servicing Transfer Date. Prior Servicer will be held responsible for any outstanding MI items as of the Servicing Transfer Cutoff Date to include late and interest due on FHA loans, past due premiums and disclosure issues.

Nationstar Mortgage LLC
Attn: PMI/MIP Unit /Sharon Goody
350 Highland Drive
Lewisville, Texas 75067
469-549-2005
Sharon.Goody@nationstarmail.com

Nationstar Mortgage LLC
Attn: FHA Unit /Sharon Goody

© 2008 Nationstar Mortgage LLC. “The information within this document is confidential and provided solely for the internal use of Nationstar Mortgage LLC. This document is an intellectual property of Nationstar Mortgage LLC, and is protected under copyright laws of the United States. This material should not be released to any third party supplier without the Previous written approval Nationstar Mortgage LLC.”

Page 24

EXHIBIT B

350 Highland Drive
Lewisville, Texas 75067
469-549-2005
Sharon.Goody@nationstarmail.com

Vendor Requirements

Tax

The Nationstar Tax Vendor is First American: Customer Numbers: 10578 and 10904 Name: Homeselect Settlement Solutions, LLC.

The Nationstar Contact at First American is TJ Douglas: 817-699-3587 tjdouglas@firstam.com.

For loans to bene change from one First American client to Nationstar/Homeselect, the prior Servicer will submit a spreadsheet from Nationstar with the following information:

Ø	Prior lender’s loan number (preferably just one column/one loan # string)
Ø	Name of prior lender and/or their FA customer number(s)
Ø	FA contract number on all loan numbers

For loans to be boarded on First American’s system as an Acquired loan (loans NOT currently under service with First American), the prior Servicer will provide to Nationstar a spreadsheet/ with the following info:

Ø	Borrower Name (2 columns — first/last)
Ø	Borrower Address (preferably 5 columns — street #, street name, city, state, zip)
Ø	Tax authority/agency (preferably FA’s payee # or at least something we can cross reference)
Ø	Tax id/parcel number
Ø	Service Type (escrow/C or non-escrow/B)
Ø	Term of contract
Ø	Amount of Mortgage/Loan
Ø	If loans are coming from Land America: their ‘reverse adds’ file

Insurance (Flood and Hazard)

The Nationstar Insurance Vendor is Assurant:

The Nationstar Contact at Assurant is Kathy Ward: kathyward@mindspring.com

Office: 281.346.2008.

The prior Servicer will submit an Excel file to Nationstar with the following information:

© 2008 Nationstar Mortgage LLC. “The information within this document is confidential and provided solely for the internal use of Nationstar Mortgage LLC. This document is an intellectual property of Nationstar Mortgage LLC, and is protected under copyright laws of the United States. This material should not be released to any third party supplier without the Previous written approval Nationstar Mortgage LLC.”

Page 25

EXHIBIT B

Ø	Prior Servicer Loan #
Ø	Borrower Name
Ø	Property Address, City, State, Zip
Ø	Insurance Carrier
Ø	Policy Number
Ø	Effective date and Expiration Date
Ø	Coverage Amount
Ø	Premium Amount
Ø	If policy is currently in a cancellation status, the cancellation effective date

Flood

The Flood Vendor for Nationstar is First American:

The Nationstar Contact at First American Flood is Cynthia Fresch: cfresch@firstam.com Office Phone: 800.447.1772 ext. 3112, Cell: 512.689.5239

The prior Servicer will submit an Excel file to Nationstar with the following information:

Ø	Prior Servicer Loan #
Ø	Borrower Name (First and Last)
Ø	Property Address, City, State, Zip
Ø	Certification Number

© 2008 Nationstar Mortgage LLC. “The information within this document is confidential and provided solely for the internal use of Nationstar Mortgage LLC. This document is an intellectual property of Nationstar Mortgage LLC, and is protected under copyright laws of the United States. This material should not be released to any third party supplier without the Previous written approval Nationstar Mortgage LLC.”

Page 26

EXHIBIT B

Credit Life and Other Optional Products

The Previous Servicer must provide the appropriate written instructions to the Mortgagor related to the discontinuation of any optional products prior to the Servicing Transfer Date within the RESPA good-bye letter. The Previous Servicer will remove the premium amount(s) from the Mortgagor’s total monthly payment and disburse any and all premiums to the product vendor or the Mortgagor prior to the Servicing Transfer Date.

Claims Process

Loan Level Detail containing the following items listed below. This report is required pre-transfer and post-transfer. The pre-transfer report needs to be provided as part of the preliminary data with the final report provided as defined under Delivery of Final Loan Level Data & Reports.

Ø	How many open claims — broken down by pre and post foreclosure status
Ø	Type of claim (MI, FNMA 571, etc)
Ø	Date claim filed
Ø	Beginning claim amount, funds received, remaining balance
Ø	Current disposition status of REO properties
Ø	Record for any loans previously where claims closed in last 90 days including denied claims
Ø	Break down of claims process
Ø	Claims closed in last 90 days including denied claims
Ø	Loans where recourse / indemnification agreements are in place
Ø	Loans where recourse / indemnification — repurchase / payout in process
Ø	Identify claims in dispute and the disputed item
Ø	Corporate Advance Detail broken down by type and loan level

© 2008 Nationstar Mortgage LLC. “The information within this document is confidential and provided solely for the internal use of Nationstar Mortgage LLC. This document is an intellectual property of Nationstar Mortgage LLC, and is protected under copyright laws of the United States. This material should not be released to any third party supplier without the Previous written approval Nationstar Mortgage LLC.”

Page 27

EXHIBIT B

Records and Files

File Delivery

The Previous Servicer must deliver the Servicing Files to the Servicer within five business days after the Servicing Transfer Date. If images are available, Previous Servicer shall provide an example of the format fourteen days prior to the Servicing Transfer Date. The Servicing Files must contain copies of all the documents delivered to the Document Custodian in the Collateral Files and all other documents and information relating to the origination and servicing of the Mortgage Loans through the date on which the files are delivered to the Servicer.

Arrangements shall be made for an inside delivery of the Servicing Files. The Previous Servicer agrees to coordinate the file delivery with the Servicer. The Previous Servicer agrees to the best of its ability remove any files for loans that pay off prior to the Transfer Date.

The files shall be placed in a box in the Previous Servicer’s loan number order. Transmittals shall be attached to each box listing contents by loan number. Each box must be labeled as follows:

<NEW CLIENT NAME>//____<NAME OF SELLER>___//__<DATE OF TRANSFER>___//BOX 1 OF___

(Example: Nationstar Mortgage LLC/PREVIOUS SERVICER NAME/07.05.07/BOX 5 of 32).

An electronic master manifest in Excel containing prior servicer loan number and box number is required prior to Shipment.

     File Delivery Address:

Nationstar Mortgage LLC
Attn: File Services/ Keenan Cain
350 Highland Drive
Lewisville, Texas 75067
469-549-3241
Keenan.Cain@nationstarmail.com

Preferred Format of Images

• Group 4 TIFF, Single page TIFF

Electronic Image Requirements

• Electronic cumulative manifest of each image provided. The manifest should include but is not limited to previous servicer loan number and document/index type.

• Electronic cumulative list of document/index types and corresponding user friendly description.

Trailing Documents (Non-collateral documents)

© 2008 Nationstar Mortgage LLC. “The information within this document is confidential and provided solely for the internal use of Nationstar Mortgage LLC. This document is an intellectual property of Nationstar Mortgage LLC, and is protected under copyright laws of the United States. This material should not be released to any third party supplier without the Previous written approval Nationstar Mortgage LLC.”

Page 28

EXHIBIT B

Please send trailing original collateral documents to the address above. Write the Previous Servicer’s loan number on each document.

MERS Notification

If any loans are registered with MERS the Previous Servicer must create a TOB (Transfer of Beneficial Rights) and/or TOS (Transfer of Servicing) batch for any active loan in the transfer. This shall be done either through the Previous Servicer’s servicing system, if allowable or through the MERS Online System on the Transfer Date. The Previous Servicer must determine the correct MERS ORG ID for the investor.

The Org ID for Nationstar Mortgage LLC as sub-servicer is 1003972.

1.	Move the MERS loans to the correct Org ID to coincide with the transfer.
2.	Enter the Sale Date, Transfer Date applicable to the Transfer and the MERS quality review flag.
3.	Enter the Recording Information and that the loan servicing has been transferred to Nationstar Mortgage LLC
4.	Provide Nationstar Mortgage LLC with the MIN and batch numbers for all loans transferred on MERS.

Contact Information:

Nationstar Mortgage LLC
Attn: MERS/ Keenan Cain
350 Highland Drive
Lewisville, Texas 75067
469-549-3241
Keenan.Cain@nationstarmail.com

© 2008 Nationstar Mortgage LLC. “The information within this document is confidential and provided solely for the internal use of Nationstar Mortgage LLC. This document is an intellectual property of Nationstar Mortgage LLC, and is protected under copyright laws of the United States. This material should not be released to any third party supplier without the Previous written approval Nationstar Mortgage LLC.”

Page 29

EXHIBIT B

IRS Reporting

For any period prior to the Servicing Transfer Cutoff Date, Previous Servicer must prepare, report to the Internal Revenue Service and provide to Mortgagors, all in accordance the applicable law, rules and regulations, any and all tax information required to be provided with respect the Mortgage Loans for that period. The Previous Servicer shall provide to the Servicer confirmation when and by whom Social Security Number validation has been completed on the Mortgage Loans.

© 2008 Nationstar Mortgage LLC. “The information within this document is confidential and provided solely for the internal use of Nationstar Mortgage LLC. This document is an intellectual property of Nationstar Mortgage LLC, and is protected under copyright laws of the United States. This material should not be released to any third party supplier without the Previous written approval Nationstar Mortgage LLC.”

Page 30

EXHIBIT B

Litigation (This is covered in the Transfer Letter) / Update to show pre&post

In the event the Previous Servicer receives notification of Litigation being issued in conjunction with any Mortgage Loan the Previous Servicer will give written notification to the Servicer within five (5) business days. In the event time does not permit prior approval by the Servicer, Previous Servicer will retain counsel to represent the Servicer’s interests and obtain said approval as soon thereafter as possible. The costs incurred in providing legal representation in conjunction with any such Mortgage Loan serviced hereunder will be borne by the Servicer.

The Previous Servicer must provide the Servicer with a listing of any loans with open litigation, including an explanation for each case . This report is required pre-transfer and post-transfer. The pre-transfer report needs to be provided as part of the preliminary data with the final report provided as defined under Delivery of Final Loan Level Data & Reports.

Partial Releases

The Previous Servicer must provide the Servicer with a listing of any loans on which a partial release is pending, including an explanation for each case and all documentation received as defined under Delivery of Final Loan Level Data & Reports.

Subordinations

The Previous Servicer must provide the Servicer with a listing of any loans on which a Subordination requests are pending, including an explanation for each case, any subordination in the Mississippi Grant Program and all documentation received as defined under Delivery of Final Loan Level Data & Reports.

Qualified Written Requests (RESPA)

The Previous Servicer must provide the Servicer with a listing of any loans on which a Qualified Written Request has been received and is pending, including an explanation for each case and all documentation received as defined under Delivery of Final Loan Level Data & Reports. The Previous Servicer must provide the Servicer with all research backup and written explanation of the issue.

Mortgagor Name Changes

The Previous Servicer must provide to the Servicer in the servicing file backup for each pending legal name change along with the appropriate documentation (i.e., quit claims, death certificates, divorce decrees, etc.) as defined under Delivery of Final Loan Level Data & Reports.

© 2008 Nationstar Mortgage LLC. “The information within this document is confidential and provided solely for the internal use of Nationstar Mortgage LLC. This document is an intellectual property of Nationstar Mortgage LLC, and is protected under copyright laws of the United States. This material should not be released to any third party supplier without the Previous written approval Nationstar Mortgage LLC.”

Page 31

EXHIBIT B

Soldier’s and Sailor’s Civil Relief Act of 1940 (SSCRA)

The Previous Servicer shall provide a loan level report listing the following information for all loans under SSCRA. This report is required pre-transfer and post-transfer. The pre-transfer report needs to be provided as part of the preliminary data with the final report provided as defined under Delivery of Final Loan Level Data & Reports.

Ø	Loan Number for loans in which relief has been requested under the Soldier’s and Sailor’s Civil Relief Act of 1940, as amended
Ø	Mortgagor’s Name
Ø	Period of Reduced Payment (mm/yy to mm/yy)
Ø	Loan has received reduced payments thru mm/yy
Ø	Effective date of the subsidy
Ø	Subsidy method (buydown subsidized or 6% interest rate)
Ø	If buydown subsidy method, how was loan funded
Ø	Calculation method of the reduced payment
Ø	Active duty start date
Ø	Active duty termination date
Ø	Complete copy of the customer’s Military Orders
Ø	Copy of ARM adjustment notification letter(s) during SSCRA period
Ø	Additional comments or notes

Please forward one report for each SSCRA loan to:

Nationstar Mortgage LLC
Attn: SSCRA/Marina Reyes
350 Highland Drive
Lewisville, Texas 75067
469-549-2014
Marina.Reyes@nationstarmail.com

© 2008 Nationstar Mortgage LLC. “The information within this document is confidential and provided solely for the internal use of Nationstar Mortgage LLC. This document is an intellectual property of Nationstar Mortgage LLC, and is protected under copyright laws of the United States. This material should not be released to any third party supplier without the Previous written approval Nationstar Mortgage LLC.”

Page 32

EXHIBIT B

Loss Mitigation and Collection Activity

The Previous Servicer shall make available any written procedures for loss mitigation alternatives and share with Nationstar to ensure a smooth transfer. An electronic report in Excel format is required for each report defined in this section. . Each report in this section should be delivered as defined under Delivery of Final Loan Level Data & Reports.

1. Pending Checks Report

Ø	All loans with pending checks
Ø	Date of Pending Check
Ø	Amount of Pending Check

2. Open Research Item Report

Ø	All loans with open research items
Ø	Missing Payments
Ø	Payment Corrections
Ø	Date of Research Item
Ø	Amount of Research Item
Ø	Type of research item (i.e. western union, moneygram, check) as outlined in the Qualified Written Request section.
Ø	Status

3. Repayment Plan Report

© 2008 Nationstar Mortgage LLC. “The information within this document is confidential and provided solely for the internal use of Nationstar Mortgage LLC. This document is an intellectual property of Nationstar Mortgage LLC, and is protected under copyright laws of the United States. This material should not be released to any third party supplier without the Previous written approval Nationstar Mortgage LLC.”

Page 33

EXHIBIT B

Ø	All loans with active repayment plan
Ø	Loans for which repayment plan activity has been initiated
Ø	Detail of the terms and conditions of the repayment plan
Ø	Status

4. Pending Short Sale Report

Ø	All loans with an active short sale
Ø	All short sales with an offer outstanding
Ø	All short sales with an active sales contract
Ø	Approved Short Sales
Ø	Approved Short Sales awaiting claims to be filed
Ø	Outstanding Short Sale claims
Ø	Recent property valuation

5. Pending Non-HAMP Loan Modification Report

Ø	All Loans Pending Modification
Ø	Trial period information if applicable
Ø	Recent property valuation
Ø	Title search
Ø	Modification terms

• Permanent/Temporary (Expiration Date)

• Rate Reduction Only/Capitalization

Ø	Document/Title company contact information
Ø	Documentation collected from borrower (Y/N)
Ø	Identification of any funds collected in conjunction with the modification
Ø	Modification subordination date
Ø	Modification record date

6. Pending Deed-in-Lieu Report

Ø	All loans pending deed-in-lieu of foreclosure
Ø	Recent property valuation
Ø	Title search
Ø	Status

7. Charged-off Loan Report

© 2008 Nationstar Mortgage LLC. “The information within this document is confidential and provided solely for the internal use of Nationstar Mortgage LLC. This document is an intellectual property of Nationstar Mortgage LLC, and is protected under copyright laws of the United States. This material should not be released to any third party supplier without the Previous written approval Nationstar Mortgage LLC.”

Page 34

EXHIBIT B

Ø	All loans charged-off
Ø	Lien
Ø	Date of charge-off
Ø	Amount charged-off

Loss Mitigation Servicing File Documentation Requirements

In addition to the data requirements the following Loss Mitigation documents are required. If Loss Mitigation documents are not imaged then physical documents will need to be delivered within five (5) days of after the Transfer Date to the loss mitigation contact in addition to being in the servicing file,

Ø	Copies of all written correspondence regarding delinquencies
Ø	Written agreements entered into with the Mortgagor including any modification documents, repayment plans, stipulated repayment plans, or any other document that constitutes approval of the loss mitigation workout or alternative.
	Pending Short Sale Doc Requirements
Ø	Sales contract
Ø	HUD-I Settlement Statement, estimated
Ø	Realtor/Broker contact information
Ø	Mortgagor financials
Ø	Mortgagor hardship letter
Ø	Approval letter (if approved and not closed prior to transfer date)
Ø	Appraisal and/or Title Search Performed
	Pending Loan Modification Doc Requirements
Ø	Mortgagor financials
Ø	Mortgagor hardship letter
Ø	Hard copy of the Modification Agreement
Ø	Copy of the Modification Approval
	Pending Deed-in-Lieu Doc Requirements
Ø	Deed-in-Lieu agreement
Ø	Document/Title company contact information
Ø	Mortgagor financials
Ø	Mortgagor hardship letter
Ø	Appraisal and/or Title Search Performed

If Loss Mitigation documents are not imaged then deliver hard copies to:

© 2008 Nationstar Mortgage LLC. “The information within this document is confidential and provided solely for the internal use of Nationstar Mortgage LLC. This document is an intellectual property of Nationstar Mortgage LLC, and is protected under copyright laws of the United States. This material should not be released to any third party supplier without the Previous written approval Nationstar Mortgage LLC.”

Page 35

EXHIBIT B

Nationstar Mortgage LLC
Attn: Loss Mitigation Department/Bryan Minassian
350 Highland Drive
Lewisville, Texas 75067
469-549-2
Bryan.Minassian@Nationstarmail.com

Please refer to the Records and Files section regarding the forwarding of documents and/or files

Bankruptcy

The Previous Servicer shall provide a loan level report listing the following information for loans with Bankruptcy. This report is required pre-transfer and post-transfer. The pre-transfer report needs to be provided as part of the preliminary data with the final report provided as defined under Delivery of Final Loan Level Data & Reports.

Ø	Loan Number
Ø	Mortgagor’s Name
Ø	Name of Filer
Ø	Lien
Ø	Filing date
Ø	Chapter
Ø	Case number
Ø	Bankruptcy State/District
Ø	Bankruptcy status
Ø	Post-petition due date
Ø	Contractual due date at the time of filing
Ø	Date file referred to Attorney
Ø	Previous Servicer’s Attorney name

© 2008 Nationstar Mortgage LLC. “The information within this document is confidential and provided solely for the internal use of Nationstar Mortgage LLC. This document is an intellectual property of Nationstar Mortgage LLC, and is protected under copyright laws of the United States. This material should not be released to any third party supplier without the Previous written approval Nationstar Mortgage LLC.”

Page 36

EXHIBIT B

Ø	Previous Servicer’s Attorney address
Ø	Previous Servicer’s Attorney phone number
Ø	Mortgagor’s Attorney name
Ø	Mortgagor’s Attorney address
Ø	Mortgagor’s Attorney phone number
Ø	Trustee name
Ø	Trustee address
Ø	Trustee phone number
Ø	Trustee website
Ø	Trustee date
Ø	Mortgagor’s Suspense Balance
Ø	Trustee Suspense Balance
Ø	Suspense Balance of any Stipulated Agreement
Ø	Has Proof of Claim been filed (Y/N)
Ø	Confirmed Proof of Claim
Ø	Amount with Breakdown
Ø	Amount Paid to Date from Trustee for Claim
Ø	Litigation Status (Motion for Relief Filed, Cramdown, etc.)
Ø	If Litigation, by whom
Ø	Stipulated agreement (Y/N)
Ø	Which post-petition payments are included
Ø	What post-petition payments have been paid by the debtor

The Previous Servicer shall provide a loan level report listing the following information for all loans that are in an active Chapter 7 Bankruptcy:

Ø	Date of Discharge
Ø	Date of Reaffirmation
Ø	Date Filed
Ø	Case #
Ø	State Filed
Ø	District Filed
Ø	Name of Filer
Ø	Dismissal Date
Ø	Motion for Relief Obtained Date

© 2008 Nationstar Mortgage LLC. “The information within this document is confidential and provided solely for the internal use of Nationstar Mortgage LLC. This document is an intellectual property of Nationstar Mortgage LLC, and is protected under copyright laws of the United States. This material should not be released to any third party supplier without the Previous written approval Nationstar Mortgage LLC.”

Page 37

EXHIBIT B

The Previous Servicer shall provide a loan level report listing the following information for loans with active Chapter 11, 12 and 13 Bankruptcies:

Ø	Complete Payment History for both pre and post petition payments
Ø	Original confirmed claim amount
Ø	Breakdown of all amounts included in the claim.

The Previous Servicer shall provide Bankruptcy files for each loan to contain the following information:

Ø	Mortgage
Ø	Note
Ø	Title Policy
Ø	Breakdown of trustee money received and how it was applied
Ø	Breakdown of all payments received from debtor and how it was applied
Ø	Copies of all invoices
Ø	Any pending relief of stay hearings within 60 days of the transfer
Ø	Bank’s attorney and contact information
Ø	Debtor’s attorney and contact information
Ø	Bankruptcy petition
Ø	Proof of claim
Ø	If arrearages included in proof of claim, please provide breakdown
Ø	Reorganization plan
Ø	Copies of stipulation/agreed orders (details of payment plan)
Ø	Foreclosure information prior to bankruptcy filing (if applicable)
Ø	Information of prior bankruptcy filings (multi-filers)
Ø	APO or RFS order
Ø	RFS motion
Ø	Dismissal/discharge order and/or a list of loans that have been dismissed/discharged
Ø	Contractual Payment History
Ø	Stipulated Agreement

The Previous Servicer shall provide a report of all attorneys used for bankruptcy, including the full firm name, contact name, address, phone number and tax identification number (TIN). Previous Servicer shall also provide copies of attorney standards and fee schedules.

The Previous Servicer shall provide written notice, in accordance with applicable court procedures, to bankruptcy trustees and debtor attorneys with respect to the assignment of any Bankruptcy Loans. Such notices shall be mailed to the bankruptcy trustees and debtor attorneys prior to the respective Transfer Date. Copies of all such notices shall be provided to Servicer within five (5) days after the Transfer Date.

     Nationstar Mortgage LLC

© 2008 Nationstar Mortgage LLC. “The information within this document is confidential and provided solely for the internal use of Nationstar Mortgage LLC. This document is an intellectual property of Nationstar Mortgage LLC, and is protected under copyright laws of the United States. This material should not be released to any third party supplier without the Previous written approval Nationstar Mortgage LLC.”

Page 38

EXHIBIT B

Attn: Bankruptcy Department/Matthew Barrett
350 Highland Drive
Lewisville, Texas 75067
469-549-2234
Matthew.Barrett@nationstarmail.com

Please refer to the Records and Files section regarding the forwarding of documents and/or files.

Foreclosure File Report

The Previous Servicer shall provide a loan level report listing the following information for any loan in which foreclosure actions have been initiated. This report is required pre-transfer and post-transfer. The pre-transfer report needs to be provided as part of the preliminary data with the final report provided as defined under Delivery of Final Loan Level Data & Reports.

Ø	Loans in foreclosure
Ø	Legal specifics/process by state
Ø	Foreclosure status
Ø	Date referred to foreclosure
Ø	Attorney or firm assigned
Ø	Attorney phone number
Ø	Date of first legal action
Ø	Date of Demand/Breach Letter sent to borrower
Ø	Date the service was completed
Ø	Date the judgment was ordered
Ø	Scheduled Sale Date / Actual Sale Date (if applicable)
Ø	Any information related to holds during the process
Ø	Lien Position
Ø	If second lien, need 1st lien holder name, status, and contact information

Foreclosure File Requirements

The Previous Servicer shall provide Foreclosure files for each loan to contain the following information:

Ø	Copy of the demand/breach letter
Ø	Bid instructions for any loans with a sale date occurring within 15 days after the Transfer Date must be provided upon transfer.
Ø	Trustee/attorney names and contact information
Ø	Referral letter
Ø	Copies of all invoices, paid and due
Ø	NOD/Complaint
Ø	Foreclosure title report
Ø	Foreclosure bid worksheet (if available)
Ø	Actual/projected foreclosure sale date
Ø	Foreclosure review committee packet (not referred to attorney but recommended for foreclosure).
Ø	Bankruptcy information prior to foreclosure action (if applicable)
Ø	Mark the outside of the file for any exception loans (e.g., SEIZED, DEMOLITION; MOBILE HOMES AND MANUFACTURED HOUSING)

© 2008 Nationstar Mortgage LLC. “The information within this document is confidential and provided solely for the internal use of Nationstar Mortgage LLC. This document is an intellectual property of Nationstar Mortgage LLC, and is protected under copyright laws of the United States. This material should not be released to any third party supplier without the Previous written approval Nationstar Mortgage LLC.”

Page 39

EXHIBIT B

Foreclosure File Handling

Loan files for loans scheduled for sale within two (2) weeks after the Servicing Transfer Date are to be received on the Servicing Transfer Date. These files are to contain a payoff statement good through cutoff date (or a total amount due statement), and the recent BPO/Appraisal. Hard copy screen prints may be substituted for the electronic reports, but must contain the required information.

The Previous Servicer shall provide a report of all attorneys used for foreclosure litigation fifteen (15) days prior to the Transfer Date, including the full firm name, contact name, address, phone number and tax identification number (TIN). Please advise your foreclosure attorneys of the servicing transfer thirty (30) days prior and advise to proceed with the foreclosure process.

For all loans facing a foreclosure sale date within thirty (30) days before or after the Transfer Date, the Controlling Party requests a report forty-five (45) days prior to the Transfer Date and again fifteen (15) days prior to the Transfer Date summarizing the following loan-level information:

Ø	Loan number
Ø	Scheduled foreclosure sale date
Ø	Scheduled foreclosure bid amount
Ø	Property state
Ø	Property city
Ø	Origination value
Ø	Updated property valuation
Ø	Attorney name
Ø	Attorney contact information

In addition to the items above please provide information regarding the following on all loans:

Ø	Lenstar History
Ø	Appraisal/Values
Ø	If government loans — case #’s
Ø	Maintenance/Inspection Records — What loans were winterized?
	Comprehensive List of loans with:

Ø	Sale Dates
Ø	Redemptions
Ø	Projected Sale Dates
	Vendor Information for:

Ø	Inspections
Ø	Demands
Ø	Appraisals
Ø	Billing
Ø	Any other outsourcer/system
Ø	Attorney Fee Schedule
Ø	Attorney timeline/production reports
Ø	List of Aged Inventory with Chronological Events

© 2008 Nationstar Mortgage LLC. “The information within this document is confidential and provided solely for the internal use of Nationstar Mortgage LLC. This document is an intellectual property of Nationstar Mortgage LLC, and is protected under copyright laws of the United States. This material should not be released to any third party supplier without the Previous written approval Nationstar Mortgage LLC.”

Page 40

EXHIBIT B

A foreclosure should not be put on hold without the prior written approval or email confirmation from the controlling party.

Nationstar Mortgage LLC
Attn: Foreclosure Department/Mike Hansen
350 Highland Drive
Lewisville, Texas 75067
469-549-3096
Mike.Hansen@nationstarmail.com

Please refer to the Records and Files section regarding the forwarding of documents and/or files.

© 2008 Nationstar Mortgage LLC. “The information within this document is confidential and provided solely for the internal use of Nationstar Mortgage LLC. This document is an intellectual property of Nationstar Mortgage LLC, and is protected under copyright laws of the United States. This material should not be released to any third party supplier without the Previous written approval Nationstar Mortgage LLC.”

Page 41

EXHIBIT B

REO

In the event a Mortgage Loan goes to foreclosure sale and the redemption period expires or the Loan is currently in REO the Previous Servicer shall provide a pre-transfer and post-transfer electronic report in Excel format to the Servicer containing the data points listed below. The pre-transfer report needs to be provided as part of the preliminary data with the final report provided as defined under Delivery of Final Loan Level Data & Reports.

Ø	Loans in REO
Ø	Foreclosure and eviction attorney contact information
Ø	Foreclosure Sale Date
Ø	Successful Bidder
Ø	Confirmation/Ratification/Redemption Date (if Applicable)
Ø	Offers and counter-offers and amounts received
Ø	Agent contact information (name, company, phone, fax, email)
Ø	Contact information for any other third party vendors involved
Ø	Under contract flag
Ø	Closing date
Ø	Force placed insurance information
Ø	Taxes due
Ø	Taxes Paid
Ø	Code Violations
Ø	Open Legal files
Ø	Closing status
Ø	Closing contact information (Title company, closer, agent)
Ø	Occupancy status
Ø	Eviction status
Ø	Cash for keys offered/accepted/denied
Ø	Title work completed
Ø	All interior values
Ø	Amount of REO repairs made to property
Ø	If Third Party Sale — Date Proceeds Received
Ø	If Third Party Sale — Amount
Ø	If Redeemed — Date Proceeds Received
Ø	If Redeemed — Amount
Ø	REO Closing Attorney Contact Information (Name, Address, phone, fax, email)
Ø	Party Marketing the Property
Ø	Date Property Sold
Ø	Initial Investor Claim-Date Filed
Ø	Investor Name Claim Sent to and Contact Information
Ø	Investor Claim Amount
Ø	Investor Claim Date Paid
Ø	Investor Claim Status
Ø	MI Claim-Date Filed
Ø	MI Name Claim Sent to and Contact Information
Ø	MI Claim Amount
Ø	MI Claim Date Paid
Ø	Other Claim-Date Filed (i.e. Secondary etc.)

© 2008 Nationstar Mortgage LLC. “The information within this document is confidential and provided solely for the internal use of Nationstar Mortgage LLC. This document is an intellectual property of Nationstar Mortgage LLC, and is protected under copyright laws of the United States. This material should not be released to any third party supplier without the Previous written approval Nationstar Mortgage LLC.”

Page 42

EXHIBIT B

Ø	Other Name Claim Sent to and Contact Information
Ø	Other Claim Amount
Ø	Other Claim Date Paid
Ø	Identification of a redemption loan that have not confirmed

The Previous Servicer shall provide a pre-transfer and post-transfer electronic report in Excel format to the Servicer and controlling party documenting REOs with offers, sales, or closings pending. The pre-transfer report needs to be provided no later than 20 days prior to the transfer date, updated report 5 days prior to transfer and the final report provided as defined under Delivery of Final Loan Level Data & Reports. An REO offer should not be put on hold without the prior written approval or email confirmation from the controlling party

In addition to the data requirements the following REO documents are required. If REO documents are not imaged then physical REO files will need to be delivered no later than 5 days post transfer.

Ø	Foreclosure deed
Ø	Foreclosure bid worksheet with supporting BPO’s or APO’s attached
Ø	Property inspection reports
Ø	Listing agreements including initial list price and date, current list price and all list reductions and dates.
Ø	Listing activity reports
Ø	Rehabilitation work orders and/or contractor invoices
Ø	All Closing documents (contract, title work, etc.), closing attorney contact information, scheduled closing date, etc.
Ø	Executed contracts
Ø	Preliminary/Final HUD

The file shall be organized so that all documents pertaining to the REO are together and in chronological order, including a copy of any claims filed, the Foreclosure and or Sheriff’s Deed and foreclosure attorney information; eviction attorney information, if applicable, and any other attorney correspondence; copies of all invoices paid; hard copy REO notes, if not provided electronically. If the REO file is delivered to the Servicer prior to the Transfer Date the Previous Servicer shall work with the Servicer to determine how best to transfer the loan record data. Please forward current vendor, vendor system information and contact information to our contact below. REO files and unpaid invoices shall be delivered to:

REO Files and Invoices:

Nationstar Mortgage LLC
Attn: REO Department/Kevin Friday
350 Highland Drive
Lewisville, Texas 75067
469-549-2271
Kevin.Friday@Nationstarmail.com

© 2008 Nationstar Mortgage LLC. “The information within this document is confidential and provided solely for the internal use of Nationstar Mortgage LLC. This document is an intellectual property of Nationstar Mortgage LLC, and is protected under copyright laws of the United States. This material should not be released to any third party supplier without the Previous written approval Nationstar Mortgage LLC.”

Page 43

EXHIBIT B

Mortgagor Recoverable Corporate Advances

The Previous Servicer shall provide a loan-level, itemized accounting of all expenses, to date, for all mortgagor recoverable expenses. This itemized accounting shall include supporting documentation of all recoverable expenses disbursed from escrow accounts or any other account. Copies of all property inspections, property preservation, and invoices for all loans, including bankruptcy and foreclosure, shall be provided in a format agreed upon by all parties.

The Previous Servicer shall provide a loan level report listing the following information for any loan with an advance. The detail of the advance amount should tie back to the cumulative balance provided in the trial balance. This report is required pre-transfer and post-transfer. The pre-transfer report needs to be provided as part of the preliminary data with the final report provided as defined under Delivery of Final Loan Level Data & Reports.

Ø	Loans with advance
Ø	Advance Type and Amount: (attorney fee, BPO, Inspections, Recording Fees, Bankruptcy, Foreclosure, etc.)
Ø	Corporate Expense Detail
Ø	Debit/Credit Indicator
Ø	Recoverable, Non-Recoverable, or Third Party Indicator

© 2008 Nationstar Mortgage LLC. “The information within this document is confidential and provided solely for the internal use of Nationstar Mortgage LLC. This document is an intellectual property of Nationstar Mortgage LLC, and is protected under copyright laws of the United States. This material should not be released to any third party supplier without the Previous written approval Nationstar Mortgage LLC.”

Page 44

EXHIBIT B

Release of Title, Payoff Requests and Payoff Funds Received After Transfer

The Previous Servicer is responsible for, and must send for recordation, all Mortgage Loan satisfactions for all Mortgage Loans that pay in full prior to the Transfer Date.

The Previous Servicer must wire transfer any payoff funds that are received by the Previous Servicer after the Servicing Transfer Date on the same day of receipt. Payoff wiring instructions:

Bank: JPM Chase
City, State, Zip: Dallas, Texas 75201
RT# : 111000614
ACCT# : 1563367653
For further credit to: Nationstar Mortgage LLC, Payment Clearing
Customer’s Name ___________________
Customer’s Loan Acct # ______________
Customer’s Address _________________
Sender’s Name and Phone #____________

The Previous Servicer shall reimburse the Servicer for additional per diem interest on any payoff check that is not received by the Servicer on the day of its receipt by the Previous Servicer. The Previous Servicer will forward the Servicer a check in the appropriate amount upon receipt of a properly documented request. Payoff mailing instructions:

Nationstar Mortgage LLC, Payment Processing — Service Transfer Payoffs
Attn: Marina Reyes
Address: 350 Highland Drive
City, State, Zip: Lewisville, Texas 75067
Phone: 469-549-2014
Email: Marina.Reyes@nationstarmail.com

All requests for a payoff statement should be faxed to 469-549-2455.

The Previous Servicer shall provide a loan level report listing all of the loans for which the Prepayment Penalty has been waived and any pending payoff requests that have not been fulfilled. The following information should be included in this report:

Ø Prepayment Penalty Term

© 2008 Nationstar Mortgage LLC. “The information within this document is confidential and provided solely for the internal use of Nationstar Mortgage LLC. This document is an intellectual property of Nationstar Mortgage LLC, and is protected under copyright laws of the United States. This material should not be released to any third party supplier without the Previous written approval Nationstar Mortgage LLC.”

Page 45

EXHIBIT B

Ø	Prepayment Penalty Calculation
Ø	Payoff Request Date

Automatic Payment Plans, Mortgage Payments or other checks received after Transfer

The Previous Servicer shall provide an example of their current payment coupon and a loan level report as defined under Conversion Reports.

Any mortgage payments received by Previous Servicer after the Servicing Transfer Date must be forwarded to Servicer on a daily basis and be clearly identified with the Previous Servicer’s loan number in upper right corner of check. All checks should be date-stamped and endorsed as follows:

Pay to the order of Nationstar Mortgage LLC without recourse.

By

(Name of Signer) (Title of Signer) (Name of Company)

Previous Servicer agrees to forward on a daily basis all payments received after the Transfer Date via overnight delivery to:

Nationstar Mortgage LLC
Attn: Service Transfer Payments/Payment Processing
350 Highland Drive
Lewisville, Texas 75067

NSF & Stop Payment Handling

The following procedures shall apply to checks other than payments, NSFs or stop payments received by the Previous Servicer after the Servicing Transfer Date:

1.	Checks shall be clearly identified with Previous Servicer’s loan number in the upper right-hand corner.
2.	Checks that include funds for two or more accounts should be accompanied by a detailed listing providing Previous Servicer’s loan number and amount due each account.
3.	Checks should be properly endorsed as noted above.

© 2008 Nationstar Mortgage LLC. “The information within this document is confidential and provided solely for the internal use of Nationstar Mortgage LLC. This document is an intellectual property of Nationstar Mortgage LLC, and is protected under copyright laws of the United States. This material should not be released to any third party supplier without the Previous written approval Nationstar Mortgage LLC.”

Page 46

EXHIBIT B

4.	The purpose of check shall be identified and grouped accordingly (i.e., tax refund, loss draft, payment of special insurance, principal payment, etc.).
5.	Checks shall be forwarded via overnight delivery to the address above.

© 2008 Nationstar Mortgage LLC. “The information within this document is confidential and provided solely for the internal use of Nationstar Mortgage LLC. This document is an intellectual property of Nationstar Mortgage LLC, and is protected under copyright laws of the United States. This material should not be released to any third party supplier without the Previous written approval Nationstar Mortgage LLC.”

Page 47

EXHIBIT B

Dishonored Payments after Transfer and Misapplied payments

The Previous Servicer will ensure the returned check has been presented twice to the bank for good funds prior to requesting reimbursement from Nationstar Mortgage LLC. The Previous Servicer will submit the following applicable documentation related to a dishonored payment which was not reversed by Previous Servicer before the Servicing Transfer Cutoff Date:

1.	Original returned or dishonored payment, along with a copy of the debit advice, should be provided and clearly reflect the reason the payment was dishonored (e.g. NSF, stop payment, etc.). In the case of a dishonored draft, adequate proof should be provided indicating the bank rejected the draft.
2.	Payment history from point of the dishonored payment to the Transfer Cutoff Date
3.	Nationstar Mortgage LLC shall reimburse Previous Servicer the dishonored payment funds within twenty (20) days of receipt of applicable documentation.

Misapplied Payments

A “misapplied payment” shall mean a Mortgagor payment for which funds have been deposited in an incorrect Escrow Account or applied to an incorrect Mortgagor’s account. The existence of a canceled Mortgagor payment bearing the endorsement of Previous Servicer, for which funds have not been allocated to the proper Escrow Accounts, shall be considered conclusive evidence of a misapplied payment. Misapplied payments shall be processed as follows:

1.	Both parties shall cooperate in correcting misapplication errors by providing the payment history from point of error to the Transfer Cutoff Date and a copy of the canceled check bearing the endorsement of the Previous Servicer responsible for the posting of the missing funds.
2.	The party receiving notice of a misapplied payment occurring to the Transfer Date and discovered after the Transfer Date shall immediately notify the other party.
3.	If a misapplied payment cannot be identified by either party and said misapplied payment has resulted in a shortage in a Mortgage account, Previous Servicer shall be liable for the amount of such shortage. Previous Servicer shall reimburse Nationstar Mortgage LLC for the amount of such shortage within twenty (20) days after receipt of written demand from Nationstar Mortgage LLC.
4.	Any check issued under the provisions of this paragraph shall be accompanied by a statement indicating the purpose of the check, the mortgagor and property address involved, and the corresponding Previous Servicer and/or Nationstar Mortgage LLC account number.

Please forward all documentation regarding dishonored and/or misapplied payments to:

Nationstar Mortgage LLC
Attn: Service Transfer NSF Returns/ Payment Processing
350 Highland Drive
Lewisville, Texas 75067

© 2008 Nationstar Mortgage LLC. “The information within this document is confidential and provided solely for the internal use of Nationstar Mortgage LLC. This document is an intellectual property of Nationstar Mortgage LLC, and is protected under copyright laws of the United States. This material should not be released to any third party supplier without the Previous written approval Nationstar Mortgage LLC.”

Page 48

EXHIBIT B

Correspondence Received After Transfer

All correspondence, insurance renewals, cancellation notices, customer inquiries, etc., received by Previous Servicer after the Servicing Transfer Date shall be identified with the Previous Servicer’s loan number and forwarded via overnight delivery on a daily basis to the Servicer:

Nationstar Mortgage LLC
Attn: Service Transfer Correspondence / Austin Cobb
350 Highland Drive
Lewisville, Texas 75067
469-549-2284
Austin.Cobb@nationstarmail.com

© 2008 Nationstar Mortgage LLC. “The information within this document is confidential and provided solely for the internal use of Nationstar Mortgage LLC. This document is an intellectual property of Nationstar Mortgage LLC, and is protected under copyright laws of the United States. This material should not be released to any third party supplier without the Previous written approval Nationstar Mortgage LLC.”

Page 49

EXHIBIT B

HAMP Requirements

The Previous Servicer must complete all HAMP Reporting Transfer Process requirements posted by Fannie Mae 30 to 60 days prior to the servicing transfer date.

1.	Fill out and submit the HAMP Reporting Transfer Request Form
2.	Fill out and submit the HAMP Reporting Transfer Loan List form with all HAMP loans transferring
3.	If transferring non-GSE loans the Assignment and Assumption Agreement must be filled out and submitted to FNMA

The following HAMP electronic reports are required for transferring loans that have been solicited, currently in a trial period, failed, denied, or have been successfully modified. Each report is required pre-transfer and post-transfer. The pre-transfer report needs to be provided as part of the preliminary data with the final report provided as defined under Delivery of Final Loan Level Data & Reports.

1.	List of all loans that have been solicited.
2.	Report outlining where each loan is in the process, payments received, and payment received date. If the process has been completed then provide the new modification terms.
3.	Report providing which documents have been received and if incomplete, what is still missing. Will need copies of all documents received.
4.	Report outlining any loans that previously failed (no longer eligible for the HAMP program) or were turned down.
5.	Copies of any Treasury reporting A, B, C, and/or D.

In addition to the reports, the previous servicer will provide HAMP loan level data electronically on all loans to include the following items pre-transfer and post-transfer. The pre-transfer report needs to be provided as part of the preliminary data with the final report provided as defined under Delivery of Final Loan Level Data & Reports.

Data Elements Required for HAMP Loans

# of units

© 2008 Nationstar Mortgage LLC. “The information within this document is confidential and provided solely for the internal use of Nationstar Mortgage LLC. This document is an intellectual property of Nationstar Mortgage LLC, and is protected under copyright laws of the United States. This material should not be released to any third party supplier without the Previous written approval Nationstar Mortgage LLC.”

Page 50

EXHIBIT B

Current Collateral Value

HAMP Terms
HAMP Type (Imminent Default or Default)
Trial Period Payment Dates
Trial Period Payment Amount
Trial Period Payment History
Trial Period Completion/End Date
Amortization Duration
Maturity Date
Beginning Unpaid Principal Balance (at the start of the trial period)
Forbearance Amount at Trial Period
Reset ARM Identifier (Y/N)
Reset Interest Rate
Reset Payment Amount
Eligibility Payment Amount Indicator (will need to calc this in house — current pmt vs. reset pmt)
Date Executed Trial Period Documents Received
Date Trial Period Qualifying Documents Received
Extended Trial Period Payment Date (if applicable)

HAMP Modification Terms
HAMP Type (Imminent Default or Default)
Freddie Weekly Survey Rate (used to determine mod terms)
Step Modification Rates
Step Modification Dates
Final Modification Rate
Modification Effective Date
Final Forbearance Amount
Ending Unpaid Principal Balance (at the end of the trial period)

Hardship Affidavit Information
Borrower First Name
Borrower Middle Name
Borrower Last Name
Borrower Date of Birth
Co-Borrower First Name
Co-Borrower Middle Name
Co-Borrower Last Name
Co-Borrower Date of Birth
Borrower Default Reason
Co-Borrower Default Reason
Borrower Ethnicity
Borrower Race
Borrower Sex
Borrower Info Not Provided
Co-Borrower Ethnicity
Co-Borrower Race
Co-Borrower Sex
Co-Borrower Info Not Provided

© 2008 Nationstar Mortgage LLC. “The information within this document is confidential and provided solely for the internal use of Nationstar Mortgage LLC. This document is an intellectual property of Nationstar Mortgage LLC, and is protected under copyright laws of the United States. This material should not be released to any third party supplier without the Previous written approval Nationstar Mortgage LLC.”

Page 51

EXHIBIT B

FNMA NPV Results
Date
De Minimis Test
Value No Mod
NPV Test
Error Code
Waterfall Test
Forbearance Flag
Value Mod
NPV Test Successful?

Hope for Homeowners (H4H)
H4H Lead Eligible?
H4H Offered?

Income
Verified Borrower Income Type
Verified Borrower Gross Income
Verified Borrower Net Income
Verified Borrower Rental Income
Verified Borrower Pension
Verified Borrower Alimony/Child Support
Verified Borrower Misc Amount
Verified Borrower Misc Type
Verified Borrower Checking Account
Verified Borrower Savings/Money Market Account
Verified Borrower 401K/ESOP/IRA/Keogh
Verified Borrower Stocks/Bonds/CD’s/Other
Verified Co-Borrower Income Type
Verified Co-Borrower Gross Income
Verified Co-Borrower Net Income
Verified Co-Borrower Rental Income
Verified Co-Borrower Pension
Verified Co-Borrower Alimony/Child Support
Verified Co-Borrower Misc Amount
Verified Co-Borrower Misc Type
Verified Co-Borrower Checking Account
Verified Co-Borrower Savings/Money Market Account
Verified Co-Borrower 401K/ESOP/IRA/Keogh
Verified Co-Borrower Stocks/Bonds/CD’s/Other
Stated Borrower Income Type
Stated Borrower Gross Income
Stated Borrower Net Income
Stated Borrower Rental Income
Stated Borrower Pension
Stated Borrower Alimony/Child Support
Stated Borrower Misc Amount
Stated Borrower Misc Type

© 2008 Nationstar Mortgage LLC. “The information within this document is confidential and provided solely for the internal use of Nationstar Mortgage LLC. This document is an intellectual property of Nationstar Mortgage LLC, and is protected under copyright laws of the United States. This material should not be released to any third party supplier without the Previous written approval Nationstar Mortgage LLC.”

Page 52

EXHIBIT B

Stated Borrower Checking Account
Stated Borrower Savings/Money Market Account
Stated Borrower 401K/ESOP/IRA/Keogh
Stated Borrower Stocks/Bonds/CD’s/Other
Stated Co-Borrower Income Type
Stated Co-Borrower Gross Income
Stated Co-Borrower Net Income
Stated Co-Borrower Rental Income
Stated Co-Borrower Pension
Stated Co-Borrower Alimony/Child Support
Stated Co-Borrower Misc Amount
Stated Co-Borrower Misc Type
Stated Co-Borrower Checking Account
Stated Co-Borrower Savings/Money Market Account
Stated Co-Borrower 401K/ESOP/IRA/Keogh
Stated Co-Borrower Stocks/Bonds/CD’s/Other

Expenses
First Lien Mortgage P&I
Other Mortgage(s)
Property Taxes
Home Owners Insurance
Home Owners Association
Mortgage Insurance
Car Payment (1)
Car Payment (2)
Auto Insurance
Charge Account (1)
Charge Account (2)
Charge Account (3)
Student Loan
Bank/Finance Loans
Medical Bills
Health Insurance
Child Care
Gas
Auto Maintenance
Public Trans
Gas (Natural/Propane)
Electric
Garbage P/U
Water & Sewer
Home Phone
Cell Phone
Cable TV
Home Maintenance
Food
Child Support
Alimony

© 2008 Nationstar Mortgage LLC. “The information within this document is confidential and provided solely for the internal use of Nationstar Mortgage LLC. This document is an intellectual property of Nationstar Mortgage LLC, and is protected under copyright laws of the United States. This material should not be released to any third party supplier without the Previous written approval Nationstar Mortgage LLC.”

Page 53

EXHIBIT B

Camper, Boat, Motorocycle
Personal/Life Insurance
Club/Union Dues
Religious Contributions
Dry Cleaning
Clothing
Entertainment
School Tuition
Rent Expense
Other Expenses

Appendix Data Requirements

Ref ID	Name of Data Point	Description
1	GSE Servicer Number	The Fannie Mae or Freddie Mac unique Servicer identifier.
2	Servicer Loan Number	The unique (for the lender) identifier assigned to the loan by the lender that is servicing the loan.
3	HAMP Servicer Number	A unique identifier assigned to each Servicer that is participating in the HAMP program.
4	GSE Loan Number	A unique identifier assigned to each loan by a GSE (Fannie or Freddie).
5	Underlying Trust Identifier	This is the shelf and series security identifier associated with the underlying security. A shelf offering is an SEC provision allowing an issuer to register a new issue security without selling the entire issue at once. Additionally, this may be the CUSIP identifier associated with the security. The CUSIP number is the identification number assigned to a security by CUSIP (Committee on Uniform Security Identification Procedures) for trading.
6	Program Type/Campaign ID	A new program type that will identify campaign types. The unique identifier of a Loan Workout Campaign.
7	Investor Code	Owner of the mortgage.
8	Borrower Last Name	The last name of the Borrower. This is also known as the family name or surname.
9	Borrower First Name	First Name of the Borrower of record
10	Borrower Social Security Number	The Social Security Number of the Borrower
11	Co-Borrower Last name	Last Name of the co- Borrower of record
12	Co-Borrower First Name	First Name of the co-Borrower of record
13	Co-Borrower Social Security Number	The Social Security Number of the Co-borrower
14	Borrower Execution Date	For trial loan submission, this is the date that the borrower executed (signed) the trial documents if available. Otherwise it is the date of the first payment (through check, wire, or credit card). For official loan submission, this is the date that the borrower signed the official loan modification documents.
15	Submission Status	Status of loan data being submitted.
16	Date of Original Note	The date the mortgage note was signed.

© 2008 Nationstar Mortgage LLC. “The information within this document is confidential and provided solely for the internal use of Nationstar Mortgage LLC. This document is an intellectual property of Nationstar Mortgage LLC, and is protected under copyright laws of the United States. This material should not be released to any third party supplier without the Previous written approval Nationstar Mortgage LLC.”

Page 54

EXHIBIT B

Ref ID	Name of Data Point	Description
17	Unpaid Principal Balance Before Modification	The total principal amount outstanding as of the end of the month. The UPB should not reflect any accounting based write-downs and should only be reduced to zero when the loan has been liquidated — either paid-in-full, charged-off, REO sold or Service transferred (before modification)
18	Loan Mortgage Type Code	The code that specifies the type of mortgage being applied for or that has been granted.
19	Last Paid Installment Date Before Modification	The due date of the last paid installment of the loan.
20	First Lien Indicator	Indicates if loan is first lien.
21	Foreclosure Referral Date	Provide the date that the mortgage was referred to an attorney for the purpose of initiating foreclosure proceedings. This date should reflect the referral date of currently active foreclosure process. Loans cured from foreclosure should not have a referral date.
22	Projected Foreclosure Sale Date	Projected date for foreclosure sale of subject property
23	Hardship Reason Code	Identifies the reason for the borrower’s hardship, on their mortgage payment obligations.
24	Monthly Gross Income	Total monthly income in dollars for all borrowers on the loan. This is the gross income for all borrowers.
25	Monthly Debt Payments excluding PITIA	Total amount of monthly debt payments excluding Principal, Interest, Taxes, Insurance and Association Dues (PITIA)
26	NPV Date	This is the date that the NPV model is run using stated income (or verified income if available).
27	NPV Model Result Amount Pre-mod	Net Present Value amount generated from the model before modification
28	NPV Model Result Amount Post-mod	Net Present Value amount generated from the model after modification
29	Amortization Term Before Modification	Represents the number of months on which installment payments are based. Example: Balloon loans have a seven year life (Loan Term = 84) but a 30 year amortization period (Amortization Term = 360). Installment payments are determined based on the 360 month
30	Interest Rate Before Modification	The interest rate in the month prior to loan modification. Please report as rounded to nearest 8th. (e.g. 4.125)
31	Principal and Interest Payment Before Modification	The scheduled principal and interest amount in the month prior to loan modification.
32	Escrow Payment Before Modification	Report the escrow amount in the month prior to loan modification. The amount of money that is collected from [added on to] the regular monthly mortgage payment to cover periodic payments of property taxes, private mortgage insurance and hazard insurance by the servicer on behalf of the mortgagee. Depending on the mortgage terms, this amount may or may not be collected. Generally, if the down payment is less than 20%, then these amounts are collected by the servicer.
33	Association Dues/Fees Before Modification	Existing monthly payment for association dues/fees before modification
34	Principal Payment	Principal portion of the P&I remitted
35	Interest Payment	Interest portion of the P&I
36	Principal Payment Owed or Not Reported	If borrower has contributed any cash or amounts in suspense

© 2008 Nationstar Mortgage LLC. “The information within this document is confidential and provided solely for the internal use of Nationstar Mortgage LLC. This document is an intellectual property of Nationstar Mortgage LLC, and is protected under copyright laws of the United States. This material should not be released to any third party supplier without the Previous written approval Nationstar Mortgage LLC.”

Page 55

EXHIBIT B

Ref ID	Name of Data Point	Description
37	Other Contributions	If there are any amounts contributed by the borrower due to Hazard Claims
38	Attorney Fees Not in Escrow	Estimated legal fee not in escrow for advances capitalization and liquidation expense calculation
39	Escrow Shortage for Advances	Any Escrow advance amounts to be capitalized
40	Other Advances	Other capitalized advance amounts excluding escrow. Example: field inspections or title costs associated with recording the modification.
41	Borrower Contributions	If the borrower is contributing any amounts, they must be reported here
42	Modified Loan Term-Officer Signature Date	Servicer sign off at the officer level for the loan modification. This is the date the servicer’s officer approved the loan modification. This column will be populated for modification cases that need reclassification. There is no conversion needed for existing cases
43	Disbursement Forgiven	If there are any Forgiven disbursement for advances capitalization
44	Monthly Housing Expense Before Modification	The dollar amount per month of the borrowers housing expense of the subject property before modification .May be used for their primary residence. This must be Principal, Interest, Taxes, Insurance and Association Dues (PITIA).
45	Delinquent Interest	Delinquent interest for interest capitalization. It is the amount of delinquent interest from the delinquent loan’s LPI date to the workout execution date.
46	Interest Owed Or Payment Not Reported	If there is Interest owed/received but not reported for interest capitalization, this field must be populated.
47	Servicing Fee Percent, After Modification	Percentage of servicing Fee after loan modification ( e.g. 0.25)
48	Product Before Modification	The mortgage product of the loan, before the modification.
49	Maturity Date Before Modification	The date on which the mortgage obligation is scheduled to be paid off, according to the mortgage note. Maturity Date is commonly called Balloon Date for balloon loans, for which scheduled amortization does not pay off the balance of the loan, so that there is a final, large “balloon” payment at the end.
50	Remaining Term Before Modification	The remaining number of months until the loan will be paid off, assuming that scheduled payments are made. This will equal lesser of 1. the number of months until the actual balance of the loan will amortize to zero; or 2. the number of months difference between the LPI date and the Maturity Date.
51	Front Ratio Before Modification	The refreshed Front-end DTI (Principal, Interest, Taxes, Insurance and Association Dues (PITIA)) housing ratio.
52	Back Ratio Before Modification	Percentage of borrower’s PITIA plus debts to income ratio. Borrower Total Debt To Income Ratio Percent. The monthly expenses divided by the total monthly income for the Borrower. (e.g. 30.25)
53	Principal and Interest Payment at 31% DTI	Principal and Interest payable for a 31% Debt to Income ratio
54	Principal and Interest Payment at 38% DTI	Principal and Interest payable for a 38% Debt to Income ratio
55	Property Number of Units	Number of units in subject property (Valid values are 1, 2, 3 or 4)
56	Property Street Address	The street address of the subject property

© 2008 Nationstar Mortgage LLC. “The information within this document is confidential and provided solely for the internal use of Nationstar Mortgage LLC. This document is an intellectual property of Nationstar Mortgage LLC, and is protected under copyright laws of the United States. This material should not be released to any third party supplier without the Previous written approval Nationstar Mortgage LLC.”

Page 56

EXHIBIT B

Ref ID	Name of Data Point	Description
57	Property City	The name of the city where the subject property is located.
58	Property State	The 2-character postal abbreviation of the state, province, or region of the subject property.
59	Property Zip Code	The code designated by the postal service to direct the delivery of physical mail or which corresponds to a physical location. In the USA, this can take either a 5 digit form (ZIP Code) or a 9-digit form (ZIP + 4).
60	Property Valuation Method	Type of value analysis.
61	Property Valuation Date	The date the property value analysis was performed.
62	Property Valuation As is Value	Property as-is value determined by the property valuation
63	Property Condition Code	A code denoting the condition of the subject property.
64	Property Occupancy Status Code	A code identifying the occupancy by the borrower of the subject property.
65	Property Usage Type Code	A code identifying the intended use by the borrower of the property.
66	Modification Effective Date	For Trial, this is the anticipated Modification Effective Date of the official loan modification. This is the first day of the month following the month when the last trial payment is due. For Official, this is the actual Modification Effective Date of the official loan modification. This is the first day of the month following the month when the last trial payment is due. The Modification Effective Date on the official loan submission must be less than the submission date.
67	Product After Modification	The mortgage product of the loan, after the modification (Allowable values are Fixed or Step).
68	Amortization Term After Modification	The number of months used to calculate the periodic payments of both principal and interest that will be sufficient to retire a mortgage obligation.
69	Unpaid Principal Balance After Modification	The unpaid principal balance of a loan after the loan modification. The unpaid principal balance after modification excludes any applicable forbearance amount and can also be referred to as Net UPB Amount.
70	Last Paid Installment Date After Modification	For Trial, this is the anticipated LPI Date after modification. It should be one month before the anticipated Modification Effective Date. For Official, This is the actual LPI Date after Modification. It must be one month before the Modification Effective Date.
71	Interest Rate After Modification	The interest rate in the month after loan modification.
72	Interest Rate Lock Date for Modification	The date that the rate lock was applied — in reference to modification of loan terms
73	First Payment Due Date After Modification	For Trial Loan Submission, this is a projection of the first payment due date after modification. First Payment Due Date After Modification should be the same as the anticipated Modification Effective Date. For Official Loan Submission , this is the actual first payment due date. First Payment Due Date After Modification should be the same as the actual Modification Effective Date.

© 2008 Nationstar Mortgage LLC. “The information within this document is confidential and provided solely for the internal use of Nationstar Mortgage LLC. This document is an intellectual property of Nationstar Mortgage LLC, and is protected under copyright laws of the United States. This material should not be released to any third party supplier without the Previous written approval Nationstar Mortgage LLC.”

Page 57

EXHIBIT B

Ref ID	Name of Data Point	Description
74	Principal and Interest Payment After Modification	The P&I amount after modification
75	Escrow Payment After Modification	Existing monthly payment to escrow-after modification
76	Monthly Housing Expense After Modification	The dollar amount per month of the borrowers housing expense of the subject property after modification .May be used for their primary residence. This must be Principal, Interest, Taxes, Insurance and Association Dues (PITIA).
77	Maturity Date After Modification	The maturity date of the loan after modification
78	Principal Forbearance Amount	The total amount in dollars of the principal that was deferred through loss mitigation.
79	Term After Modification	The remaining number of months until the loan will be paid off, assuming that scheduled payments are made. This will equal lesser of 1. the number of months until the actual balance of the loan will amortize to zero; or 2. the number of months difference between the LPI date and the Maturity Date. In this case, the Maturity Date is the Maturity Date after the modification and may be different from the original Maturity Date (before the modification).
80	Front Ratio After Modification	Percentage of borrower’s PITIA to income ratio
81	Back Ratio After Modification	Percentage of borrower’s PITIA plus debts to income ratio
82	Principal Write-down (Forgiveness)	Amount of principal written-down or forgiven
83	Paydown or Payoff of Subordinate Liens	Have subordinate liens been paid off or paid down?
84	Paydown or Payoff of Subordinate Liens Amount	Amount of paydown or payoff of subordinate liens
85	Action Code	A code reported by the lender to update the loan that indicates the action that occurred during the reporting period
86	Action Code Date	The effective date of the action associated with the action code specified on the incoming LPC Transaction by the Servicer. The action date is required for certain action codes.
87	Max Interest Rate After Modification	Interest rate cap for the loan.
88	Trial Payment Number	The number of the trial payment being reported. The code that is used to define a single payment number that will be one of a series of payments that together will complete a loan trial payment period.
89	Trial Payment Received Amount	The actual dollar amount of the payment received from the borrower to the servicer for the trial payment.
90	Trial Payment Posted Date	The date the payment was posted during the Trial period
91	1st Trial Payment Due Date	This is the date that the first trial payment is due. It is also the trial modification effective date. This date must be less than the trial loan submission date.
92	1st Trial Payment Posted Date	The date the first payment posted during the Trial period
93	1st Trial Payment Received Amount	This is the actual amount of the Payment received from the Borrower to the Servicer for the 1st Trial payment.
94	Length of Trial Period	The length of the trial period
95	Step — Interest Rate Step Number	The sequence is used to uniquely identify and order Loan Interest Rate Adjustment schedule records specific to the loans step rate schedule.
96	Step — Payment Effective Date	The date the payment will be effective.
97	Step — Note Rate	The interest rate in the month after loan modification.

© 2008 Nationstar Mortgage LLC. “The information within this document is confidential and provided solely for the internal use of Nationstar Mortgage LLC. This document is an intellectual property of Nationstar Mortgage LLC, and is protected under copyright laws of the United States. This material should not be released to any third party supplier without the Previous written approval Nationstar Mortgage LLC.”

Page 58

EXHIBIT B

Ref ID	Name of Data Point	Description
98	Step — New Interest Rate — Step Duration	After modification step duration in months. If this step is the last step and will be the rate and payment effective for the life of the loan, then duration is not required.
99	Step — Principal and Interest Payment	P&I Amount — The amount of the principal and/or interest payment due on the loan for each installment, beginning on the effective date.
100	Servicer TARP Contract Number	Servicer contract number with Treasury (TARP)
101	Fee Cap at Servicer Level	Max amount that will be paid to Servicer for loan modification
102	Servicer Primary Contact First Name	The first name of the Person.
103	Servicer Primary Contact Last Name	The last name of the Person.
104	Servicer Primary Contact Phone Number	The entire sequence of digits required to initiate a call from a standard phone to this number. It should include the area code or, for overseas numbers, the full country and city codes as they would be dialed.
105	Servicer Primary Contact Email	Servicer contact email address
106	Servicer Secondary Contact First Name	The first name of the Person.
107	Servicer Secondary Contact Last Name	The last name of the Person.
108	Servicer Secondary Contact Phone Number	The entire sequence of digits required to initiate a call from a standard phone to this number. It should include the area code or, for overseas numbers, the full country and city codes as they would be dialed.
109	Servicer Secondary Contact Email	Servicer contact email address
110	Servicer Street Address Line 1	The street address that denotes the location where mail is delivered for the Servicer.
111	Servicer City Name	The name of the city to which physical mail is directed for the Servicer.
112	Servicer State	The 2-character postal abbreviation of the state, province, or region to which physical mail is directed or which corresponds to a physical location.
113	Servicer Postal Code	The code designated by the postal service to direct the delivery of physical mail or which corresponds to a physical location. In the USA, this can take either a 5 digit form (ZIP Code) or a 9-digit form (ZIP + 4).
114	Servicer Technical Point of Contact Name	Person we can contact at servicer to set up B2B interactions
115	Servicer Technical Point of Contact Email	Email address of servicer technical point of contact.
116	Servicer Technical Point of Contact Phone	Phone number of servicer technical point of contact
117	Servicer Data Return URL	URL to which we will connect to send data and reports directly to the servicer. For example https://servicer.com/prevention
118	Servicer Data Return Port Number	Port number associated with the URL
119	Servicer Data Exchange Protocol	B2B protocol to be used to exchange data with a servicer. Must be one of the following: AS2, Connect:Direct, or SFTP.
120	Disbursement Type	This describes the bank account type to which the disbursements will be paid

© 2008 Nationstar Mortgage LLC. “The information within this document is confidential and provided solely for the internal use of Nationstar Mortgage LLC. This document is an intellectual property of Nationstar Mortgage LLC, and is protected under copyright laws of the United States. This material should not be released to any third party supplier without the Previous written approval Nationstar Mortgage LLC.”

Page 59

EXHIBIT B

Ref ID	Name of Data Point	Description
121	Servicer Routing (ABA) Number	The transit number devised by the American Bankers Association (ABA). A routing transit number (RTN) or ABA number is a nine digit code, used in the United States, which for instance appears on the bottom of negotiable instruments such as checks that identifies which financial institution it is drawn upon.-WIRE Transfer
122	Servicer Bank Account Number	A bank account is a monetary account with a banking institution recording the balance of money for a customer.-Wire Transfer
123	Servicer Bank Name	The name of the bank that receives the funds.
124	Servicer Bank Street Address Line 1	The unparsed street address that denotes the location where mail is delivered.
125	Servicer Bank City Name	The name of the city to which physical mail is directed.
126	Servicer Bank State	The 2-character postal abbreviation of the state, province, or region to which physical mail is directed or which corresponds to a physical location.
127	Servicer Bank Postal Code	The code designated by the postal service to direct the delivery of physical mail or which corresponds to a physical location. In the USA, this can take either a 5 digit form (ZIP Code) or a 9-digit form (ZIP + 4).

© 2008 Nationstar Mortgage LLC. “The information within this document is confidential and provided solely for the internal use of Nationstar Mortgage LLC. This document is an intellectual property of Nationstar Mortgage LLC, and is protected under copyright laws of the United States. This material should not be released to any third party supplier without the Previous written approval Nationstar Mortgage LLC.”

Page 60

EXHIBIT B

HAFA Requirements

The Previous Servicer must provide HAFA document and data requirements as posted in Supplemental Directive 09-09 on March 26, 2010.

A copy of each executed document must be provided based on document requirements outlined under section ‘Records and Files’. An electronic report in Excel format is required for each report defined in this section. Each report in this section should be delivered as defined under Delivery of Final Loan Level Data & Reports.

Data Elements Required for HAFA Loans

1. Reporting based on HAFA letter being sent on a loan.

• Each loan that did meet HAMP eligibility but did not fulfill HAMP obligations

• Reason code/reason for HAMP fall out

• Date Letter Sent

• Type of HAFA Letter Sent (e.g. Solicitation Letter or SSA, RASS, ALT Rass, or DIL agreement)

• If postpone foreclosure for the 14day solicitation letter, need date foreclosure postponed

2. Reporting based on response to HAFA letter.

• Each loan that responded to the letter

• Date responded to letter

• Which alternative borrower agreed to fulfill (short sale and/or deed-in-lieu)

• Executed documents received by Servicer(Y/N Flag)

• Status of Request (e.g. Talked to borrower about alternatives, borrower is interested and documents sent but not received, documents sent by servicer, executed documents in mail, etc...)

• Date foreclosure was postponed

• Any completed request for Approval of Short Sale (RASS) or Alt Request for Approval of Short Sale (Alt Rass)

3. Treasury Reporting Requirements

Logical Data Element	Description
HAMP Registration Number	The unique identifier for the servicer participating in the HAMP program
HAMP Servicer Number	A unique identifier assigned to each servicer that is participating in the HAMP program
Servicer Loan Number	The unique identifier assigned to the loan by the lender that is servicing the loan for the first lien

© 2008 Nationstar Mortgage LLC. “The information within this document is confidential and provided solely for the internal use of Nationstar Mortgage LLC. This document is an intellectual property of Nationstar Mortgage LLC, and is protected under copyright laws of the United States. This material should not be released to any third party supplier without the Previous written approval Nationstar Mortgage LLC.”

Page 61

EXHIBIT B

Logical Data Element	Description
GSE Servicer Number	The Fannie Mae or Freddie Mac unique servicer identifier
GSE Loan Number	A unique identifier assigned to each loan by a GSE
Investor Code	Owner of the Mortgage
Borrower Last Name
Borrower First Name
Borrower SSN
Co-Borrower Last name
Co-Borrower First Name
Co-Borrower SSN
Program Type/Campaign ID	A new program type that will identify campaign types. The unique identifier of a Loan Workout Campaign.
Submission Status	Status of loan data being submitted
Property Street Address
Property City
Property State
Property Zip Code
Date of original Note
Front Ratio Before Modification	The front-end DTI (principal, interest, taxes, insurance and association dues) housing ratio as of the HAMP modification evaluation.
Property usage type code	A code identifying the use by the borrower of the property
Loan Status type code	A code specifying whether the loan is in default, imminent default, or current status as of the HAMP modification evaluation.
Borrower execution date	This is the date that the borrower signed the SPO agreement or DIL agreement
Agreement issue Date	This is the date that the SPO agreement or the DIL agreement was issued
agreement experiation date	The expiration date of the SPO agreement or DIL agreement.

© 2008 Nationstar Mortgage LLC. “The information within this document is confidential and provided solely for the internal use of Nationstar Mortgage LLC. This document is an intellectual property of Nationstar Mortgage LLC, and is protected under copyright laws of the United States. This material should not be released to any third party supplier without the Previous written approval Nationstar Mortgage LLC.”

Page 62

EXHIBIT B

Logical Data Element	Description
SPO or DIL reason code	A field identifying the reason for the borrower entering into a SPO or DIL transaction
SPO or DIL Reason date	For loans that do not qualify for a HAMP trial modification or the borrower declines a mod, this is the date that a trial mod was not offered to the borrower or was not accepted by the borrower. For a borrower who did not successfullly complete a trial p
Property List Price	At notification this is the original list price of the property. At extension or correction, it is the latest list price of the property as of the extension or correction. At loan set up, it is the ending list price of the property as of the transaction
Property Vacancy Date	The SPO agreement or DIL agreement will state the date by which the property must be cacated, which in no event will be less than 30 calendar days from expeiration day of the SPO agreement (or any exstension thereof) or the date of a separate DIL agreemen
Minimum net return to investor amount	The mimimum net return is the minimum acceptable net proceeds that the investor will accept from the transaction. The minimum net return must be reported as a dollar amount.
Mortgage insurance waiver approval indicator	For loans with MI coverage, this attribute indicates whether the MI provided delegations of authority to execute a SPO or DIL in accordance with the forreclosure alternative guidelines and waives any right to collect additional sums from the borrower.

© 2008 Nationstar Mortgage LLC. “The information within this document is confidential and provided solely for the internal use of Nationstar Mortgage LLC. This document is an intellectual property of Nationstar Mortgage LLC, and is protected under copyright laws of the United States. This material should not be released to any third party supplier without the Previous written approval Nationstar Mortgage LLC.”

Page 63

EXHIBIT B

Logical Data Element	Description
UPB amount	The UPB of a loan as of the time of the SPO or DIL
Property sale or transaction amount	The sale or transfer price of the property.
Total Allowable Costs	The total allowable costs associated with selling the property that can be deducted from the gross sale price at closing. Allowable costs may include subordinate lien release amount, borrower relocation assistance, sales commission, closing costs for tax
Transaction Closing Date	the date on which the SPO or DIL transaction is closed
Subordinate Lien release reimbursement amount	The total amount of reimbursement paid by the ser4vicer to subordinate lien holder to secure release of subordinate lien. This amount may not exceed $3000
SPO or DIL cancellation reason code	A field indicating the reason why a SPO or DIL transaction was cancelled.

© 2008 Nationstar Mortgage LLC. “The information within this document is confidential and provided solely for the internal use of Nationstar Mortgage LLC. This document is an intellectual property of Nationstar Mortgage LLC, and is protected under copyright laws of the United States. This material should not be released to any third party supplier without the Previous written approval Nationstar Mortgage LLC.”

Page 64

EXHIBIT C

[RESERVED]

EXHIBIT D

PRICING SCHEDULE

Exhibit D

Nationstar Special Servicing Pricing — American General

Pricing			Description
	Base Fee	•	Loans less than 30 days delinquent	[*]
		•	Loans 30-59 days delinquent	[*]
		•	Loans 60-89 days delinquent	[*]
		•	Loans >= 90 days delinquent	[*]
	Boarding Fee	•	Fee + actual out of pocket expenses (tax, flood, mers, assignments)	[*]
	DeBoarding Fee	•	Fee + actual out of pocket expenses (shipping, tax, flood, mers, assignments, etc)	[*]0-12 mos[*]> 12 mos
	Collections/Loss Mitigation Incentives:		If Opting into Treasury MHA Program	[*]
•	Qualified Modifications	•	Payable to subservicer under Federal Program Workout Activity
•	Qualified Short Sales	•	Payable to subservicer under Federal Program Workout Activity
•	Qualified Deed in Lieus	•	Payable to subservicer under Federal Program Workout Activity
•	Qualified H4H	•	Payable to subservicer under Federal Program Workout Activity
	Collection/Loss Mitigation Incentives:		Eligible for accounts greater than or equal to 60 days delinquent — Non Treasury MHA:	Incentive Fee:
•	Reinstatement via lump-sum or repayment plan	•	Full reinstatement of all past due amounts as a result of collections, loss mitigation or other negotiation methods	[*]
•	Paid in full	•	Pay-off of all amounts due under the then existing note terms as a result of collections, loss mitigation or other negotiation methods	[*]
•	Third Party Sales	•	Asset sold to third party at foreclosure sale	[*]
•	Redemption	•	Borrwer exercises right of redemption according to state specific guideline	[*]
•	Deed-in-Lieu	•	Property deeded over to Asset owner	[*]
•	Short Sales	•	Receipt of funds pursuant to client approved plan	[*]
•	Note Sales	•	Receipt of funds pursuant to client approved plan	[*]

* [Confidential treatment requested]

Pricing			Description
•	Modifications — < 60 Days Delinquent	•	Receipt of funds pursuant to client approved modification; requires AmGen pre-approval	[*]
•	Modifications — 60+ Days Delinquent	•	Receipt of funds pursuant to client approved modification	[*]
	REO Sale Fee		Liquidation of REO Asset	Incentive Fee:
•	Referral Fee	•	HSSS will negotiate and earn a referral fee of 1% or $1,250 from the real estate transaction	[*]
	Recovery Incentive	•	Collection of charged-off deficiency balance	[*]
delinquencies are reflected using MBA delinquency method

* [Confidential treatment requested]

EXHIBIT E

[RESERVED]

EXHIBIT F

TAX AND FLOOD LIST OF PREFERRED VENDORS

EXHIBIT F

Tax and Flood List of Preferred Vendors

First American Real Estate Tax Service, LLC (Tax)

First American Flood Data Services, a division of First American Real Estate Solutions of Texas, L.P. (Flood)

EXHIBIT G-1 and EXHIBIT G-2

MONTHLY AND DAILY REPORTS AND FILES

EXHIBIT G1 and EXHIBIT G2

		Expected
		Delivery Time
G-1 Monthly Reports		(CST)	Report Group	AGF Report Names
Appendix A HAMP INITIAL LOAN SETUP DATA — Split by
Securitizations & Unencumbered	Existing	8:00 am (2)	BI	Hamp
Appendix B HAMP LOAN TRIAL PERIOD PAYMENTS -
Split by Securitizations & Unencumbered	Existing	8:00 am (2)	BI	Hamp
Appendix C HAMP LOAN SETUP DATA FOR OFFICIAL MOD — Split by Securitizations & Unencumbered	Existing	8:00 am (2)	BI	Hamp
Appendix D HAMP LOAN PAYMENTS FOR OFFICIAL MODS — Split by Securitizations & Unencumbered	Existing	8:00 am (2)	BI	Hamp
HAMP Master Recon	New	Midnight (3)	BI	Hamp Master Recon File
SR410UR-02 TRIAL BALANCE	Existing	8:00 am (1)	LSAMS	P139
SR410UR-03 CUTOFF TRANSACTION JOURNAL	Existing	8:00 am (1)	LSAMS	S215
SR410UR-05 CURTAILMENTS / PREPAYMENTS	Existing	8:00 am (1)	LSAMS	S213 and S212
SR410UR-06 LOANS REMOVED	Existing	8:00 am (1)	LSAMS	S214
SRV120C-01 MONTHLY ACCRUED INTEREST	New	8:00 am (1)	LSAMS	New — Mortgage accruals
SRV126C-01 ACCRUED INTEREST TRIAL BALANCE	New	8:00 am (1)	LSAMS	S2TT and T3TQ
				IR reports/latitude - P4CG, P4CQ and Escrow Advances. Must
IR Reporting Package with Latitude Reports	Existing	Midnight (2)	Investor Reporting	contain a new Daily Remittance Tie
				Out Report and HAMP Cash Recon.
Custom File	New	6:00 am (1)	BI	Custom
LPMA File For 2010-1 Portfolio	New	Midnight (3)	BI	12 Oversight Reports
Securitization remittance files for 2010-1 and 2006-1	New	Midnight (3)	BI & Investor Reporting	Remittance 06 & 10 deal
Monthly modification data file for 2010-1	New	Midnight (3)	BI & Investor Reporting	Compliment for 2010 securitization remittance
REO Monthly Client Package	New	Midnight (3)	BI & Investor Reporting	LPS Monthly Client Package
Annual LSAM’s Masterfile Extract for 2010-1	New	Midnight (4)	BI & Investor Reporting	Oversight Report

		Expected
		Delivery Time
G-2 Daily Reports		(CST)	Report Group	AGF Report Names
SRV105C-01 LOAN TRANSFER REPORT	Existing	8:00 am (1)	LSAMS	P129 and P130
SRV111C-01 ACCRUED INTEREST REPORT	Existing	8:00 am (1)	LSAMS	S2TT
SRV403C INVESTOR REMITTANCE DAILY PAYOFF REPORT	Existing	8:00 am (1)	LSAMS	P110
SRV511C-01 DAILY TRANSACTION JOURNAL	Existing	8:00 am (1)	LSAMS	P102 and HELOC Advances
SRV583AR-01 DETAIL MORTGAGE TRIAL BALANCE	Existing	8:00 am (1)	LSAMS	P181 detail
SRV583AR-02 SUMMARY MORTGAGE TRIAL BALANCE	Existing	8:00 am (1)	LSAMS	P181 summary
LPMA Portfolio Oversight Files for Total Portfolio	Existing	6:00 am (1)	BI	Oversight
Custom File	New	6:00 am (1)	BI	Custom
Daily ACCRUED INTEREST	New	6:00 am (1)	BI	New “SRV120 Daily Like”
REO Reporting Detail	New	6:00 am (1)	BI	REO
HELOC Reporting Detail	New	6:00 am (1)	BI	FM’s, Applied/unapplied and trend report

(1)	Delivered Tuesday through Saturday, except company holidays, or in more general terms — available the morning following ENDDAY, if month end falls on a Saturday or Sunday and additional ENDDAY is ran — reports would be provided the next morning; Delivery method = SFTP
(2)	Delivered by the end of business on the 3rd business day of the month. Delivery method = secure email
(3)	Delivered by the end of business on the 5th calendar day of the month. Delivery method = secure email
(4)	Delivered annually by the end of business on the 5th calendar day of April. Delivery method = secure email. Starting April 2011.

EXHIBIT H

SECURITY ASSESSMENT

     EXHIBIT H — Security Assessment — Nationstar

The AGFS Security Office has completed a review of Nationstar Security Assessment Questionnaire responses and conducted an onsite assessment for physical and information security on December 8, 2010. Based on the observations from the review, the Security Office has concluded that the following actions are required within the next 12 months.

Number	Control Category	Issue Description	Remediation Required	Date Remediated
1	Access Controls	a) Sufficient controls are not currently in place to ensure that access to premises and systems by terminated employees is revoked in a timely fashion. The following action items must be completed.	a) Implement controls to integrate the termination process across HR, management, and IT / Security to provide timely removal of physical and logical user access rights for all terminated employees. Termination processing should be weekly at a minimum. Application and system access should be recertified by management on an annual basis at minimum.
		b) Contractors are currently not reviewed for access termination	b) Implement a formal review / recertification process for contractors. Review and renewal of access rights should be performed by management on a quarterly interval at minimum.
2	Access Controls	Personally identifiable information (PII) is not comprehensively scrubbed in test / development environments.	All sensitive data in test / development should be scrubbed.
3	Access Controls	Currently, Nationstar technical staff have open access to production data	Access to production data by technical support staff should only be granted upon appropriate management approval, limited in scope to the specified purpose, and revoked when no longer justified. Access to production data should be reviewed and recertified quarterly.
4	Access Controls	All developers have read / update access to all source code.	Access to source code for each application should be restricted to only those employees assigned to an application. A formal process for approvals and promotion of changes from development to separate and controlled QA and production environments should be implemented.

Number	Control Category	Issue Description	Remediation Required	Date Remediated
5	Network Security Controls	The Nationstar network is protected by a single Nokia Checkpoint firewall and configured with 2 zones, core and external DMZ. A project is in place to create an additional DMZ zone to house the ecommerce application servers. The plan is to utilize the existing firewall for the new zone in addition to the current zone in place. Completion is scheduled for end of January 2011. While this offers greater protection and controls than currently in place, a vulnerability exploit in the Nokia Checkpoint would expose Nationstar to data compromise within both DMZ’s and the core.	A second firewall from another vendor should be implemented to strengthen protection of sensitive data.
6	Network Security Controls	Remote access by employees is allowed through the Nationstar VPN from non-company owned devices with no checks for patch levels, virus scanning, or firewall. Dual factor authentication is not deployed.	Deploy dual factor authentication for remote users. Implement remote device scanning and block utilization of devices that do not meet minimum security requirements for antivirus, firewall, and operating system patch levels.
7	Policy/Governance	Application updates for Remedy are currently released on an ad hoc basis as updates become available. Consistent change management controls are not in place for all applications.	Change management processes for all applications need to be formalized to scheduled, controlled release cycles and incorporate a formal QA process.
8	Policy/Governance	Use of USB devices for removable media is permitted by exception approval only. Although a corporate, encrypted thumb drive is issued, there is no facility to prevent approved employees from using their own non-company devices.	Policy should be clearly defined and protection should be deployed to limit USB devices to company-issued only.
9	Policy/Governance	No retention policy for personally identifiable information (PII) or business confidential data is currently defined and documented.	A policy governing retention guidelines should be created and enforced.
10	Policy/Governance	Passwords are not allowed to repeat within the last 5 passwords used.	Increase the threshold on re-use of passwords to prevent repeating within the last 12 passwords used.

Number	Control Category	Issue Description	Remediation Required	Date Remediated
11	Policy/Governance	Data owners are not currently identified to approve creation, access rights, or classification of data groups. No formal process exists for classification of data, structured or un-structured. Policies and procedures are defined but execution is ad hoc.	Ownership of data groups should be documented and a formal process established to classify company and customer confidential (sensitive) data. Formal processes for new data group creation, annual review, and recertification of access to sensitive data should be implemented.
12	Disaster Recovery/Business Continuity	BIA’s have not been completed with the business areas. Business Continuity is not currently integrated into the disaster recovery testing process to ensure that all business critical applications and resources are included and successfully tested on an annual basis.	Complete BIA’s for all critical business areas. Document business continuity plans for each business area and ensure that all critical personnel and applications are included in annual testing. Table-top exercises should be completed fro each business area in scope.
13	Disaster Recovery/Business Continuity	The disaster recovery site is located within 21 miles from the Nationstar data center.	An alternate location within a different region of the US should be established to decrease the probability of losing both primary and secondary locations during a catastrophic event.
14	External Audit/Certification	A SAS 70 audit or equivalent has not been performed for Nationstar.	A SAS 70 audit or equivalent should be performed to assess overall Nationstar security posture.

EXHIBIT I

APPROVAL MATRIX

EXHIBIT I

Approval Matrix

		Servicer
	Delegated	Approval
Action	Authority	Required	Terms and Conditions
			Process Payments by requiring Principal, Interest and Escrow portions of the payment before calling it a contractual payment and rolling the due date subject to the below exceptions.
			Exception for if an Escrowed loan, allow a $50 shortage and pull the shortage out of Escrow.
Modified Payment Logic	X		Exception for if not an Escrowed loan, allow a $5 shortage and pull the shortage out of Recoverable Corporate Advance.
			Followed Servicer Guidelines for Payment Overages.
Paid In Full Loans with Balances	X		If paid in full loan has a remaining balance of Escrow or Suspense, hold funds for 30 days to ensure any returned payments are received and netted out of the refund.
Pre-Payment Penalty (PPP) Waivers	X		Subservicer may waive the application of any related PPP if Subservicer reasonably believes doing so would maximize proceeds for the account.
Releasing Liens	X		Subservicer will release liens in accordance with the state requirements on paid in full and short sale loans.
Servicemembers Civil Relief Act	X		Subservicer will service loans qualified for the Servicemembers Civil Relief Act in accordance with the provisions of the law.

		Servicer
	Delegated	Approval
Action	Authority	Required	Terms and Conditions
			Subservicer will consider a customer’s request for a Subordination of a Second Lien base upon the below criteria.
			Must have a current Interior Appraisal — Appraisal from Lender acceptable.
			CLTV must be less than 80% if greater than $1,000 Cash Out or between 80 — 95% with less than $1,000 Cash Out.
Subordinations	X		CLTV calculated by (the Good Faith Estimate Loan Amount + the Second Credit Limit) divided by the As Is Appraisal Value.
			Based upon Subservicer judgment, the customer must have good pay history on the Second lien and on the credit bureau.
			Based upon Subservicer judgment, Subservicer can also approve Subordination with the stipulation of closing the line of credit.
Responding to Disputes and Written Complaints	X		Subservicer will respond promptly to any written inquiry from any Federal, State, County or City Agency or Organization as well as the Better Business Bureau with a copy to Servicer.
			Subservicer will follow all applicable laws, Subservicer’s written Complaint Resolution Process and good servicing practices as it relates to customer written complaints and disputes.
Credit Bureau reporting	X		Subservicer will report loans in compliance with the Fair Credit Reporting Act.
			Subservicer will set up Escrow for customers who make the request.
			Subservicer will set up Escrow for customers who are not set up for Escrow but are modified under the HAMP program.
Setting Up Escrow	X		Subservicer will set up Escrow for customers who are not set up for Escrow but Subservicer has had to pay delinquent taxes or establish a Creditor Placed Insurance Policy.
			Subservicer will follow all RESPA Requirements in relation to servicing Escrow Loans on behalf of Servicer.
			Subservicer will use its best judgment when a customer requests to dissolve an Escrow Account.
Dissolving an Escrow Account	X		At a minimum, customer should have a perfect pay history (0 x 30) for the past 24 months and the LTV should not be greater than 80%.
Interest on Escrow	X		Subservicer will follow all state requirements when by paying Interest On Escrow on a quarterly basis.

		Servicer
	Delegated	Approval
Action	Authority	Required	Terms and Conditions
Creditor Placed Insurance	X		For loans that are not set up for Escrow on Insurance, Subservicer will annually receive proof that the customers have a valid and paid for Hazard Insurance Policy. If the customers do not provide proof, Subservicer will set up a Creditor Placed Insurance Policy to cover the principal balance of the loan.
			Subservicer will set up an Escrow Account so Advance can be repaid over 12 months.
Payment of Delinquent Real Estate Taxes	X		As a rule of thumb, Subservicer should only pay delinquent taxes on behalf of a customer only if there is a risk of a Tax Sale within the next year (High Severity).
			However, Subservicer should use good business judgment when paying delinquent taxes on loans that are not Escrowed for Taxes. For example, if the delinquent taxes are given to a private company to collect with a high interest rate, it would be prudent to go ahead and pay those taxes even though they might not go to a Tax Sale. Would want to look at value of property and Balance as well.
			Subservicer will set up an Escrow Account so Advance can be repaid over 12 months.
Release of Hazard Insurance proceeds	X		Consistent with Subservicer Servicing Guidelines.
Applicable 1098, 1099A and 1099C IRS Reporting	X		Subservicer will provide customers and appropriate end of year reporting as required by law. This would include, but not be limited to, 1098, 1099A and 1099C reporting.
Hardship / Disaster		X	Servicer must be informed and approve approach / arrangements.

		Servicer
	Delegated	Approval
Action	Authority	Required	Terms and Conditions
			Subservicer will follow all applicable collections laws including, but not limited to, FDCPA.
			Subservicer will have a dedicated staff assigned to Servicer Loans.
			Subservicer will staff with low spans of control for each delinquency bucket of Servicer Loans.
			Subservicer will make at least 1 collection phone attempt every 3 days on Servicer Loans.
			Subservicer will make multiple phone attempts using different strategies to contact customer beginning when a loan is 1 - 29 days past due.
Collections Efforts	X		Subservicer will start collections attempts no later than 16 days past due (as early as 5 days past due for higher risk loans).
			Upon contact, Subservicer will ascertain reason for delinquency and ask for payment.
			Subservicer will continue to make collection calls for payments even if loan is in Foreclosure and/or Loss Mitigation.
			Subservicer will utilize a letter strategy that is consistent with Subservicer Guidelines.
Timing of Breach Notice	X		Typically at day 45 or at day 35 for loans in states that have implemented laws that require longer timeframes for NOI Letters. Consistent with Subservicer Servicing Guidelines.
			After 2 consecutive monthly contractual payments and no deferment in the last 12 months, deferment can be offered.
Delinquent Loans Deferment Plans for	X		Must collect the Escrow and Principal portions of the delinquent and current month payments in order to roll to the Next Due Date to Current (due for the next month).
			Exception, Deferments as described above are not approved for the Servicer Mortgage Loan Trust 2010-1 Securitization loans.
			Loan must be greater than or equal to 30 days delinquent.
			1/2 of arrears should be collected prior to the forbearance, if possible.
Repayment Plans for	X		Remaining arrears to be collected over a 3 — 6 month period.
			6 month max repayment plan term.
			Follow all HAMP rules / process / reporting / guidelines including new required Directives.
HAMP Modification	X		Participate in only the required programs unless approved by Servicer.
			Principal reductions not approved unless approved by Servicer at loan level.
			Follow all HAFA rules / process / reporting / guidelines including new required Directives.
HAFA Short Sale/DIL	X		Subservicer must use the Minimum Net Proceeds calculation Approved by Servicer.

		Servicer
	Delegated	Approval
Action	Authority	Required	Terms and Conditions
HAUP Program	X		Follow all HAUP (Unemployment) rules / process / reporting / guidelines including new required Directives.
	X		HAMP must always be the first alternative for Loan Modifications.
		X	For loans less than 90 days past due and not eligible for HAMP, Subservicer will submit all Loan Modification packages to Servicer for approval.
Custom Modification	X		Loans greater than or equal to 90 days past due and not eligible for HAMP, a minimum of a 3 month Forbearance Plan is required before loan can be modified.
	X		NPV must exceed Foreclosure / REO, Short Sale and DIL best case.
Forgiveness of principal, interest or other amounts outstanding / owed		X	All debt forgiveness of principal, interest or other outstanding arrears must be approved Servicer.
	X		HAFA always the first alternative for Short Sales.
	X		Interior Appraisal Value less than 60 days old is required along with Hardship Letter from Customer.
	X		NPV must exceed Foreclosure / REO, Loan Modification and DIL base case.
	X		Realtor commissions not to exceed 5%.
Short Sale	X		No cash out to seller.
	X		Sale Amount is compared to Appraisal to ensure value received.
		X	Servicer approval required on loans less than 90 Days past due.
		X	Servicer approval required on loans greater than or equal to 90 Days past due where Expected Loss exceeds $125,000.
	X		HAFA always the first alternative for DIL.
	X		Interior Appraisal Value less than 60 days old is required along with Hardship Letter from Customer.
	X		Updated Title required.
Deed - in - Lieu (DIL)	X		NPV must exceed Foreclosure / REO, Loan Modification and Short Sale base case.
		X	Servicer approval required on loans less than 90 Days past due.
		X	Servicer approval required on loans greater than or equal to 90 Days past due where Expected Loss exceeds $125,000.

		Servicer
	Delegated	Approval
Action	Authority	Required	Terms and Conditions
			Delegated authority up to 3 monthly payments or 1% of the Unpaid Principal Balance, whichever is greater.
Cash for Keys - DIL	X		Property must be left vacant and broom swept clean.
			Customer must permit an Interior Appraisal or BPO and execute DIL before receiving Proceeds.
Recoverable Corporate Advances	X		As allowed by law, Subservicer will charge any legal foreclosure or bankruptcy attorney cost or expense to the loan in the Recoverable Corporate Advance bucket so that the borrower will be responsible for paying these amounts back.
Foreclosure Referral 1st Liens 2nd Liens	X	X	1st liens will be referred within 3 days upon expiration of demand notice and no longer active in HAMP. 1st liens with Principal Balances less than $60,000 or recent Interior Appraised/BPO Value of less than $15,000 must be approved by Servicer.
		X	Servicer to approve all 2nd lien referrals based on equity analysis.
			For any Advance that is presented for payment of $10,000 or more, Subservicer will do a Signature Verification prior to acceptance of the advance.
HELOCs	X		For any Advance that is presented for payment that is in the form of a Draft, Subservicer will decline payment and not post the transaction to the loan.
			For any Advance that is presented for payment less than $100, Subservicer will decline the payment and not post the transaction to the loan.
			If a HELOC loan that is still in the Draw Period goes 60 days past due, the line of credit will be shut down and an Adverse Action Notice will be sent to the customer.
Securitized Loans	X		For loans in the two Securitized Pools — 2006-1 and 2010-1, prior to the initiation of a Foreclosure Action, Subservicer will perform all actions necessary to transfer ownership of such Mortgage Loan to the appropriate Owner or Owner Designee Name.

		Servicer
	Delegated	Approval
Action	Authority	Required	Terms and Conditions
MERS	X		Prior to initiation of a Foreclosure Action, Subservicer will perform all actions necessary to transfer ownership of such Mortgage Loan from MERS to the appropriate Owner or Owner Designee Name.
			Within 180 days of Foreclosure Sale, an Interior Appraisal (if Vacant, Short Sale or DIL) is required or a BPO (prefer this to be done within 2 months of the Foreclosure Sale date if possible for the most current value).
Foreclosure Valuations	X		Upon Completion of Foreclosure Sale, an Interior Appraisal (if Vacant, Short Sale or DIL) is required if the last Interior Appraisal is older than 180 days.
			If property occupied, a BPO is required if previous BPO is older than 180 days.
	X		85% of the most recent Interior Appraisal (vacant property) or BPO or the Pay-off, whichever is lower.
Foreclosure Bidding Instructions		X	Foreclosure Bids with Estimated Loss greater than $125,000 should be approved by Servicer.
Property Preservation	X		Delegated authority up to a cumulative $10,000 for each property.
Foreclosure and Bankruptcy Fees and Costs	X		Must comply with most recent FNMA Fee Matrix.
	X		Subservicer will file for Motion For Relief after 2 missed payments on bankrupt loans.
	X		Subservicer will solicit all Active Bankruptcy Chapter 7 loans for Reaffirmations and will receive court approval.
Bankruptcy		X	Subservicer cannot approve principal reductions on bankrupt loans without prior approval from Servicer.
	X		Accounts should be charged-off in the month in which the loan is 180 days past due and the lien is determined to no longer be valid. (e.g. senior lien foreclosure, third party sale foreclosure (3rd party outbids Servicer) or short sale completed).
Charge-off Approval	X		Subservicer has the authority to make charge-off decisions on 2nd liens with less than $30,000 equity.
		X	Charge-offs greater than $125,000 should be approved by Servicer.

		Servicer
	Delegated	Approval
Action	Authority	Required	Terms and Conditions
Registering of REO Properties	X		Subservicer will follow all local jurisdiction property registering requirements as required by local ordinances and statutes.
Dwelling Insurance	X		Subservicer will adequately provide for dwelling insurance of all REO properties up to and including the value of the property.
			Limit of $2,000 for First Attempt.
Relocation Assistance to shorten Eviction - Cash For Keys	X		Second and greater Attempts limit is $2,500 for most recent Value of $0 — $250,000 or 1% of the most recent Value greater than $250,000.
			Property must be left in broom swept condition to receive proceeds.
			An Interior Appraisal is required either for the Foreclosure Bid process, the Foreclosure Sale process or upon Vacancy once in REO.
REO List Price	X		A BPO should also be received from the Real Estate Agent who is assigned the property to sell.
			REO Initial List Price should be set at the higher of the Interior Appraisal or BPO “As Is” value.
			If property being repaired, list using the “Repaired” value vs. the “As Is” value is acceptable.
			At 1 year and every year thereafter from the last Interior Appraisal Date, order a new Interior Appraisal unless the property is under contract.

		Every 30 Days. After 60 Days, use best judgment.
		Property Value	30 Day Reduction			60 Day Reduction
REO List Price Reductions	X	$0 — $24.9k		18	%		14	%
		$25 — $49.9k		14	%		12	%
		$50 — $99.9k		8	%		6	%
		$100k+		5	%		5	%

REO Repairs /
Improvements X Delegated authority up to cumulative $10,000 for each property. Rule of thumb should be that the repair should increase the selling price by two times the expense.

		Servicer
	Delegated	Approval
Action	Authority	Required	Terms and Conditions
Property Preservation /Emergency Repairs	X		Delegated authority up to cumulative $10,000 for each property. Rule of thumb should be that the repair should increase the selling price by two times the expense.
Acceptance of REO Sales Offer	X		Offer must be greater than or equal to 92% of current list price.
		X	All other offers less than 92% will require Servicer approval.
	X		All REO Sales Contracts should be executed “As Is” and “Final”.
			Subservicer will provide monthly updates to Servicer as the status of any litigation loan in process.
Settlement of Litigated Accounts		X	Servicer to approve all litigated files (initiated from outside party) based on recommendation by Subservicer and outside counsel.
Approval of any Form Letters	X		Subservicer will have Legal Approval of all Form Letters being sent to customers for any servicing reasons.
Regulatory Requests for Information or Exams	X		If Servicer receives data and/or exam requests from a State Regulatory Agency (for example: A Bureau of Financial Institutions), the request will be sent to Subservicer to retrieve data and/or provide answers and, with timely prior approval from Servicer, will provide the data or complete the exam or will send the information to Servicer for their response (Servicer decision).
			If Subservicer receives data and/or exam requests from a State Regulatory Agency on American General loans (for example: VA Bureau of Financial Institutions), Subservicer will notify American General within 10 days, will retrieve the data and/or complete the exam and, with timely prior approval from Servicer, will provide the data or exam to the requesting agency.
Solicitation of Customers		X	Subservicer will seek approval of any offer of any third party product or origination offer from Servicer prior to solicitation.
			In the event that Servicer approves of a Solicitation, Subservicer will eliminate any Do Not Solicit loans.

This Approval Matrix may have items added to it, items revised or items deleted at any time with mutual consent of both Subservicer and Servicer.

EX-10.7

Exhibit 10.7

EXECUTED

(CONFIDENTIAL TREATMENT OF CERTAIN DESIGNATED PORTIONS OF THIS AGREEMENT HAVE BEEN REQUESTED BY NATIONSTAR MORTGAGE LLC, SUCH CONFIDENTIAL PORTIONS HAVE BEEN OMITTED, AS INDICATED BY AN [*] IN THE TEXT, AND SUBMITTED TO THE SECURITIES AND EXCHANGE COMMISSION).

SUBSERVICING AGREEMENT
(AMERICAN GENERAL MORTGAGE LOAN TRUST 2010-1)

Effective as of February 1, 2011

Between

MorEquity, Inc.
as Servicer

and

Nationstar Mortgage LLC
as Subservicer

RESIDENTIAL MORTGAGE LOANS

Table of Contents

Page

Article I Definitions	1
Section 1.1 Defined Terms	1
Article II Engagement of Subservicer	12
Section 2.1 Servicing; Possession of Servicing Files	12
Section 2.2 Books and Records	14
Section 2.3 Custodial Agreement	14
Section 2.4 Limitation on Scope of Servicing Obligation	14
Section 2.5 Loss Mitigation and Recovery Actions	15
Section 2.6 HMP Program	15
Section 2.7 Oversight Program	15
Article III Representations, Warranties and Covenants	16
Section 3.1 Subservicer Representations, Warranties and Covenants	16
Section 3.2 Servicer Representations, Warranties and Covenants	17
Section 3.3 Servicer Representations, Warranties and Covenants for Mortgage Loans	18
Article IV Servicing of the Mortgage Loans	19
Section 4.1 Standard and Scope of Service	19
Section 4.2 Authority of the Subservicer; Delinquencies	19
Section 4.3 Collection of Mortgage Loan Payments	21
Section 4.4 Notification of Adjustments	21
Section 4.5 Duties the Subservicer May Delegate	22
Section 4.6 Servicing Files	22
Section 4.7 Imaged Records	24
Section 4.8 Enforcement of Due-On-Sale Clause; Assumption	24
Section 4.9 Insurance	25
Section 4.10 Insurance Notices	26
Section 4.11 Tax and Flood Contracts	26
Section 4.12 Tax and Insurance Accounts; Tax Service	27
Section 4.13 Bankruptcies	28
Section 4.14 Foreclosure Procedures	28
Section 4.15 Reinstatement of Mortgage Loans	30
Section 4.16 Servicing REO Property	30
Section 4.17 Satisfactions	32
Section 4.18 Servicing Advances and Pass-Through Expenses	33
Section 4.19 Prepayment Penalties	33
Section 4.20 Restoration and Repair	34
Section 4.21 Subservicer Bond, Errors and Omissions Insurance	35
Section 4.22 Disaster Recovery	35
Section 4.23 High Cost Loans	36
Article V Compensation to the Subservicer	36
Section 5.1 Compensation to the Subservicer	36
Article VI Accounting	36
Section 6.1 General	36
Section 6.2 Account Maintenance	37

	Page
Section 6.3 P & I Custodial Account; Remittance	38
Section 6.4 T & I Escrow Accounts	39
Section 6.5 Interest on Tax and Insurance Reserves	40
Section 6.6 Access to Records	40
Article VII Reports to the Servicer	41
Section 7.1 Reports to the Servicer	41
Section 7.2 Annual Independent Certified Public Accountants’ Servicing Report	42
Section 7.3 Reports of Foreclosures and Abandonment of Mortgaged Property	43
Section 7.4 Real Estate Owned Reports	43
Section 7.5 Liquidation Reports	44
Section 7.6 Compliance with Gramm-Leach-Bliley Act of 1999	44
Section 7.7 Reporting	44
Article VIII Subservicer and Indemnification	44
Section 8.1 Merger or Consolidation of the Subservicer	44
Section 8.2 Limitation on Resignation	45
Section 8.3 Subservicer Limitation on Liability and Indemnification	45
Section 8.4 Servicer Limitation on Liability and Indemnification	46
Section 8.5 Notice of Litigation	47
Article IX Termination	47
Section 9.1 Events of Default	47
Section 9.2 Termination of Agreement	49
Article X Miscellaneous Provisions	50
Section 10.1 Protection of Confidential and Proprietary Information	50
Section 10.2 Notices	54
Section 10.3 Severability Clause	54
Section 10.4 Performance Audits	55
Section 10.5 Counterparts	55
Section 10.6 Place of Delivery and Governing Law	55
Section 10.7 Waiver of Jury Trial	55
Section 10.8 Further Agreements	55
Section 10.9 Successors and Assigns; Assignment of Subservicing Agreement	56
Section 10.10 Amendments, Etc.	56
Section 10.11 Exhibits	56
Section 10.12 General Interpretive Principles	56
Section 10.13 Reproduction of Documents	57
Section 10.14 Conflicts	57

Exhibit A	Mortgage Loan Data Field Request
Exhibit B	Servicing Transfer Instructions
Exhibit C	[RESERVED]
Exhibit D	Pricing Schedule
Exhibit E	[RESERVED]
Exhibit F	Tax and Flood List of Preferred Vendors
Exhibit G-1	Monthly Reports and Files
Exhibit G-2	Daily Reports and Files
Exhibit H	Nationstar Security Assessment
Exhibit I	Delegated Authority Guidelines and Approval Matrix

SUBSERVICING AGREEMENT

     THIS SUBSERVICING AGREEMENT, dated as of February 1, 2011 (this “Agreement”), is entered into between Nationstar Mortgage LLC (the “Subservicer”) and MorEquity, Inc. (the “Servicer”).

     WHEREAS, on January 31, 2010, the Servicer entered into a pooling and servicing agreement (the “Pooling and Servicing Agreement”), among Sixth Street Funding LLC (the “Depositor”), Wells Fargo Bank, N.A., as master servicer (the “Master Servicer”), securities administrator and custodian, Green Tree Servicing LLC, as designated successor servicer, and U.S. Bank National Association, as trustee, pursuant to which the Servicer is responsible for servicing the mortgage loans identified on Exhibit D thereto (the “Mortgage Loans”) for the benefit of the Depositor;

     WHEREAS, in connection with the Pooling and Servicing Agreement, the Servicer is permitted to enter into subservicing arrangements to service the Mortgage Loans;

     WHEREAS, the Servicer and the Subservicer desire that the Subservicer subservice the Mortgage Loans pursuant to this Agreement;

     NOW, THEREFORE, in consideration of the mutual promises contained herein and for other good and valuable consideration the receipt and sufficiency of which are hereby acknowledged, the parties hereto hereby agree as follows:

ARTICLE I
DEFINITIONS

     Section 1.1 Defined Terms.

     For purposes of this Subservicing Agreement, all capitalized words and terms in this Agreement not otherwise defined herein shall have the respective meanings set forth in the Pooling and Servicing Agreement. The following capitalized terms, unless the context requires otherwise, shall have the respective meanings set forth below:

     Accepted Servicing Practices means, with respect to any Mortgage Loan, those mortgage servicing practices that comply with the terms of the Mortgage Loans, the Legal Requirements and the terms and conditions of this Agreement (including those requirements on Exhibit I of this Agreement), and consistent with the same standard of care, skill, prudence, and diligence with which the Subservicer services similar mortgage loans within its servicing portfolio, giving due consideration to (i) the customary and usual standards of practice of prudent institutional mortgage loan servicers that are utilized with respect to mortgage loans comparable to the Mortgage Loans and (ii) the objective of maximizing the timely recovery of principal and interest on the Mortgage Loans in the best interests of the Trust.

     Accounts mean the P & I Custodial Accounts and the T & I Escrow Accounts.

     Affiliate shall have the meaning set forth in the Pooling and Servicing Agreement.

1

     Agreement means this Subservicing Agreement and all written amendments hereof and supplements hereto.

     Ancillary Income means an amount equivalent to all income derived from the Mortgage Loans in accordance with Accepted Servicing Practices (other than Subservicing Fees and prepayment penalties) from Late Fees, phone pay fees, fees received with respect to checks or bank drafts returned by the related bank for non-sufficient funds, investment income on the Accounts, assumption fees and modification fees.

     Appraisal Report means a report setting forth the fair market value of a Mortgaged Property as determined by an appraiser and in compliance with applicable law. For appraisals conducted prior to the Servicing Transfer Date, such Appraisal Reports shall be in the form received by the Subservicer, and for appraisals conducted subsequent to the Servicing Transfer Date, such Appraisal Reports shall be in a form indicating that the related appraisals have been conducted in accordance with the Uniform Standards of Professional Appraisal Practice, provided in each case by an independent appraiser.

     Assignment of Mortgage means an assignment of the Mortgage, notice of transfer or equivalent instrument in recordable form, sufficient under the laws of the jurisdiction wherein the related Mortgaged Property is located to reflect the transfer of the Mortgage to the party indicated therein.

     Broker Price Opinion (“BPO”) means an opinion of the fair market value of a Mortgaged Property given by a licensed real estate broker, which generally includes at least three comparable sales and three comparable listings.

     Business Day shall have the meaning set forth in the Pooling and Servicing Agreement.

     Code shall have the meaning set forth in the Pooling and Servicing Agreement.

     Condemnation Proceeds means all awards of settlements in respect of a Mortgaged Property, whether permanent or temporary, partial or entire, by exercise of the power of eminent domain or condemnation, to the extent the award of settlement is not required to be released to a Mortgagor in accordance with the terms of the related Mortgage Loan Documents.

     Custodial Agreement means any custodial agreement between the Trust and any Custodian (as the same may be amended, restated, supplemented or otherwise modified from time to time), which provides for the custody of the original Mortgage Note and recorded Mortgage, and which the Trust provides notice in writing to the Subservicer.

     Custodian shall have the meaning set forth in the Pooling and Servicing Agreement.

     De-Boarding Fee means a fee paid by Servicer to Subservicer when a Mortgage Loan transfers from Subservicer to another servicer and in accordance with Exhibit D.

     Defaulted Loan means a Mortgage Loan that is sixty (60) or more days Delinquent, or such other Mortgage Loan as may be agreed upon between Servicer and Subservicer.

2

     Delegated Authority Guidelines and Approval Matrix means the delegated authority to initiate loss mitigation or recovery actions within the agreed parameters set forth in Section 2.5 and in Exhibit I.

     Delinquent shall have the meaning set forth in the Pooling and Servicing Agreement.

     Designated Successor Servicer shall have the meaning set forth in the Pooling and Servicing Agreement.

     Determination Date means, with respect to each Remittance Date, the last Business Day prior to that Remittance Date.

     Due Date shall have the meaning set forth in the Pooling and Servicing Agreement.

     Eligible Account shall have the meaning set forth in the Pooling and Servicing Agreement.

     Eligible Investments means any one or more of the following obligations or securities acquired at a purchase price of not greater than par which investment provides for a date of maturity not later than the next succeeding Remittance Date:

     (i) direct obligations of, or obligations fully guaranteed as to timely payment of principal and interest by, the United States or any agency or instrumentality thereof, provided such obligations are backed by the full faith and credit of the United States;

     (ii) (A) demand and time deposits in, certificates of deposit of, bankers’ acceptances issued by or federal funds sold by any depository institution or trust company incorporated under the laws of the United States of America or any state thereof and subject to supervision and examination by federal and/or state authorities, so long as, at the time of such investment or contractual commitment providing for such investment, such depository institution or trust company has a short-term uninsured debt rating in one of the two highest available rating categories of Standard & Poor’s and in the highest available rating category of Moody’s and provided that each such investment has an original maturity of no more than 365 days and (B) any other demand or time deposit or deposit which is fully insured by the FDIC;

     (iii) repurchase obligations with a term not to exceed 30 days with respect to any security described in clause (i) above and entered into with a depository institution or trust company (acting as principal) rated “A” or higher by S&P and “Aaa” or higher by Moody’s, provided, however, that collateral transferred pursuant to such repurchase obligation must be of the type described in clause (i) above and must (A) be valued daily at current market prices plus accrued interest or (B) pursuant to such valuation, be equal, at all times, to 105% of the cash transferred by the Trustee, the Servicer, the Master Servicer or the Securities Administrator, as the case may be, in exchange for such collateral and (C) be delivered to the Trustee, the Servicer, the Master Servicer or the Securities Administrator or, if the Trustee, the Servicer, the Master Servicer or the Securities Administrator, as applicable, is supplying the collateral, an agent for the Trustee, the Servicer, the Master Servicer or the Securities Administrator, in such a manner as to accomplish perfection of a security interest in the collateral by possession of

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     certificated securities;

     (iv) securities bearing interest or sold at a discount that are issued by any corporation incorporated under the laws of the United States of America or any State thereof and that are rated by each of Standard & Poor’s and Moody’s in their respective highest long-term unsecured rating categories at the time of such investment or contractual commitment providing for such investment;

     (v) commercial paper (including both non-interest-bearing discount obligations and interest-bearing obligations payable on demand) that is rated by each of Standard & Poor’s and Moody’s in their respective highest short-term unsecured debt ratings available at the time of such investment; and

     (vi) units of money market funds registered under the Investment Company Act of 1940 that, if rated by each of Standard & Poor’s and Moody’s, are rated in their respective highest rating categories (if so rated);

     provided, that no instrument described hereunder shall evidence either the right to receive (a) only interest with respect to the obligations underlying such instrument or (b) both principal and interest payments derived from obligations underlying such instrument and the interest and principal payments with respect to such instrument provide a yield to maturity at par greater than 120% of the yield to maturity at par of the underlying obligations.

     Escrow means all funds collected by the Subservicer and to be held in one or more T & I Escrow Accounts to cover expenses of the Mortgagor required to be paid under the Mortgage to third parties, including, without limitation, (i) taxes, special assessments, water, sewer and other governmental impositions or charges that are or may become liens on the Mortgaged Property prior to that of the Mortgage Loan, (ii) ground rents, and (iii) Hazard Insurance, Flood Insurance, and Private Mortgage Insurance and other insurance premiums.

     Escrow Payments shall have the meaning set forth in the Pooling and Servicing Agreement.

     Event of Default means any event set forth in Section 9.1 hereof.

     Fannie Mae means the government sponsored entity organized or known as the Federal National Mortgage Association or any successor thereto.

     Fannie Mae Guidelines means the guidelines contained in the Fannie Mae Servicing Guide pertaining to one-to-four-family, first or junior lien, conventional single family mortgage loans, and all supplements, amendments or additions thereto, but only with respect to the practices set forth therein that are applicable to actions undertaken in connection with the delinquency, foreclosure, REO disposition, remedies for defaulted loans and property insurance procedures and claims.

     FDIC means the Federal Deposit Insurance Corporation.

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     FHA means the Federal Housing Administration of the United States Department of Housing and Urban Development, or any successor thereto.

     First Lien Mortgage Loan means a Mortgage Loan secured by a first priority lien Mortgage on the related Mortgage Property.

     Flood Insurance or Flood Insurance Policy means an insurance policy insuring against loss or damage from flood hazards not typically covered within the scope of standard extended hazard coverage, together with all riders and endorsements thereto.

     Freddie Mac means the government sponsored entity organized or known as the Federal Home Loan Mortgage Corporation or any successor thereto.

     Freddie Mac Guidelines means the guidelines contained in the Freddie Mac Single-Family Seller/Servicer Guide and all supplements, amendments, or additions thereto, but only with respect to the practices set forth therein that are applicable to actions undertaken in connection with the delinquency, foreclosure, REO disposition, remedies for defaulted loans and property insurance procedures and claims.

     Hazard Insurance or Hazard Insurance Policy means a fire casualty extended coverage insurance policy insuring against loss or damage from fire hazard, wind, liability and other risks covered within the scope of standard extended hazard coverage, together with all riders and endorsements thereto.

     High Cost Loan means any Mortgage Loan, as specifically identified on the Mortgage Loan Schedule, classified at the time of its origination as (a) a “high cost” loan under HOEPA, or (b) a “high cost,” “threshold,” “covered” (provided however the “covered” classification does not apply to loans originated subject to the New Jersey Home Ownership Act of 2002 as a “covered home loan” which are not also high cost loans), “predatory” or similar loan under any other applicable state, federal or local law (or a similarly classified loan using different terminology under a law imposing heightened regulatory scrutiny or additional legal liability for residential mortgage loans having high interest rates, points and/or fees.

     HOEPA means the Home Ownership and Equity Protection Act of 1994.

     HMP Owner Payments means payments from the U.S. Treasury to an investor, as outlined under the heading “Lender/Investor Compensation” in the guidelines established under the HMP Program.

     HMP Program means the Home Affordable Modification Program as issued by the United States Treasury Department.

     HMP Servicer Payments means payments from the U.S. Treasury to a servicer, as outlined under the heading “Servicer Compensation” in the guidelines established under the HMP Program , including but not limited to any and all incentive payments due under the guidelines on and after the Transfer Date.

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     Insurance Policy means any insurance policy issued for a Mortgage Loan, including any related Private Mortgage Insurance, Hazard Insurance, Flood Insurance, and Title Insurance, including all riders and endorsements thereto in effect, including any replacement policy or policies for any such Insurance Policies.

     Insurance Proceeds shall have the meaning set forth in the Pooling and Servicing Agreement.

     Insurer means an insurance company that provides an Insurance Policy.

     Late Fee means, as described in the Mortgage Note, any fee paid by or due from a Mortgagor as an additional payment in respect of Mortgagor’s making payment later than the Due Date thereof, after application of any applicable grace period.

     Legal Requirements means, with respect to the context in which this defined term is used herein, all applicable federal, state or local laws (including without limitation any Predatory Lending Law and anti-money laundering law) and any other applicable requirements of any government or any agency or instrumentality thereof, which involve or relate to the origination and servicing of a Mortgage Loan, the actions or interests of the lender or mortgagee of a Mortgage Loan, the management (including ownership, servicing, and disposition) of a Mortgaged Property or REO Property, and the performance of the servicing obligations by the Subservicer hereunder.

     Lender-Paid Mortgage Insurance means lender-paid mortgage insurance.

     LIBOR means, as of any date of determination, the rate per annum equal to the one-month LIBOR rate published by Bloomberg for such date or, if such rate is not available, the rate appearing at page 3750 of the Telerate Screen as one-month LIBOR for such date.

     Limited Power of Attorney means the power of attorney or other documentation to be agreed upon by the Trustee and the Subservicer.

     Liquidated Mortgage Loan shall have the meaning set forth in the Pooling and Servicing Agreement.

     Liquidation Proceeds shall have the meaning set forth in the Pooling and Servicing Agreement.

     Master Servicer shall have the meaning set forth in the Pooling and Servicing Agreement.

     MERS^® shall have the meaning set forth in the Pooling and Servicing Agreement.

     Monthly Payment shall have the meaning set forth in the Pooling and Servicing Agreement.

     Mortgage shall have the meaning set forth in the Pooling and Servicing Agreement.

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     Mortgage Interest Rate shall have the meaning set forth in the Pooling and Servicing Agreement.

     Mortgage Loan means an individual mortgage loan which is the subject of this Agreement as a result of the Servicer’s identification of such Mortgage Loan and the delegation of the servicing thereof to the Subservicer pursuant to Section 2.1 hereof and which mortgage loan is included on the Mortgage Loan Schedule, and includes without limitation the Mortgage Loan Documents, the Monthly Payments, Principal Prepayments, Liquidation Proceeds, Condemnation Proceeds, Insurance Proceeds, Ancillary Income and all other rights, benefits, proceeds and obligations arising from or in connection with such Mortgage Loan. As applicable, “Mortgage Loan” shall be deemed to refer to the related REO Property or unsecured debt.

     Mortgage Loan Documents means all documents relating to a Mortgage Loan held by the Trustee, Servicer, any Custodian, any Owner Designee and the Subservicer or its designee.

     Mortgage Loan Pool means each group of Mortgage Loans identified on a Mortgage Loan Schedule and made subject to this Agreement from time to time.

     Mortgage Loan Schedule means a schedule of the Mortgage Loans prepared by the Servicer to be delivered by the Servicer as set forth in Section 2.1(a) of this Agreement.

     Mortgage Note shall have the meaning set forth in the Pooling and Servicing Agreement.

     Mortgaged Property shall have the meaning set forth in the Pooling and Servicing Agreement.

     Mortgagor shall have the meaning set forth in the Pooling and Servicing Agreement.

     Negative Environmental Condition means, with respect to any Mortgaged Property, a violation of any standards under applicable statutes, ordinances, rules, regulations, orders or decisions relating to pollution, protection of human health or the environment (including, without limitation, ambient air, surface water, ground water, land surface or subsurface strata and natural resources), including without limitation, applicable statutes, ordinances, rules, regulations, orders or decisions relating to emissions, discharges, releases or threatened releases of chemicals, pollutants, contaminants, wastes, toxic substances, petroleum and petroleum products, asbestos and asbestos-containing materials, polychlorinated biphenyls and lead and lead-containing materials, or otherwise relating to the manufacture, processing, distribution, use, treatment, storage, disposal, transport or handling of such items.

     Non-recoverable Servicing Advance means any Servicing Advance previously made or proposed to be made in respect of a Mortgage Loan or REO Property that, in the reasonable business judgment of the Subservicer, will not, or, in the case of a proposed Servicing Advance, would not be, ultimately recoverable from related late payments, Insurance Proceeds, Primary Insurance Proceeds, Condemnation Proceeds or Liquidation Proceeds on such Mortgage Loan or REO Property as provided herein.

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     NPV Tool means the Fannie Mae approved Net Present Value calculator utilized pursuant to the HMP Program for determining whether foreclosure, a deed in lieu, short sale or a loan modification (or other loss mitigation treatment) results in the optimal economic outcome.

     Owner Designee means a Person designated by the Trustee or Servicer, as the case may be, pursuant to a written notice delivered to the Subservicer that identifies the full legal name and address of such Person and the purpose for which such Person has been designated to act or serve on behalf of the Trustee or Servicer, as the case may be.

     P & I Custodial Account means the separate account or accounts created and maintained pursuant to Article VI hereof.

     Paid-In-Full means with respect to a Mortgage Loan, the amount required to satisfy a Mortgage Loan in full, which amount includes the unpaid principal balance, interest due on account and, to the extent permitted by the Legal Requirements, any other funds to be collected at the time of payoff from the Mortgagor pursuant to the terms of such Mortgage Loan, such as recording fees, service fees, attorney fees, escrow advances, prepayment penalties and other costs as applicable.

     Pass-Through Expense means all customary and reasonable costs and expenses incurred by the Subservicer, which pursuant to customary industry standards are due and payable to a Person other than the Subservicer, which are not reimbursable to the Subservicer from the Mortgagor or through the netting of proceeds from the related Mortgage Loan or Mortgaged Property, and which are in the nature of an expenditure that relates to establishing, maintaining or curing the right, title or interests of the mortgagee or lender of the Mortgage Loan; provided that such costs and expenses shall not include any allocation of overhead costs of the Subservicer. If not specifically listed in Exhibit I, such Pass-Through Expenses shall include, but are not limited to, each of the following items:

1.	The reasonable actual cost of research, recovery and locating any documents missing from the Mortgage Loan Documents.
2.	Payments for reasonable actual costs, fees and expenses incurred in perfecting, filing or recording documents evidencing the assignment, foreclosure, sale or mortgaging of any Mortgaged Property.
3.	Reasonable actual expenses incurred to resolve or cure a dispute or issue involving any failure of the Mortgage Loan to comply with any Legal Requirements or customary industry standards that is attributable to the Servicer, originator or any Person (other than the Subservicer).
4.	Actual expenses or costs incurred in connection with any proceeding, investigation, audit, request or other inquiry by any governmental regulatory agency or other instrumentality involving the compliance of any Mortgage Loans with the Legal Requirements relating to the origination or servicing prior to the Servicing Transfer Date of such Mortgage Loans.

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5.	Prior Servicer Expenses — for the prior servicers’ failure to fund or offset the funding of the following; non-funded positive escrow, unapplied balances, non-documented corporate advances, monthly payments not forwarded to the Subservicer, and positive Lender-Paid Mortgage Insurance collected or advanced balances.
6.	Tax Penalties and Interest Expenses — incurred as a result of a prior servicer not disbursing property taxes in a timely manner as defined in the Servicing Transfer Procedures.
7.	Regulatory fines and or penalties associated with the Servicer’s or Owner Designee’s or Custodian’s failure to provide required documents in order to complete the timely satisfaction or release of the mortgage.
8.	Custodian expenses that are paid by the Subservicer.
9.	Set-up, transfer, and release fees for MERS® Mortgage Loans.
10.	Payments for the cost of transfer and/or purchase of services, including such services for property taxes and flood insurance information.

     Person shall have the meaning set forth in the Pooling and Servicing Agreement.

     Pooling and Servicing Agreement has the meaning set forth in the recitals.

     Predatory Lending Law means any Federal, state or local law relating to any predatory, High Cost Loan or abusive lending practices or transactions, which involve or govern single family mortgage loans, including without limitation any such law that provides for the assessment of liability against the purchaser or assignee of the mortgage loan for violations of such law.

     Pricing Schedule means the schedule attached hereto and incorporated herein by reference as Exhibit D, which sets forth certain pricing and compensation rates and amounts accruing and due to the Subservicer hereunder.

     Principal Prepayment shall have the meaning set forth in the Pooling and Servicing Agreement.

     Private Mortgage Insurance or Private Mortgage Insurance Policy means insurance obtained from a Private Mortgage Insurer that insures the holder of the Mortgage Note against all or a portion of any loss incurred from a Mortgagor default under the Mortgage Note or the Mortgage, including all endorsements or riders thereto.

     Private Mortgage Insurer means, with respect to any Mortgage Loan, the entity that has provided Private Mortgage Insurance with respect to such Mortgage Loan.

     Proprietary Information has the meaning set forth in Section 11.1 hereof.

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     Qualified Depository has the meaning set forth in Section 6.2 hereof.

     Released Servicing Date means, with respect to a Mortgage Loan, the date on which the servicing of such Mortgage Loan is released from this Agreement and which the servicing functions for such Mortgage Loan are transferred by the Subservicer to another Person.

     REMIC means a “real estate mortgage investment conduit” within the meaning of Section 860D of the Code.

     REMIC Provisions means provisions of the United States federal income tax law relating to real estate mortgage investment conduits which appear at Section 860A through 860G of Subchapter M of Chapter 1 of the Code, and related provisions, and regulations and rulings promulgated thereunder, as the foregoing may be in effect from time to time.

     Remittance Date means each Business Day of each month.

     REO Disposition means the final sale or other disposition by the Subservicer of any REO Property on behalf of the Trust.

     REO Proceeds means proceeds, net of any unreimbursed Servicing Advances in respect of the related Mortgage Loan or REO Property, received in respect of any REO Property (including, without limitation, proceeds from the rental of the related Mortgaged Property), which are received prior to the REO Disposition. REO Proceeds shall first be applied to outstanding accrued interest and then to outstanding principal on the related Mortgage Loan.

     REO Property means a Mortgaged Property acquired by the Subservicer on behalf of the Trust or its designee through foreclosure or by deed in lieu of foreclosure.

     Reporting Date means the applicable date for reports and files as set forth on Exhibit G-1 and Exhibit G-2.

     Servicer means MorEquity, Inc. or its successor in interest or assigns or any successor to the Servicer under this Agreement, as permitted pursuant to this Agreement.

     Servicing Advances shall have the meaning set forth in the Pooling and Servicing Agreement.

     Servicing Fee shall have the meaning set forth in the Pooling and Servicing Agreement.

     Servicing File means the applicable documents identified in Section 4.6 pertaining to a particular Mortgage Loan, and the computer files, data disks, books, records, data tapes, notes and additional documents generated in the course of servicing the Mortgage Loan, in paper or electronic form.

     Servicing Transfer Date means, with respect to a Mortgage Loan, February 1, 2011, unless otherwise agreed by the Servicer and the Subservicer.

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     Servicing Transfer Procedures means the procedures for effecting servicing transfers to the Subservicer hereunder as set forth on Exhibit B attached hereto.

     Stated UPB shall have the meaning of “Stated Principal Balance” set forth in the Pooling and Servicing Agreement.

     Subsequent Recovery shall have the meaning set forth in the Pooling and Servicing Agreement.

     Subservicer means Nationstar Mortgage LLC, or its successor in interest or assigns or any successor to the Subservicer under this Agreement, as permitted pursuant to this Agreement.

     Subservicing Fees shall have the meaning set forth in Section 5.1 hereof.

     Subservicing Officer means any officer of the Subservicer involved in, or responsible for, the administration and servicing of Mortgage Loans, whose name and specimen signature appear on a list of servicing officers furnished by the Subservicer to the Servicer, the Trustee and the Custodian on the Servicing Transfer Date, as such list may be amended from time to time.

     T & I Advance has the meaning set forth in Section 4.12 hereof.

     T & I Escrow Account means the separate account or accounts defined in Section 6.1 and operated and maintained pursuant to Article VI hereof.

     Tax and Insurance Reserve means an accounting maintained by the Subservicer for tracking a Mortgagor’s Escrow Payments and Insurance Proceeds.

     Termination Fee has the meaning given in Section 9.2(b) hereof.

     Termination for Convenience has the meaning given in Section 9.2(a) hereof.

     Title Insurance or Title Insurance Policy means an American Land Title Association (ALTA) mortgage loan title policy form 1970, or other form of lender’s title insurance policy in accordance with Freddie Mac or Fannie Mae requirements, including all riders and endorsements thereto, insuring that the Mortgage constitutes a valid lien of specified priority on the Mortgaged Property.

     Trust shall have the meaning set forth in the Pooling and Servicing Agreement.

     Trustee shall have the meaning set forth in the Pooling and Servicing Agreement.

     Valuation means an Appraisal Report, or Broker Price Opinion of any Mortgaged Property.

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ARTICLE II
ENGAGEMENT OF SUBSERVICER

     Section 2.1 Servicing; Possession of Servicing Files.

     (a) The Servicer shall transfer the servicing of the Mortgage Loans to the Subservicer on the Servicing Transfer Date. The procedures for affecting such transfer shall be as set forth on the Servicing Transfer Procedures schedule attached hereto as Exhibit B. The Servicer shall make reasonable efforts to provide the Subservicer with advance written or electronic notice of the expected mortgage loans for which servicing may be transferred on the Servicing Transfer Date. Prior to the Servicing Transfer Date, the Subservicer shall negotiate a Limited Power of Attorney with the Trustee in form and substance acceptable to the Subservicer and the Trustee authorizing Subservicer or its authorized agent to execute necessary loan and real estate documents on the Trust’s behalf; and the Subservicer shall deliver a list of its Subservicing Officers to the Servicer and the Trustee. Additionally, with respect to each Mortgage Loan to be serviced hereunder, the Servicer shall comply with the Servicing Transfer Procedures and deliver to the Subservicer the Mortgage Loan Data Field Request (in the form set forth on Exhibit A) for each related Mortgage Loan and, by computer readable electronic transmission, the related Mortgage Loan Schedule not later than five (5) Business Days after the Servicing Transfer Date.

     (b) No later than five (5) Business Days after the Servicing Transfer Date, the Servicer shall deliver or cause to be delivered to the Subservicer all of the documents, information and property that is required for the transfer and commencement of servicing for the related Mortgage Loans, including without limitation the Servicing File and all escrow balances (whether positive or negative), suspense balances, restricted escrow and other cash balances that exist in connection with the Mortgage Loans without offset or netting of any negative balances. In the event that the Subservicer reasonably incurs any cost or expenses because of the failure by the Servicer to deliver or cause the delivery of all such required documents, information and property (including without limitation any advances of funds for escrows or impounds), then the Subservicer shall be reimbursed any such amounts as Pass-Through Expenses pursuant to Section 6.3 hereof. Notwithstanding any provision in this Agreement to the contrary, this paragraph shall not be applicable with respect to any Mortgage Loans to the extent servicing of such Mortgage Loans was previously transferred by the prior servicer to the Subservicer prior to the Trust becoming owner of such Mortgage Loans.

     (c) Nothing shall prohibit the Subservicer or any Affiliate of the Subservicer from taking applications from those Mortgagors who initiate action on their own, or in the case of Mortgage Loans for which default is reasonably foreseeable, from engaging in a program generally to encourage or recommend mortgage loan products provided by the Subservicer or such Affiliate, provided such refinancing is in accordance with Exhibit I. The Subservicer shall furnish to the Servicer all marketing materials at such time such items are provided to the Mortgagors, which materials shall be acceptable to the Servicer. To the extent consistent with Accepted Servicing Practices, as one of its loss mitigation options, the Subservicer shall consider the refinancing of an existing Mortgage Loan in accordance with Exhibit I and to the extent for which default is reasonably foreseeable, into a mortgage loan with a principal balance less than the principal balance of the Mortgage Loan to the extent necessary to qualify the Mortgagor for an FHA-insured mortgage loan.

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     (d) The Subservicer shall service the Mortgage Loans as provided herein commencing on the related Servicing Transfer Dates. All servicing shall be conducted in the name of the Subservicer as servicing agent for the Servicer; provided, however, that the Subservicer shall conduct any foreclosure proceedings in the name of the Trust or a designee designated by the Trust, as provided above, and may complete and record any related Assignment in the name of the Trust, or a designee designated by the Trust, as applicable, in such proceedings. The Subservicer may enter into a commercially reasonable arrangement for certain functions relating to the servicing and administration of Mortgage Loans with any Person if such Person is in compliance with the laws of the state(s) necessary to enable it to perform its obligations under such servicing arrangement; provided, however, that pursuant to Section 4.5 the Subservicer shall not delegate the servicing responsibilities with respect to any Mortgage Loan to any subservicer without the prior written consent of the Servicer. Any such arrangement shall be consistent with and not violate the provisions of this Agreement and shall not constitute a “mortgage servicing transfer” within the meaning of Section 6 of the Real Estate Procedures Settlement Act, 12 U.S.C. §2605, (“RESPA”), without prior written approval of the Servicer. In each case, the Subservicer shall remain responsible for its obligations under this Agreement notwithstanding any such arrangement, the Subservicer shall be liable for all acts and omissions of such Person as fully as if such acts and omissions were those of the Subservicer, and the Subservicer shall pay all fees and expenses associated with such arrangement from the Subservicer’s own funds.

     (e) If permitted by the Limited Power of Attorney, the Subservicer, on behalf of the Trust, may sue to enforce or collect on any of the Mortgage Loans or any Insurance Policy covering a Mortgage Loan, as agent of the Trust.

     (f) The Subservicer shall hold each Servicing File in trust for the benefit of the Trust for the sole purpose of servicing the Mortgage Loans. The Subservicer’s possession of Servicing Files shall be for the sole purpose of facilitating servicing of the related Mortgage Loan pursuant to this Agreement, and the ownership of the Servicing Files shall remain vested in the Trust and Subservicer shall provide the Trust, Servicer and any Owner Designee with full access to the Servicing Files. All records and documents with respect to the related Mortgage Loan prepared by or which come into the possession of the Subservicer shall become part of the Servicing Files. The ownership of each Mortgage Loan, including the Mortgage Note, the Mortgage, the Mortgage Loan Documents, the contents of the related Servicing File and all rights, benefits, proceeds and obligations arising therefrom or in connection therewith, is vested in the Trust. All rights arising out of the Mortgage Loans including, but not limited to, all funds received on or in connection with the Mortgage Loans and all records or documents with respect to the Mortgage Loans prepared by or which come into the possession of the Subservicer shall be received and held by the Subservicer in trust for the benefit of the Trust as the owner of the Mortgage Loans. Any portion of the Servicing Files held by the Subservicer shall be segregated from the other books and records of the Subservicer and shall be appropriately marked to clearly reflect the ownership of the Mortgage Loans by the Trust. The Subservicer shall release its custody of the contents of the Servicing Files only in accordance with written instructions of the Servicer, except when such release is required as incidental to the Subservicer’s servicing of the Mortgage Loans. Except as provided herein, the original Mortgage Loan Documents for each Mortgage Loan shall be retained by the Custodian pursuant to the Pooling and Servicing

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Agreement. Except as set forth in Section 2.3(a), any fees and expenses of the Custodian shall not be payable by the Subservicer.

     Section 2.2 Books and Records.

     Unless otherwise specifically agreed by the Servicer, record title to each Mortgage and the related Mortgage Note shall remain (i) in blank, (ii) in the name of the Trust, or (iii) in the name of an Owner Designee. The Subservicer shall be responsible for maintaining, and shall maintain, a complete set of books and records for the Mortgage Loans which shall be clearly marked to reflect the ownership of the Mortgage Loans by the Trust. The Trustee, the Servicer and their agents may from time to time upon reasonable notice inspect any of the Subservicer’s books and records pertaining to this Agreement, including without limitation all Servicing Files, at reasonable times during the Subservicer’s normal business hours at the Subservicer’s offices; provided, that upon the occurrence and continuance of an Event of Default, only one (1) Business Day’s prior notice shall be required. At all times while a Mortgage Loan is being serviced hereunder, the beneficial ownership of such Mortgage Loan shall be vested and remain in the name of the Trust. All rights arising out of each Mortgage Loan shall be vested in the Trust and the Subservicer shall not assert any contrary interest therein.

     Section 2.3 Custodial Agreement.

     (a) On or prior to the Servicing Transfer Date, the Servicer shall use reasonable efforts to ensure that the Custodian has received all such Mortgage Loan Documents required to be delivered to it pursuant to the Pooling and Servicing Agreement. The Subservicer shall forward to the Custodian original documents evidencing any assumption, modification, consolidation or extension of any Mortgage Loan entered into in accordance with this Agreement within ten (10) Business Days of the Subservicer’s receipt of an executed copy of such document; provided, however, that the Subservicer shall provide the Custodian with a certified true copy of any such document submitted for recordation within ten (10) Business Days of submission, and to provide the original of any document submitted for recordation or a copy of such document certified by the appropriate public recording office to be a true and complete copy of the original within ten (10) Business Days of receipt by Subservicer of the original recorded document.

     (b) If permitted by the Limited Power of Attorney, the Subservicer will be permitted to release any Liquidated Mortgage Loan or proceed with foreclosure actions.

     Section 2.4 Limitation on Scope of Servicing Obligation.

The Subservicer shall not be under any obligation to appear in, prosecute or defend any legal action that (i) is not incidental to its duties to service the Mortgage Loans in accordance with this Agreement, or (ii) exclusively involves allegations against the Trust, the Trustee, the Servicer or prior owners or prior servicers of the Mortgage Loan, including without limitation any allegation or claim involving a violation or breach of any Predatory Lending Law. Notwithstanding the forgoing, should Subservicer desire to undertake to appear in, prosecute or defend actions described in (i) or (ii) above, Subservicer shall obtain Servicer’s consent prior to appearing in, prosecuting or defending these actions. In such event, the reasonable legal expenses and costs of

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such action and any liability resulting therefrom shall be expenses, costs and liabilities for which the Servicer will be liable and the Servicer agrees to reimburse the Subservicer for any such expenses, costs and liabilities as Pass-Through Expenses under the terms of this Agreement, except with respect to any expenses, costs and liabilities that are incurred solely as a result of a material breach of this Agreement, the negligence or willful misconduct of the Subservicer that relate to actions pursuant to this Section.

     Section 2.5 Loss Mitigation and Recovery Actions.

     Consistent with Section 4.2 below, Subservicer shall have the delegated authority to initiate loss mitigation or recovery actions (e.g., forbearance plans, modifications and deeds in lieu of foreclosure, foreclosures and repossessions, as applicable) within the agreed upon parameters set forth on Exhibit I hereto (also known herein as the “Delegated Authority Guidelines and Approval Matrix”). Subservicer will not engage in principal forgiveness without the prior written consent of the Servicer.

     Section 2.6 HMP Program.

     Subservicer shall implement the HMP Program with respect to the Mortgage Loans subserviced under the Agreement to the extent a Mortgage Loan is eligible for the HMP Program. Subservicer warrants that Subservicer is a servicer in good standing under the HMP. With regard to the Mortgage Loans, Subservicer will not participate in the HMP Principal Reduction Alternative program, the Second Lien Modification Program or the HFA Hardest-Hit Fund Program. Subservicer must obtain Servicer’s written approval with regard to Mortgage Loans to participate in any future optional HMP programs.

     If required by FNMA, FHLMC or the U.S. Department of Treasury, Servicer and Subservicer will execute an Assignment and Assumption Agreement for the transfer of servicing of the Mortgage Loans.

     Section 2.7 Oversight Program.

     Subservicer shall provide to Servicer the ability to monitor Subservicer’s actions by:

     (a) Allowing ten (10) users of Servicer to have remote access to all of Subservicer’s systems that contain account notes, balances, and loan level data. These Subservicer systems include, but are not limited to, LSAMs, Foretracs, and Remedy, as well as other Subservicer systems for which remote access is available for use.

     (b) Subservicer will provide recordings of phone calls with Mortgagors with respect to Mortgage Loans as requested by Servicer not to exceed 10 recorded phone calls per week. Servicer will provide pertinent information needed for Subservicer to identify the requested recordings and Subservicer will send the requested recordings to Servicer on a weekly basis in the form of a .wav or equivalent file per recording. The Servicer and the Subservicer may also have regularly scheduled monitoring sessions on the premises of the Subservicer to listen to the requested phone calls with Mortgagors with respect to Mortgage Loans.

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     (c) Subservicer will provide oversight specific reporting. Subservicer agrees to provide data files in formats agreed to with Servicer.

ARTICLE III
REPRESENTATIONS, WARRANTIES AND COVENANTS

     Section 3.1 Subservicer Representations, Warranties and Covenants.

     With respect to each Mortgage Loan, as of the related Servicing Transfer Date and as of each day thereafter during which such Mortgage Loan is serviced hereunder, the Subservicer represents, warrants and covenants to the Servicer as follows:

     (a) Due Organization and Authority. The Subservicer is a limited liability company duly organized, validly existing and in good standing under the laws of the State of Delaware and has the full power and authority to execute, deliver and perform this Agreement; the execution, delivery and performance of this Agreement by the Subservicer and the consummation of the transactions contemplated hereby have been duly and validly authorized and the Subservicer has duly executed and delivered this Agreement; and this Agreement evidences the valid and binding agreement of the Subservicer, enforceable in accordance with its terms, except as limited by applicable bankruptcy, insolvency, moratorium, reorganization or other similar laws affecting creditors’ rights generally or general equitable principles.

     (b) Ordinary Course of Business. The consummation of the transactions contemplated by this Agreement is in the ordinary course of business of the Subservicer.

     (c) No Conflicts. The execution, delivery and performance of this Agreement by the Subservicer will not: (i) conflict with or result in a material breach of any of the terms, conditions or provisions of the Subservicer’s organizational documents or any material agreement or instrument to which the Subservicer is now a party or by which it is bound, or (ii) result in the material violation of any law, rule, regulation, order, judgment or decree to which the Subservicer or its property is subject, which violations would have a material adverse effect on the Subservicer’s ability to perform its obligations hereunder.

     (d) Ability to Perform. The Subservicer does not believe, nor does it have any reason or cause to believe, that it cannot perform in all material respects each and every covenant of the Subservicer contained in this Agreement.

     (e) No Litigation Pending. There is no action, suit, proceeding or investigation pending or, to the Subservicer’s knowledge, threatened against the Subservicer which, either in any one instance or in the aggregate, is reasonably likely to result in any material adverse change in the business, operations, financial condition, properties or assets of the Subservicer, or in any material impairment of the right or ability of the Subservicer to carry on its business substantially as now conducted, or in any material liability on the part of the Subservicer, or which would draw into question the validity of this Agreement or of any action taken or to be taken in connection with the obligations of the Subservicer contemplated herein, or which would be likely to impair materially the ability of the Subservicer to perform under the terms of this Agreement.

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     (f) No Consent Required. No material consent, approval, authorization or order of any court or governmental agency or body is required for the execution, delivery and performance by the Subservicer of this Agreement or the consummation of the transactions contemplated in the Agreement, except those that have been obtained and, to the extent required, remain in full force and effect.

     (g) Qualifications. The Subservicer is an FHA nonsupervised mortgagee.

     (h) Compliance. The Subservicer, its agents and employees, have, and will maintain at all times, all requisite licenses, permits, qualifications and approvals to perform its obligations hereunder in each jurisdiction in which any Mortgaged Property or REO Property is located and is in good standing in each such jurisdiction, except where the failure to possess any such license, permit, qualification or approval would not materially and adversely affect the ability of the Subservicer to conduct its business as it is presently conducted or the enforceability of the related Mortgage Note or Mortgage.

     Section 3.2 Servicer Representations, Warranties and Covenants.

     With respect to each Mortgage Loan, as of the related Servicing Transfer Date and as of each day thereafter during which such Mortgage Loan is serviced hereunder, the Servicer represents, warrants and covenants to the Subservicer as follows:

     (a) Due Organization and Authority. The Servicer is duly organized, validly existing and in good standing under the laws of the State of its organization; the Servicer has the full power and authority to execute, deliver and perform this Agreement; the execution, delivery and performance of this Agreement by the Servicer and the consummation of the transactions contemplated hereby have been duly and validly authorized and the Servicer has duly executed and delivered this Agreement; and this Agreement evidences the valid and binding agreement of the Servicer, enforceable in accordance with its terms, except as limited by applicable bankruptcy, insolvency, moratorium, reorganization or other similar laws affecting creditors’ rights generally or general equitable principles.

     (b) No Conflicts. The execution, delivery and performance of this Agreement by Servicer will not: (i) conflict with or result in a material breach of any of the terms, conditions or provisions of the Servicer’s organizational documents or any material agreement or instrument to which the Servicer is now a party or by which it is bound, or (ii) result in the material violation of any law, rule, regulation, order, judgment or decree to which the Servicer or its property is subject, which violations would have a material adverse effect on Servicer’s ability to perform its obligations hereunder or impair the value of the Mortgage Loans.

     (c) Ability to Perform. The Servicer does not believe, nor does it have any reason or cause to believe, that it cannot perform each and every covenant of the Servicer contained in this Agreement.

     (d) No Litigation Pending. There is no material action, suit, proceeding or investigation pending or, to the Servicer’s knowledge, threatened against the Servicer that, either in any one instance or in the aggregate, would draw into question the validity of this Agreement or of any action taken or to be taken in connection with the obligations of the Servicer

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contemplated herein, or which would be likely to impair materially the ability of the Servicer to perform under the terms of this Agreement.

     (e) No Consent Required. No material consent, approval, authorization or order of any court or governmental agency or body is required for the execution, delivery and performance by the Servicer of or compliance by the Servicer with this Agreement, or if required, such approval has been obtained prior to the date of this Agreement, including the approval of this Agreement by the appropriate examiners and supervisory agents.

     (f) Compliance. The Servicer has all requisite licenses, permits, qualifications and approvals to perform its obligations hereunder in each jurisdiction in which any Mortgaged Property is located, except where the failure to possess any such license, permit, qualification or approval would not materially and adversely affect the enforceability of the related Mortgage Note or Mortgage.

     Section 3.3 Servicer Representations, Warranties and Covenants for Mortgage Loans.

     Subject to any disclosures provided by the Servicer, with respect to each Mortgage Loan as of the related Servicing Transfer Date, the Servicer represents, warrants and covenants to the Subservicer as follows:

     (a) Rights to Transfer Servicing. The servicing responsibilities contracted for as of the Servicing Transfer Date have not been assigned or pledged, and the Servicer has full right to transfer the servicing responsibilities to the Subservicer and has full right and authority subject to no interest, or agreement with, any other party (other than any notice required by law, regulation or otherwise, to be delivered to the Mortgagors) to assign the servicing responsibilities pursuant to this Agreement. Upon execution of this Agreement by the parties, no right, title, and interest in and to the ownership of the servicing rights arising from or in connection with the Mortgage Loans shall transfer to the Subservicer.

     (b) Compliance; Enforceability. Except as previously disclosed to the Subservicer in writing: (i) to Servicer’s knowledge, each Mortgage Loan conforms in all material respects to the Legal Requirements; and (ii) to Servicer’s knowledge, the Servicer and each other originator or servicer, as applicable, have complied with all Legal Requirements, the related Mortgage Note and Mortgage and any applicable Insurance Policy with respect to the processing, origination and servicing of each Mortgage Loan.

     (c) Servicing Files and Related Materials. Servicer shall use commercially reasonable efforts to ensure the Servicing Files or Imaged Files provided to the Subservicer by or on behalf of the Servicer and its agent, if applicable, shall contain all documents, instruments and information necessary to service the Mortgage Loans in accordance with the Accepted Servicing Practices and the Mortgage Loan Documents, which may include copies thereof.

     (d) Assistance and Cooperation of Trustee. If any actions of the Trustee or any applicable Owner Designee are necessary or appropriate in connection with the servicing and administration of any Mortgage Loan hereunder, following request by the Subservicer the Servicer shall use its commercially reasonable efforts to cause the Trustee or Owner Designee to

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perform such actions in a timely manner and to cooperate with and assist the Subservicer in connection with such actions.

ARTICLE IV
SERVICING OF THE MORTGAGE LOANS

     Section 4.1 Standard and Scope of Service.

     On and after each Servicing Transfer Date, the Subservicer shall service each Mortgage Loan in accordance with the Accepted Servicing Practices, the Mortgage Loan Documents and the Legal Requirements and, to the extent applicable to any servicing actions undertaken in connection with the delinquency, foreclosure, REO disposition, remedies for defaulted Mortgage Loans and property insurance procedures and claims, generally in accordance with Accepted Servicing Practices. The Subservicer shall make all Servicing Advances as required pursuant to Section 4.18 and any other applicable provisions of this Agreement. The Subservicer shall not be required to take any action with respect to a Mortgage Loan if it determines in good faith that the action is not permitted by the Legal Requirements, any related Insurance Policy or the Mortgage Loan Documents; provided, however, that the Subservicer shall be entitled to assume that the Mortgage Note and Mortgage may be enforced in accordance with their respective terms. Notwithstanding any provision herein to the contrary, Subservicer shall cooperate with and assist the Servicer in the implementation of all servicing provisions of the Pooling and Servicing Agreement.

     Section 4.2 Authority of the Subservicer; Delinquencies.

     (a) The Subservicer shall have the full power and authority acting alone to do or cause to be done any and all things in connection with the servicing and administration of the Mortgage Loans consistent with the Accepted Servicing Practices.

     (b) If agreed to by the Trustee, upon the request of the Subservicer, the Trustee will furnish the Subservicer with a sufficient quantity of Limited Powers of Attorney and other documents necessary or appropriate, as reasonably specified by Subservicer, to enable the Subservicer to carry out its servicing and administrative duties under this Agreement.

     (c) The Subservicer will conduct its activities hereunder with the goal of curing any Delinquencies in accordance with Accepted Servicing Practices, and in no case, less than in a commercially reasonable manner, including without limitation the pursuit of any remedy or recovery in a manner that has a reasonable likelihood of realizing a higher amount of net proceeds taking into consideration the costs and expenses of obtaining such realization, the probability or risks associated in obtaining such realization and the net present value of such amount based on the expected timing of such realization. The Subservicer’s initial discussions with the Mortgagor will cover the cause of the Delinquency and the time frame in which the Mortgagor believes the Delinquency will be cured. The Subservicer will, at its sole discretion, use notices, letters, telegrams, telephone calls, face-to-face contact and other responsible collection techniques consistent with the Accepted Servicing Practices to attempt to cure the Delinquency and will maintain collection records on all contacts with the Mortgagor. Subject to

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Legal Requirements and the Accepted Servicing Practices, the Subservicer shall have the right, at its sole discretion and without the approval of the Servicer, to:

     (i) determine the timing, manner and amount of contact the Subservicer makes with the Mortgagors, but contact attempts with Mortgagors must be initiated no more than sixteen (16) calendar days after each Mortgagor’s Due Date in the event of nonpayment by Mortgagors;

     (ii) negotiate with any Mortgagor a repayment plan of up to twelve (12) months duration; and

     (iii) determine the timing of any notice of intent to foreclose, posting of an account for foreclosure, commencement of foreclosure proceedings or the filing of any documents in connection therewith; provided, however, that the Subservicer shall follow Accepted Servicing Practices.

     (d) Consistent with the terms of this Agreement, the Subservicer may waive, modify or vary any term of any Mortgage Loan or consent to the postponement of strict compliance with any such term or in any manner grant indulgence to any Mortgagor if in the Subservicer’s reasonable and prudent determination such waiver, modification, postponement or indulgence is not materially adverse to the Trust; provided,however, that the Subservicer shall not permit any waiver or modification with respect to any Mortgage Loan that would change the Mortgage Interest Rate, forgive the payment thereof of any principal or interest payments, reduce the outstanding principal amount (except for actual payments of principal), extend the final maturity date with respect to such Mortgage Loan, waive any prepayment penalty (other than accordance with Section 4.19) or any other act that could reasonably be expected to affect materially and adversely the Trust’s interest in the Mortgage Note, Mortgage Loan, Mortgage, Mortgaged Property, Mortgage Loan Documents or Mortgage Servicing File related to a Mortgage Loan.

     (e) Notwithstanding the foregoing, in the event that any Mortgage Loan is a Defaulted Loan or, in the judgment of the Subservicer, such default is reasonably foreseeable, the Subservicer, consistent with Accepted Servicing Practices, may also waive, modify or vary the following terms of such Mortgage Loan (including modifications that would change the Mortgage Interest Rate, forgive the payment of interest or extend the final maturity date of such Mortgage Loan), accept payment from the related Mortgagor of an amount less than the unpaid principal balance in final satisfaction of such Mortgage Loan, or consent to the postponement of strict compliance with any such term or otherwise grant indulgence to any Mortgagor (any and all such waivers, modifications, variances, forgiveness of principal or interest, postponements, or indulgences collectively referred to herein as “forbearance”), unless prohibited by Exhibit I.

     (f) As to any Mortgage Loan that becomes 180 days Delinquent, if the Subservicer, determines that the expected recovery through foreclosure or other liquidation of the Mortgaged Property will result in no or a de minimus amount of Liquidation Proceeds, then the Subservicer shall provide the Servicer at least four Business Days prior notice of the Subservicer’s intention to charge-off such Mortgage Loan. In the event that the Servicer does not respond within such period, then the parties agree that the Servicer consents to such action.

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     (g) The Subservicer further is hereby authorized and empowered in its own name, when such Subservicer believes it is appropriate in its best judgment and in accordance with Accepted Servicing Practices, to cause the removal from the registration of any Mortgage Loan on the MERS® system and record the related Mortgage in the appropriate jurisdiction. Any expenses incurred in connection with the actions described in the preceding sentence shall be a Servicing Advance.

     (h) The Subservicer shall not consent to the placement of any lien on the Mortgaged Property or any REO Property that would impair the Trust’s lien position without notifying and obtaining the written consent of the Servicer.

     (i) Exhibit I hereto provides an overview of the actions which may be taken by the Subservicer under the terms of this Agreement and the corresponding Servicer approval required for such actions.

     (j) Notwithstanding anything contained in this Section 4.2 to the contrary, the Subservicer shall apply the appropriate loss mitigation treatment as identified in and in compliance with Exhibit I. Such treatments include, but are not limited to, the HMP Program. With respect to Mortgage Loans modified under the HMP Program, in the event of any conflict among the HMP Program, Exhibit I, and/or the Fannie Mae Guidelines, the HMP Program will govern the servicing, and to the extent not in conflict with the HMP Program, Exhibit I will govern the servicing. The Trust will be given credit for all HMP Owner Payments and the Subservicer will be given credit for all HMP Servicer Payments; provided, however, the Subservicer shall pay to the Servicer fifty percent (50%) of all “Servicer Pay for Success Payments” received by the Subservicer pursuant to the HMP Program through and including January 31, 2012 within sixty (60) days of receipt thereof.

     (k) Prior to pursuing any foreclosure action hereunder with respect to a Mortgage Loan or if the related Mortgagor files for bankruptcy protection, Subservicer shall (i) if such Mortgage Loan is registered on the MERS^® system, remove the related Mortgage from the MERS system and record the related Assignment of Mortgage in the name of the Trust in the applicable jurisdiction and (ii) if such Mortgage Loan is not registered on the MERS^® system, record the related Assignment of Mortgage in the name of the Trust.

     Section 4.3 Collection of Mortgage Loan Payments.

     Continuously from each Servicing Transfer Date, in accordance with the Accepted Servicing Practices and this Agreement, the Subservicer shall diligently collect all payments due under each of the related Mortgage Loans and ascertain and estimate Escrow Payments with respect to escrowed Mortgage Loans and all other charges that will become due and payable with respect to the Mortgage Loans and each related Mortgaged Property such that the installments payable by the Mortgagors will be sufficient to pay such charges as and when they become due and payable.

     Section 4.4 Notification of Adjustments.

     With respect to each adjustable rate Mortgage Loan, the Subservicer shall adjust the Mortgage Interest Rate on the related interest rate adjustment date and shall adjust the Monthly

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Payment on the related mortgage payment adjustment date, if applicable, in compliance with the Legal Requirements and the related Mortgage and Mortgage Note. The Subservicer shall execute and deliver any and all necessary notices required under applicable law and the terms of the related Mortgage Note and Mortgage regarding the Mortgage Interest Rate and Monthly Payment adjustments.

     Section 4.5 Duties the Subservicer May Delegate.

     (a) Subject to the limitations set forth in Section 4.16(j) below, in the ordinary course of business, the Subservicer at any time may delegate any of its duties hereunder relating to the tracking of tax payments and insurance, collections agreements and the listing of REO Properties to any Person, including any of its Affiliates, who agrees to conduct such duties in accordance with the servicing standards set forth in Section 4.1 and pursuant to the terms of this Section 4.5.

     (b) The Subservicer shall use reasonable efforts to ensure that each such Person retained to provide any of the delegated services is fully licensed and holds all required governmental licenses, franchises, certificates, qualifications and permits necessary to provide, and that such Person is reputable and capable of providing, the services for which such Person is retained. Any such Person shall be retained solely for the Subservicer’s account and any servicing fees and compensation payable to the Person shall be at the sole expense of the Subservicer. The Subservicer shall remain liable to the Trust, the Trustee, the Master Servicer, the Servicer, their successors and assigns for the performance of the Subservicer’s duties and obligations under this Agreement, notwithstanding the delegation of any servicing function pursuant to this Section 4.5.

     (c) The Subservicer shall indemnify and hold the Trust, Trustee, Master Servicer, Servicer and Owner Designee harmless from any and all claims, losses, expenses, costs, fees (including but not limited to attorney fees) and damages arising out of or relating to the delegation of any of its duties hereunder except where delegation by the Subservicer was at the request of the Servicer; provided, however, that this provision shall not protect the Subservicer against any liability which would be imposed on the Subservicer or any its directors, officers, agents or employees by reason of the Subservicer’s willful misconduct, bad faith, negligence or reckless disregard of its obligations hereunder in following such instructions.

     Section 4.6 Servicing Files.

     (a) Each Servicing File maintained by the Subservicer for each Mortgage Loan shall be clearly identified and marked to reflect the Trust’s ownership of the related Mortgage Loan, shall be kept in accordance with the Accepted Servicing Practices, and shall contain the following items, to the extent received by the Subservicer from the Servicer or its agent or photocopies or imaged copies of each:

     (i) a copy of the Mortgage Note bearing all intervening endorsements, endorsed “Pay to the order of “[Trust’s Name], without recourse”; or in blank and signed in the name of the previous endorsee by an authorized officer;

     (ii) a copy of the Mortgage, with evidence of recording thereon;

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     (iii) a copy of all assumption, modification, consolidation or extension agreements, and if recorded, with evidence of recording thereof;

     (iv) evidence (which may be a certificate of insurance) of all insurance required by such Mortgage;

     (v) a copy of the Title Insurance Policy, or, if not yet issued, evidence of the title commitment;

     (vi) a copy of all intervening Assignments , if any, with evidence of recording thereof unless the applicable Assignment is held by the related public recording office or is registered on the MERS® system; and

     (vii) any other material documents (or copies thereof, as applicable).

     (b) Notwithstanding any provision herein to the contrary, blanket insurance policies may be kept by the Subservicer in a separate blanket file and need not be included in each Servicing File.

     (c) Each Servicing File shall also contain the following documents or photocopies or imaged copies thereof, to the extent received by the Subservicer from the Servicer or its agent in connection with the Subservicer’s duties under this Agreement:

     (i) the Appraisal Report made at the time the Mortgage Loan was originated;

     (ii) the settlement statement for the purchase and financing or refinancing of the Mortgaged Property under the Mortgage Note and Mortgage;

     (iii) copies or originals of any tax service contract;

     (iv) documentation of all non-HMP modifications to the original Mortgage Loan Documents;

     (v) documentation, including appropriate approval by the Trustee, if required, relating to any releases of any collateral supporting the Mortgage Loan;

     (vi) the loan application, any credit reports, verification of employment, verification of any deposit, and tax returns;

     (vii) the originals of all RESPA and Truth in Lending Act disclosure statements executed by the Mortgagor; and

     (viii) all other Mortgage Loan Documents which are customarily maintained in a Mortgage Loan file in order to properly service a Mortgage Loan.

     (d) Foreclosure correspondence, and legal notifications, if applicable, as well as documentation of all HMP modifications to the original Mortgage Loan Documents, will be provided in separate electronic files.

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     (e) Upon discovery by the Subservicer, the Trustee or the Servicer or upon the request of the Trustee or Servicer, the Subservicer will promptly deliver to the Custodian any original Mortgage Loan Document listed in Section 4.6(a) that comes into the Subservicer’s possession and shall retain a copy of any such Mortgage Loan Document in its Servicing File. Notwithstanding the foregoing, with respect to any document listed in clause (a)(iii) above, (1) within ten (10) Business Days of the execution of any such assumption, modification, consolidation or extension agreement, Subservicer shall provide a copy thereof to the Custodian; and (2) within sixty (60) days of the execution of any such assumption, modification, consolidation or extension agreement, Subservicer shall provide the original counterpart(s) thereof to the Custodian.

     Section 4.7 Imaged Records.

     The Subservicer, at its expense, may duplicate or image the Servicing Files on electronic media, but may not destroy hard copies of the documents required to be maintained in Servicing Files without the Servicer’s prior consent; provided, however, if Subservicer is under no legal, regulatory, administrative or similar obligation to maintain the original contents of the Servicing Files in hard format for at least seven (7) years after the last activity on the Mortgage Loan, and the Servicer does not consent to the destruction of such hard copies, the cost and responsibility of storing such hard copies shall be the cost and responsibility of Servicer.

     Section 4.8 Enforcement of Due-On-Sale Clause; Assumption.

     (a) Upon the transfer of title to the Mortgaged Property, the Subservicer, upon the earlier of notice or discovery, shall enforce the due-on-sale clause contained in any Mortgage Loan, unless (i) the Subservicer determines that the enforcement would not be permitted by the Legal Requirements; provided, however, that the Subservicer shall be entitled to assume that the Mortgage Note and Mortgage may be enforced in accordance with their respective terms, (ii) a Mortgage Note assumption rider relates to the Mortgage Loan, or (iii) the applicable Insurer advises that the enforcement of the due-on-sale clause will jeopardize the Private Mortgage Insurance coverage, if any, on such Mortgage Loan. Notwithstanding the foregoing, the Subservicer may, in its reasonable discretion, provide the Mortgagor notice of the Mortgagor’s breach of the due-on-sale clause and allow the Mortgagor to cure the breach within thirty (30) days of receipt of such notice. In all circumstances of unapproved transfer initiated by the Mortgagor, the Subservicer shall notify the Servicer (which notice may be pursuant to the reports to the Servicer required by this Agreement) and the Private Mortgage Insurer, if any, of such transfer and obtain written approval from the Private Mortgage Insurer before initiating enforcement proceedings.

     (b) Notwithstanding the preceding paragraph, the Subservicer may also in its discretion waive the due-on-sale clause on any Mortgage Loan and permit the assumption of such Mortgage Loan if the assumption is required by the Legal Requirements or by the terms of the Mortgage Loan Documents. Upon such approval and the execution by the new Mortgagor of an assumption agreement obligating the new Mortgagor to all of the terms of the related Mortgage Note and Mortgage, the Subservicer may approve such assumption in accordance with the Legal Requirements and the terms of the Mortgage Loan Documents as applicable. Subsequent to the assumption, the new mortgagor shall be deemed to be Mortgagor under this

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Agreement. The Subservicer shall notify the Servicer of the completion of any approved assumption by the tenth (10th) day of the month following the month of completion. The Subservicer shall provide to the Custodian the original assumption agreement.

     (c) Subject to the Accepted Servicing Practices, the Subservicer may charge the related Mortgagor a reasonable and customary assumption fee and retain such fee.

     Section 4.9 Insurance.

     (a) Subject to reimbursement as a Servicing Advance under the terms of this Agreement, and subject to the Accepted Servicing Practices, the Subservicer shall cause each Mortgaged Property and REO Property to be covered at all times by Hazard Insurance in an amount equal to least equal to the lesser of (a) the full insurable value of the Mortgaged Property or (b) the greater of (i) the Stated Principal Balance owing on the Mortgage Loan (or, in the case of an REO Property, the fair market value of such REO Property) and (ii) an amount such that the proceeds of such insurance shall be sufficient to avoid the application to the Mortgagor or loss payee of any coinsurance clause under the policy. All Hazard Insurance Policies shall be underwritten by an Insurer that has a current rating that is acceptable under Fannie Mae Guidelines. Subject to reimbursement under the terms of this Agreement, and subject to the Accepted Servicing Practices, the Subservicer shall ensure that Flood Insurance is maintained on each Mortgaged Property and REO Property located in an area that is identified in the Federal Register by the Federal Emergency Management Agency as having special flood hazards; provided, that Flood Insurance, as described below, is available on commercially reasonable terms. The Flood Insurance Policy shall be in an amount representing coverage not less than the least of (A) the replacement value of the improvements that are part of the Mortgaged Property, (B) the Stated Principal Balance of the Mortgage Loan or (C) the maximum amount of insurance available under the National Flood Insurance Act of 1968 or the Flood Disaster Prevention Act of 1973, as amended. All Flood Insurance Policies shall be underwritten by a federal government agency or by an Insurer that satisfies Fannie Mae Guidelines regarding the rating of the Insurer or the guarantee of the Insurer’s policies by the National Flood Insurance Program. Additionally, if a Mortgaged Property or REO Property that is not identified by the Federal Emergency Management Agency as having special flood hazards becomes so identified in the Federal Register, within a reasonable period of time after such identification, the Subservicer shall arrange for Flood Insurance to be obtained on the Mortgaged Property or REO Property in accordance with this Section 4.9. All such policies shall be endorsed with standard mortgagee clauses with loss payable to the Subservicer and shall provide for at least thirty (30) days prior written notice of any cancellation, reduction in the amount of or material change in coverage to the Subservicer. The Subservicer shall not interfere with the Mortgagor’s freedom of choice in selecting either his insurance carrier or agent, provided, however, that the Subservicer shall not accept any such insurance policies from insurance companies unless such companies are acceptable under the Fannie Mae Guidelines and are licensed to do business in the state wherein the Mortgaged Property is located.

     (b) In the event that the Subservicer shall obtain and maintain, at its own expense, a blanket policy issued by an insurer that is acceptable under the Fannie Mae Guidelines (a “Qualified Insurer”) insuring against fire and hazard losses on all of the REO Properties, then, to the extent such policy provides coverage in an amount equal to the amount

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required pursuant Section 4.9(a) and otherwise complies with all other requirements of Section 4.9(a), it shall conclusively be deemed to have satisfied its obligations as set forth in Section 4.9(a). It is further understood and agreed that such policy may contain a deductible clause, in which case the Subservicer shall, in the event that there shall not have been maintained on the related escrowed Mortgaged Property or REO Property a policy complying with Section 4.9(a), and there shall have been a loss which would have been covered by such policy, deposit in the P & I Custodial Account the amount not otherwise payable under the blanket policy because of such deductible clause without reimbursement therefor (and such amount shall be deemed Insurance Proceeds). Upon request of the Servicer, the Subservicer shall cause to be delivered to the Servicer a certified true copy of such policy and a statement from the insurer thereunder that such policy shall in no event be terminated or materially modified without thirty (30) days’ prior written notice to the Servicer.

     (c) The Subservicer shall prepare and present on behalf of the Servicer all claims under the Insurance Policies and take such actions (including the negotiation, settlement, compromise or enforcement of the insured’s claim) as shall be reasonably necessary to realize recovery under the Insurance Policies. Any proceeds disbursed to the Subservicer in respect of such Insurance Policies (other than amounts applied to the restoration and repair of the related Mortgaged Property or to be released to the related Mortgagor in accordance with the Subservicer’s normal servicing procedures) shall be promptly deposited in the P & I Custodial Account or the applicable T & I Escrow Account, as appropriate.

     (d) Subservicer may engage one or more insurance claim adjustors for the purpose of negotiating, settling, compromising, enforcing and otherwise managing insurance claims related to the Mortgage Loans and the REO Properties. In such event, the Servicer agrees to be responsible for all such fees.

     Section 4.10 Insurance Notices.

     The Servicer shall arrange, or shall cause its Owner Designee to arrange, for all insurance drafts, notices, policies, invoices, and similar documents to be delivered directly to the Subservicer, to the extent permitted under the Insurance Policies and Legal Requirements.

     Section 4.11 Tax and Flood Contracts.

     With respect to each First Lien Mortgage Loan designated by Servicer, the Subservicer shall provide such real estate tax processing, delinquent tax control, tax status determination, and with respect to any first or junior lien, flood status determination, monitoring of flood insurance and customer support services (collectively the “Tax and Flood Services”) as the Subservicer typically provides for other escrowed and non-escrowed mortgage loans that it services. The purchase or transfer fees associated with the Tax and Flood Services shall be reimbursed by the Servicer to the Subservicer as Pass-Through Expenses in accordance with this Agreement. If the tax or flood data supplied to Subservicer has been prepared by a provider other than Subservicer’s primary Tax or Flood Services provider (as listed on Exhibit F hereto), any transfer fees assessed shall be reimbursed by the Servicer to the Subservicer as Pass-Through Expenses in accordance with this Agreement. The Subservicer shall request that the prior servicer, if any, provide Tax and Flood Services agreements and information with respect to each

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Mortgage Loan prior to procuring any new Tax and Flood Services. If such agreements and information are not provided by the Servicer or the prior servicer within fifteen (15) days the Servicing Transfer Date, then a tax and/or flood contract (as applicable) will be purchased by Subservicer. Notwithstanding the foregoing, the Subservicer shall have no obligation to obtain tax service contracts with respect to second lien Mortgage Loans.

     Section 4.12 Tax and Insurance Accounts; Tax Service.

     (a) All T & I Escrow Accounts shall be established and maintained in accordance with the Mortgage Loan Documents and Legal Requirements for those Mortgage Loans that provide for or otherwise require Escrow Payments. The Subservicer shall reflect in the Tax and Insurance Account the Escrow funds collected from the Mortgagor and deposited into the applicable T & I Escrow Account for the payment of real estate taxes, ground rents, Private Mortgage Insurance, Hazard Insurance and, if applicable, Flood Insurance premiums, assessments and other charges. If Escrow funds are being collected when the Servicer transfers servicing of the Mortgage Loan to the Subservicer, the Subservicer must establish a T & I Escrow Account (either a separate account or a sub account) for such Mortgage Loan and continue to collect 1/12 of the yearly charge for Escrow with each Monthly Payment. If a Mortgagor’s Escrow funds are insufficient to pay taxes, insurance premiums or other escrowed items, the Subservicer shall timely advance to the T & I Escrow Account from its own funds an amount sufficient to cover the shortage and reflect such advance in the Mortgagor’s Tax and Insurance Account (a “T & I Advance”). Whenever possible, these T & I Advances shall be recovered from the Mortgagor’s subsequent monthly Escrow Payments, Insurance Proceeds or Liquidation Proceeds with respect to the Mortgagor’s Mortgage Loan, pursuant to Section 6.4(b). Insurance premiums that are not Escrow items but that are collected and disbursed for payment, such as life, major medical, disability or other assessments not required as part of the Mortgagor’s monthly installments, should not be reflected in the Mortgagor’s Tax and Insurance Reserve. The Subservicer shall comply with all applicable Legal Requirements in connection with Escrow items, the analysis of the Mortgagor’s T & I Escrow Account and any reports to the Mortgagor related thereto. Without limiting the foregoing, the Subservicer shall comply with all requirements concerning the handling of escrow accounts contained in the federal Real Estate Settlement Procedures Act of 1974, as amended, and all regulations promulgated thereunder.

     (b) As outlined in Exhibit I, for any First Lien Mortgage Loan that is a non-escrowed loan, in the event that any real estate taxes or assessments in connection with a Mortgage Loan are or become delinquent, then the Subservicer shall effect payment thereof as appropriate and prior to the related tax sale foreclosure date, and any such payment shall be reimbursable as a Servicing Advance under the terms of this Agreement. The Subservicer shall pay, on behalf of the related Mortgagor, any penalties, fines, similar charges or interest resulting from such delinquency, and shall be entitled to reimbursement for any such penalties, fines, similar charges or interest that it may incur as Servicing Advances under the terms of this Agreement. Additionally, in the event that any Mortgagor fails to provide Subservicer with reasonable proof of hazard insurance in connection with a Mortgage Loan, the Subservicer shall promptly provide such insurance coverage until such time as the Mortgagor submits reasonable proof of Mortgagor’s own coverage. Any such payment of hazard insurance by Subservicer shall be reimbursable as a Servicing Advance under the terms of this Agreement.

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     (c) For any Mortgage Loan with an established escrow account, in the event that any real estate taxes or assessments in connection with a Mortgage Loan are or become delinquent, then the Subservicer shall effect payment thereof as soon as reasonably possible and any such payment shall be reimbursable as a Servicing Advance under the terms of this Agreement. The Subservicer shall pay, on behalf of the related Mortgagor, any penalties, fines, or other charges or interest resulting from such delinquency and shall be entitled to reimbursement from the Servicer as Pass-Through Expenses, for any such expenses that it may incur, so long as such delinquency was within thirty (30) days after the Servicing Transfer Date. Any such fines, penalties, or other charges or interest incurred pursuant to this subsection after thirty (30) days following the Servicing Transfer Date shall be the responsibility of the Subservicer.

     (d) In the event that a Mortgaged Property has outstanding tax delinquencies prior to the Servicing Transfer Date that were not reported by the Servicer, a prior servicer or a prior tax service to the Subservicer, the Subservicer shall not be liable for a Mortgaged Property lost to a tax sale for a delinquency occurring prior to the Servicing Transfer Date; provided, however, that the Subservicer shall take all reasonable actions required to cure such tax delinquency in accordance with Accepted Servicing Practices and/or the reasonable instructions of the Servicer. If the Subservicer obtains prior year delinquency information from a prior servicer and/or Servicer, the Subservicer may find it necessary to perform a prior delinquency search in order to adequately service such loan. Subject to notice and prior approval by the Servicer, the cost of such search shall be reimbursed by the Servicer to the Subservicer as a Pass-Through Expense.

     Section 4.13 Bankruptcies.

     The Subservicer will represent the Trust’s interest in any bankruptcy proceedings relating to the Mortgagor and follow the procedures set forth in Section 4.2(k) hereof. The associated costs of protecting the Trust’s interest in bankruptcy shall be paid as Servicing Advances in accordance with this Agreement. If the Mortgagor, a creditor, or a bankruptcy trustee proposes to reduce the unpaid principal balance of the Mortgage Note, reduce the Mortgage Interest Rate, or otherwise modify a Mortgagor’s obligations under a Mortgage Loan, the Subservicer shall use reasonable efforts to challenge any such modification on a timely basis if a commercially reasonable and valid legal basis exists for such challenge, unless the Servicer agrees to such reduction. Subservicer shall provide notice as provided in Exhibit I to Servicer of any reduction in unpaid principal balance prior to this reduction and obtain written approval of Servicer for the reduction.

     Section 4.14 Foreclosure Procedures.

     (a) In conjunction with loss mitigation efforts provided for in Exhibit I, in the event that any payment(s) due under any Mortgage Loan remains delinquent and Subservicer determines that such payment(s) are unlikely to be collected from the Mortgagor, the Subservicer shall order one or more Valuations or property inspections with respect to the related Mortgaged Property, and may commence foreclosure proceedings in accordance with Accepted Servicing Practices. In such connection, the Subservicer shall from its own funds, subject to reimbursement pursuant to Section 6.3, make all necessary and proper Servicing Advances;

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provided, however, that the Subservicer shall have no obligation to advance any amount that the Subservicer determines is likely to be a Non-Recoverable Servicing Advance.

     (b) As provided for in Exhibit I, the Subservicer shall initiate, carry out, complete or perform any foreclosure proceeding in the name of the Trust or Owner Designee. Immediately prior to the initiation of foreclosure of any Mortgage Loan by the Subservicer under this Agreement, the Subservicer shall perform all actions necessary to transfer ownership of such Mortgage Loan to the Trust or Owner Designee.

     (c) In connection with a foreclosure or other conversion, the Subservicer shall exercise such rights and powers vested in it hereunder and use the same degree of care and skill in its exercise as prudent mortgage servicers would exercise or use under the circumstances in the conduct of their own affairs and consistent with Accepted Servicing Practices with respect to mortgage loans in foreclosure or similar proceedings. In the event that foreclosure results in a deficiency and applicable law permits, the Subservicer shall continue to perform collection services in accordance with a receivable collection agreement to be negotiated with the Servicer.

     (d) Notwithstanding anything to the contrary contained in this Agreement, in connection with a foreclosure or acceptance of a deed in lieu of foreclosure, in the event the Subservicer has notice or knowledge that a Mortgaged Property has a Negative Environmental Condition or is otherwise contaminated by hazardous or toxic substances or wastes, or if the Servicer otherwise requests, an environmental inspection or review of such Mortgage Property conducted by a qualified inspector shall be arranged for by the Subservicer. Upon completion of the inspection, the Subservicer shall promptly provide the Servicer with a written report of environmental inspection. All costs incurred by the Subservicer pursuant to this paragraph shall constitute Servicing Advances.

     (e) In the event the environmental inspection report indicates that the Mortgaged Property has a Negative Environmental Condition or is otherwise contaminated by hazardous or toxic substances or wastes, the Subservicer (i) shall promptly notify the Servicer and (ii) shall not proceed with foreclosure or acceptance of a deed in lieu of foreclosure if the estimated costs of the environmental clean up, as estimated in the environmental inspection report, together with the Servicing Advances made by the Subservicer and the estimated costs of foreclosure or acceptance of a deed in lieu of foreclosure exceeds the estimated value of the Mortgaged Property based on a Valuation obtained by the Subservicer at such time. If, however, the aggregate of such clean up and foreclosure costs and Servicing Advances is less than the estimated value of the Mortgaged Property, then the Subservicer shall, in its reasonable judgment and in accordance with Accepted Servicing Practices, proceed with foreclosure or acceptance of a deed in lieu of foreclosure and the Subservicer shall be reimbursed for all reasonable costs associated with such foreclosure or acceptance of a deed in lieu of foreclosure and any related environmental clean up costs, as applicable. In the event the Subservicer does not proceed with foreclosure or acceptance of a deed in lieu of foreclosure pursuant to the first sentence of this paragraph, the Subservicer shall be reimbursed for all Servicing Advances and the Subservicer shall have no further obligation to service such Mortgage Loan under the provisions of this Agreement.

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     Section 4.15 Reinstatement of Mortgage Loans.

     If the Mortgagor offers full reinstatement of the Mortgage Loan during the foreclosure process, the Subservicer shall accept the offer. Full reinstatement means: (i) payment of all amounts due in order to bring the Mortgage Loan current, including attorneys’ and trustees’ fees, any additional legal costs and any other expenditures or advances made by the Subservicer during the foreclosure process, and (ii) payments of all other amounts necessary to cure all other defaults under the Mortgage Loan Documents, including, without limitation, the payment of real property taxes due and owing. Upon accepting the reinstatement, the Subservicer will contact the attorney or trustee promptly to avoid incurring additional legal costs or fees. The Subservicer will apply the funds upon receipt. If the Mortgage Note and other Mortgage Loan related documents were delivered to the Subservicer by the Servicer or the Custodian in connection with the Mortgagor’s delinquency, the Subservicer will return the Mortgage Note and other Mortgage Loan related documents to the Servicer or the Custodian to be included in the Mortgage Loan Documents upon receipt of the reinstatement funds from the Mortgagor.

     Section 4.16 Servicing REO Property.

     (a) In the event that title to the Mortgaged Property is acquired by deed in lieu of foreclosure executed prior to the commencement of a foreclosure proceeding, then the deed or certificate of sale shall be issued in the name of the Trust or an Owner Designee for the benefit of the holders of the American General Mortgage Loan Trust 2010-1 certificates. In the event that title to the Mortgaged Property is acquired in foreclosure or prior to the completion of a foreclosure proceeding commenced by the Subservicer, then the deed shall be issued in the name of Trust or the Owner Designee for the benefit of the holders of the American General Mortgage Loan Trust 2010-1 certificates. The Subservicer shall cooperate with the Trustee or the Owner Designee in connection with the transfer and assignment of title and ownership of REO Properties following foreclosure proceedings or the execution of deeds in lieu of foreclosure and shall ensure that the title to such REO Property references the Pooling and Servicing Agreement.

     (b) The Subservicer shall manage, conserve, protect, and operate each REO Property in accordance with Accepted Servicing Practices, subject to the REMIC Provisions, either through itself or through an agent selected by the Subservicer, and in the manner that similar property in the same locality as the REO Property is managed. Consistent with the provisions of Exhibit I, if the Subservicer deems it advisable, the Subservicer may, in accordance with Accepted Servicing Practices, order one or more Valuations with respect to the REO Property. The Subservicer shall attempt to sell such REO Property on such terms and conditions as the Subservicer deems to be in the best interest of the Trust or the Owner Designee, as applicable. If permitted by the applicable Limited Power of Attorney, the Subservicer shall be authorized to execute and deliver on behalf of the Trust or the Owner Designee, as applicable, all deeds, instruments of transfer and other closing documentation necessary and desirable to implement the disposition of REO Property.

     (c) The Subservicer shall also maintain on each REO Property fire and hazard insurance with extended coverage, liability insurance and, to the extent required and available under the National Flood Insurance Act of 1968, as amended, flood insurance, and all other insurance coverage required under Section 4.9.

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     (d) Each REO Disposition shall be carried out by the Subservicer as provided in Exhibit I. If as of the date title to any REO Property was acquired by the Subservicer there were outstanding unreimbursed Servicing Advances with respect to the REO Property, the Subservicer, upon an REO Disposition of such REO Property, shall be entitled to reimbursement for any such unreimbursed Servicing Advances from proceeds received in connection with such REO Disposition. The proceeds from the REO Disposition, net of any payment to the Subservicer as provided above, shall be deposited within two (2) Business Days of receipt in the P&I Custodial Account following receipt thereof for distribution on the next Remittance Date.

     (e) The Subservicer shall cause each REO Property to be inspected promptly upon the acquisition of title thereto and shall cause each REO Property to be inspected at least annually thereafter. The Subservicer shall make or cause to be made an electronic report of each such inspection. Such reports shall be retained in the Mortgage Servicing File and copies thereof shall be forwarded by the Subservicer to the Servicer upon request. That statement shall be accompanied by such other information as the Servicer shall reasonably request.

     (f) Upon the foreclosure sale of any Mortgaged Property or the acquisition thereof by the Trust or the Owner Designee, as applicable, or pursuant to a deed in lieu of foreclosure, the Subservicer shall submit to the Servicer or the Owner Designee, as applicable, a liquidation report with respect to such Mortgaged Property.

     (g) Following the foreclosure sale or abandonment of any Mortgaged Property, the Subservicer shall report such foreclosure or abandonment to the Servicer and as required pursuant to Section 6050J of the Code or any successor provision thereof.

     (h) In the event that Servicer requests the transfer of a serviced REO Property from the Subservicer, all costs incurred by the Subservicer in marketing the subject REO Property (prior to the Servicer’s transfer request) shall be reimbursable as a Servicing Advance. Additionally, any costs and/or penalties payable by the Subservicer to a third party (to which Subservicer has delegated some or all of its duties with respect to such REO Property pursuant to Section 4.5) then-payable in connection with such REO Property shall be reimbursable as a Servicing Advance.

     (i) The Subservicer shall deposit or cause to be deposited, on a daily basis in the P&I Custodial Account, all revenues received, including revenues from rental of an REO Property and sale proceeds, with respect to each REO Property and shall withdraw therefrom funds necessary for the proper operation, management and maintenance of the REO Property, including the cost of maintaining any hazard insurance pursuant to Section 4.9 hereof and the fees of any managing agent acting on behalf of the Subservicer.

     (j) In accordance with, and subject to the limitations of Sections 4.5 and 4.16(j), the Subservicer may outsource the management, conservation, protection and operation of REO Property to a third party, which arrangement will result in fees to the Trust, provided that Subservicer shall seek written approval of Servicer of the third party and such fees to be charged. In such event, the Servicer agrees to be responsible for all such fees. Home Select Settlement Solutions, LLC is a third party of which Servicer approves.

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     (k) Any disposition of REO Property shall be for cash only (unless changes in the REMIC Provisions made subsequent to March 30, 2010 allow a sale for other consideration and an opinion of counsel is obtained by the Subservicer to the effect that such sale shall not (i) endanger the status of any REMIC of the Trust as a REMIC or (ii) result in the imposition of United States federal income tax upon any REMIC of the Trust (including but not limited to the tax on prohibited transactions as defined in Code Section 860F(a)(2) and the tax on contributions after the startup day set forth on Section 860G(d) of the Code).

     (l) In the event that the Trust acquires any REO Property as aforesaid or otherwise in connection with a default or imminent default on a Mortgage Loan, the Subservicer shall dispose of such REO Property before the end of the third taxable year beginning after the year of its acquisition by the Trust for purposes of Section 860G(a)(8) of the Code (or the end of such other period as may be identified in the REMIC Provisions as the maximum time during which such REO Property continues to constitute “foreclosure property” under the REMIC Provisions) unless the Servicer shall have applied for and received an extension of such period from the Internal Revenue Service, in which case the Trust may continue to hold such REO Property for the period of such extension. Notwithstanding any other provision of this Agreement, no REO Property acquired by the Trust shall be rented (or allowed to continue to be rented) or otherwise used for the production of income by or on behalf of the Trust in such a manner or pursuant to any terms that would (i) cause such REO Property to fail to qualify as “foreclosure property” within the meaning of Section 860G(a)(8) of the Code or (ii) subject any REMIC of the Trust to the imposition of any federal, state or local income taxes on the income earned from such Mortgaged Property under Section 860G(c) of the Code or otherwise, unless the Subservicer has agreed to indemnify and hold harmless the Trust with respect to the imposition of any such taxes.

     Section 4.17 Satisfactions.

     If permitted by the Limited Power of Attorney, the Subservicer will thereby be authorized and empowered to execute and deliver on behalf of itself and the Trust all instruments of satisfaction or of partial or full release and all other comparable instruments with respect to the Mortgage Loans and Mortgaged Properties. The Subservicer shall take all actions necessary to satisfy mortgages and release their liens in a timely manner. Once the required release or satisfaction documents are executed and recorded, if applicable, and the Mortgage Note is canceled, the Subservicer shall promptly send the canceled documents to the Mortgagor if state law requires such action or the Mortgagor specifically requests the return of the documents. In other instances, the Subservicer may either return the documents to the Mortgagor or retain them (as long as they are not destroyed until after the retention period required by applicable law). The Subservicer should also take any other steps required to release the lien and assure that no penalties are incurred because the actions were not performed in a timely manner. The Subservicer may not seek reimbursement from the Servicer, the Trust or the Mortgagor for any penalty fee that the Subservicer has to pay because the Subservicer failed to process any release or satisfaction documents within the required time frame. If the Trustee, the Servicer, or the Custodian fail to do so, the Subservicer may seek reimbursement from the Trust for any penalty that the Subservicer pays because the release or satisfaction was not processed in the required time frame as a result of Trustee’s failure, Servicer’s failure or the Custodian’s failure to act in a

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timely manner as a Servicing Advance under the terms of this Agreement. The Subservicer shall generally follow the procedures set forth in the Fannie Mae Guidelines regarding satisfactions of mortgages.

     Section 4.18 Servicing Advances and Pass-Through Expenses.

     (a) The Subservicer shall not have any obligation or duty hereunder to: (i) advance any amounts constituting delinquent principal and interest payments or (ii) advance any amounts that would otherwise constitute a Servicing Advance hereunder if the Subservicer reasonably determines that such amount is not likely to be recovered from late payments, insurance proceeds, liquidation proceeds, condemnation proceeds on the related Mortgage Loan or REO Property. Notwithstanding any provision to the contrary herein, including without limitation that any Servicing Advance is subsequently determined to be non-recoverable, the Subservicer shall be entitled to recover any Servicing Advance and any Pass-Through Expenses in accordance with the terms of Section 6.3 and Section 6.4(b)(iii).

     (b) The Subservicer shall provide and maintain appropriate procedures to ensure that each individual Servicing Advance and Pass-Through Expense is accounted for as a single item and amount without any duplication thereof.

     (c) Notwithstanding anything to the contrary contained herein, if at the end of any calendar month, the amount of unreimbursed Servicing Advances (excluding Non-recoverable Servicing advances) exceed the aggregate amount collected by the Subservicer during such calendar month in accordance with the provisions of this Agreement, the Subservicer shall so notify the Servicer and the Servicer shall remit the total amount of such shortfall plus accrued interest at the rate of LIBOR plus four percent (4%) to the Subservicer for each calendar day after the end of the calendar month until the day the payment is made, which shall be within seven (7) days of such notification. If the Servicer fails to pay to the Subservicer the amount of any such shortfall within thirty (30) days of the related notification by the Subservicer to the Servicer of such shortfall, such failure shall constitute an Event of Default under Section 9.1(k).

     (d) Without limiting any other provision of this Agreement, from the Servicing Transfer Date until the termination of this Agreement, with respect to each Mortgage Loan serviced pursuant to this Agreement, Subservicer shall not assume Servicer’s obligations to make Advances. Advances made by Subservicer shall be reimbursed by Servicer.

     Section 4.19 Prepayment Penalties.

     (a) Upon receipt of a request for a payoff, if the information provided by the Servicer or the prior servicer to the Subservicer indicates that a prepayment penalty is applicable with respect to a Mortgage Loan, the Subservicer shall review the Mortgage Note to determine whether a prepayment penalty may be collected from the Mortgagor and shall be obligated to collect such prepayment penalty, if any. Notwithstanding anything herein to the contrary, the Subservicer shall have no obligation to collect, or make payments to the Servicer with respect to, any prepayment penalties, Late Fees, or other fees or items which are prohibited under applicable law for that Mortgage Loan. In addition, as long permissible under Exhibit I, the Subservicer may also waive, in whole or in part, any such fees mentioned in the preceding sentence if: (A)

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(i)(a) the Subservicer determines that such waiver is standard and customary in servicing similar mortgage loans, (b) such waiver relates to a default or, in the judgment of the Subservicer, a reasonably foreseeable default in respect of the applicable Mortgage Loan and (c) such waiver would, in the reasonable judgment of the Subservicer, maximize recovery of Liquidation Proceeds for such Mortgage Loan, taking into account the value of such prepayment penalty, (ii) the enforceability thereof is limited (1) by bankruptcy, insolvency, moratorium, receivership, or other similar law relating to creditors’ rights generally or (2) due to acceleration in connection with a foreclosure or other involuntary payment or (iii) such waiver is otherwise permitted by Exhibit I..

     (b) Upon transfer of servicing of a Mortgage Loan to the Subservicer, if the servicing transfer tape or data provided to the Subservicer indicates that such Mortgage Loan has a prepayment penalty, then the Subservicer shall flag its system to indicate that a prepayment penalty is applicable with respect to such Mortgage Loan.

     (c) Except as provided in this Section 4.19, in no event will the Subservicer waive a prepayment penalty in connection with a refinancing of a Mortgage Loan that is not related to a default or a reasonably foreseeable default without Servicer’s written approval. If the Subservicer waives or does not collect all or a portion of a prepayment penalty relating to a Principal Prepayment in full or in part due to any action or omission of the Subservicer, other than as permitted above, the Subservicer shall deposit from its own funds without any right of reimbursement therefore the amount of such prepayment penalty (or such portion thereof as had been waived for deposit) in the P & I Custodial Account for distribution in accordance with the terms of this Agreement.

     Section 4.20 Restoration and Repair.

     The Subservicer need not obtain the approval of the Servicer prior to releasing any Insurance Proceeds or Condemnation Proceeds to the Mortgagor to be applied to the restoration or repair of the Mortgaged Property or REO Property if such release is in accordance with Accepted Servicing Practices and the terms of this Agreement. If Insurance Proceeds or Condemnation Proceeds exceed $10,000, the Subservicer shall comply with the following conditions in connection with any such release :

     (i) the Subservicer shall receive satisfactory independent verification of completion of repairs and issuance of any required approvals with respect thereto;

     (ii) the Subservicer shall take all steps necessary to preserve the priority of the lien of the Mortgage, including, but not limited to requiring waivers with respect to mechanics’ and material men’s liens;

     (iii) the Subservicer shall verify that the Mortgage Loan is not in default; and

     (iv) pending repairs or restoration, the Subservicer shall place the Insurance Proceeds or Condemnation Proceeds in the Escrow Account.

     If the Servicer is named as an additional loss payee, the Subservicer is hereby empowered to endorse any loss draft issued in respect of such a claim in the name of the Servicer.

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     The Subservicer shall inspect the Mortgaged Property as often as is deemed necessary by the Subservicer to assure itself that the value of the Mortgaged Property is being preserved. In addition, if any Mortgage Loan is more than ninety (90) days Delinquent, the Subservicer shall immediately inspect the Mortgaged Property and shall conduct subsequent inspections in accordance with Accepted Servicing Practices. The Subservicer shall keep a written report of each such inspection.

     Section 4.21 Subservicer Bond, Errors and Omissions Insurance.

     The Subservicer shall maintain, at its own expense, a blanket Subservicer Bond and an errors and omissions insurance policy, with broad coverage with a Qualified Insurer on all officers, employees or other Persons acting in any capacity with regard to the Mortgage Loans to handle funds, money, documents and papers relating to the Mortgage Loans. The Subservicer Bond shall be in the form of the Mortgage Banker’s Blanket Bond and shall protect and insure the Subservicer against losses, including forgery, theft, embezzlement, misrepresentation and fraud. The errors and omissions insurance policy shall protect and insure the Subservicer against losses due to errors and omissions and negligent acts of such Persons. Such errors and omissions insurance policy shall also protect and insure the Subservicer against losses in connection with the failure to maintain any insurance policies required pursuant to this Agreement and the release or satisfaction of a Mortgage Loan without having obtained payment in full of the indebtedness secured thereby. No provision of this Section 4.21 requiring the Subservicer Bond and errors and omissions insurance policy shall diminish or relieve the Subservicer from its duties and obligations as set forth in this Agreement. The minimum coverage under any such bond and insurance policy shall be at least equal to the corresponding amounts required by Fannie Mae in the Fannie Mae MBS Selling and Servicing Guide. Upon request of the Servicer or the Master Servicer, the Subservicer shall cause to be delivered to the Servicer a certified true copy of the Subservicer Bond and errors and omissions insurance policy and a statement from the surety and the insurer that such Subservicer Bond and errors and omissions insurance policy shall in no event be terminated or materially modified without thirty (30) days’ prior written notice to the Servicer.

     Section 4.22 Disaster Recovery.

     The Subservicer will maintain disaster recovery services at a dedicated facility which is equipped to handle Subservicer’s data center processing in the event disaster recovery is needed. Throughout the term of this Agreement, Subservicer shall maintain in effect contracts and/or arrangements which are substantially equivalent to those that are currently in effect.

     Subservicer will test its disaster recovery capabilities at least once per calendar year and provide the results of each such test to Servicer. Subservicer will notify Servicer within one (1) hour of an event occurring that will likely result in service interruption in excess of forty-eight (48) hours. Following such a communication, Subservicer will provide updates on an hourly basis as to whether or not a disaster will be declared.

     Subservicer will provide off-site storage for Servicer’s data files so that they can be reconstructed in the event of loss or destruction of Servicer’s processing files at Subservicer’s location.

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     Section 4.23 High Cost Loans.

     To the extent any Mortgage Loan is discovered to be a High Cost Loan, the Subservicer shall continue to service such High Cost Loan provided that the unpaid principal balance of all High Cost Loans that the Subservicer is subservicing under this Agreement with Servicer, as of any date of determination, is not more than one million ($1,000,000) dollars (or such other amount as mutually agreed upon by the Subservicer and the Servicer); provided that, in the event the addition of any High Cost Loan(s) results in the unpaid principal balance of all High Cost Loans that the Subservicer is servicing pursuant to this Agreement with Servicer, as of such date of determination, becomes greater than one million ($1,000,000) dollars (or such other amount as mutually agreed upon by the Subservicer and the Servicer), the Subservicer shall promptly notify the Servicer of such event and shall service transfer one or more High Cost Loans within one-hundred eighty (180) calendars days of Servicer’s receipt of such notice such that, after the date of such service transfer, the unpaid principal balance of all High Cost Loans that the Subservicer is servicing pursuant to this Agreement with Servicer, as of such date of determination, is less than one million ($1,000,000) dollars (or such other amount as mutually agreed upon by the Subservicer and the Servicer); provided further that the specific High Cost Loans to be serviced transferred shall be selected by the Servicer in its sole discretion. The Subservicer shall not have any affirmative obligation to determine whether a Mortgage Loan is a High Cost Loan or satisfies the document disclosure or other requirements applicable to High Cost Loans.

ARTICLE V
COMPENSATION TO THE SUBSERVICER

     Section 5.1 Compensation to the Subservicer.

     With respect to each Mortgage Loan, as compensation for its services under this Agreement the Subservicer shall be entitled to withdraw from the P & I Custodial Account when earned the fees (collectively, the “Subservicing Fees”) set forth on the Pricing Schedule attached hereto as Exhibit D. As additional servicing compensation, the Subservicer shall be entitled to receive an amount equivalent to all Ancillary Income (except as otherwise described in Section 4.2(j)) with respect to the Mortgage Loans.

ARTICLE VI
ACCOUNTING

     Section 6.1 General.

     Upon the initial Servicing Transfer Date, the Subservicer shall establish one or more escrow accounts (including subaccounts) for the deposit of Escrow funds collected (each a “T & I Escrow Account”) and one or more custodial accounts for the deposit of funds collected in connection with the Mortgage Loans for principal and interest (each a “P & I Custodial Account”). All of the foregoing accounts shall be maintained in accordance with sound and controlled practices and the Subservicer shall segregate and hold all funds collected and received separate and apart from any of its own funds and general assets. The funds in the T & I Escrow Accounts and the P & I Custodial Accounts may not be commingled with any other

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funds, including the proceeds of any other mortgage loans or with funds serviced for other investors or for the Subservicer’s own portfolio.

     Section 6.2 Account Maintenance.

     Each P & I Custodial Account and T & I Escrow Account shall be an Eligible Account.

     (a) The name of each P & I Custodial Account and T & I Escrow Account shall be designated as:

     (i) T & I Escrow Account: “Nationstar Mortgage LLC, as subservicer for MorEquity, Inc., as servicer under the Pool and Servicing Agreement , dated January 31, 2010 among Sixth Street Funding LLC, as Depositor, Wells Fargo Bank, N.A., as Master Servicer, as Securities Administrator and as Custodian, MorEquity, Inc., as Servicer Green Tree, as Designator successor servicer, and U.S. Bank National Association, as Trustee, in trust for registered Holders of American General Mortgage Loan Trust 2010-1, American General Mortgage Pass-Through Certificates, Series 2010-1”; and

     (ii) P & I Custodial Account: “Nationstar Mortgage LLC, as subservicer for MorEquity, Inc., as serivcer under the Pool and Servicing Agreement , dated January 31, 2010 among Sixth Street Funding LLC, as Depositor, Wells Fargo Bank, N.A., as Master Servicer, as Securities Administrator and as Custodian, MorEquity, Inc., as Servicer Green Tree, as Designator successor servicer, and U.S. Bank National Association, as Trustee, in trust for registered Holders of American General Mortgage Loan Trust 2010-1, American General Mortgage Pass-Through Certificates, Series 2010-1.”

     (b) The Subservicer shall provide a reconciliation of each P & I Custodial Account to the Servicer within 30 days after each month end. Subservicer shall provide for on-line view access to custodial accounts or PDF transmissions of transactions in lieu of on-line access.

     (c) All collections on the Mortgage Loans with posting instructions shall be deposited to the P & I Custodial Account no later than two (2) Business Days following the day on which good funds are received by the Subservicer.

     (d) Each T & I Escrow Account will be maintained at the expense of the Subservicer. Such accounts may be interest-bearing accounts; provided, however, that such accounts shall comply with the Legal Requirements and all local, state and federal laws and regulations governing interest-bearing accounts and borrower escrow accounts.

     (e) If the Subservicer elects or is required by law to deposit a Mortgagor’s Escrow funds into an interest-bearing account, the Subservicer shall remain obligated to pay the Mortgagor’s taxes and insurance premiums when due, even if the Mortgagor’s Escrow funds are not subject to withdrawal on demand. Any amounts held in the P & I Custodial Account may be, but are not required to be, invested, and if invested by the Subservicer, such funds will be invested in Eligible Investments. Other than interest or other income received on Eligible

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Investments, which shall belong to the Subservicer and which may be withdrawn by the Subservicer from the P & I Custodial Account in accordance with Section 6.3 hereof, no other amounts may be commingled in the P & I Custodial Account. The Subservicer shall promptly deposit in the P & I Custodial Account from its own funds, without any right of reimbursement, the full amount of any losses on its investment of funds in the P & I Custodial Account.

     Section 6.3 P & I Custodial Account; Remittance.

     (a) The following funds received with respect to the Mortgage Loans shall be transferred into the P & I Custodial Account within two (2) Business Days of the receipt of good funds (together with information sufficient to identify the Mortgage Loan to which such funds relate). The Subservicer shall maintain separate accounting for each category of funds. Such funds may be net of reimbursements for any unreimbursed Servicing Advances and Pass-Through Expenses and any unpaid Subservicing Fees pursuant to Section 5.1 hereof:

     (i) principal collections (including prepayments and curtailments);

     (ii) interest collections;

     (iii) Liquidation Proceeds, Subsequent Recoveries and Insurance Proceeds (except as set forth in Section 6.4(a) hereof);

     (iv) the net proceeds of any sale of an REO Property pursuant to Section 4.16 hereof;

     (v) prepayment penalties, if any;

     (vi) any amounts deposited in accordance with the last sentence of Section 6.2 hereof; and

     (vii) any amounts required to be deposited by the Subservicer pursuant to Section 4.9 in connection with the deductible clause in any blanket hazard insurance policy, such deposit being made from the Subservicer’s own funds, without reimbursement therefore.

     (b) The Subservicer may from time to time withdraw funds from the P & I Custodial Account for the following reasons:

     (i) to reimburse itself for any unreimbursed Pass-Through Expenses, unreimbursed Servicing Advances, and any unpaid Subservicing Fees pursuant to Section 5.1 (and Subservicer shall prepare and deliver to Servicer, a report detailing the reimbursement of any Servicing Advances, Pass-Through Expenses and Subservicing Fees from the P & I Custodial Account);

     (ii) to reimburse itself for Non-recoverable Servicing Advances;

     (iii) to pay itself Ancillary Income, to the extent not retained or previously paid to Subservicer;

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     (iv) to make remittances to the Servicer, as set forth in subsection (c);

     (v) to clear and terminate the P & I Custodial Account;

     (vi) to transfer funds in any P & I Custodial Account to another P & I Custodial Account maintained by a Qualified Depository;

     (vii) to remove any deposits made in error; and

     (viii) to cover non-sufficient funds.

     (c) On each Remittance Date, the Subservicer shall remit all amounts in the P & I Custodial Account as of the close of business on the related Determination Date, net of allowable withdrawals under subsection (b), to the Servicer by wire transfer of immediately available funds to the account designated in writing by the Servicer.

     (d) With respect to any remittance received by the Servicer after the Business Day on which such payment was due, the Subservicer shall pay to the Servicer interest on any such late payment at The Wall Street Journal Prime Rate, plus two (2) percentage points but in no event greater than the maximum amount permitted by applicable law. Such interest shall be paid by the Subservicer to the Servicer on the date such late payment is made and shall cover the period commencing with the Business Day on which such payment was due and ending with the Business Day on which such payment is made, both inclusive. Such interest shall be remitted along with such late payment. The payment by the Subservicer of any such interest shall not be deemed an extension of time for payment or a waiver by the Servicer of any Subservicer Event of Default.

     Section 6.4 T & I Escrow Accounts.

     (a) The following funds shall be deposited into the applicable T & I Escrow Account promptly after the Subservicer’s receipt and verification of such amounts and the Subservicer shall maintain separate accountings for each of these types of funds:

     (i) Mortgagors’ Escrow Payments;

     (ii) Loss drafts;

     (iii) Unapplied funds; and

     (iv) Liquidation Proceeds that offset a deficit balance in a Mortgagor’s Tax and Insurance Reserve.

     (b) The Subservicer may make withdrawals from the applicable T & I Escrow Account for the following:

     (i) timely payment of Mortgagors’ taxes and insurance premiums;

     (ii) refunds to Mortgagors of excess Escrow funds collected;

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     (iii) reimbursement to itself for all T & I Advances made by the Subservicer with respect to the related Mortgage Loan;

     (iv) pay interest, if required, to Mortgagors on funds in the T & I Accounts;

     (v) removal of any deposits made in error;

     (vi) termination of the account;

     (vii) disburse loss drafts to contractors for repairs to Mortgaged Property damaged by hazard losses;

     (viii) pay loss drafts to Mortgagors to the extent a loss draft exceeds total hazard loss repair charges and the Tax & Insurance Reserve deficiency; and

     (ix) cover non-sufficient funds.

     (c) The Subservicer shall not allow the T & I Escrow Accounts to become overdrawn. If there are insufficient funds in an account, the Subservicer will make a Servicing Advance which shall be reimbursable pursuant to the terms of this Agreement.

     (d) Each T & I Escrow Account is to be designated in the name of the Subservicer acting as an agent for the applicable Mortgagors in order to show that the account is custodial in nature. The Subservicer is required to keep records identifying each Mortgagor’s payment deposited into the account.

     Section 6.5 Interest on Tax and Insurance Reserves.

     If the law requires payment of interest on Tax and Insurance Reserves to the Mortgagor, the Subservicer is solely and fully responsible for payment of such interest. Payment of such interest on Tax and Insurance Reserves shall not be reflected in the Subservicer’s accounting for principal and interest.

     Section 6.6 Access to Records.

     (a) The Subservicer will establish and maintain a system of: (i) records of operational information relating to the collection of Mortgage Loans, the conduct of default management services and the administration, management, servicing, repair, maintenance, rental, sale, or other disposition of Mortgage Loans and Mortgaged Property and (ii) books and accounts, which shall be maintained in accordance with customary business practices, of financial information relating to the Mortgage Loans and the Mortgaged Properties. Information may be maintained on a computer or electronic system.

     (b) The Trustee, Master Servicer, Servicer and their accountants, attorneys, agents, or designees may at their respective expense upon reasonable prior written notice and at reasonable times during the Subservicer’s regular business hours, examine the Subservicer’s books and records relating to the Mortgage Loans and the Mortgaged Properties. Such records shall not include any proprietary or confidential information, as reasonably determined by the

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Subservicer. In addition, the Subservicer may provide to Servicer at Servicer’s expense, any other information reasonably requested by the Servicer related to the Mortgage Loans and Mortgaged Properties, subject to compliance by the Subservicer and Servicer with the Legal Requirements, including without limitation, the Gramm-Leach-Bliley Act.

ARTICLE VII
REPORTS TO THE SERVICER

     Section 7.1 Reports to the Servicer.

     (a) The Subservicer shall prepare and deliver to the Servicer the reports and files identified on Exhibit G-1 and Exhibit G-2 in accordance with the time frames set forth thereon; provided, however, that in the event the Subservicer fails to provide such reports and files within such time frames, the Subservicer shall submit to the Servicer within ten (10) Business Days of such failure a written report detailing the reason for such failure and its recommended plan to overcome such failure in the future.

     (b) The Subservicer shall deliver to the Servicer a written remittance advice on each Remittance Date.

     (c) With respect to each Reporting Date, the corresponding individual loan accounting report shall be received by the Servicer no later than the next calendar date, which report shall contain the following:

     (i) with respect to each Monthly Payment, the amount of such remittance allocable to principal (including a separate breakdown of any Principal Prepayment, including the date of such prepayment, and any prepayment penalties or premiums, along with a detailed report of interest on principal prepayment amounts);

     (ii) with respect to each Monthly Payment, the amount of such remittance allocable to interest;

     (iii) the amount of servicing compensation received by the Subservicer since the preceding Remittance Date;

     (iv) the aggregate outstanding principal balance of the Mortgage Loans;

     (v) the aggregate of any expenses reimbursed to the Subservicer during the prior distribution period;

     (vi) a listing of (a) the paid-through date of each Mortgage Loan, (b) the Mortgage Loans as to which foreclosure has commenced, which foreclosure shall be carried out in the name of the Trust or the Owner Designee, (c) the Mortgage Loans with respect to which the related Mortgagors that have declared bankruptcy; and (d) the Mortgage Loans as to which REO Property has been acquired; and

     (vii) a trial balance, sorted in the Servicer’s assigned loan number order.

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     (d) The Servicer shall pay the Subservicer for any additional servicing reports, that are not customary in the mortgage servicing industry and for which the Subservicer would undertake significant expense to prepare. The cost for such reports or modification to existing reports, including reports or data in electronic form, shall be agreed to by the parties before Subservicer shall be obligated to produce such reports. Notwithstanding the previous sentence, if a requested report pertains to an Event of Default or other breach of this Agreement by the Subservicer, the cost of such report or reports shall be borne by the Subservicer. Notwithstanding anything else stated previously in this subsection, Servicer shall have sixty days after the effective date of this Agreement to review the reports required by this Section and determine what, if any other reports Servicer will require, and Subservicer shall provide these reports requested by Servicer without additional cost, with delivery time of these reports to be as mutually agreed by Servicer and Subservicer.

     Section 7.2 Annual Independent Certified Public Accountants’ Servicing Report.

     On or before March 30 of each year, beginning with March 30, 2011 (with respect to calendar year 2010), the Subservicer at its expense shall cause to be delivered to the Servicer a letter or letters of a firm of independent public accountants which is a member of the American Institute of Certified Public Accountants to the effect that such firm has examined certain documents and records relating to the Subservicer’s overall servicing operations and that on the basis of such an examination conducted substantially in compliance with the Uniform Single Attestation Program for Mortgage Bankers (the “Standards”), such firm confirms that such servicing has been conducted in compliance with the Standards, except for such significant exceptions or errors in the records that, in the opinion of such firm, the Uniform Single Attestation Program for Mortgage Bankers requires it to report.

     Subservicer will at its expense cause to be delivered to Servicer an initial SSAE 16 Type 2 report (formerly, through June 15, 2011, a Type II SAS 70 report) prepared by a firm of independent public accountants which is a member of the American Institute of Certified Public Accountants covering the period of April 1, 2011 to September 30, 2011, with a reporting deadline of November 15, 2011. Subservicer will provide a gap letter by January 31, 2012 to address any changes from September 30, 2011 to December 31, 2011. Thereafter, Subservicer will, at its expense, cause to be delivered to Servicer a SSAE 16 Type 2 report prepared by a firm of independent public accountants which is a member of the American Institute of Certified Public Accountants covering the annual periods of October 1 to September 30 each year with a reporting deadline of November 15. Subservicer will provide a gap letter to address any changes from September 30 to December 31 each year, which is due by January 31 of the following year. The scope of such SSAE 16 Type 2 reports shall be limited to documentation and testing of those areas directly affecting the servicing of the Mortgage Loans. Subservicer will also obtain a SSAE 16 Type 2 report as described above for its lockbox provider covering the annual periods of October 1 to September 30 each year with a reporting deadline of November 15 with the initial report covering the period of October 1, 2010 to September 30, 2011 will be due November 15, 2011. Subservicer will cause the Lockbox provider to provide a gap letter to address any changes from September 30 to December 31 each year, which is due by January 31 of the following year. The initial lockbox provider gap letter covering the period of October 1, 2011 to December 31, 2011 will be due January 31, 2012.

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     As part of the initial year transfer of servicing from the Servicer to the Subservicer, the Subservicer will provide written representation to Servicer addressing any significant changes to systems and controls affecting the Mortgage Loans since December 31, 2010 through March 31, 2011 or note that there were no significant changes. Such representation letter is to be delivered by April 30, 2011. As a supplement to the initial USAP Report for 2010 to be delivered by March 30, 2011 as described above, the Subservicer at its expense shall cause to be delivered to the Servicer a letter of a firm of independent public accountants which is a member of the American Institute of Certified Public Accountants to the effect that such firm has examined certain documents and records relating to the Subservicer’s overall servicing of the Mortgage Loans through March 31, 2011 and, on the basis of such an examination conducted substantially in compliance with procedures to be mutually agreed upon between the Servicer, Subservicer and the firm of independent public accountants, to provide a report on the results of such examination. At a minimum the agreed upon procedures shall address transactional processes for payment processing, payoffs, adjustable rate mortgages, escrow balances, loan modifications, loan default processes, and REO management. Such report is to be delivered to Servicer by May 1, 2011. For the three months ended June 30, 2011, the Subservicer will provide written representation to Servicer addressing any significant changes to systems and controls affecting the Mortgage Loans since December 31, 2010 through June 30, 2011 or note that there were no significant changes. Such representation letter is to be delivered by July 31, 2011. For the three months ended September 30, 2011, the Subservicer will provide written representation to Servicer addressing any significant changes to systems and controls affecting the Mortgage Loans since December 31, 2010 through September 30, 2011 or note that there were no significant changes. Such representation letter is to be delivered by October 31, 2011.

     As part of Servicer’s review for Type II SAS 70 compliance, Servicer has conducted a security assessment review of Subservicer, as identified on Exhibit H. Subservicer agrees to take the necessary actions indicated as “Remediation Required” within the times indicated on Exhibit H.

     Section 7.3 Reports of Foreclosures and Abandonment of Mortgaged Property.

     The Subservicer shall file, or cause to be filed, the information returns with respect to the receipt of mortgage interest received in a trade or business, the reports of foreclosures and abandonment of any Mortgaged Property and the information returns relating to cancellation of indebtedness income with respect to any Mortgaged Property required by Sections 6050H, 6050J, 6050P and any comparable or successor provisions of the Code, respectively. Such reports shall be in form and substance sufficient to meet the reporting requirements imposed by Sections 6050H, 6050J, 6050P of the Code and any comparable or successor provisions.

     Section 7.4 Real Estate Owned Reports.

     Together with the statement furnished pursuant to Section 4.2, with respect to any REO Property, the Subservicer shall furnish to the Servicer a statement covering the Subservicer’s efforts in connection with the sale of such REO Property and any rental of such REO Property incidental to the sale thereof for the previous month, together with an operating statement.

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     Section 7.5 Liquidation Reports.

     Upon the foreclosure sale of any Mortgaged Property or the acquisition thereof by the Servicer pursuant to a deed-in-lieu of foreclosure, the Subservicer shall submit to the Servicer a liquidation report with respect to such Mortgaged Property.

     Section 7.6 Compliance with Gramm-Leach-Bliley Act of 1999.

     With respect to each Mortgage Loan and related Mortgagor, the Subservicer shall comply with Title V of the Gramm-Leach-Bliley Act of 1999 and all applicable regulations promulgated thereunder, and shall provide all notices required thereunder with respect to the Subservicer and the Servicer.

     Section 7.7 Reporting.

     The Subservicer shall prepare promptly each report required by applicable law including reports to be delivered to all governmental agencies having jurisdiction over the servicing of the Mortgage Loans and the Escrow Accounts, shall execute such reports or, if the Servicer must execute such reports, shall deliver such reports to the Servicer for execution prior to the date on which such reports are due and shall file such reports with the appropriate Persons. The Subservicer shall timely prepare and deliver to the appropriate Persons Internal Revenue Service forms 1098, 1099 and 1099A (or any similar replacement, amended or updated Internal Revenue Service forms) relating to any Mortgage Loan for the time period such Mortgage Loan has been serviced by the Subservicer. The Servicer shall be solely responsible for filing any other forms including, without limitation and to the extent applicable, forms 1041 and K-1 or any similar replacement, amended or updated Internal Revenue Service forms. The reports to be provided under this subsection shall cover the period through the end of the month following the termination of this Agreement or, in the case of reports to be sent to the Internal Revenue Service, the end of the calendar year following termination of the Agreement. To the extent it is an Acceptable Servicing Practice, the Subservicer shall promptly prepare all reports or other information required to respond to any inquiry from, or give any necessary instructions to, any mortgage insurer, provider of hazard insurance or other insurer or guarantor, taxing authority, tax service, or the Mortgagor.

ARTICLE VIII
SUBSERVICER AND INDEMNIFICATION

     Section 8.1 Merger or Consolidation of the Subservicer.

     Notwithstanding anything herein to the contrary, any Person into which the Subservicer may be merged or consolidated, or any corporation resulting from any merger, conversion or consolidation to which the Subservicer shall be a party, or any Person succeeding to the business of the Subservicer, shall be the successor of the Subservicer hereunder, provided, however, that the successor or surviving Person must be an established housing and home finance institution, bank or other mortgage loan or equity servicer: (i) having a net worth of not less than $25 million, (ii) that is an FHA- Approved Mortgagee and a Freddie Mac or Fannie Mae approved servicer in good standing, and (iii) Servicer in its sole discretion has approved as a Subservicer.

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     Section 8.2 Limitation on Resignation.

     The Subservicer shall not resign from the obligations and duties hereby imposed on it except: (i) by mutual consent of the Subservicer and the Servicer, (ii) upon Subservicer’s good-faith determination that its duties hereunder are no longer permissible under applicable law and such incapacity cannot be cured by the Subservicer (including by hiring a subservicer for certain of the Mortgage Loans) or the Subservicer determines in good faith that curing such incapacity is not commercially reasonable, or (iii) upon not less than one hundred eighty (180) days’ prior written notice to Servicer. The Subservicer shall promptly notify the Servicer of any determination of the type described in clause (ii) above and provide an opinion of counsel acceptable to the Servicer to evidence such determination. In addition, the Subservicer shall use its best efforts to locate and engage a successor to it in the event of a resignation pursuant to clause (ii) above.

     Section 8.3 Subservicer Limitation on Liability and Indemnification.

     (a) Neither the Subservicer nor any of the directors, officers, agents or employees thereof shall be liable to the Servicer for any action taken, or for refraining from the taking of any action, in good faith pursuant to this Agreement or for errors in judgment. The Subservicer and any director, officer, agent, or employee of the Subservicer may rely in good faith on any document of any kind which it reasonably believes has been properly executed and/or submitted by any appropriate Person respecting any matters arising hereunder.

     (b) Other than in connection with removing a Mortgage Loan from the MERS® system pursuant to Section 4.2(g) or (k) hereof, the Subservicer does not assume any obligation to record the original Mortgage unless otherwise instructed to do so by the Servicer. The Subservicer shall not be under any obligation to appear in, prosecute or defend any legal action that is not incidental to its duties hereunder and which in its opinion may involve it in any expenses or liability.

     (c) The Servicer shall indemnify and hold harmless the Subservicer and its officers, employees, members, directors, Affiliates and representatives (collectively, the “Subservicer Indemnified Parties”) against any and all liability, cost and expense incurred by the Subservicer including, without limitation, all losses, damages, penalties, fines, forfeitures, reasonable legal fees and related costs and judgments resulting from any claim, demand, defense or assertion asserted against any Subservicer Indemnified Party in connection with: (i) any action with respect to the origination of a Mortgage Loan; (ii) any action of any originator, holder or servicer of the Mortgage Loans occurring prior to the related Servicing Transfer Date; (iii) a material breach by Servicer of any representation, warranty, covenant, or obligation hereunder; (v) any document, instrument or any other information that is missing from the Servicing File on the Servicing Transfer Date that is necessary for the Subservicer to service the Mortgage Loans; (vi) lost or misplaced user ID or password by Servicer (or Servicer’s designee); (vii) following the directions and instructions of the Servicer (or its designee); provided, however, that the

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Servicer shall not be required to indemnify any Subservicer Indemnified Party against any such liability attributable to the willful misconduct, bad faith or negligence or reckless disregard of such Subservicer Indemnified Party or the failure of such Subservicer Indemnified Party to comply with any covenant or obligation applicable to it hereunder (unless such failure to comply is the result of a determination by the Subservicer that compliance with such covenant or obligation would not be permissible under applicable law). This indemnity shall survive the termination of this Agreement and the payment of the Mortgage Loans. The Subservicer shall promptly notify the Servicer of any liability or claim for which the Subservicer expects to be indemnified pursuant to this Section.

     (d) The Servicer shall be entitled to participate in and, upon notice to the Subservicer, assume the defense of any action or claim described in Section 8.3(d) in reasonable cooperation with, and with the reasonable cooperation of the Subservicer. The Subservicer shall have the right to employ its own counsel in any such action in addition to the counsel of the Servicer, but the fees and expenses of such counsel shall be at the expense of the Subservicer, unless (i) the employment of counsel by the Subservicer at the Servicer’s expense has been authorized in writing by the Servicer, (ii) the Servicer has not in fact employed counsel to assume the defense of such action within a reasonable time after receiving notice of the commencement of the action, or (iii) the named parties to any such action or proceeding (including any impleaded parties) include the Servicer and the Subservicer, and the Subservicer has been advised by counsel that there may be one or more legal defenses available to it which are different from or additional to those available to the Servicer. The Subservicer shall not be liable for any settlement of any such claim or action unless the Subservicer shall have consented thereto (which consent shall not be unreasonably conditioned, withheld or delayed). Any failure by the Subservicer to comply with the provisions of this Section shall relieve the Servicer of liability only if such failure is materially prejudicial to the position of the Servicer and then only to the extent of such prejudice.

     Section 8.4 Servicer Limitation on Liability and Indemnification.

     (a) Neither the Servicer, nor any of the directors, members, officers, agents or employees thereof shall be liable to the Subservicer for any action taken, or for refraining from the taking of any action, in good faith pursuant to this Agreement or for errors in judgment. The Servicer and any director, member, officer, agent, or employee of the Servicer may rely in good faith on any document of any kind, which it reasonably believes has been properly executed and/or submitted by any appropriate Person respecting any matters arising hereunder.

     (b) The Subservicer shall indemnify and hold harmless the Servicer and its officers, employees, members, directors, Affiliates and representatives (collectively, the “Servicer Indemnified Parties”) against any and all liability, cost and expense incurred by the Servicer, including, without limitation, all losses, damages, penalties, fines, forfeitures, reasonable legal fees and related costs and judgments resulting from any claim, demand, defense or assertion asserted against any Servicer Indemnified Party in connection with (i) the failure of the Subservicer to perform its duties and service the Mortgage Loans in compliance with the terms of the Agreement or (ii) a material breach of any representation, warranty, covenant or obligation made by the Subservicer hereunder; provided, however, that the Subservicer shall not be required to indemnify any Servicer Indemnified Party against any such liability attributable to

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the willful misconduct, bad faith, negligence or reckless disregard of such Servicer Indemnified Party or the failure of such Servicer Indemnified Party to comply with any covenant or obligation applicable to it hereunder (unless such failure to comply is the result of a determination by the Servicer that compliance with such covenant or obligation would not be permissible under applicable law). This indemnity shall survive the termination of this Agreement and the payment of the Mortgage Loans. The Servicer shall promptly notify the Subservicer of any liability or claim for which the Servicer expects to be indemnified pursuant to this Section.

     (c) The Subservicer shall be entitled to participate in and, upon notice to the Servicer, assume the defense of any action or claim described in Section 8.4(b) in reasonable cooperation with, and with the reasonable cooperation of the Servicer. The Servicer shall have the right to employ its own counsel in any such action in addition to the counsel of the Subservicer, but the fees and expenses of such counsel shall be at the expense of the Servicer, unless (i) the employment of counsel by the Servicer at the Subservicer’s expense has been authorized in writing by the Subservicer, (ii) the Subservicer has not in fact employed counsel to assume the defense of such action within a reasonable time after receiving notice of the commencement of the action, or (iii) the named parties to any such action or proceeding (including any impleaded parties) include the Subservicer and the Servicer, and the Servicer has been advised by counsel that there may be one or more legal defenses available to it which are different from or additional to those available to the Subservicer. The Servicer shall not be liable for any settlement of any such claim or action unless the Servicer shall have consented thereto (which consent shall not be unreasonably conditioned, withheld or delayed). Any failure by the Servicer to comply with the provisions of this Section shall relieve the Subservicer of liability only if such failure is materially prejudicial to the position of the Subservicer and then only to the extent of such prejudice.

     Section 8.5 Notice of Litigation.

     In the event of litigation with respect to the Mortgage Loans or any duty under this Agreement, the party being served shall notify the other party promptly, and, in any case, within ten (10) days of receipt of service. The parties will cooperate in the handling of such litigation.

ARTICLE IX
TERMINATION

     Section 9.1 Events of Default.

     The following events shall each constitute an “Event of Default” under this Agreement:

     (a) Any failure by the Subservicer to deposit into the designated account or remit to the Servicer any amount required to be so deposited or remitted under this Agreement on the date required under this Agreement within two days of the date such amount is due;

     (b) The Subservicer shall fail to provide to the Servicer any report required by this Agreement to be provided to the Servicer within three days of the date such report is due;

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     (c) The entry against the Subservicer or the Servicer of a decree or order of a court or agency or supervisory authority having jurisdiction in the premises for the appointment of a conservator, receiver, liquidator, trustee or similar official in any bankruptcy, insolvency, conservatorship, receivership, readjustment of debt, marshaling of assets and liabilities or similar proceedings, or for the winding-up or liquidation of its affairs, which decree or order shall have remained in force undischarged or unstayed for a period of sixty (60) consecutive days;

     (d) The Subservicer or the Servicer shall consent to the appointment of a conservator, receiver, liquidator, trustee or similar official in any bankruptcy, insolvency, conservatorship, receivership, readjustment of debt, marshalling of assets and liabilities or similar proceedings of or relating to such party or of or relating to all or substantially all of the property of such party;

     (e) The Subservicer or the Servicer shall admit in writing its inability to pay its debts generally as they become due, file a petition to take advantage of any applicable bankruptcy, insolvency or reorganization statute, make an assignment for the benefit of its creditors, voluntarily suspend payment of its obligations, or take any corporate action in furtherance of any of the foregoing;

     (f) The Subservicer shall be merged or consolidated into any Person or the Subservicer or the Servicer shall assign or transfer or attempt to assign or transfer all or part of its rights and obligations hereunder, in each case except as permitted by this Agreement;

     (g) The Subservicer transfers or otherwise disposes of all or substantially all of its assets;

     (h) The inability of the Subservicer to, or the Subservicer loses its authority under any applicable government entity to, perform any material obligation hereunder;

     (i) The failure of the Subservicer to maintain its license to conduct business or service residential mortgages in any jurisdiction where the Mortgaged Properties are located;

     (j) Any breach by the Servicer or the Subservicer of a representation or warranty made in Article III hereof (other than, in the case of the Servicer, a representation or warranty set forth in Section 3.3(b) or Section 3.3(c) hereof) or any failure by the Servicer or the Subservicer to perform any of their respective material obligations hereunder, which breach or failure continues unremedied for a period of thirty (30) days after the earlier of: (1) knowledge of such party of such breach or failure; and (2) the date on which written notice of such breach or failure requiring the same to be remedied shall have been given to such party; or

     (k) In accordance with Section 4.18(c) hereof, the failure of the Servicer to pay to the Subservicer the amount of any shortfall within thirty (30) days of the related notification by the Subservicer to the Servicer of such shortfall.

     The Servicer may waive any default by the Subservicer in the performance of its obligations hereunder and its consequences. Upon any such waiver of a past default, such default shall cease to exist, and any Event of Default arising therefrom shall be deemed to have been remedied for every purpose of this Agreement. No such waiver shall extend to any

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subsequent or other default or impair any right consequent thereon except to the extent expressly so waived.

     Section 9.2 Termination of Agreement.

     (a) The obligations and responsibilities of the Subservicer shall terminate, with respect to any related Mortgage Loan(s) and/or REO Properties, upon the earliest of: (i) the final payment or other liquidation of the last Mortgage Loan and related REO Property and the remittance of all amounts due hereunder; (ii) the date designated by the Servicer following the occurrence and during the continuance of an Event of Default with respect to the Subservicer (after giving effect to any applicable cure period), subject to compliance with the Legal Requirements for the transfer of the servicing of the Mortgage Loans; (iii) after ninety (90) days following the occurrence and during the continuance of an Event of Default with respect to the Servicer (after giving effect to any applicable cure period) and subject to compliance with the Legal Requirements for the transfer of the servicing of the Mortgage Loans; (iv) the date specified in accordance with Section 8.2 above; (v) upon a termination pursuant to Section 10.01 of the Pooling and Servicing Agreement; (vi) at the sole discretion of Servicer upon ninety (90) days notice to the Subservicer (a “Termination for Convenience”), or (vii) with such other date as shall have been mutually agreed upon by the Subservicer and the Servicer. Following the termination of the Subservicer, the Subservicer shall be paid all amounts due the Subservicer in accordance with the terms of this Agreement. Notwithstanding the foregoing, upon a termination pursuant to clause (v) above, the Servicer and the Subservicer agree that the servicing of the remaining Mortgage Loans and related REO Property shall be governed by the terms of the Subservicing Agreement, dated as of February 1, 2011, among the Subservicer, the Servicer, American General Financial Services of Arkansas, Inc. and American General Home Equity, Inc.

     (b) In the event of a termination of this Agreement by the Servicer in accordance with Section 9.2(a) above, upon receipt by the Subservicer of written notice of termination, all authority and power of the Subservicer under this Agreement, whether with respect to the Mortgage Loans or otherwise, shall (i) pass to the Designated Successor Servicer (following the occurrence and during the continuance of a Servicer Event of Default ), (ii) be extinguished, if the Servicer’s responsibilities and duties under the Pooling and Servicing Agreement are terminated or (iii) pass to and be vested in a successor subservicer, if a successor subservicer is appointed by the Servicer. The Subservicer shall cooperate with the Servicer, the Designated Successor Servicer and any successor servicer in effecting the termination of the Subservicer’s responsibilities and rights hereunder. In the event of a Termination for Convenience by the Servicer, the Servicer shall pay the applicable termination fee (the “Termination Fee”) to the Subservicer in accordance with the terms of Exhibit D immediately upon such termination.

     (c) Upon written request from the Servicer, the Subservicer shall (i) prepare, execute and deliver to the successor servicer all related Servicing Files; however, the Subservicer may retain copies of Servicing Files to the extent necessary to comply with the Legal Requirements and other laws; and (ii) be responsible for the costs of packaging and transferring all of the aforementioned materials to the Servicer, the Designated Successor Servicer or any successor servicer, as the case may be, upon such termination. The Servicer shall pay all reasonable shipping expenses associated with such transfer, unless Subservicer is terminated for

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an Event of Default or Subservicer resigns pursuant to Section 8.2 (iii). Any remaining amounts pursuant to the preceding sentence shall be remitted by the Servicer to the Subservicer no later than thirty (30) days after the Released Servicing Date. Subservicer shall do or cause to be done all other acts or things necessary or appropriate to affect the purposes of such notice of termination, including the transfer and endorsement or assignment of the Mortgage Loans and related documents.

     (d) Subservicer shall transfer to successor servicer for administration by it of all cash amounts which shall at the time be credited by the Subservicer to the P & I Custodial Account or T & I Escrow Accounts or thereafter received with respect to the Mortgage Loans. Notwithstanding any other term of this Agreement to the contrary and in all circumstances under which this Agreement is terminated, the Subservicer shall be entitled to offset against deposits in the P & I Custodial Account all unreimbursed Subservicing Fees, Servicing Advances and Pass-Through Expenses from any amounts due and owing to the Servicer or successor servicer at the time of a corresponding servicing transfer.

     (e) In the event the Servicer shall for any reason no longer be the Servicer (including by reason of a Servicer Event of Default), the Designated Successor Servicer shall thereupon assume all of the rights and obligations of the Servicer under this Agreement and the Servicer shall terminate this Agreement. The Subservicer shall deliver to the Designated Successor Servicer all documents and records and afford the Designated Successor Servicer (to the extent practicable) access to the computer systems, electronic files and personnel as they relate to this Agreement and the Mortgage Loans then being serviced and an accounting of amounts collected and held by it and otherwise use its best efforts to effect the orderly and efficient transfer of the servicing of the Mortgage Loans to the Designated Successor Servicer.

     (f) This Section 9.2 shall survive any termination of this Agreement and any termination of this Agreement shall not prejudice the rights of Subservicer to recover any amounts due Subservicer under this Agreement.

ARTICLE X
MISCELLANEOUS PROVISIONS

     Section 10.1 Protection of Confidential and Proprietary Information.

     (a) The Subservicer shall keep confidential and shall not divulge to any party, without the Servicer’s prior written consent, the terms and provisions of this Agreement, including, without limitation, the purchase price paid by the Servicer for the Mortgage Loans, REO Properties and/or rights transferred pursuant to this Agreement and any information pertaining to such Mortgage Loans, REO Properties and/or rights, or any Mortgagor thereunder, except to the extent that it is appropriate for the Subservicer to do so in working with legal counsel, auditors, taxing authorities, or other governmental agencies, insurance carriers, any property inspector, or other Person necessary to fulfill the Subservicer’s obligations hereunder. Except as otherwise provided in this Agreement, including as specified in Section 10.1(j) with respect to the filing of a Form 8-K, the Servicer shall keep confidential and shall not divulge to any party, without the Subservicer’s prior written consent, the terms and provisions of this Agreement, except to the extent that it is appropriate for the Servicer to do so in working with

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legal counsel, auditors, taxing authorities, or other governmental agencies, insurance carriers, any property inspector, or other Person necessary to fulfill the Servicer’s obligations hereunder. Notwithstanding any provision of this Agreement, the trademarks, trade secrets, know-how, business methods and practices, internal procedures and other intellectual property and confidential information of the Subservicer or the Servicer, respectively (“Proprietary Information”) shall remain vested in the Subservicer and the Servicer, respectively, and are not hereby transferred to the other party, and the Subservicer and the Servicer shall have the right to take all actions necessary to protect their Proprietary Information. Notwithstanding the above, each party (and each employee, representative, or other agent of a party) may disclose to any and all persons, without limitation of any kind, the tax treatment and tax structure of the transaction and all materials of any kind (including opinions or other tax analyses) that are provided to it relating to such tax treatment and tax structure.

     (b) Except as otherwise set forth herein, the Subservicer agrees that it shall not refer to or use the Servicer’s name or any derivation or significant portion of such name in any manner in any of its servicing, enforcement or collection activities with respect to any Mortgage Loan or in any advertising, printed material, electronic medium or other medium, without first obtaining the named party’s prior written consent, except to the extent that it is appropriate for the Subservicer to do so in working with legal counsel, auditors, taxing authorities, or other governmental agencies, insurance carriers, any property inspector, or other person necessary to fulfill the Subservicer’s obligations hereunder. The Subservicer shall inform its subservicers, contractors, advisors and agents of the restriction stated in this subparagraph (b) and shall take commercially reasonable steps to cause such parties to conduct their activities relating to the Mortgage Loans and REO Properties in compliance herewith. Except as required hereunder, no such named party shall have any obligation to give any such written consent and may withhold the same in its sole and absolute discretion.

     (c) All information of a non-public nature disclosed by Servicer to Subservicer during the term of this Agreement (“Servicer Proprietary Information”) (1) shall be deemed the property of Servicer, (2) shall be used solely for the purposes of administering and otherwise implementing the terms of this Agreement, and (3) shall be protected by Subservicer in accordance with the terms of this Article X. Servicer’s Proprietary Information shall also include all “non-public personal information” as defined in Title V of the Gramm-Leach-Bliley Act (15 U.S. C. Section 6801, et seq.) and the implementing regulations thereunder (collectively, the “GLB Act”), as the same may be amended from time to time, that Subservicer received from or at the direction of Servicer and that concerns any of Servicer’s “customers” and/or “consumers” (as defined in the GLB Act). Subservicer acknowledges that any Servicer Proprietary Information being stored or processed by Subservicer is and shall remain the sole property of Servicer and will take all such reasonable measures as may be necessary to protect the confidentiality of Servicer Proprietary Information which comes into Subservicer’ possession, if any. Subservicer further agrees to observe complete confidentiality regarding all aspects of Servicer Proprietary Information, including without limitation agreeing not to disclose or otherwise permit any other person or entity access to, in any manner, Servicer Proprietary Information or any part thereof without Servicer’s prior written consent, except that such disclosure or access shall be permitted to an employee of Subservicer requiring such access in the course of employment or a subcontractor of Subservicer. Subservicer shall not disclose or use Servicer Proprietary Information for any purposes other than to carry out the purposes for

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which Servicer disclosed the data to Subservicer, or as permitted by this Agreement. Notwithstanding the foregoing, Servicer consents to the use by Subservicer of statistical data generated by Servicer Proprietary Information provided that such use shall not result in the disclosure of Servicer Proprietary Information which will directly or indirectly identify Servicer or any specific individual. At the request of Servicer, and upon payment to Subservicer of all undisputed monies due under the terms of this Agreement, Subservicer shall transfer any Servicer Proprietary Information held by Subservicer to Servicer. Upon termination of this Agreement, Subservicer’s rights to use or access Servicer Proprietary Information shall end immediately. In the event that Subservicer does not immediately return such Servicer Proprietary Information to Servicer, Subservicer agrees it will not access or use such Servicer Proprietary Information in any manner and shall maintain such Servicer Proprietary Information in a secure manner until its return to Servicer. In the event that Servicer desires for Subservicer to perform year-end IRS reporting or other services following deconversion from Subservicer’s system, Servicer shall provide a written request for such services prior to the last week of deconversion activities. In such case, Servicer acknowledges that Subservicer will retain a set of Servicer’s Proprietary Information in order to perform such services. To the extent that Servicer desires that Subservicer not retain Servicer’s Proprietary Information in its secured, archived environment in accordance with its data retention policies, upon 1) written notice and instruction by Servicer, 2) Subservicer’s receipt of all monies owed by Servicer to Subservicer, and 3) Servicer’s return of all Subservicer Proprietary Information to Subservicer, Subservicer shall destroy Servicer’s Proprietary Information. Subservicer shall provide written certification of destruction within thirty (30) days following completion of such destruction. Servicer shall be responsible for any regulatory or other concerns regarding retention of Servicer Proprietary Information.

     (d) Subservicer presently maintains and will continue to maintain information security programs and measures designed to safeguard the security and confidentiality of Servicer Proprietary Information. Such security programs and measures are and will be designed to identify and protect against reasonably foreseeable risks to (1) the security and confidentiality of Servicer Proprietary Information, (2) the integrity of such information, and (3) unauthorized access to or use of such information that might result in substantial harm or inconvenience to any customer or consumer of Servicer. Subservicer agrees to (1) periodically test the efficacy and appropriateness of such information security programs and (2) take reasonable measures to be able to detect and respond to security breaches, including widely known potential security failures that have been experienced by its vendors or others in the industry.

     (e) Subservicer will use commercially reasonable efforts to adhere to such additional security measures with respect to Servicer’s Proprietary Information as may be reasonably imposed by Servicer.

     (f) Subservicer also agrees to notify Servicer, immediately following discovery, if any Servicer Proprietary Information was, or is reasonably believed to have been, acquired by an unauthorized person. Notification required by this section may be delayed if a law enforcement agency determines that the notification of Servicer will impede a criminal investigation. In such case, Subservicer shall notify Servicer immediately after Subservicer has been notified that the law enforcement agency determines that it will not compromise the investigation. In the event of any such breach of security or unauthorized access, Subservicer

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agrees to use highest commercially reasonable efforts to cooperate with Servicer to minimize the consequences of such security breach for Servicer’s customers, and to provide all necessary information reasonably requested by Servicer’s state and federal regulators.

     (g) Subservicer agrees to comply with any further notification requirements imposed from time to time by state and federal regulators with jurisdiction over the use of, and/or security relating to Servicer’s Proprietary Information. Subject to the limitations of liability set forth in any other part of this Agreement, Subservicer expressly agrees that it will be responsible for all reasonable costs and expenses related to (i) an investigation and resolution of unauthorized access to Servicer Proprietary Information while in Subservicer’s possession and (ii) notification of Servicer’s customers affected by unauthorized access to such Servicer Proprietary Information, in the event such notification is required by state or federal law or by Servicer’s state and federal regulators.

     (h) Subservicer agrees to annually provide Servicer with a written report assessing its vulnerability or potential vulnerability to security breaches, loss of data integrity, and threats to confidentiality.

     (i) Subservicer may disclose Servicer Proprietary Information to third parties only after providing Servicer with reasonable prior written notice (unless such notice is prohibited by law):

a)	to comply with a properly authorized civil, criminal, or regulatory investigation, subpoena or summons by Federal, State or local authorities; or
b)	to respond to judicial process or government regulatory authorities having jurisdiction over it for examination, compliance or other purposes.

     Upon receipt of such notice, Servicer may seek an appropriate protective order. Subservicer shall use reasonable efforts to cooperate with Servicer, at Servicer’s sole cost, to pursue an appropriate protective order. It is further agreed that, if, in the absence of a protective order, Subservicer is legally compelled to disclose Servicer Proprietary Information, Subservicer shall make commercially reasonable efforts to disclose only such portions of Servicer Proprietary Information that are legally required to be disclosed. Except as set forth in this Section 10.1, Subservicer may disclose Servicer Proprietary Information to third parties for any other purpose permitted by law, only after receiving prior written consent from Servicer.

     (j) The parties acknowledge that this Agreement contains confidential information that may be considered proprietary by one or both of the parties, and agree to limit distribution of this Agreement to those individuals with a need to know the contents of this Agreement. In no event may this Agreement be reproduced or copies shown to any third parties (exclusive of contractors, subcontractors and agents who have a need for it) without the prior written consent of the other party, except as may be necessary by reason of legal, accounting, tax or regulatory requirements, in which event Servicer and Subservicer agree to exercise reasonable diligence in limiting such disclosure to the minimum necessary under the particular circumstances. The parties further agree to seek commercial confidential status for this Agreement with any regulatory commission with which this Agreement must be filed, to the extent such a designation can be secured. Notwithstanding anything to the contrary in this

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Agreement, the Servicer and its affiliates are allowed to disclose the Agreement as necessary to comply with any subpoena, order, regulation, ruling or request of any judicial, administrative or legislative body or committee or any self-regulatory body (including any securities body), including the filing of a Form 8-K with the Securities and Exchange Commission (with a copy of the Agreement) if they believe (in their sole discretion) that such a filing is necessary or appropriate; provided, however, in connection with any such filing the Servicer and its affiliates shall request confidential treatment with respect to all pricing information set forth in this Agreement.

     (k) In addition, each party agrees to give notice to the other party of any demands to disclose or provide the Proprietary Information received from the other or any third party under lawful process prior to disclosing or furnishing Proprietary Information, and agrees to cooperate in seeking reasonable protective arrangements requested by the other party.

     Section 10.2 Notices.

     All demands, notices and communications hereunder shall be in writing and shall be deemed to have been duly given as of the next Business Day if sent by overnight courier, addressed as follows (or such other address as may hereafter be furnished to the other party by like notice):

a.	if to the Servicer	American General Financial Services, Inc.
		601 N.W. Second Street
		Evansville, IN 47708
		Attention: General Counsel
b.	if to the Subservicer	Nationstar Mortgage LLC
		350 Highland Drive
		Lewisville, Texas 75067
		Attention: Shawn Stone
c.	if to the Custodian	Wells Fargo Bank, N.A.
		751 Kasota Avenue
		Minneapolis, Minnesota 55414
		Attention: Document Custody

     Section 10.3 Severability Clause.

     Any part, provision, representation or warranty of this Agreement which is prohibited or which is held to be void or unenforceable shall be ineffective to the extent of such prohibition or unenforceability without invalidating the remaining provisions hereof. Any part, provision, representation or warranty of this Agreement which is prohibited or unenforceable or is held to be void or unenforceable in any jurisdiction shall be ineffective, as to such jurisdiction, to the

54

extent of such prohibition or unenforceability without invalidating the remaining provisions hereof, and any such prohibition or unenforceability in any jurisdiction as to any Mortgage Loan shall not invalidate or render unenforceable such provision in any other jurisdiction. To the extent permitted by applicable law, the parties hereto waive any provision of law which prohibits or renders void or unenforceable any provision hereof. If the invalidity of any part, provision, representation or warranty of this Agreement shall deprive any party of the economic benefit intended to be conferred by this Agreement, the parties shall negotiate, in good-faith, to develop a structure the economic effect of which is as close as possible to the economic effect of this Agreement without regard to such invalidity.

     Section 10.4 Performance Audits.

     Subservicer will cooperate reasonably and in good faith with Servicer or its auditors, internal or external, upon reasonable prior notice, for the purpose of inspecting, examining, and auditing the performance of the activities required by Subservicer of this Agreement provided, however, that any such inspection, examination and/or audit shall take place during normal business hours and shall not unreasonably interfere with the business operations of the Subservicer.

     Section 10.5 Counterparts.

     This Agreement may be executed simultaneously in any number of counterparts. Each counterpart shall be deemed to be an original, and all such counterparts shall constitute one and the same instrument.

     Section 10.6 Place of Delivery and Governing Law.

     The Agreement shall be construed in accordance with the laws of the State of New York and the obligations, rights and remedies of the parties hereunder shall be determined in accordance with the laws of the State of New York, except to the extent preempted by Federal law.

     Section 10.7 Waiver of Jury Trial.

     Each party hereby knowingly, voluntarily and intentionally, waives (to the extent permitted by applicable law) any right it may have to a trial by jury of any dispute arising under or relating to this Agreement and agrees that any such dispute shall be tried before a judge sitting without a jury.

     Section 10.8 Further Agreements.

     The Servicer and the Subservicer agree to execute and deliver to the other such reasonable and appropriate additional documents, instruments or agreements as may be necessary or appropriate to effectuate the purposes of this Agreement.

     Section 10.9 Successors and Assigns; Assignment of Subservicing Agreement.

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     This Agreement shall bind and inure to the benefit of and be enforceable by the Subservicer and the Servicer and the respective permitted successors and assigns of the Subservicer and the Servicer. Except as contemplated by Section 8.1, the Subservicer shall not assign this Agreement or sell or otherwise dispose of all or substantially all of its property or assets without the prior written consent of the Servicer, which consent shall not be unreasonably withheld.

     The Servicer may assign its rights and obligations under this Agreement with respect to some or all of the related Mortgage Loans without the consent of the Subservicer. The Subservicer agrees to cooperate with the Servicer in connection with any such assignment including, without limitation, executing such documents and entering into such agreements in order to give effect to such assignment. Except as otherwise provided in this Agreement, upon any such assignment and written notice thereof to the Subservicer, the Person to whom such assignment is made shall succeed to all rights and obligations of the Servicer under this Agreement to the extent of the related Mortgage Loan or Mortgage Loans and this Agreement, to the extent of the related Mortgage Loan or Mortgage Loans, shall be deemed to be a separate and distinct Agreement between the Subservicer and the assignee of the related Mortgage Loan or Loans.

     Notwithstanding any other provision of this Agreement, Subservicer shall have the right following thirty (30) days’ notice to the Servicer to assign, transfer and pledge any right Subservicer has to receive payment under this Agreement without the consent of the Servicer.

     Section 10.10 Amendments, Etc.

     No term or provision of this Agreement may be amended, waived or modified unless such amendment, waiver or modification is in writing and signed and delivered by each of the parties hereto.

     Section 10.11 Exhibits.

     The exhibits to this Agreement are hereby incorporated and made a part hereof and are an integral part of this Agreement.

     Section 10.12 General Interpretive Principles.

     For purposes of this Agreement, except as otherwise expressly provided or unless the context otherwise requires:

     (a) The terms defined in this Agreement have the meanings assigned to them in this Agreement and include the plural as well as the singular, and the use of any gender herein shall be deemed to include the other gender;

     (b) Accounting terms not otherwise defined herein have the meanings assigned to them in accordance with generally accepted accounting principles;

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     (c) References herein to “Articles,” “Sections,” “Subsections,” “Paragraphs,” and other subdivisions without reference to a document are to designated Articles, Sections, Subsections, Paragraphs and other subdivisions of this Agreement;

     (d) A reference to a Subsection without further reference to a Section is a reference to such Subsection as contained in the same Section in which the reference appears, and this rule shall also apply to Paragraphs and other subdivisions;

     (e) The words “herein,” “hereof,” “hereunder,” and other words of similar import refer to this Agreement as a whole and not to any particular provision;

     (f) The term “include” or “including” shall mean “including without limitation”; and

     (g) The terms “best efforts” or “reasonable efforts” shall not be interpreted to require the Servicer or the Subservicer, as the case may be, to initiate or participate in any litigation, arbitration or proceeding or to incur expenses in excess of those explicitly set forth in this Agreement or as are otherwise commercially reasonable.

     Section 10.13 Reproduction of Documents.

     This Agreement and all documents relating thereto, including: (a) consents, waivers and modifications which may hereafter be executed, (b) documents received by any party at the closing, and (c) financial statements, certificates and other information previously or hereafter furnished, may be reproduced by any photographic, photostatic, microfilm, micro-card, miniature photographic or other similar process. The parties agree that any such reproduction shall be admissible in evidence as the original itself in any judicial or administrative proceeding, whether or not the original is in existence and whether or not such reproduction was made by a party in the regular course of business, and that any enlargement, facsimile or further reproduction of such reproduction shall likewise be admissible in evidence.

     Section 10.14 Conflicts.

     Following the Servicing Transfer Date, if the Servicer discovers a conflict between the terms of this Agreement and the Pooling and Servicing Agreement and notifies the Subservicer of such conflict, and, such conflict, in the reasonable judgment of the Servicer, could result in a Servicer Event of Default under the Pooling and Servicing Agreement if not remedied, the Subservicer and the Servicer agree to use their respective best efforts to modify the applicable term or terms of this Agreement to conform to the Pooling and Servicing Agreement.

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     In Witness Whereof, the Subservicer and the Servicer have caused their names to be signed to this Subservicing Agreement by their respective officers duly authorized as of the date first above written.

SERVICER MOREQUITY, INC.
By:
	Name:
	Title:
SUBSERVICER NATIONSTAR MORTGAGE LLC
By:
	Name:
	Title:

SERVICING AGREEMENT – Signature Page

EXHIBIT A

MORTGAGE LOAN DATA FIELD REQUEST SCHEDULE

Exhibit A-Mortgage Loan Data Field Request

Please refer to the schedule below for Mortgage Loan Data Requirements.

	Refer Page # in
	Servicing Transfer
Mortgage Data Related To:	Instructions
LOAN LEVEL DATA FILE		5
CONVERSION REPORTS		6
Trial Balance Report		6
ACH Report		7
System Codes and Data Dictionary Report		7
Transaction and Disbursement History Report		7
Odd Due Date Loan Report		8
Second Liens Report		8
Non-Solicitation Report		8
Outstanding Trailing Docs Report		8
Escrow Analysis History Report		8
Adjustable Rate Mortgages		8
Payment Option ARMs		9
Interest Only Loans		10
Balloon Loans		10
Buydown Loans		10
LOAN TYPE OR PLAN INFORMATION		11
ESCROWED LOAN INFORMATION		15
INSURANCE (HAZARD, FLOOD, ETC...)		17
REAL ESTATE TAXES		21
PENDING TAX SALES		21
TAX		21
MORTGAGE INSURANCE		23
VENDOR REQUIREMENTS		24
CREDIT LIFE AND OTHER OPTIONAL PRODUCTS		26
CLAIMS PROCESS		26
SOLDIER’S AND SAILOR’S CIVIL RELIEF ACT OF 1940 (SSCRA)		31
LOSS MITIGATION AND COLLECTION ACTIVITY		32
BANKRUPTCY		35
FORECLOSURE		37
REO		40
HAMP REQUIREMENTS		47
HAFA REQUIREMENTS		57

EXHIBIT B

SERVICING TRANSFER INSTRUCTIONS

EXHIBIT B

Nationstar Mortgage LLC — Servicing Transfer Instructions

EXHIBIT B

SERVICING TRANSFER INSTRUCTIONS
TABLE OF CONTENTS

Introduction
Important Servicing Transfer Dates
Secured Data Transmission
Loan Level Data File
Loan Level Data File Specifications
Conversion Reports
Loan Type or Plan Information
Investor Reporting and Remittance Requirements
Balance Settlement
Mortgagor Notification
Escrowed Loan Information
Escrow Procedures
Escrowed Loan Report
Hazard Insurance
Real Estate Taxes
Mortgage Insurance
Vendor Requirements
Tax
Insurance (Flood and Hazard)
Flood
Credit Life and Other Optional Products
Claims Process
Records and Files
MERS Notification
IRS Reporting
Litigation (This is covered in the Transfer Letter) / Update to show pre&post
Partial Releases
Subordinations
Qualified Written Requests (RESPA)
Mortgagor Name Changes
Soldier’s and Sailor’s Civil Relief Act of 1940 (SSCRA)
Loss Mitigation and Collection Activity
Bankruptcy
Foreclosure File Report
REO
Mortgagor Recoverable Corporate Advances
Release of Title, Payoff Requests and Payoff Funds Received After Transfer
Automatic Payment Plans, Mortgage Payments or other checks received after Transfer
Dishonored Payments after Transfer and Misapplied payments
Correspondence Received After Transfer
HAMP Requirements
HAFA Requirements

© 2008 Nationstar Mortgage LLC. “The information within this document is confidential and provided solely for the internal use of Nationstar Mortgage LLC. This document is an intellectual property of Nationstar Mortgage LLC, and is protected under copyright laws of the United States. This material should not be released to any third party supplier without the Previous written approval Nationstar Mortgage LLC.”

Page 1

EXHIBIT B

Introduction

The Previous Servicer agrees to coordinate with Nationstar Mortgage LLC (the “Servicer”) to affect an efficient and orderly Servicing Transfer. On the Servicing Transfer Date Previous Servicer shall deliver to Servicer with respect to all Mortgage Loans all records, files and information required to complete the Servicing Transfer.

The Previous Servicer agrees to provide the Servicer with preliminary data files and reports prior to the Servicing Transfer Date as specified on Important Servicing Transfer Dates schedule and Servicing Transfer Timeline. Unless otherwise specified all reports will be in an electronic format acceptable to the Servicer.

The Previous Servicer agrees to use all reasonable efforts to comply with the requirements set forth herein. The Servicer acknowledges, however, that in some instances the Previous Servicer’s systems may not permit such compliance. In such event, the Servicer agrees to work with the Previous Servicer in good faith to accommodate the Previous Servicer’s systems’ limitations.

Any questions regarding the Servicing Transfer Instructions/Servicing Transfer should be directed to Scott Tenery, contact information listed below. Nationstar and the Previous Servicer will exchange functional and department level contact information no later than 30 days prior to the servicing Transfer Date.

Scott Tenery
Vice President
Nationstar Mortgage LLC
350 Highland Drive
Lewisville, Texas 75067
Phone: 469-549-6405
Scott.Tenery@nationstarmail.com

Unless directed otherwise within the Servicing Transfer Instructions, all data files and reports should be directed to:

Nationstar Mortgage LLC
Attn: Jennifer Dancer
350 Highland Drive
Lewisville, Texas 75067
Phone: 469-549-2110
Email: Jennifer.Dancer@nationstarmail.com

Unless directed otherwise, herein, all documents, records, files, notices and other communications must be directed to:

Nationstar Mortgage LLC, File Services
Attn: Keenan Cain
350 Highland Drive
Lewisville, Texas 75067
Phone: 469-549-3241
Email: Keenan.Cain@nationstarmail.com

© 2008 Nationstar Mortgage LLC. “The information within this document is confidential and provided solely for the internal use of Nationstar Mortgage LLC. This document is an intellectual property of Nationstar Mortgage LLC, and is protected under copyright laws of the United States. This material should not be released to any third party supplier without the Previous written approval Nationstar Mortgage LLC.”

Page 2

EXHIBIT B

Important Servicing Transfer Dates

Dates for this Servicing Transfer are set as follows:

Servicing Transfer Date:	XX/XX/XXXX
Delivery of Preliminary Loan Level Data & Reports:	XX/XX/XXXX
Goodbye Letter Deadline Date:	XX/XX/XXXX
Servicing Transfer Cutoff Date (close of business)	XX/XX/XXXX
Delivery of Final Loan Level Data & Reports:	XX/XX/XXXX
Servicing Transfer Settlement	XX/XX/XXXX

© 2008 Nationstar Mortgage LLC. “The information within this document is confidential and provided solely for the internal use of Nationstar Mortgage LLC. This document is an intellectual property of Nationstar Mortgage LLC, and is protected under copyright laws of the United States. This material should not be released to any third party supplier without the Previous written approval Nationstar Mortgage LLC.”

Page 3

EXHIBIT B

Secured Data Transmission

All data transmissions to Servicer should be through a secure FTP site with PGP encryption. To set up the FTP data transmission, contact:

Davis Kersey
Nationstar Mortgage LLC
469-549-2444
Davis.Kersey@nationstarmail.com

© 2008 Nationstar Mortgage LLC. “The information within this document is confidential and provided solely for the internal use of Nationstar Mortgage LLC. This document is an intellectual property of Nationstar Mortgage LLC, and is protected under copyright laws of the United States. This material should not be released to any third party supplier without the Previous written approval Nationstar Mortgage LLC.”

Page 4

EXHIBIT B

Loan Level Data File

The Previous Servicer agrees to provide all necessary Loan Level Data and Conversion Reports in a file format agreed upon by all parties. Nationstar’s preferred format is noted below in the Loan Level Data File Specifications section. The Previous Servicer agrees to support the Servicer in data mapping and testing prior to the Servicing Transfer Date. The Final Data Tapes & Conversion Reports should be prepared as of the Servicing Transfer Cutoff Date.

Loan Level Data File Specifications

The Loan Level Data Files should be provided in a fixed width format (ASCII TXT) or a comma delimited format (ASCII CSV). If the fixed width format is provided, then a detailed File Layout should accompany each file with the following:

Ø	Field name
Ø	Type/Attribute (to include decimal precision and implicit/explicit decimal point representation)
Ø	Starting position
Ø	Ending position

If a comma delimited format is provided, then a detailed File Layout should accompany each file with the following:

Ø	Field name
Ø	Field Type: include decimal precision and non-numeric fields should be delimited with double quotes (“ “)

Loan Level Data Requirements:

The Previous Servicer will provide loan level data on all loans to including but not limited to the following items:

Ø	Loan Master File
Ø	Borrower Information (Names, Address, Note Relationship, all Secondary Info, Contact & Employment info, etc.)
Ø	Property Information (Legal Description, Address, Property Type, Occupancy Status, etc)
Ø	Loan Characteristics (term, payment amounts, interest rate, lien position, channel or land home, etc.)
Ø	Unpaid Principal Balance and other loan level balances (e.g., Corporate Balances, Corporate Expenses, Suspense, Fees, Escrow, etc.)
Ø	Dates (first payment due date, next payment due date, etc.)
Ø	Corporate Advance Detail (e.g., need breakdown by attorney fees, BPO, Inspections, Recording Fees, Bankruptcy, Foreclosure, etc.)
Ø	Corporate Expense Detail
Ø	Escrow Advance Detail
Ø	Suspense Detail (e.g., need breakdown by Pre-Petition, Post-Petition, Forbearance, etc.)
Ø	Fee Details
Ø	ACH Data (Routing Number, Account Number, Last Draft Date, etc.)
Ø	Escrow Information (Escrow Pmt, Tax Lines — including installments, Hazard Insurance Lines, MIP/PMI, etc.)
Ø	Pending ARM Rate/Payment Changes
Ø	Pending Escrow Payment Changes
Ø	Interest Only Data
Ø	Balloon Data

© 2008 Nationstar Mortgage LLC. “The information within this document is confidential and provided solely for the internal use of Nationstar Mortgage LLC. This document is an intellectual property of Nationstar Mortgage LLC, and is protected under copyright laws of the United States. This material should not be released to any third party supplier without the Previous written approval Nationstar Mortgage LLC.”

Page 5

EXHIBIT B

Ø	Buydown/Subsidy Data
Ø	ARM Specifications/Change File
Ø	Flood Determination
Ø	Collection and Customer Service Comments
Ø	MERS and MIN information
Ø	Transaction History
Ø	Escrow Analysis History
Ø	ARM history
Ø	Second Lien indicator
Ø	Payment Option Specifications (Option terms, caps, ceilings, floors, change dates, etc.)
Ø	Origination Data (Original LTV, Originator, Original Occupancy Status, etc.)
Ø	Foreclosure Data (e.g. Demand Date, FC Sale Date, Attorney, etc.)
Ø	Bankruptcy Data (e.g. Chapter, Filed Date, POC, Attorney, etc.)
Ø	REO Data (e.g. Occupancy Status, Eviction Status, Eviction Date, etc.)
Ø	Loss Mitigation Data (e.g. status, type, approval date, updated values, borrower financials, # of previous workouts, HAMP/HAFA solicited, etc.)
Ø	Skip Trace Information
Ø	HAMP Data (e.g. Required Treasury Reporting)
Ø	Loss Mitigation Indicator (e.g. Workout, Pending Short Sale, Forbearance, etc.)
Ø	Modification Flag and Type (e.g. HAMP, Cap Mod, etc.)

Conversion Reports

Each Conversion Report and other reports requested throughout the Servicing Transfer Instructions should be provided electronically in Excel format. Please include loan number and mortgagor name along with the additional data elements requested in all reports. Each report is required pre-transfer with an updated report provided post-transfer. The pre-transfer report needs to be provided as part of the preliminary data with the final report provided as defined under Delivery of Final Loan Level Data & Reports.

The Previous Servicer shall provide the following Conversion Reports:

1.	Trial Balance Report
	A Trial Balance Report as of the Servicing Transfer Cutoff Date with the following required data:

Ø	Previous Servicer loan number
Ø	Mortgagor Last name
Ø	Mortgagor First Name
Ø	Mortgagor Middle Name
Ø	Interest rate
Ø	Service fee rate
Ø	Unpaid principal balance
Ø	Escrow balance
Ø	Escrow advance balance
Ø	Next due date
Ø	P&I payment
Ø	Total monthly payment

© 2008 Nationstar Mortgage LLC. “The information within this document is confidential and provided solely for the internal use of Nationstar Mortgage LLC. This document is an intellectual property of Nationstar Mortgage LLC, and is protected under copyright laws of the United States. This material should not be released to any third party supplier without the Previous written approval Nationstar Mortgage LLC.”

Page 6

EXHIBIT B

Ø	Unapplied/suspense funds balance, including breakdown of the type of unapplied/suspense funds balance
Ø	Accrued interest
Ø	Interest on escrow accrual
Ø	Recoverable corporate advance amount, including breakdown of the type of corporate advance
Ø	Accrued late charges
Ø	Deferred late charges
Ø	Hazard expense
Ø	Escrow payment

2.	Data Balancing Report
	A Data Balancing Report including loan level detail with the following required data:

Ø	Previous Servicer loan number
Ø	Mortgagor name
Ø	Unpaid principal balance
Ø	Escrow balance
Ø	Escrow advance balance
Ø	P&I payment
Ø	Escrow payment
Ø	A&H payment amount
Ø	Credit life payment amount
Ø	Total monthly payment
Ø	Next due date
Ø	Interest rate
Ø	Interest on escrow accrual
Ø	Recoverable corporate advance amount, including breakdown of the type of corporate advance
Ø	Unapplied/suspense funds balance, including breakdown of the type of unapplied/suspense funds balance
Ø	Buydown subsidy balance (replacement reserve)
Ø	Pending escrow payment
Ø	Pending escrow payment effective date

3.	ACH Report
	An ACH report including loan level detail with the following required data:

Ø	Previous Servicer loan number
Ø	Mortgagor Last name
Ø	Routing Number
Ø	Account Number
Ø	Account Type (checking or savings)
Ø	Last Draft Date
Ø	Next Draft Date

© 2008 Nationstar Mortgage LLC. “The information within this document is confidential and provided solely for the internal use of Nationstar Mortgage LLC. This document is an intellectual property of Nationstar Mortgage LLC, and is protected under copyright laws of the United States. This material should not be released to any third party supplier without the Previous written approval Nationstar Mortgage LLC.”

Page 7

EXHIBIT B

Ø	Draft Day
Ø	Draft Frequency (e.g. monthly, weekly, biweekly, etc.)
Ø	Draft Amount
Ø	Additional Principle Amount
Ø	Total Draft Amount

4.	System Codes and Data Dictionary Report
	A report detailing all system code descriptions required to analyze and load the loan data including file names, field names, field descriptions, valid values and field sizes for each field within each file.
5.	Transaction and Disbursement History Report
	A loan level report listing all available transaction and disbursement history from loan Origination Date to the Transfer Date should be provided. An electronic version of the transaction history report should also be provided in a flat file ‘as-is’ with carriage control characters. If hardcopy is only possible, one copy should be provided in the servicing file and a second copy sent to the address provided on page 1. Transaction balances on the loan histories must agree with the balances on the final trial balance report.
6.	Master Vendor List Report
	A report of all vendors used for tax service, hazard insurance, flood insurance, force-placed insurance and taxing authorities that are not serviced by a tax service, including loan number, property address, vendor name, vendor address, vendor id, vendor.
7.	Odd Due Date Loan Report
	A report of all loans with odd due dates (not on the first of the month), including payment history for the life of the loan.
8.	Second Liens Report
	A report of second lien loans, including name/address/phone number of holder of the first lien.
9.	Non-Solicitation Report
	A report of loans for which the borrower has requested no solicitation include a list of each product for which solicitation is not allowed and the solicitation method prohibited (telephone, fax, email, etc.).
10.	Outstanding Trailing Documents Report
	A report of all outstanding trailing documents, including the date sent for recording/filing.

© 2008 Nationstar Mortgage LLC. “The information within this document is confidential and provided solely for the internal use of Nationstar Mortgage LLC. This document is an intellectual property of Nationstar Mortgage LLC, and is protected under copyright laws of the United States. This material should not be released to any third party supplier without the Previous written approval Nationstar Mortgage LLC.”

Page 8

EXHIBIT B

11.	Escrow Analysis History Report
	An electronic version of the escrow analysis history report should be provided in a flat file ‘as-is’ with carriage control characters. If hardcopy is only possible, one copy should be provided in the servicing file and a second copy sent to the address provided on page 2.
12.	Adjustable Rate Mortgages/Interest Only/Balloon/Buydowns Report

The Previous Servicer shall provide five examples in printed form of the Note and ARM rider for each ARM plan in the service transfer and a loan level report listing the following information for all ARM, Interest Only and Balloon loans and

Adjustable Rate Mortgages

Ø	All ARM Mortgage loans
Ø	Individual loan historical rate and P&I changes
Ø	Due date
Ø	Current interest rate
Ø	Current P&I
Ø	Unpaid Principal Balance
Ø	All ARM Mortgage Loans with pending interest rate and or P&I change dates
Ø	Any ARM Mortgage Loans with pending effective interest rate or payment changes dates equal to or within ninety (90) days before the Transfer Date
Ø	Pending interest rate
Ø	Pending P&I
Ø	Pending effective date
Ø	ARM plan identifier (2/28, 3/27, etc.)
Ø	ARM Plan ID/ Product Code
Ø	ARM Plan Definition
Ø	Plan Code/Product Type
Ø	First Payment Date
Ø	Margin
Ø	Max Rate
Ø	Min Rate
Ø	Period Caps — Up at 1st change
Ø	Period Caps — Down at 1st change
Ø	Period Caps — Up at Subsequent changes
Ø	Period Caps — Down at Subsequent changes
Ø	First interest change date
Ø	Month between changes thereafter
Ø	Index being used
Ø	Index History
Ø	Look Back Period
Ø	Rounding
Ø	Interest Only loan indicator (Y/N)
Ø	Interest Only period
Ø	Upcoming ARM changes

© 2008 Nationstar Mortgage LLC. “The information within this document is confidential and provided solely for the internal use of Nationstar Mortgage LLC. This document is an intellectual property of Nationstar Mortgage LLC, and is protected under copyright laws of the United States. This material should not be released to any third party supplier without the Previous written approval Nationstar Mortgage LLC.”

Page 9

EXHIBIT B

Payment Option ARMs

Ø	Original UPB
Ø	Current UPB
Ø	Due Date
Ø	Original Minimum Payment
Ø	Current Minimum Payment
Ø	Current Payment Options
Ø	Original Interest Rate
Ø	Current Interest Rate
Ø	Historical Rate Changes
Ø	Historical P&I Changes
Ø	All Pending Interest Rate Changes and/or P&I Changes
Ø	POA Plan Type
Ø	POA Plan Definition
Ø	POA Plan Payment Options
Ø	Current Index
Ø	Index History
Ø	Look Back Period
Ø	Round Factor
Ø	Minimum Rate
Ø	Maximum Rate
Ø	Interest Only Indicator (Y/N)
Ø	Interest Only Period
Ø	First Interest Adjustment Date
Ø	Next Interest Adjustment Date
Ø	Interest Adjustment Frequency
Ø	Interest Adjustment Period Caps
Ø	First Payment Adjustment Date
Ø	Next Payment Adjustment Date
Ø	Payment Adjustment Frequency
Ø	Payment Adjustment Period Caps
Ø	Maximum Payment Cap
Ø	Maximum Principal Balance %
Ø	Current Principal Balance %
Ø	Loan amortizing at P&I due to exceeding max prin bal (Y/N)
Ø	Required Fully Amortized Payment Frequency
Ø	Months between Subsequent Fully Amortized Payment Changes
Ø	Negative Amortization Balance

© 2008 Nationstar Mortgage LLC. “The information within this document is confidential and provided solely for the internal use of Nationstar Mortgage LLC. This document is an intellectual property of Nationstar Mortgage LLC, and is protected under copyright laws of the United States. This material should not be released to any third party supplier without the Previous written approval Nationstar Mortgage LLC.”

Page 10

EXHIBIT B

Interest Only Loans

Ø	All Interest Only loans
Ø	Interest Only expiration date
Ø	Interest Only term (in months)
Ø	Reset option regarding curtailments during the interest only period (Y/N)
Ø	Interest only payment type (recast or fixed)

Balloon Loans

Ø	All Balloon loans
Ø	Reset option indicator
Ø	Current interest rate
Ø	Due date
Ø	Maturity date
Ø	Amortization term
Ø	Unpaid Principal Balance
Ø	Reset option (Y/N)
Ø	Reset option in process (Y/N)
Ø	Daily Simple Interest
Ø	Servicer shall provide a listing of all daily simple interest loans and the interest calculation method (e.g. 360, 365)

Buydown Loans

Ø	All buydown subsidy loans
Ø	Due date
Ø	Total monthly payment
Ø	Monthly buydown subsidy amount
Ø	Remaining buydown balance
Ø	Schedule of future monthly buydown payments
Ø	Effective dates of buydown payment changes
Ø	Buydown terms
Ø	Buydown calculation
Ø	SSCRA Loan (Y/N)
Ø	CORP Subsidy Loan (Y/N)

Loan Type or Plan Information

The Previous Servicer shall provide a listing of all ARM Plan Codes and ARM Index Code Definitions as well as a sample Note and Interest Only addendum for each ARM, Balloon and Interest Only product plans and definitions for loans being transferred with the Preliminary Data. All codes and definitions shall be provided 30 days prior to transfer.

All applicable ARM Specifications and Rate and Payment Change Histories should be provided electronically for any loan that has gone through an ARM change.

At time of the Servicing Transfer, please provide a listing of loans that were not adjusted due to the release of the index (e.g., 11^th district COFI).

© 2008 Nationstar Mortgage LLC. “The information within this document is confidential and provided solely for the internal use of Nationstar Mortgage LLC. This document is an intellectual property of Nationstar Mortgage LLC, and is protected under copyright laws of the United States. This material should not be released to any third party supplier without the Previous written approval Nationstar Mortgage LLC.”

Page 11

EXHIBIT B

Investor Reporting and Remittance Requirements

Investor Cutoff

The Previous Servicer agrees to schedule an Investor Cutoff (including all monetary activity) as of the Servicing Transfer Cutoff Date so that all standard cutoff and remittance reports are produced. Previous Servicer should not adjust any reporting or remitting to backdate payoffs occurring after the Investor Cutoff into the prior cutoff period. The Previous Servicer is responsible for any required reporting and remitting, as is normally completed, on all Investor Cutoffs prior to the Servicing Transfer Date. This includes remittance of guaranty fees related to the cutoff date immediately preceding the Servicing Transfer Date. Adjustments to over and under collateralized pools should be limited to those in excess of $5,000.

Cutoff & Remittance Reports

The Previous Servicer agrees to provide the following cutoff and remittance reports in an electronic format (Excel) acceptable to Servicer within 10 days subsequent to the Servicing Transfer Date.

• Report of Pending Transfer loans by old and new investor

• Report of loan level and pool level security balances reported at investor cutoff, including adjustments done for over and under collateralization and for partial pool transfers

• List and supporting documentation for all manual and systematic adjustments completed post cutoff, including documentation before and after adjustment

• List of all Pool to Security differences, with explanations for those greater than $1,000

• List of all loan level rejects for the investor cutoff immediately preceding Transfer Date

• Monthly ARM reset report —includes new P&I payment and interest rate

The Previous Servicer will provide a contact that will assist with requests resulting from customer inquiries related to outstanding and canceled check copies.

The above investor reports should be provided to:

Nationstar Mortgage LLC
Attn: Investor Reporting/Juanita Gomez
350 Highland Drive
Lewisville, Texas 75067
469-549-6296
Juanita.Gomez@nationstarmail.com

© 2008 Nationstar Mortgage LLC. “The information within this document is confidential and provided solely for the internal use of Nationstar Mortgage LLC. This document is an intellectual property of Nationstar Mortgage LLC, and is protected under copyright laws of the United States. This material should not be released to any third party supplier without the Previous written approval Nationstar Mortgage LLC.”

Page 12

EXHIBIT B

Balance Settlement

Escrow funds for tax and insurance as of the Servicing Transfer Cutoff Date should be wire transferred to the Servicer on or before the Servicing Transfer Settlement Date along with all other positive balance information. Loan level detail on how the wire should be applied must be provided to both Nationstar and the controlling party.

Servicer’s wiring instructions are:

JPM Chase
Dallas, Texas 75201
ABA#: 111000614
ACCT#: 1563367653
For further credit to: Nationstar Mortgage LLC, Payment Clearing
Attn: Service Transfer Balances / Juanita Gomez

Loan Level Data Requirements

• Prior Servicer Loan Number

• Escrow Balance

• Suspense (e.g. borrower suspense, pre or post petition money, subsidy, forbearance, etc.)

• Hazard Loss Suspense

• Sale Proceeds

© 2008 Nationstar Mortgage LLC. “The information within this document is confidential and provided solely for the internal use of Nationstar Mortgage LLC. This document is an intellectual property of Nationstar Mortgage LLC, and is protected under copyright laws of the United States. This material should not be released to any third party supplier without the Previous written approval Nationstar Mortgage LLC.”

Page 13

EXHIBIT B

Mortgagor Notification

The Previous Servicer shall mail the mortgagor notifications at least 15 days prior to the Servicing Transfer Date. In addition, the Previous Servicer must provide the Servicer with a copy of the Goodbye Letter for review and approval at least two days prior to the mailing date.

Immediately after mailing the Goodbye Letters, the Previous Servicer will provide Servicer with the electronic mailing manifest used for the letters. This must include all variable fields such as mortgagor name, mailing address, property address, loan number, letter date and transfer date. In addition, electronic files must be provided within 24 hours of mailing or hard copies of the Goodbye Letters should be retained in the servicing file to be transferred to the Servicer.

The following Nationstar Mortgage LLC contact information must be provided in the Combined RESPA compliant Goodbye Letter:

Customer Service Hours of Operation:

Monday through Thursday 8:00 am to 8:00 pm Central Standard Time,
Friday 8:00 am to 5:00 pm Central Standard Time

Customer Service Toll Free Number:

1-877-372-0512 extension 25

Correspondence Address:

Nationstar Mortgage LLC
Attn: Customer Service
350 Highland Drive
Lewisville, Texas 75067

Payment Address:

Nationstar Mortgage LLC
Attn: Payment Processing
P. O. Box 650783
Dallas, Texas 75265-0783

The Goodbye Letter must also advise the Mortgagor that any existing Optional Insurance with the Previous Servicer will be discontinued on or before the Servicing Transfer Date. The Mortgagor may contact the Servicer to obtain the Servicer’s available options.

In the event a Goodbye Letter is sent to a Mortgagor in error (i.e., the servicing for the related Mortgage Loan is not transferred to the Servicer), then the Previous Servicer shall immediately send (on behalf of itself and Servicer) a second letter to such Mortgagor advising such Mortgagor that the servicing transfer will not take place.

© 2008 Nationstar Mortgage LLC. “The information within this document is confidential and provided solely for the internal use of Nationstar Mortgage LLC. This document is an intellectual property of Nationstar Mortgage LLC, and is protected under copyright laws of the United States. This material should not be released to any third party supplier without the Previous written approval Nationstar Mortgage LLC.”

Page 14

EXHIBIT B

Escrowed Loan Information

The Previous Servicer should provide the following information for all escrowed loans

Escrow Procedures

Within 25 days prior to transfer the Previous Servicer will discuss procedures as it relates to the following to allow for a smooth transfer:

• History Lender Forced Placed Insurance letters

• Escrow Analysis Schedule

• Interest on Escrow Schedule

• Blanket policies for REO loans (as applicable)

• Blanket policies for non first lien and REOs (as applicable)

• Escrow Advances: How reconciled and recovered

• Payment policies for delinquent taxes

Escrowed Loan Report

The Previous Servicer shall provide a loan level Excel report listing the following information for all loans with Escrow and/or Partial Escrow. Each report is required pre-transfer with an updated report provided post-transfer. The pre-transfer report needs to be provided as part of the preliminary data with the final report provided as defined under Delivery of Final Loan Level Data & Reports.

Ø	Escrow Type (tax, insurance or both)
Ø	Escrow payment type (escrowed, lender forced place, non-escrowed)
Ø	Date of Last Escrow Analysis
Ø	Escrow Analysis History
Ø	Escrow Analysis Schedule
Ø	Escrow Advances
Ø	Interest on Escrow Schedule

Hazard Insurance

Ø	Agent and Insurance Company payee codes
Ø	Expiration date
Ø	Due date
Ø	Payment Term
Ø	Payment or accrual amount
Ø	Coverage amount
Ø	Coverage Type (force-placed or borrower paid)
Ø	Coverage types (wind, hazard, flood)
Ø	Policy Number(s)
Ø	File representing all corporate advances relating to insurance
Ø	Reporting on REO coverage (as applicable)
Ø	Blanket policies for non first liens and REO (as applicable)

© 2008 Nationstar Mortgage LLC. “The information within this document is confidential and provided solely for the internal use of Nationstar Mortgage LLC. This document is an intellectual property of Nationstar Mortgage LLC, and is protected under copyright laws of the United States. This material should not be released to any third party supplier without the Previous written approval Nationstar Mortgage LLC.”

Page 15

EXHIBIT B

Ø Indicator by Escrow/Coverage Type to determine escrowed or non-escrowed

Flood Determination

Ø	Evidence of Flood contract (certification number)
Ø	Determination date
Ø	Contract type
Ø	Community Number
Ø	Panel
Ø	Suffix
Ø	Flood zone
Ø	Program status
Ø	Map Date

Other Escrow Related Items

Ø	Escrow Analysis has not been performed within the last twelve (12) months
Ø	Explanation for non-compliance of Escrow Analysis guidelines
Ø	Pending Escrow Analysis
Ø	Escrow Analysis history for the last two years
Ø	Escrow disbursement stops
Ø	Explanation for the escrow stop
Ø	Date of escrow stop
Ø	Escrow stop expiration date
Ø	Interest on escrow paid
Ø	Loan level percentage of interest on escrow paid
Ø	Stale escrow refund checks
Ø	Amount of stale escrow refund
Ø	Date of stale escrow refund transaction
Ø	Vendor name of stale escrow refund check
Ø	Form ME-2 New Jersey Escrow Account Transaction Notice must be filed
Ø	Insurance or tax expiration date within 30 days after the Transfer Date
Ø	List of all outstanding research cases with current service level agreement and Mortgagor’s expectations
Ø	Property Type
Ø	Suspense Items and audit/reconciliation post transfer

Escrowed Loan Requirements

With respect to the Mortgage Loans the Previous Servicer shall pay all hazard and flood insurance premiums which become due prior to and within thirty (30) days following the Servicing Transfer Date, and all real estate taxes for which the economic loss date is within thirty (30) days following the Servicing Transfer Date, assuming the bills are available for payment, and shall indemnify the Servicer against any tax penalties incurred prior to the Servicing Transfer Date or uninsured losses due to the non-payment of premiums or policy cancellation.

The Previous Servicer shall credit all accrued interest due on escrow to the individual accounts prior to the Servicing Transfer Date and provide confirmation of such to the Servicer.

© 2008 Nationstar Mortgage LLC. “The information within this document is confidential and provided solely for the internal use of Nationstar Mortgage LLC. This document is an intellectual property of Nationstar Mortgage LLC, and is protected under copyright laws of the United States. This material should not be released to any third party supplier without the Previous written approval Nationstar Mortgage LLC.”

Page 16

EXHIBIT B

All Escrow Analysis reports or statement copies should be forwarded to:

Nationstar Mortgage LLC
Attn: Escrow Administration/Sharon Goody
350 Highland Drive
Lewisville, Texas 75067
469-549-2005
Sharon.Goody@nationstarmail.com

Hazard Insurance

The Previous Servicer shall provide a loan level Excel report listing the following information for all loans. Each report is required pre-transfer and post-transfer. The pre-transfer report needs to be provided as part of the preliminary data with the final report provided as defined under Delivery of Final Loan Level Data & Reports.

Ø	Hazard insurance flag
Ø	Flood insurance flag
Ø	Agent and Insurance Company payee codes with full descriptions
Ø	Expiration date
Ø	Due date
Ø	Payment type escrowed or non-escrowed for each line (hazard, flood, etc.)
Ø	Payment term
Ø	Payment amount
Ø	Coverage amount
Ø	Coverage types with descriptions
Ø	Policy Number
Ø	Loans with Force Placed Insurance policy in effect
Ø	Indication of binder or policy for Force Placed Insurance
Ø	Force Placed Insurance payment method (monthly/annual)
Ø	Terms of Force Placed Insurance
Ø	Loans with damaged property
Ø	Hazard loss claims in process
Ø	Interest on Hazard Loss Schedule
Ø	Date of last property inspection
Ø	Detail on Inspection frequency for Hazard Loss — draw schedule/disbursement procedures
Ø	Maintenance results
Ø	BPO or appraisal results
Ø	Loans with an open insurance loss claim
Ø	Insurance Agent name
Ø	Insurance Agent contact number
Ø	Date claim opened
Ø	Date settled

© 2008 Nationstar Mortgage LLC. “The information within this document is confidential and provided solely for the internal use of Nationstar Mortgage LLC. This document is an intellectual property of Nationstar Mortgage LLC, and is protected under copyright laws of the United States. This material should not be released to any third party supplier without the Previous written approval Nationstar Mortgage LLC.”

Page 17

EXHIBIT B

Ø	Insurance proceeds received
Ø	Insurance proceeds available
Ø	Type of loss
Ø	Status of repairs
Ø	Loans affected by Hurricane Katrina
Ø	Hurricane Katrina total hazard loss amount
Ø	Hurricane Katrina hazard loss funds deposit date
Ø	Hurricane Katrina hazard loss funds disbursement date
Ø	Hurricane Katrina claim type (hazard, flood, wind)
Ø	Hurricane Katrina total number of days funds in hazard loss
Ø	Hurricane Katrina interest paid on hazard loss funds (Y/N)
Ø	If yes, interest rate and schedule
Ø	Hurricane Katrina general comments
Ø	MS and LA Road Home Program
Ø	Loans in Federally Declared Disaster Areas (FDDA)
Ø	FDDA refund amount
Ø	FDDA deposit date
Ø	Loans with Flood Insurance and all Flood Insurance data
Ø	Flood Insurance vendor name
Ø	Life of Loan status
Ø	Determination date
Ø	Certificate number
Ø	Open Flood zone disputes
Ø	Reporting on Vacant Properties — Active Claims

The Previous Servicer shall provide the following information:

Ø	Evidence that the Flood Contract Vendor(s) have been notified to transfer Life of Loan Flood Contracts to Nationstar Mortgage LLC.
Ø	Vendor Name, contact information, website access, if applicable.
Ø	Vendor issued compliance data file to include: Determination Date, Certificate Number, Contract Type, Community Number, Panel, Suffix, Flood Zone, Program Status, and Map Date.

Cancellation of Forced Placed Insurance

As of the Servicing Transfer Date the Previous Servicer must cancel any Force Placed Hazard or Flood coverage in effect.

Insurance Loss Draft Handling

The Previous Servicer must provide a properly documented file for each Mortgage Loan with an insurance loss draft claim. This file shall include the following information:

Ø	Date claim filed
Ø	Cause
Ø	State
Ø	Delinquent amount
Ø	Amount of the loss

© 2008 Nationstar Mortgage LLC. “The information within this document is confidential and provided solely for the internal use of Nationstar Mortgage LLC. This document is an intellectual property of Nationstar Mortgage LLC, and is protected under copyright laws of the United States. This material should not be released to any third party supplier without the Previous written approval Nationstar Mortgage LLC.”

Page 18

EXHIBIT B

Ø	Amount of insurance proceeds received to date
Ø	Date hazard funds deposited
Ø	Hazard loss funds disbursement date
Ø	Amount of available hazard loss funds
Ø	Hazard/claim type (hazard, flood, wind)
Ø	Hurricane Katrina (Y/N)
Ø	Notes from conversations with or information received from contractors
Ø	Correspondence to or from insurance companies and/or Mortgagor
Ø	Status of the repairs
Ø	Inspection reports
Ø	Report of expected future proceeds
Ø	Total number of days hazard loss funds held
Ø	Detailed listing of all funds received and disbursed to date

The Loss Draft file must be provided within five (5) business days of the Servicing Transfer and delivered to:

Nationstar Mortgage LLC
Attn: Escrow Administration/Sharon Goody
350 Highland Drive
Lewisville, Texas 75067
469-549-2005

Sharon.Goody@nationstarmail.com

Insurance Agent Notification of Servicing Transfer

With respect to the Mortgage Loans, the Previous Servicer shall transmit to the applicable insurance companies or agents, notification of the transfer of the servicing to the Servicer and instructions to deliver all notices and insurance statements, as the case may be, to the Servicer from and after the Transfer Date. Such notices shall specify the new mortgagee clause. The Previous Servicer shall provide the Servicer with copies of all such notices (at the address below) or shall provide an Officer’s Certification that such notices were produced and transmitted as specified herein and within five days of the Transfer Date.

Servicer Insurance Mortgagee Clause

The new mortgagee clause applicable to all hazard, flood and miscellaneous (i.e., wind, earthquake, mine, etc.) will read as follows:

Nationstar Mortgage LLC
Its successors and/ or assigns
P.O. Box 7729
Springfield, Ohio 45501-7729
Toll Free Number: (866) 825-9267

Mississippi & Louisiana Road Home Program Loans

© 2008 Nationstar Mortgage LLC. “The information within this document is confidential and provided solely for the internal use of Nationstar Mortgage LLC. This document is an intellectual property of Nationstar Mortgage LLC, and is protected under copyright laws of the United States. This material should not be released to any third party supplier without the Previous written approval Nationstar Mortgage LLC.”

Page 19

EXHIBIT B

The Previous Servicer shall also provide loan files currently participating in the Mississippi and Louisiana “Road Home” programs (via LA File Zilla report or excel spreadsheet). Include the unpaid principal balance, loan detail, total funds in hazard loss and rebuild or payoff option.

Transfer of Life of Loan Flood Contracts

The Previous Servicer shall affect the transfer of Life of Loan Flood Contracts/Data to Servicer

• The Previous Servicer shall notify Nationstar Mortgage LLC of existing Life of Loan (LOL) transferable contracts and the current vendor (Second liens must be assigned their own Flood Contract).

• Fifteen (15) days prior to Servicing Transfer:

• Contact your Flood Insurance representative to request that all LOL contracts are transferred to Nationstar Mortgage LLC. Provide your contact with a loan level listing of transferring loans including Previous Servicer’s loan number, name, and property address of the borrower.

• Previous Servicer will confirm to Servicer that pre- Servicing Transfer processing is complete.

• Within at least five (5) business days after the Servicing Transfer date:

Ø	Evidence that the Flood Contract Vendor(s) have been notified to transfer Life of Loan Flood Contracts to Nationstar Mortgage LLC.
Ø	Vendor Name, contact information, website access, if applicable.
Ø	Vendor issued compliance data file to include: Determination Date, Certificate Number, Contract Type, Community Number, Panel, Suffix, Flood Zone, Program Status, and Map Date.

Should you have specific questions regarding the transfer of flood data, you may contact a member of the Servicer’s Flood Compliance Team.

Nationstar Mortgage LLC, Flood Compliance
Attn: Sharon Goody
350 Highland Drive
Lewisville, Texas 75067
469-549-2005
Sharon.Goody@nationstarmail.com

Please include the following individual(s) in any email correspondence to the Vendor or for any Post-Service Transfer Flood issues:

Sharon.Goody@nationstarmail.com

Physical Hazard loss files should be sent to:
James Stauffer/Nationstar Team Manager
One Assurant Way
Springfield OH 45505

© 2008 Nationstar Mortgage LLC. “The information within this document is confidential and provided solely for the internal use of Nationstar Mortgage LLC. This document is an intellectual property of Nationstar Mortgage LLC, and is protected under copyright laws of the United States. This material should not be released to any third party supplier without the Previous written approval Nationstar Mortgage LLC.”

Page 20

EXHIBIT B

Real Estate Taxes

The Previous Servicer shall provide a loan level report listing the following information for all loans. Each report is required pre-transfer and post-transfer. The pre-transfer report needs to be provided as part of the preliminary data with the final report provided as defined under Delivery of Final Loan Level Data & Reports.

Ø	Real Estate taxes
Ø	Taxing Jurisdiction Name(s) (Tax payee)
Ø	Tax parcel or Tax ID Number
Ø	Due dates
Ø	Escrowed or non-escrowed flag for each line (City, State, County, etc.)
Ø	Payment term (annual, quarterly, etc.)
Ø	Accrual (full year payment amount)
Ø	Parcel number(s)
Ø	Next tax due date
Ø	Economic loss date
Ø	Unpaid tax and items
Ø	Loans that do not have an escrow record established for taxes
Ø	Open or unpaid tax installments for current and prior tax cycle
Ø	Open tax issues
Ø	Pending tax refunds from tax collectors
Ø	Description of the issue
Ø	Name of the tax collector
Ø	Amount of the expected refund
Ø	Taxes due and paid for Ground Rents
Ø	Taxes due and paid for Homeowner association fees
Ø	Taxes due and paid for Sewer lines
Ø	Taxes due and paid for miscellaneous fees (drainage, front foot, assessments, etc.)
Ø	All other taxes due and paid along with tax type
Ø	Property legal description
Ø	Name/address/phone of entity to whom these fees/taxes are due
Ø	Next tax payment due date
Ø	Liens assessed for taxes
Ø	Loans exempt from taxes
Ø	Reason for exemption
Ø	Name/address/phone of taxing authority
Ø	Tax Vendor, tax type and full description
Ø	REO properties (as applicable)
Ø	Identification of states with annual or semi-annual payments
Ø	File Representing corporate advances for taxes
Ø	Pending Tax Research Items

Pending Tax Sales

© 2008 Nationstar Mortgage LLC. “The information within this document is confidential and provided solely for the internal use of Nationstar Mortgage LLC. This document is an intellectual property of Nationstar Mortgage LLC, and is protected under copyright laws of the United States. This material should not be released to any third party supplier without the Previous written approval Nationstar Mortgage LLC.”

Page 21

EXHIBIT B

The Previous Servicer agrees to provide information regarding a pending tax sale within 12 months of the Servicing Transfer Date on a property if available at the time of transfer. This file shall include the following information and be provided within 10 days prior to transfer.

Ø	State
Ø	Redemption amount
Ø	Redemption date
Ø	Total funds already corporate advanced
Ø	Tax Sale (loss) date
Ø	Current redemption in process
Ø	Non-redeemable properties

Unpaid Property Taxes

The Previous Servicer must provide a listing of all unpaid taxes including the reason the taxes remain unpaid. In addition, the Previous Servicer must provide to the Servicer all due and unpaid tax bills in their possession as of the Transfer Date and shall forward all stub bills in its possession and tax sale property files to the following address five (5) days prior to the Servicing Transfer Date.

Nationstar Mortgage LLC
Attn: Escrow Administration
350 Highland Drive
Lewisville, Texas 75067

Transfer of Life of Loan (“LOL”) Tax Contracts

For all loans where a Life of Loan Tax Contract exists, the Previous Servicer shall cooperate with the transfer of the life of loan contracts to the Servicer within five (5) days after the Servicing Transfer Date.

In connection with the transfer of the servicing for any Mortgage Loans, within fifteen (15) days prior to transfer, Previous Servicer shall provide written notice to tax bill services or tax authorities (as applicable) of the future transfer and assignment of the Mortgage Loans. Copies of all such notices shall be provided to Servicer within five (5) days after the Servicing Transfer Date.

     Tax Information Prior to and After Transfer:

Nationstar Mortgage LLC
Attn: Sharon Goody
350 Highland Drive
Lewisville, Texas 75067
469-549-2005
Sharon.Goody@nationstarmail.com

Tax Litigation Report

© 2008 Nationstar Mortgage LLC. “The information within this document is confidential and provided solely for the internal use of Nationstar Mortgage LLC. This document is an intellectual property of Nationstar Mortgage LLC, and is protected under copyright laws of the United States. This material should not be released to any third party supplier without the Previous written approval Nationstar Mortgage LLC.”

Page 22

EXHIBIT B

The Previous Servicer must also provide an electronic report of all loans fifteen (15) days prior to the Servicing Transfer Date in which taxes are in litigation status, including loan number, borrower name, property address and an explanation of the type of litigation.

© 2008 Nationstar Mortgage LLC. “The information within this document is confidential and provided solely for the internal use of Nationstar Mortgage LLC. This document is an intellectual property of Nationstar Mortgage LLC, and is protected under copyright laws of the United States. This material should not be released to any third party supplier without the Previous written approval Nationstar Mortgage LLC.”

Page 23

EXHIBIT B

Mortgage Insurance

The Previous Servicer shall provide a loan level report listing the following information for all loans with Private Mortgage Insurance or HUD Mortgage Insurance Premium. Report is required pre-transfer and post-transfer. The pre-transfer report needs to be provided as part of the preliminary data with the final report provided as defined under Delivery of Final Loan Level Data & Reports.

Ø Loans with PMI/MIP

• Borrower Paid Indicator

• Lender Paid Indicator

• Investor Paid Indicator

Ø	Insurance company
Ø	Policy/Certificate number
Ø	Effective/Expiration Date
Ø	Coverage Amount
Ø	% Covered
Ø	Premium Amount
Ø	Payment amount
Ø	Payment term
Ø	Due date
Ø	Payment status (borrower paid vs. lender paid)
Ø	Outstanding MI claim (Y/N)
Ø	Cancellations

• In process

• Borrower cancelled

• Cancelled as a result of non-payment

With respect to the Mortgage Loans, the Previous Servicer shall ensure all Mortgage Insurance premiums due up to and including the Transfer Date are paid, including lender paid mortgage insurance premiums. In addition, the Previous Servicer shall transmit to the applicable private mortgage insurance companies, notification of the transfer of the servicing to the Servicer and instructions to deliver all notices and insurance statements, as the case may be, to the Servicer from and after the Transfer Date. In addition, the Previous Servicer shall notify HUD of the change in servicer information within fifteen days after the Transfer Date. Nationstar Mortgage LLC’s HUD ID number is 26450-0000-1.

Further, the Previous Servicer will be responsible for correcting errors on the HUD 92080 Reject Report prior to the Servicing Transfer Date. Prior Servicer will be held responsible for any outstanding MI items as of the Servicing Transfer Cutoff Date to include late and interest due on FHA loans, past due premiums and disclosure issues.

Nationstar Mortgage LLC
Attn: PMI/MIP Unit /Sharon Goody
350 Highland Drive
Lewisville, Texas 75067
469-549-2005
Sharon.Goody@nationstarmail.com

© 2008 Nationstar Mortgage LLC. “The information within this document is confidential and provided solely for the internal use of Nationstar Mortgage LLC. This document is an intellectual property of Nationstar Mortgage LLC, and is protected under copyright laws of the United States. This material should not be released to any third party supplier without the Previous written approval Nationstar Mortgage LLC.”

Page 24

EXHIBIT B

Nationstar Mortgage LLC
Attn: FHA Unit /Sharon Goody
350 Highland Drive
Lewisville, Texas 75067
469-549-2005
Sharon.Goody@nationstarmail.com

Vendor Requirements

Tax

The Nationstar Tax Vendor is First American: Customer Numbers: 10578 and 10904 Name: Homeselect Settlement Solutions, LLC.

The Nationstar Contact at First American is TJ Douglas: 817-699-3587 tjdouglas@firstam.com.

For loans to bene change from one First American client to Nationstar/Homeselect, the prior Servicer will submit a spreadsheet from Nationstar with the following information:

Ø	Prior lender’s loan number (preferably just one column/one loan # string)
Ø	Name of prior lender and/or their FA customer number(s)
Ø	FA contract number on all loan numbers

For loans to be boarded on First American’s system as an Acquired loan (loans NOT currently under service with First American), the prior Servicer will provide to Nationstar a spreadsheet/ with the following info:

Ø	Borrower Name (2 columns – first/last)
Ø	Borrower Address (preferably 5 columns – street #, street name, city, state, zip)
Ø	Tax authority/agency (preferably FA’s payee # or at least something we can cross reference)
Ø	Tax id/parcel number
Ø	Service Type (escrow/C or non-escrow/B)
Ø	Term of contract
Ø	Amount of Mortgage/Loan
Ø	If loans are coming from Land America: their ‘reverse adds’ file

Insurance (Flood and Hazard)

The Nationstar Insurance Vendor is Assurant:

The Nationstar Contact at Assurant is Kathy Ward: kathyward@mindspring.com

Office: 281.346.2008.

The prior Servicer will submit an Excel file to Nationstar with the following information:

© 2008 Nationstar Mortgage LLC. “The information within this document is confidential and provided solely for the internal use of Nationstar Mortgage LLC. This document is an intellectual property of Nationstar Mortgage LLC, and is protected under copyright laws of the United States. This material should not be released to any third party supplier without the Previous written approval Nationstar Mortgage LLC.”

Page 25

EXHIBIT B

Ø	Prior Servicer Loan #
Ø	Borrower Name
Ø	Property Address, City, State, Zip
Ø	Insurance Carrier
Ø	Policy Number
Ø	Effective date and Expiration Date
Ø	Coverage Amount
Ø	Premium Amount
Ø	If policy is currently in a cancellation status, the cancellation effective date

Flood

The Flood Vendor for Nationstar is First American:

The Nationstar Contact at First American Flood is Cynthia Fresch: cfresch@firstam.com Office Phone: 800.447.1772 ext. 3112, Cell: 512.689.5239

The prior Servicer will submit an Excel file to Nationstar with the following information:

Ø	Prior Servicer Loan #
Ø	Borrower Name (First and Last)
Ø	Property Address, City, State, Zip
Ø	Certification Number

© 2008 Nationstar Mortgage LLC. “The information within this document is confidential and provided solely for the internal use of Nationstar Mortgage LLC. This document is an intellectual property of Nationstar Mortgage LLC, and is protected under copyright laws of the United States. This material should not be released to any third party supplier without the Previous written approval Nationstar Mortgage LLC.”

Page 26

EXHIBIT B

Credit Life and Other Optional Products

The Previous Servicer must provide the appropriate written instructions to the Mortgagor related to the discontinuation of any optional products prior to the Servicing Transfer Date within the RESPA good-bye letter. The Previous Servicer will remove the premium amount(s) from the Mortgagor’s total monthly payment and disburse any and all premiums to the product vendor or the Mortgagor prior to the Servicing Transfer Date.

Claims Process

Loan Level Detail containing the following items listed below. This report is required pre-transfer and post-transfer. The pre-transfer report needs to be provided as part of the preliminary data with the final report provided as defined under Delivery of Final Loan Level Data & Reports.

Ø	How many open claims – broken down by pre and post foreclosure status
Ø	Type of claim (MI, FNMA 571, etc)
Ø	Date claim filed
Ø	Beginning claim amount, funds received, remaining balance
Ø	Current disposition status of REO properties
Ø	Record for any loans previously where claims closed in last 90 days including denied claims
Ø	Break down of claims process
Ø	Claims closed in last 90 days including denied claims
Ø	Loans where recourse / indemnification agreements are in place
Ø	Loans where recourse / indemnification — repurchase / payout in process
Ø	Identify claims in dispute and the disputed item
Ø	Corporate Advance Detail broken down by type and loan level

© 2008 Nationstar Mortgage LLC. “The information within this document is confidential and provided solely for the internal use of Nationstar Mortgage LLC. This document is an intellectual property of Nationstar Mortgage LLC, and is protected under copyright laws of the United States. This material should not be released to any third party supplier without the Previous written approval Nationstar Mortgage LLC.”

Page 27

EXHIBIT B

Records and Files

File Delivery

The Previous Servicer must deliver the Servicing Files to the Servicer within five business days after the Servicing Transfer Date. If images are available, Previous Servicer shall provide an example of the format fourteen days prior to the Servicing Transfer Date. The Servicing Files must contain copies of all the documents delivered to the Document Custodian in the Collateral Files and all other documents and information relating to the origination and servicing of the Mortgage Loans through the date on which the files are delivered to the Servicer.

Arrangements shall be made for an inside delivery of the Servicing Files. The Previous Servicer agrees to coordinate the file delivery with the Servicer. The Previous Servicer agrees to the best of its ability remove any files for loans that pay off prior to the Transfer Date.

The files shall be placed in a box in the Previous Servicer’s loan number order. Transmittals shall be attached to each box listing contents by loan number. Each box must be labeled as follows:

<NEW CLIENT NAME>//                  <NAME OF SELLER>            //             <DATE OF TRANSFER>                //BOX 1 OF                

(Example: Nationstar Mortgage LLC/PREVIOUS SERVICER NAME/07.05.07/BOX 5 of 32).

An electronic master manifest in Excel containing prior servicer loan number and box number is required prior to Shipment.

File Delivery Address:

Nationstar Mortgage LLC
Attn: File Services/ Keenan Cain
350 Highland Drive
Lewisville, Texas 75067
469-549-3241
Keenan.Cain@nationstarmail.com

Preferred Format of Images

• Group 4 TIFF, Single page TIFF

Electronic Image Requirements

• Electronic cumulative manifest of each image provided. The manifest should include but is not limited to previous servicer loan number and document/index type. · Electronic cumulative list of document/index types and corresponding user friendly description.

• Electronic cumulative list of document/index types and corresponding user friendly description.

Trailing Documents (Non-collateral documents)

© 2008 Nationstar Mortgage LLC. “The information within this document is confidential and provided solely for the internal use of Nationstar Mortgage LLC. This document is an intellectual property of Nationstar Mortgage LLC, and is protected under copyright laws of the United States. This material should not be released to any third party supplier without the Previous written approval Nationstar Mortgage LLC.”

Page 28

EXHIBIT B

Please send trailing original collateral documents to the address above. Write the Previous Servicer’s loan number on each document.

MERS Notification

If any loans are registered with MERS the Previous Servicer must create a TOB (Transfer of Beneficial Rights) and/or TOS (Transfer of Servicing) batch for any active loan in the transfer. This shall be done either through the Previous Servicer’s servicing system, if allowable or through the MERS Online System on the Transfer Date. The Previous Servicer must determine the correct MERS ORG ID for the investor.

The Org ID for Nationstar Mortgage LLC as sub-servicer is 1003972.

1.	Move the MERS loans to the correct Org ID to coincide with the transfer.
2.	Enter the Sale Date, Transfer Date applicable to the Transfer and the MERS quality review flag.
3.	Enter the Recording Information and that the loan servicing has been transferred to Nationstar Mortgage LLC
4.	Provide Nationstar Mortgage LLC with the MIN and batch numbers for all loans transferred on MERS.

Contact Information:

Nationstar Mortgage LLC
Attn: MERS/ Keenan Cain
350 Highland Drive
Lewisville, Texas 75067
469-549-3241
Keenan.Cain@nationstarmail.com

© 2008 Nationstar Mortgage LLC. “The information within this document is confidential and provided solely for the internal use of Nationstar Mortgage LLC. This document is an intellectual property of Nationstar Mortgage LLC, and is protected under copyright laws of the United States. This material should not be released to any third party supplier without the Previous written approval Nationstar Mortgage LLC.”

Page 29

EXHIBIT B

IRS Reporting

For any period prior to the Servicing Transfer Cutoff Date, Previous Servicer must prepare, report to the Internal Revenue Service and provide to Mortgagors, all in accordance the applicable law, rules and regulations, any and all tax information required to be provided with respect the Mortgage Loans for that period. The Previous Servicer shall provide to the Servicer confirmation when and by whom Social Security Number validation has been completed on the Mortgage Loans.

© 2008 Nationstar Mortgage LLC. “The information within this document is confidential and provided solely for the internal use of Nationstar Mortgage LLC. This document is an intellectual property of Nationstar Mortgage LLC, and is protected under copyright laws of the United States. This material should not be released to any third party supplier without the Previous written approval Nationstar Mortgage LLC.”

Page 30

EXHIBIT B

Litigation (This is covered in the Transfer Letter) / Update to show pre&post

In the event the Previous Servicer receives notification of Litigation being issued in conjunction with any Mortgage Loan the Previous Servicer will give written notification to the Servicer within five (5) business days. In the event time does not permit prior approval by the Servicer, Previous Servicer will retain counsel to represent the Servicer’s interests and obtain said approval as soon thereafter as possible. The costs incurred in providing legal representation in conjunction with any such Mortgage Loan serviced hereunder will be borne by the Servicer.

The Previous Servicer must provide the Servicer with a listing of any loans with open litigation, including an explanation for each case . This report is required pre-transfer and post-transfer. The pre-transfer report needs to be provided as part of the preliminary data with the final report provided as defined under Delivery of Final Loan Level Data & Reports.

Partial Releases

The Previous Servicer must provide the Servicer with a listing of any loans on which a partial release is pending, including an explanation for each case and all documentation received as defined under Delivery of Final Loan Level Data & Reports.

Subordinations

The Previous Servicer must provide the Servicer with a listing of any loans on which a Subordination requests are pending, including an explanation for each case, any subordination in the Mississippi Grant Program and all documentation received as defined under Delivery of Final Loan Level Data & Reports.

Qualified Written Requests (RESPA)

The Previous Servicer must provide the Servicer with a listing of any loans on which a Qualified Written Request has been received and is pending, including an explanation for each case and all documentation received as defined under Delivery of Final Loan Level Data & Reports. The Previous Servicer must provide the Servicer with all research backup and written explanation of the issue.

Mortgagor Name Changes

The Previous Servicer must provide to the Servicer in the servicing file backup for each pending legal name change along with the appropriate documentation (i.e., quit claims, death certificates, divorce decrees, etc.) as defined under Delivery of Final Loan Level Data & Reports.

© 2008 Nationstar Mortgage LLC. “The information within this document is confidential and provided solely for the internal use of Nationstar Mortgage LLC. This document is an intellectual property of Nationstar Mortgage LLC, and is protected under copyright laws of the United States. This material should not be released to any third party supplier without the Previous written approval Nationstar Mortgage LLC.”

Page 31

EXHIBIT B

Soldier’s and Sailor’s Civil Relief Act of 1940 (SSCRA)

The Previous Servicer shall provide a loan level report listing the following information for all loans under SSCRA. This report is required pre-transfer and post-transfer. The pre-transfer report needs to be provided as part of the preliminary data with the final report provided as defined under Delivery of Final Loan Level Data & Reports.

Ø	Loan Number for loans in which relief has been requested under the Soldier’s and Sailor’s Civil Relief Act of 1940, as amended
Ø	Mortgagor’s Name
Ø	Period of Reduced Payment (mm/yy to mm/yy)
Ø	Loan has received reduced payments thru mm/yy
Ø	Effective date of the subsidy
Ø	Subsidy method (buydown subsidized or 6% interest rate)
Ø	If buydown subsidy method, how was loan funded
Ø	Calculation method of the reduced payment
Ø	Active duty start date
Ø	Active duty termination date
Ø	Complete copy of the customer’s Military Orders
Ø	Copy of ARM adjustment notification letter(s) during SSCRA period
Ø	Additional comments or notes

Please forward one report for each SSCRA loan to:

Nationstar Mortgage LLC
Attn: SSCRA/Marina Reyes
350 Highland Drive
Lewisville, Texas 75067
469-549-2014
Marina.Reyes@nationstarmail.com

© 2008 Nationstar Mortgage LLC. “The information within this document is confidential and provided solely for the internal use of Nationstar Mortgage LLC. This document is an intellectual property of Nationstar Mortgage LLC, and is protected under copyright laws of the United States. This material should not be released to any third party supplier without the Previous written approval Nationstar Mortgage LLC.”

Page 32

EXHIBIT B

Loss Mitigation and Collection Activity

The Previous Servicer shall make available any written procedures for loss mitigation alternatives and share with Nationstar to ensure a smooth transfer. An electronic report in Excel format is required for each report defined in this section. . Each report in this section should be delivered as defined under Delivery of Final Loan Level Data & Reports.

1. Pending Checks Report

Ø	All loans with pending checks
Ø	Date of Pending Check
Ø	Amount of Pending Check

2. Open Research Item Report

Ø	All loans with open research items
Ø	Missing Payments
Ø	Payment Corrections
Ø	Date of Research Item
Ø	Amount of Research Item
Ø	Type of research item (i.e. western union, moneygram, check) as outlined in the Qualified Written Request section.
Ø	Status

3. Repayment Plan Report

© 2008 Nationstar Mortgage LLC. “The information within this document is confidential and provided solely for the internal use of Nationstar Mortgage LLC. This document is an intellectual property of Nationstar Mortgage LLC, and is protected under copyright laws of the United States. This material should not be released to any third party supplier without the Previous written approval Nationstar Mortgage LLC.”

Page 33

EXHIBIT B

Ø	All loans with active repayment plan
Ø	Loans for which repayment plan activity has been initiated
Ø	Detail of the terms and conditions of the repayment plan
Ø	Status

4. Pending Short Sale Report

Ø	All loans with an active short sale
Ø	All short sales with an offer outstanding
Ø	All short sales with an active sales contract
Ø	Approved Short Sales
Ø	Approved Short Sales awaiting claims to be filed
Ø	Outstanding Short Sale claims
Ø	Recent property valuation

5. Pending Non-HAMP Loan Modification Report

Ø	All Loans Pending Modification
Ø	Trial period information if applicable
Ø	Recent property valuation
Ø	Title search
Ø	Modification terms

• Permanent/Temporary (Expiration Date)

• Rate Reduction Only/Capitalization

Ø	Document/Title company contact information
Ø	Documentation collected from borrower (Y/N)
Ø	Identification of any funds collected in conjunction with the modification
Ø	Modification subordination date
Ø	Modification record date

6. Pending Deed-in-Lieu Report

Ø	All loans pending deed-in-lieu of foreclosure
Ø	Recent property valuation
Ø	Title search
Ø	Status

7. Charged-off Loan Report

© 2008 Nationstar Mortgage LLC. “The information within this document is confidential and provided solely for the internal use of Nationstar Mortgage LLC. This document is an intellectual property of Nationstar Mortgage LLC, and is protected under copyright laws of the United States. This material should not be released to any third party supplier without the Previous written approval Nationstar Mortgage LLC.”

Page 34

EXHIBIT B

Ø	All loans charged-off
Ø	Lien
Ø	Date of charge-off
Ø	Amount charged-off

Loss Mitigation Servicing File Documentation Requirements

In addition to the data requirements the following Loss Mitigation documents are required. If Loss Mitigation documents are not imaged then physical documents will need to be delivered within five (5) days of after the Transfer Date to the loss mitigation contact in addition to being in the servicing file,

Ø	Copies of all written correspondence regarding delinquencies
Ø	Written agreements entered into with the Mortgagor including any modification documents, repayment plans, stipulated repayment plans, or any other document that constitutes approval of the loss mitigation workout or alternative.

Pending Short Sale Doc Requirements

Ø	Sales contract
Ø	HUD-I Settlement Statement, estimated
Ø	Realtor/Broker contact information
Ø	Mortgagor financials
Ø	Mortgagor hardship letter
Ø	Approval letter (if approved and not closed prior to transfer date)
Ø	Appraisal and/or Title Search Performed

Pending Loan Modification Doc Requirements

Ø	Mortgagor financials
Ø	Mortgagor hardship letter
Ø	Hard copy of the Modification Agreement
Ø	Copy of the Modification Approval

Pending Deed-in-Lieu Doc Requirements

Ø	Deed-in-Lieu agreement
Ø	Document/Title company contact information
Ø	Mortgagor financials
Ø	Mortgagor hardship letter
Ø	Appraisal and/or Title Search Performed

If Loss Mitigation documents are not imaged then deliver hard copies to:

© 2008 Nationstar Mortgage LLC. “The information within this document is confidential and provided solely for the internal use of Nationstar Mortgage LLC. This document is an intellectual property of Nationstar Mortgage LLC, and is protected under copyright laws of the United States. This material should not be released to any third party supplier without the Previous written approval Nationstar Mortgage LLC.”

Page 35

EXHIBIT B

Nationstar Mortgage LLC
Attn: Loss Mitigation Department/Bryan Minassian
350 Highland Drive
Lewisville, Texas 75067
469-549-2
Bryan.Minassian@Nationstarmail.com

Please refer to the Records and Files section regarding the forwarding of documents and/or files

Bankruptcy

The Previous Servicer shall provide a loan level report listing the following information for loans with Bankruptcy. This report is required pre-transfer and post-transfer. The pre-transfer report needs to be provided as part of the preliminary data with the final report provided as defined under Delivery of Final Loan Level Data & Reports.

Ø	Loan Number
Ø	Mortgagor’s Name
Ø	Name of Filer
Ø	Lien
Ø	Filing date
Ø	Chapter
Ø	Case number
Ø	Bankruptcy State/District
Ø	Bankruptcy status
Ø	Post-petition due date
Ø	Contractual due date at the time of filing
Ø	Date file referred to Attorney
Ø	Previous Servicer’s Attorney name

© 2008 Nationstar Mortgage LLC. “The information within this document is confidential and provided solely for the internal use of Nationstar Mortgage LLC. This document is an intellectual property of Nationstar Mortgage LLC, and is protected under copyright laws of the United States. This material should not be released to any third party supplier without the Previous written approval Nationstar Mortgage LLC.”

Page 36

EXHIBIT B

Ø	Previous Servicer’s Attorney address
Ø	Previous Servicer’s Attorney phone number
Ø	Mortgagor’s Attorney name
Ø	Mortgagor’s Attorney address
Ø	Mortgagor’s Attorney phone number
Ø	Trustee name
Ø	Trustee address
Ø	Trustee phone number
Ø	Trustee website
Ø	Trustee date
Ø	Mortgagor’s Suspense Balance
Ø	Trustee Suspense Balance
Ø	Suspense Balance of any Stipulated Agreement
Ø	Has Proof of Claim been filed (Y/N)
Ø	Confirmed Proof of Claim
Ø	Amount with Breakdown
Ø	Amount Paid to Date from Trustee for Claim
Ø	Litigation Status (Motion for Relief Filed, Cramdown, etc.)
Ø	If Litigation, by whom
Ø	Stipulated agreement (Y/N)
Ø	Which post-petition payments are included
Ø	What post-petition payments have been paid by the debtor

The Previous Servicer shall provide a loan level report listing the following information for all loans that are in an active Chapter 7 Bankruptcy:

Ø	Date of Discharge
Ø	Date of Reaffirmation
Ø	Date Filed
Ø	Case #
Ø	State Filed
Ø	District Filed
Ø	Name of Filer
Ø	Dismissal Date
Ø	Motion for Relief Obtained Date

© 2008 Nationstar Mortgage LLC. “The information within this document is confidential and provided solely for the internal use of Nationstar Mortgage LLC. This document is an intellectual property of Nationstar Mortgage LLC, and is protected under copyright laws of the United States. This material should not be released to any third party supplier without the Previous written approval Nationstar Mortgage LLC.”

Page 37

EXHIBIT B

The Previous Servicer shall provide a loan level report listing the following information for loans with active Chapter 11, 12 and 13 Bankruptcies:

Ø	Complete Payment History for both pre and post petition payments
Ø	Original confirmed claim amount
Ø	Breakdown of all amounts included in the claim.

The Previous Servicer shall provide Bankruptcy files for each loan to contain the following information:

Ø	Mortgage
Ø	Note
Ø	Title Policy
Ø	Breakdown of trustee money received and how it was applied
Ø	Breakdown of all payments received from debtor and how it was applied
Ø	Copies of all invoices
Ø	Any pending relief of stay hearings within 60 days of the transfer
Ø	Bank’s attorney and contact information
Ø	Debtor’s attorney and contact information
Ø	Bankruptcy petition
Ø	Proof of claim
Ø	If arrearages included in proof of claim, please provide breakdown
Ø	Reorganization plan
Ø	Copies of stipulation/agreed orders (details of payment plan)
Ø	Foreclosure information prior to bankruptcy filing (if applicable)
Ø	Information of prior bankruptcy filings (multi-filers)
Ø	APO or RFS order
Ø	RFS motion
Ø	Dismissal/discharge order and/or a list of loans that have been dismissed/discharged
Ø	Contractual Payment History
Ø	Stipulated Agreement

The Previous Servicer shall provide a report of all attorneys used for bankruptcy, including the full firm name, contact name, address, phone number and tax identification number (TIN). Previous Servicer shall also provide copies of attorney standards and fee schedules.

The Previous Servicer shall provide written notice, in accordance with applicable court procedures, to bankruptcy trustees and debtor attorneys with respect to the assignment of any Bankruptcy Loans. Such notices shall be mailed to the bankruptcy trustees and debtor attorneys prior to the respective Transfer Date. Copies of all such notices shall be provided to Servicer within five (5) days after the Transfer Date.

Nationstar Mortgage LLC

© 2008 Nationstar Mortgage LLC. “The information within this document is confidential and provided solely for the internal use of Nationstar Mortgage LLC. This document is an intellectual property of Nationstar Mortgage LLC, and is protected under copyright laws of the United States. This material should not be released to any third party supplier without the Previous written approval Nationstar Mortgage LLC.”

Page 38

EXHIBIT B

Attn: Bankruptcy Department/Matthew Barrett
350 Highland Drive
Lewisville, Texas 75067
469-549-2234
Matthew.Barrett@nationstarmail.com

Please refer to the Records and Files section regarding the forwarding of documents and/or files.

Foreclosure File Report

The Previous Servicer shall provide a loan level report listing the following information for any loan in which foreclosure actions have been initiated. This report is required pre-transfer and post-transfer. The pre-transfer report needs to be provided as part of the preliminary data with the final report provided as defined under Delivery of Final Loan Level Data & Reports.

Ø	Loans in foreclosure
Ø	Legal specifics/process by state
Ø	Foreclosure status
Ø	Date referred to foreclosure
Ø	Attorney or firm assigned
Ø	Attorney phone number
Ø	Date of first legal action
Ø	Date of Demand/Breach Letter sent to borrower
Ø	Date the service was completed
Ø	Date the judgment was ordered
Ø	Scheduled Sale Date / Actual Sale Date (if applicable)
Ø	Any information related to holds during the process
Ø	Lien Position
Ø	If second lien, need 1st lien holder name, status, and contact information

Foreclosure File Requirements

The Previous Servicer shall provide Foreclosure files for each loan to contain the following information:

Ø	Copy of the demand/breach letter
Ø	Bid instructions for any loans with a sale date occurring within 15 days after the Transfer Date must be provided upon transfer.
Ø	Trustee/attorney names and contact information
Ø	Referral letter
Ø	Copies of all invoices, paid and due
Ø	NOD/Complaint
Ø	Foreclosure title report
Ø	Foreclosure bid worksheet (if available)
Ø	Actual/projected foreclosure sale date
Ø	Foreclosure review committee packet (not referred to attorney but recommended for foreclosure).
Ø	Bankruptcy information prior to foreclosure action (if applicable)
Ø	Mark the outside of the file for any exception loans (e.g., SEIZED, DEMOLITION; MOBILE HOMES AND MANUFACTURED HOUSING)

© 2008 Nationstar Mortgage LLC. “The information within this document is confidential and provided solely for the internal use of Nationstar Mortgage LLC. This document is an intellectual property of Nationstar Mortgage LLC, and is protected under copyright laws of the United States. This material should not be released to any third party supplier without the Previous written approval Nationstar Mortgage LLC.”

Page 39

EXHIBIT B

Foreclosure File Handling

Loan files for loans scheduled for sale within two (2) weeks after the Servicing Transfer Date are to be received on the Servicing Transfer Date. These files are to contain a payoff statement good through cutoff date (or a total amount due statement), and the recent BPO/Appraisal. Hard copy screen prints may be substituted for the electronic reports, but must contain the required information.

The Previous Servicer shall provide a report of all attorneys used for foreclosure litigation fifteen (15) days prior to the Transfer Date, including the full firm name, contact name, address, phone number and tax identification number (TIN). Please advise your foreclosure attorneys of the servicing transfer thirty (30) days prior and advise to proceed with the foreclosure process.

For all loans facing a foreclosure sale date within thirty (30) days before or after the Transfer Date, the Controlling Party requests a report forty-five (45) days prior to the Transfer Date and again fifteen (15) days prior to the Transfer Date summarizing the following loan-level information:

Ø	Loan number
Ø	Scheduled foreclosure sale date
Ø	Scheduled foreclosure bid amount
Ø	Property state
Ø	Property city
Ø	Origination value
Ø	Updated property valuation
Ø	Attorney name
Ø	Attorney contact information

In addition to the items above please provide information regarding the following on all loans:

Ø	Lenstar History
Ø	Appraisal/Values
Ø	If government loans — case #’s
Ø	Maintenance/Inspection Records — What loans were winterized?

Comprehensive List of loans with:

Ø	Sale Dates
Ø	Redemptions
Ø	Projected Sale Dates

Vendor Information for:

Ø	Inspections
Ø	Demands
Ø	Appraisals
Ø	Billing
Ø	Any other outsourcer/system
Ø	Attorney Fee Schedule
Ø	Attorney timeline/production reports
Ø	List of Aged Inventory with Chronological Events

© 2008 Nationstar Mortgage LLC. “The information within this document is confidential and provided solely for the internal use of Nationstar Mortgage LLC. This document is an intellectual property of Nationstar Mortgage LLC, and is protected under copyright laws of the United States. This material should not be released to any third party supplier without the Previous written approval Nationstar Mortgage LLC.”

Page 40

EXHIBIT B

A foreclosure should not be put on hold without the prior written approval or email confirmation from the controlling party.

Nationstar Mortgage LLC
Attn: Foreclosure Department/Mike Hansen
350 Highland Drive
Lewisville, Texas 75067
469-549-3096
Mike.Hansen@nationstarmail.com

Please refer to the Records and Files section regarding the forwarding of documents and/or files.

© 2008 Nationstar Mortgage LLC. “The information within this document is confidential and provided solely for the internal use of Nationstar Mortgage LLC. This document is an intellectual property of Nationstar Mortgage LLC, and is protected under copyright laws of the United States. This material should not be released to any third party supplier without the Previous written approval Nationstar Mortgage LLC.”

Page 41

EXHIBIT B

REO

In the event a Mortgage Loan goes to foreclosure sale and the redemption period expires or the Loan is currently in REO the Previous Servicer shall provide a pre-transfer and post-transfer electronic report in Excel format to the Servicer containing the data points listed below. The pre-transfer report needs to be provided as part of the preliminary data with the final report provided as defined under Delivery of Final Loan Level Data & Reports.

Ø	Loans in REO
Ø	Foreclosure and eviction attorney contact information
Ø	Foreclosure Sale Date
Ø	Successful Bidder
Ø	Confirmation/Ratification/Redemption Date (if Applicable)
Ø	Offers and counter-offers and amounts received
Ø	Agent contact information (name, company, phone, fax, email)
Ø	Contact information for any other third party vendors involved
Ø	Under contract flag
Ø	Closing date
Ø	Force placed insurance information
Ø	Taxes due
Ø	Taxes Paid
Ø	Code Violations
Ø	Open Legal files
Ø	Closing status
Ø	Closing contact information (Title company, closer, agent)
Ø	Occupancy status
Ø	Eviction status
Ø	Cash for keys offered/accepted/denied
Ø	Title work completed
Ø	All interior values
Ø	Amount of REO repairs made to property
Ø	If Third Party Sale — Date Proceeds Received
Ø	If Third Party Sale — Amount
Ø	If Redeemed — Date Proceeds Received
Ø	If Redeemed — Amount
Ø	REO Closing Attorney Contact Information (Name, Address, phone, fax, email)
Ø	Party Marketing the Property
Ø	Date Property Sold
Ø	Initial Investor Claim-Date Filed
Ø	Investor Name Claim Sent to and Contact Information
Ø	Investor Claim Amount
Ø	Investor Claim Date Paid
Ø	Investor Claim Status
Ø	MI Claim-Date Filed
Ø	MI Name Claim Sent to and Contact Information
Ø	MI Claim Amount
Ø	MI Claim Date Paid
Ø	Other Claim-Date Filed (i.e. Secondary etc.)

© 2008 Nationstar Mortgage LLC. “The information within this document is confidential and provided solely for the internal use of Nationstar Mortgage LLC. This document is an intellectual property of Nationstar Mortgage LLC, and is protected under copyright laws of the United States. This material should not be released to any third party supplier without the Previous written approval Nationstar Mortgage LLC.”

Page 42

EXHIBIT B

Ø	Other Name Claim Sent to and Contact Information
Ø	Other Claim Amount
Ø	Other Claim Date Paid
Ø	Identification of a redemption loan that have not confirmed

The Previous Servicer shall provide a pre-transfer and post-transfer electronic report in Excel format to the Servicer and controlling party documenting REOs with offers, sales, or closings pending. The pre-transfer report needs to be provided no later than 20 days prior to the transfer date, updated report 5 days prior to transfer and the final report provided as defined under Delivery of Final Loan Level Data & Reports. An REO offer should not be put on hold without the prior written approval or email confirmation from the controlling party

In addition to the data requirements the following REO documents are required. If REO documents are not imaged then physical REO files will need to be delivered no later than 5 days post transfer.

Ø	Foreclosure deed
Ø	Foreclosure bid worksheet with supporting BPO’s or APO’s attached
Ø	Property inspection reports
Ø	Listing agreements including initial list price and date, current list price and all list reductions and dates.
Ø	Listing activity reports
Ø	Rehabilitation work orders and/or contractor invoices
Ø	All Closing documents (contract, title work, etc.), closing attorney contact information, scheduled closing date, etc.
Ø	Executed contracts
Ø	Preliminary/Final HUD

The file shall be organized so that all documents pertaining to the REO are together and in chronological order, including a copy of any claims filed, the Foreclosure and or Sheriff’s Deed and foreclosure attorney information; eviction attorney information, if applicable, and any other attorney correspondence; copies of all invoices paid; hard copy REO notes, if not provided electronically. If the REO file is delivered to the Servicer prior to the Transfer Date the Previous Servicer shall work with the Servicer to determine how best to transfer the loan record data. Please forward current vendor, vendor system information and contact information to our contact below. REO files and unpaid invoices shall be delivered to:

REO Files and Invoices:

Nationstar Mortgage LLC
Attn: REO Department/Kevin Friday
350 Highland Drive
Lewisville, Texas 75067
469-549-2271
Kevin.Friday@Nationstarmail.com

© 2008 Nationstar Mortgage LLC. “The information within this document is confidential and provided solely for the internal use of Nationstar Mortgage LLC. This document is an intellectual property of Nationstar Mortgage LLC, and is protected under copyright laws of the United States. This material should not be released to any third party supplier without the Previous written approval Nationstar Mortgage LLC.”

Page 43

EXHIBIT B

Mortgagor Recoverable Corporate Advances

The Previous Servicer shall provide a loan-level, itemized accounting of all expenses, to date, for all mortgagor recoverable expenses. This itemized accounting shall include supporting documentation of all recoverable expenses disbursed from escrow accounts or any other account. Copies of all property inspections, property preservation, and invoices for all loans, including bankruptcy and foreclosure, shall be provided in a format agreed upon by all parties.

The Previous Servicer shall provide a loan level report listing the following information for any loan with an advance. The detail of the advance amount should tie back to the cumulative balance provided in the trial balance. This report is required pre-transfer and post-transfer. The pre-transfer report needs to be provided as part of the preliminary data with the final report provided as defined under Delivery of Final Loan Level Data & Reports.

Ø	Loans with advance
Ø	Advance Type and Amount: (attorney fee, BPO, Inspections, Recording Fees, Bankruptcy, Foreclosure, etc.)
Ø	Corporate Expense Detail
Ø	Debit/Credit Indicator
Ø	Recoverable, Non-Recoverable, or Third Party Indicator

© 2008 Nationstar Mortgage LLC. “The information within this document is confidential and provided solely for the internal use of Nationstar Mortgage LLC. This document is an intellectual property of Nationstar Mortgage LLC, and is protected under copyright laws of the United States. This material should not be released to any third party supplier without the Previous written approval Nationstar Mortgage LLC.”

Page 44

EXHIBIT B

Release of Title, Payoff Requests and Payoff Funds Received After Transfer

The Previous Servicer is responsible for, and must send for recordation, all Mortgage Loan satisfactions for all Mortgage Loans that pay in full prior to the Transfer Date.

The Previous Servicer must wire transfer any payoff funds that are received by the Previous Servicer after the Servicing Transfer Date on the same day of receipt. Payoff wiring instructions:

Bank: JPM Chase
City, State, Zip: Dallas, Texas 75201
RT# : 111000614
ACCT# : 1563367653
For further credit to: Nationstar Mortgage LLC, Payment Clearing
Customer’s Name ___________________
Customer’s Loan Acct # ______________
Customer’s Address _________________
Sender’s Name and Phone #____________

The Previous Servicer shall reimburse the Servicer for additional per diem interest on any payoff check that is not received by the Servicer on the day of its receipt by the Previous Servicer. The Previous Servicer will forward the Servicer a check in the appropriate amount upon receipt of a properly documented request. Payoff mailing instructions:

Nationstar Mortgage LLC, Payment Processing — Service Transfer Payoffs
Attn: Marina Reyes
Address: 350 Highland Drive
City, State, Zip: Lewisville, Texas 75067
Phone: 469-549-2014
Email: Marina.Reyes@nationstarmail.com

All requests for a payoff statement should be faxed to 469-549-2455.

The Previous Servicer shall provide a loan level report listing all of the loans for which the Prepayment Penalty has been waived and any pending payoff requests that have not been fulfilled. The following information should be included in this report:

Ø Prepayment Penalty Term

© 2008 Nationstar Mortgage LLC. “The information within this document is confidential and provided solely for the internal use of Nationstar Mortgage LLC. This document is an intellectual property of Nationstar Mortgage LLC, and is protected under copyright laws of the United States. This material should not be released to any third party supplier without the Previous written approval Nationstar Mortgage LLC.”

Page 45

EXHIBIT B

Ø	Prepayment Penalty Calculation
Ø	Payoff Request Date

Automatic Payment Plans, Mortgage Payments or other checks received after Transfer

The Previous Servicer shall provide an example of their current payment coupon and a loan level report as defined under Conversion Reports.

Any mortgage payments received by Previous Servicer after the Servicing Transfer Date must be forwarded to Servicer on a daily basis and be clearly identified with the Previous Servicer’s loan number in upper right corner of check. All checks should be date-stamped and endorsed as follows:

     Pay to the order of Nationstar Mortgage LLC without recourse.

     By

     (Name of Signer) (Title of Signer) (Name of Company)

Previous Servicer agrees to forward on a daily basis all payments received after the Transfer Date via overnight delivery to:

Nationstar Mortgage LLC
Attn: Service Transfer Payments/Payment Processing
350 Highland Drive
Lewisville, Texas 75067

NSF & Stop Payment Handling

The following procedures shall apply to checks other than payments, NSFs or stop payments received by the Previous Servicer after the Servicing Transfer Date:

1.	Checks shall be clearly identified with Previous Servicer’s loan number in the upper right-hand corner.
2.	Checks that include funds for two or more accounts should be accompanied by a detailed listing providing Previous Servicer’s loan number and amount due each account.
3.	Checks should be properly endorsed as noted above.

© 2008 Nationstar Mortgage LLC. “The information within this document is confidential and provided solely for the internal use of Nationstar Mortgage LLC. This document is an intellectual property of Nationstar Mortgage LLC, and is protected under copyright laws of the United States. This material should not be released to any third party supplier without the Previous written approval Nationstar Mortgage LLC.”

Page 46

EXHIBIT B

4.	The purpose of check shall be identified and grouped accordingly (i.e., tax refund, loss draft, payment of special insurance, principal payment, etc.).
5.	Checks shall be forwarded via overnight delivery to the address above.

© 2008 Nationstar Mortgage LLC. “The information within this document is confidential and provided solely for the internal use of Nationstar Mortgage LLC. This document is an intellectual property of Nationstar Mortgage LLC, and is protected under copyright laws of the United States. This material should not be released to any third party supplier without the Previous written approval Nationstar Mortgage LLC.”

Page 47

EXHIBIT B

Dishonored Payments after Transfer and Misapplied payments

The Previous Servicer will ensure the returned check has been presented twice to the bank for good funds prior to requesting reimbursement from Nationstar Mortgage LLC. The Previous Servicer will submit the following applicable documentation related to a dishonored payment which was not reversed by Previous Servicer before the Servicing Transfer Cutoff Date:

1.	Original returned or dishonored payment, along with a copy of the debit advice, should be provided and clearly reflect the reason the payment was dishonored (e.g. NSF, stop payment, etc.). In the case of a dishonored draft, adequate proof should be provided indicating the bank rejected the draft.
2.	Payment history from point of the dishonored payment to the Transfer Cutoff Date
3.	Nationstar Mortgage LLC shall reimburse Previous Servicer the dishonored payment funds within twenty (20) days of receipt of applicable documentation.

Misapplied Payments

A “misapplied payment” shall mean a Mortgagor payment for which funds have been deposited in an incorrect Escrow Account or applied to an incorrect Mortgagor’s account. The existence of a canceled Mortgagor payment bearing the endorsement of Previous Servicer, for which funds have not been allocated to the proper Escrow Accounts, shall be considered conclusive evidence of a misapplied payment. Misapplied payments shall be processed as follows:

1.	Both parties shall cooperate in correcting misapplication errors by providing the payment history from point of error to the Transfer Cutoff Date and a copy of the canceled check bearing the endorsement of the Previous Servicer responsible for the posting of the missing funds.
2.	The party receiving notice of a misapplied payment occurring to the Transfer Date and discovered after the Transfer Date shall immediately notify the other party.
3.	If a misapplied payment cannot be identified by either party and said misapplied payment has resulted in a shortage in a Mortgage account, Previous Servicer shall be liable for the amount of such shortage. Previous Servicer shall reimburse Nationstar Mortgage LLC for the amount of such shortage within twenty (20) days after receipt of written demand from Nationstar Mortgage LLC.
4.	Any check issued under the provisions of this paragraph shall be accompanied by a statement indicating the purpose of the check, the mortgagor and property address involved, and the corresponding Previous Servicer and/or Nationstar Mortgage LLC account number.

Please forward all documentation regarding dishonored and/or misapplied payments to:

Nationstar Mortgage LLC
Attn: Service Transfer NSF Returns/ Payment Processing
350 Highland Drive
Lewisville, Texas 75067

© 2008 Nationstar Mortgage LLC. “The information within this document is confidential and provided solely for the internal use of Nationstar Mortgage LLC. This document is an intellectual property of Nationstar Mortgage LLC, and is protected under copyright laws of the United States. This material should not be released to any third party supplier without the Previous written approval Nationstar Mortgage LLC.”

Page 48

EXHIBIT B

Correspondence Received After Transfer

All correspondence, insurance renewals, cancellation notices, customer inquiries, etc., received by Previous Servicer after the Servicing Transfer Date shall be identified with the Previous Servicer’s loan number and forwarded via overnight delivery on a daily basis to the Servicer:

Nationstar Mortgage LLC
Attn: Service Transfer Correspondence / Austin Cobb
350 Highland Drive
Lewisville, Texas 75067
469-549-2284
Austin.Cobb@nationstarmail.com

© 2008 Nationstar Mortgage LLC. “The information within this document is confidential and provided solely for the internal use of Nationstar Mortgage LLC. This document is an intellectual property of Nationstar Mortgage LLC, and is protected under copyright laws of the United States. This material should not be released to any third party supplier without the Previous written approval Nationstar Mortgage LLC.”

Page 49

EXHIBIT B

HAMP Requirements

The Previous Servicer must complete all HAMP Reporting Transfer Process requirements posted by Fannie Mae 30 to 60 days prior to the servicing transfer date.

1.	Fill out and submit the HAMP Reporting Transfer Request Form
2.	Fill out and submit the HAMP Reporting Transfer Loan List form with all HAMP loans transferring
3.	If transferring non-GSE loans the Assignment and Assumption Agreement must be filled out and submitted to FNMA

The following HAMP electronic reports are required for transferring loans that have been solicited, currently in a trial period, failed, denied, or have been successfully modified. Each report is required pre-transfer and post-transfer. The pre-transfer report needs to be provided as part of the preliminary data with the final report provided as defined under Delivery of Final Loan Level Data & Reports.

1.	List of all loans that have been solicited.
2.	Report outlining where each loan is in the process, payments received, and payment received date. If the process has been completed then provide the new modification terms.
3.	Report providing which documents have been received and if incomplete, what is still missing. Will need copies of all documents received.
4.	Report outlining any loans that previously failed (no longer eligible for the HAMP program) or were turned down.
5.	Copies of any Treasury reporting A, B, C, and/or D.

In addition to the reports, the previous servicer will provide HAMP loan level data electronically on all loans to include the following items pre-transfer and post-transfer. The pre-transfer report needs to be provided as part of the preliminary data with the final report provided as defined under Delivery of Final Loan Level Data & Reports.

Data Elements Required for HAMP Loans

# of units

© 2008 Nationstar Mortgage LLC. “The information within this document is confidential and provided solely for the internal use of Nationstar Mortgage LLC. This document is an intellectual property of Nationstar Mortgage LLC, and is protected under copyright laws of the United States. This material should not be released to any third party supplier without the Previous written approval Nationstar Mortgage LLC.”

Page 50

EXHIBIT B

Current Collateral Value

HAMP Terms
HAMP Type (Imminent Default or Default)
Trial Period Payment Dates
Trial Period Payment Amount
Trial Period Payment History
Trial Period Completion/End Date
Amortization Duration
Maturity Date
Beginning Unpaid Principal Balance (at the start of the trial period)
Forbearance Amount at Trial Period
Reset ARM Identifier (Y/N)
Reset Interest Rate
Reset Payment Amount
Eligibility Payment Amount Indicator (will need to calc this in house — current pmt vs. reset pmt)
Date Executed Trial Period Documents Received
Date Trial Period Qualifying Documents Received
Extended Trial Period Payment Date (if applicable)

HAMP Modification Terms
HAMP Type (Imminent Default or Default)
Freddie Weekly Survey Rate (used to determine mod terms)
Step Modification Rates
Step Modification Dates
Final Modification Rate
Modification Effective Date
Final Forbearance Amount
Ending Unpaid Principal Balance (at the end of the trial period)

Hardship Affidavit Information
Borrower First Name
Borrower Middle Name
Borrower Last Name
Borrower Date of Birth
Co-Borrower First Name
Co-Borrower Middle Name
Co-Borrower Last Name
Co-Borrower Date of Birth
Borrower Default Reason
Co-Borrower Default Reason
Borrower Ethnicity
Borrower Race
Borrower Sex
Borrower Info Not Provided
Co-Borrower Ethnicity
Co-Borrower Race
Co-Borrower Sex
Co-Borrower Info Not Provided

© 2008 Nationstar Mortgage LLC. “The information within this document is confidential and provided solely for the internal use of Nationstar Mortgage LLC. This document is an intellectual property of Nationstar Mortgage LLC, and is protected under copyright laws of the United States. This material should not be released to any third party supplier without the Previous written approval Nationstar Mortgage LLC.”

Page 51

EXHIBIT B

FNMA NPV Results
Date
De Minimis Test
Value No Mod
NPV Test
Error Code
Waterfall Test
Forbearance Flag
Value Mod
NPV Test Successful?

Hope for Homeowners (H4H)
H4H Lead Eligible?
H4H Offered?

Income
Verified Borrower Income Type
Verified Borrower Gross Income
Verified Borrower Net Income
Verified Borrower Rental Income
Verified Borrower Pension
Verified Borrower Alimony/Child Support
Verified Borrower Misc Amount
Verified Borrower Misc Type
Verified Borrower Checking Account
Verified Borrower Savings/Money Market Account
Verified Borrower 401K/ESOP/IRA/Keogh
Verified Borrower Stocks/Bonds/CD’s/Other
Verified Co-Borrower Income Type
Verified Co-Borrower Gross Income
Verified Co-Borrower Net Income
Verified Co-Borrower Rental Income
Verified Co-Borrower Pension
Verified Co-Borrower Alimony/Child Support
Verified Co-Borrower Misc Amount
Verified Co-Borrower Misc Type
Verified Co-Borrower Checking Account
Verified Co-Borrower Savings/Money Market Account
Verified Co-Borrower 401K/ESOP/IRA/Keogh
Verified Co-Borrower Stocks/Bonds/CD’s/Other
Stated Borrower Income Type
Stated Borrower Gross Income
Stated Borrower Net Income
Stated Borrower Rental Income
Stated Borrower Pension
Stated Borrower Alimony/Child Support
Stated Borrower Misc Amount
Stated Borrower Misc Type

© 2008 Nationstar Mortgage LLC. “The information within this document is confidential and provided solely for the internal use of Nationstar Mortgage LLC. This document is an intellectual property of Nationstar Mortgage LLC, and is protected under copyright laws of the United States. This material should not be released to any third party supplier without the Previous written approval Nationstar Mortgage LLC.”

Page 52

EXHIBIT B

Stated Borrower Checking Account
Stated Borrower Savings/Money Market Account
Stated Borrower 401K/ESOP/IRA/Keogh
Stated Borrower Stocks/Bonds/CD’s/Other
Stated Co-Borrower Income Type
Stated Co-Borrower Gross Income
Stated Co-Borrower Net Income
Stated Co-Borrower Rental Income
Stated Co-Borrower Pension
Stated Co-Borrower Alimony/Child Support
Stated Co-Borrower Misc Amount
Stated Co-Borrower Misc Type
Stated Co-Borrower Checking Account
Stated Co-Borrower Savings/Money Market Account
Stated Co-Borrower 401K/ESOP/IRA/Keogh
Stated Co-Borrower Stocks/Bonds/CD’s/Other

Expenses
First Lien Mortgage P&I
Other Mortgage(s)
Property Taxes
Home Owners Insurance
Home Owners Association
Mortgage Insurance
Car Payment (1)
Car Payment (2)
Auto Insurance
Charge Account (1)
Charge Account (2)
Charge Account (3)
Student Loan
Bank/Finance Loans
Medical Bills
Health Insurance
Child Care
Gas
Auto Maintenance
Public Trans
Gas (Natural/Propane)
Electric
Garbage P/U
Water & Sewer
Home Phone
Cell Phone
Cable TV
Home Maintenance
Food
Child Support
Alimony

© 2008 Nationstar Mortgage LLC. “The information within this document is confidential and provided solely for the internal use of Nationstar Mortgage LLC. This document is an intellectual property of Nationstar Mortgage LLC, and is protected under copyright laws of the United States. This material should not be released to any third party supplier without the Previous written approval Nationstar Mortgage LLC.”

Page 53

EXHIBIT B

Camper, Boat, Motorocycle
Personal/Life Insurance
Club/Union Dues
Religious Contributions
Dry Cleaning
Clothing
Entertainment
School Tuition
Rent Expense
Other Expenses

Appendix Data Requirements

Ref ID	Name of Data Point	Description
1	GSE Servicer Number	The Fannie Mae or Freddie Mac unique Servicer identifier.
2	Servicer Loan Number	The unique (for the lender) identifier assigned to the loan by the lender that is servicing the loan.
3	HAMP Servicer Number	A unique identifier assigned to each Servicer that is participating in the HAMP program.
4	GSE Loan Number	A unique identifier assigned to each loan by a GSE (Fannie or Freddie).
5	Underlying Trust Identifier	This is the shelf and series security identifier associated with the underlying security. A shelf offering is an SEC provision allowing an issuer to register a new issue security without selling the entire issue at once. Additionally, this may be the CUSIP identifier associated with the security. The CUSIP number is the identification number assigned to a security by CUSIP (Committee on Uniform Security Identification Procedures) for trading.
6	Program Type/Campaign ID	A new program type that will identify campaign types. The unique identifier of a Loan Workout Campaign.
7	Investor Code	Owner of the mortgage.
8	Borrower Last Name	The last name of the Borrower. This is also known as the family name or surname.
9	Borrower First Name	First Name of the Borrower of record
10	Borrower Social Security Number	The Social Security Number of the Borrower
11	Co-Borrower Last name	Last Name of the co- Borrower of record
12	Co-Borrower First Name	First Name of the co-Borrower of record
13	Co-Borrower Social Security Number	The Social Security Number of the Co-borrower
14	Borrower Execution Date	For trial loan submission, this is the date that the borrower executed (signed) the trial documents if available. Otherwise it is the date of the first payment (through check, wire, or credit card). For official loan submission, this is the date that the borrower signed the official loan modification documents.
15	Submission Status	Status of loan data being submitted.
16	Date of Original Note	The date the mortgage note was signed.

© 2008 Nationstar Mortgage LLC. “The information within this document is confidential and provided solely for the internal use of Nationstar Mortgage LLC. This document is an intellectual property of Nationstar Mortgage LLC, and is protected under copyright laws of the United States. This material should not be released to any third party supplier without the Previous written approval Nationstar Mortgage LLC.”

Page 54

EXHIBIT B

17	Unpaid Principal Balance Before Modification	The total principal amount outstanding as of the end of the month. The UPB should not reflect any accounting based write-downs and should only be reduced to zero when the loan has been liquidated — either paid-in-full, charged-off, REO sold or Service transferred (before modification)
18	Loan Mortgage Type Code	The code that specifies the type of mortgage being applied for or that has been granted.
19	Last Paid Installment Date Before Modification	The due date of the last paid installment of the loan.
20	First Lien Indicator	Indicates if loan is first lien.
21	Foreclosure Referral Date	Provide the date that the mortgage was referred to an attorney for the purpose of initiating foreclosure proceedings. This date should reflect the referral date of currently active foreclosure process. Loans cured from foreclosure should not have a referral date.
22	Projected Foreclosure Sale Date	Projected date for foreclosure sale of subject property
23	Hardship Reason Code	Identifies the reason for the borrower’s hardship, on their mortgage payment obligations.
24	Monthly Gross Income	Total monthly income in dollars for all borrowers on the loan. This is the gross income for all borrowers.
25	Monthly Debt Payments excluding PITIA	Total amount of monthly debt payments excluding Principal, Interest, Taxes, Insurance and Association Dues (PITIA)
26	NPV Date	This is the date that the NPV model is run using stated income (or verified income if available).
27	NPV Model Result Amount Pre-mod	Net Present Value amount generated from the model before modification
28	NPV Model Result Amount Post-mod	Net Present Value amount generated from the model after modification
29	Amortization Term Before Modification	Represents the number of months on which installment payments are based. Example: Balloon loans have a seven year life (Loan Term = 84) but a 30 year amortization period (Amortization Term = 360). Installment payments are determined based on the 360 month
30	Interest Rate Before Modification	The interest rate in the month prior to loan modification. Please report as rounded to nearest 8th. (e.g. 4.125)
31	Principal and Interest Payment Before Modification	The scheduled principal and interest amount in the month prior to loan modification.
32	Escrow Payment Before Modification	Report the escrow amount in the month prior to loan modification. The amount of money that is collected from [added on to] the regular monthly mortgage payment to cover periodic payments of property taxes, private mortgage insurance and hazard insurance by the servicer on behalf of the mortgagee. Depending on the mortgage terms, this amount may or may not be collected. Generally, if the down payment is less than 20%, then these amounts are collected by the servicer.
33	Association Dues/Fees Before Modification	Existing monthly payment for association dues/fees before modification
34	Principal Payment	Principal portion of the P&I remitted
35	Interest Payment	Interest portion of the P&I
36	Principal Payment Owed or Not Reported	If borrower has contributed any cash or amounts in suspense

© 2008 Nationstar Mortgage LLC. “The information within this document is confidential and provided solely for the internal use of Nationstar Mortgage LLC. This document is an intellectual property of Nationstar Mortgage LLC, and is protected under copyright laws of the United States. This material should not be released to any third party supplier without the Previous written approval Nationstar Mortgage LLC.”

Page 55

EXHIBIT B

37	Other Contributions	If there are any amounts contributed by the borrower due to Hazard Claims
38	Attorney Fees Not in Escrow	Estimated legal fee not in escrow for advances capitalization and liquidation expense calculation
39	Escrow Shortage for Advances	Any Escrow advance amounts to be capitalized
40	Other Advances	Other capitalized advance amounts excluding escrow. Example: field inspections or title costs associated with recording the modification.
41	Borrower Contributions	If the borrower is contributing any amounts, they must be reported here
42	Modified Loan Term-Officer Signature Date	Servicer sign off at the officer level for the loan modification. This is the date the servicer’s officer approved the loan modification. This column will be populated for modification cases that need reclassification. There is no conversion needed for existing cases
43	Disbursement Forgiven	If there are any Forgiven disbursement for advances capitalization
44	Monthly Housing Expense Before Modification	The dollar amount per month of the borrowers housing expense of the subject property before modification .May be used for their primary residence. This must be Principal, Interest, Taxes, Insurance and Association Dues (PITIA).
45	Delinquent Interest	Delinquent interest for interest capitalization. It is the amount of delinquent interest from the delinquent loan’s LPI date to the workout execution date.
46	Interest Owed Or Payment Not Reported	If there is Interest owed/received but not reported for interest capitalization, this field must be populated.
47	Servicing Fee Percent, After Modification	Percentage of servicing Fee after loan modification ( e.g. 0.25)
48	Product Before Modification	The mortgage product of the loan, before the modification.
49	Maturity Date Before Modification	The date on which the mortgage obligation is scheduled to be paid off, according to the mortgage note. Maturity Date is commonly called Balloon Date for balloon loans, for which scheduled amortization does not pay off the balance of the loan, so that there is a final, large “balloon” payment at the end.
50	Remaining Term Before Modification	The remaining number of months until the loan will be paid off, assuming that scheduled payments are made. This will equal lesser of 1. the number of months until the actual balance of the loan will amortize to zero; or 2. the number of months difference between the LPI date and the Maturity Date.
51	Front Ratio Before Modification	The refreshed Front-end DTI (Principal, Interest, Taxes, Insurance and Association Dues (PITIA)) housing ratio.
52	Back Ratio Before Modification	Percentage of borrower’s PITIA plus debts to income ratio. Borrower Total Debt To Income Ratio Percent. The monthly expenses divided by the total monthly income for the Borrower. (e.g. 30.25)
53	Principal and Interest Payment at 31% DTI	Principal and Interest payable for a 31% Debt to Income ratio
54	Principal and Interest Payment at 38% DTI	Principal and Interest payable for a 38% Debt to Income ratio
55	Property Number of Units	Number of units in subject property (Valid values are 1, 2, 3 or 4)
56	Property Street Address	The street address of the subject property

© 2008 Nationstar Mortgage LLC. “The information within this document is confidential and provided solely for the internal use of Nationstar Mortgage LLC. This document is an intellectual property of Nationstar Mortgage LLC, and is protected under copyright laws of the United States. This material should not be released to any third party supplier without the Previous written approval Nationstar Mortgage LLC.”

Page 56

EXHIBIT B

57	Property City	The name of the city where the subject property is located.
58	Property State	The 2-character postal abbreviation of the state, province, or region of the subject property.
59	Property Zip Code	The code designated by the postal service to direct the delivery of physical mail or which corresponds to a physical location. In the USA, this can take either a 5 digit form (ZIP Code) or a 9-digit form (ZIP + 4).
60	Property Valuation Method	Type of value analysis.
61	Property Valuation Date	The date the property value analysis was performed.
62	Property Valuation As is Value	Property as-is value determined by the property valuation
63	Property Condition Code	A code denoting the condition of the subject property.
64	Property Occupancy Status Code	A code identifying the occupancy by the borrower of the subject property.
65	Property Usage Type Code	A code identifying the intended use by the borrower of the property.
66	Modification Effective Date	For Trial, this is the anticipated Modification Effective Date of the official loan modification. This is the first day of the month following the month when the last trial payment is due. For Official, this is the actual Modification Effective Date of the official loan modification. This is the first day of the month following the month when the last trial payment is due. The Modification Effective Date on the official loan submission must be less than the submission date.
67	Product After Modification	The mortgage product of the loan, after the modification (Allowable values are Fixed or Step).
68	Amortization Term After Modification	The number of months used to calculate the periodic payments of both principal and interest that will be sufficient to retire a mortgage obligation.
69	Unpaid Principal Balance After Modification	The unpaid principal balance of a loan after the loan modification. The unpaid principal balance after modification excludes any applicable forbearance amount and can also be referred to as Net UPB Amount.
70	Last Paid Installment Date After Modification	For Trial, this is the anticipated LPI Date after modification. It should be one month before the anticipated Modification Effective Date. For Official, This is the actual LPI Date after Modification. It must be one month before the Modification Effective Date.
71	Interest Rate After Modification	The interest rate in the month after loan modification.
72	Interest Rate Lock Date for Modification	The date that the rate lock was applied — in reference to modification of loan terms
73	First Payment Due Date After Modification	For Trial Loan Submission, this is a projection of the first payment due date after modification. First Payment Due Date After Modification should be the same as the anticipated Modification Effective Date. For Official Loan Submission , this is the actual first payment due date. First Payment Due Date After Modification should be the same as the actual Modification Effective Date.

© 2008 Nationstar Mortgage LLC. “The information within this document is confidential and provided solely for the internal use of Nationstar Mortgage LLC. This document is an intellectual property of Nationstar Mortgage LLC, and is protected under copyright laws of the United States. This material should not be released to any third party supplier without the Previous written approval Nationstar Mortgage LLC.”

Page 57

EXHIBIT B

74	Principal and Interest Payment After Modification	The P&I amount after modification
75	Escrow Payment After Modification	Existing monthly payment to escrow-after modification
76	Monthly Housing Expense After Modification	The dollar amount per month of the borrowers housing expense of the subject property after modification .May be used for their primary residence. This must be Principal, Interest, Taxes, Insurance and Association Dues (PITIA).
77	Maturity Date After Modification	The maturity date of the loan after modification
78	Principal Forbearance Amount	The total amount in dollars of the principal that was deferred through loss mitigation.
79	Term After Modification	The remaining number of months until the loan will be paid off, assuming that scheduled payments are made. This will equal lesser of 1. the number of months until the actual balance of the loan will amortize to zero; or 2. the number of months difference between the LPI date and the Maturity Date. In this case, the Maturity Date is the Maturity Date after the modification and may be different from the original Maturity Date (before the modification).
80	Front Ratio After Modification	Percentage of borrower’s PITIA to income ratio
81	Back Ratio After Modification	Percentage of borrower’s PITIA plus debts to income ratio
82	Principal Write-down (Forgiveness)	Amount of principal written-down or forgiven
83	Paydown or Payoff of Subordinate Liens	Have subordinate liens been paid off or paid down?
84	Paydown or Payoff of Subordinate Liens Amount	Amount of paydown or payoff of subordinate liens
85	Action Code	A code reported by the lender to update the loan that indicates the action that occurred during the reporting period
86	Action Code Date	The effective date of the action associated with the action code specified on the incoming LPC Transaction by the Servicer. The action date is required for certain action codes.
87	Max Interest Rate After Modification	Interest rate cap for the loan.
88	Trial Payment Number	The number of the trial payment being reported. The code that is used to define a single payment number that will be one of a series of payments that together will complete a loan trial payment period.
89	Trial Payment Received Amount	The actual dollar amount of the payment received from the borrower to the servicer for the trial payment.
90	Trial Payment Posted Date	The date the payment was posted during the Trial period
91	1st Trial Payment Due Date	This is the date that the first trial payment is due. It is also the trial modification effective date. This date must be less than the trial loan submission date.
92	1st Trial Payment Posted Date	The date the first payment posted during the Trial period
93	1st Trial Payment Received Amount	This is the actual amount of the Payment received from the Borrower to the Servicer for the 1st Trial payment.
94	Length of Trial Period	The length of the trial period
95	Step — Interest Rate Step Number	The sequence is used to uniquely identify and order Loan Interest Rate Adjustment schedule records specific to the loans step rate schedule.
96	Step — Payment Effective Date	The date the payment will be effective.
97	Step — Note Rate	The interest rate in the month after loan modification.

© 2008 Nationstar Mortgage LLC. “The information within this document is confidential and provided solely for the internal use of Nationstar Mortgage LLC. This document is an intellectual property of Nationstar Mortgage LLC, and is protected under copyright laws of the United States. This material should not be released to any third party supplier without the Previous written approval Nationstar Mortgage LLC.”

Page 58

EXHIBIT B

98	Step — New Interest Rate — Step Duration	After modification step duration in months. If this step is the last step and will be the rate and payment effective for the life of the loan, then duration is not required.
99	Step — Principal and Interest Payment	P&I Amount — The amount of the principal and/or interest payment due on the loan for each installment, beginning on the effective date.
100	Servicer TARP Contract Number	Servicer contract number with Treasury (TARP)
101	Fee Cap at Servicer Level	Max amount that will be paid to Servicer for loan modification
102	Servicer Primary Contact First Name	The first name of the Person.
103	Servicer Primary Contact Last Name	The last name of the Person.
104	Servicer Primary Contact Phone Number	The entire sequence of digits required to initiate a call from a standard phone to this number. It should include the area code or, for overseas numbers, the full country and city codes as they would be dialed.
105	Servicer Primary Contact Email	Servicer contact email address
106	Servicer Secondary Contact First Name	The first name of the Person.
107	Servicer Secondary Contact Last Name	The last name of the Person.
108	Servicer Secondary Contact Phone Number	The entire sequence of digits required to initiate a call from a standard phone to this number. It should include the area code or, for overseas numbers, the full country and city codes as they would be dialed.
109	Servicer Secondary Contact Email	Servicer contact email address
110	Servicer Street Address Line 1	The street address that denotes the location where mail is delivered for the Servicer.
111	Servicer City Name	The name of the city to which physical mail is directed for the Servicer.
112	Servicer State	The 2-character postal abbreviation of the state, province, or region to which physical mail is directed or which corresponds to a physical location.
113	Servicer Postal Code	The code designated by the postal service to direct the delivery of physical mail or which corresponds to a physical location. In the USA, this can take either a 5 digit form (ZIP Code) or a 9-digit form (ZIP + 4).
114	Servicer Technical Point of Contact Name	Person we can contact at servicer to set up B2B interactions
115	Servicer Technical Point of Contact Email	Email address of servicer technical point of contact.
116	Servicer Technical Point of Contact Phone	Phone number of servicer technical point of contact
117	Servicer Data Return URL	URL to which we will connect to send data and reports directly to the servicer. For example https://servicer.com/prevention
118	Servicer Data Return Port Number	Port number associated with the URL
119	Servicer Data Exchange Protocol	B2B protocol to be used to exchange data with a servicer. Must be one of the following: AS2, Connect:Direct, or SFTP.
120	Disbursement Type	This describes the bank account type to which the disbursements will be paid

© 2008 Nationstar Mortgage LLC. “The information within this document is confidential and provided solely for the internal use of Nationstar Mortgage LLC. This document is an intellectual property of Nationstar Mortgage LLC, and is protected under copyright laws of the United States. This material should not be released to any third party supplier without the Previous written approval Nationstar Mortgage LLC.”

Page 59

EXHIBIT B

121	Servicer Routing (ABA) Number	The transit number devised by the American Bankers Association (ABA). A routing transit number (RTN) or ABA number is a nine digit code, used in the United States, which for instance appears on the bottom of negotiable instruments such as checks that identifies which financial institution it is drawn upon.-WIRE Transfer
122	Servicer Bank Account Number	A bank account is a monetary account with a banking institution recording the balance of money for a customer.-Wire Transfer
123	Servicer Bank Name	The name of the bank that receives the funds.
124	Servicer Bank Street Address Line 1	The unparsed street address that denotes the location where mail is delivered.
125	Servicer Bank City Name	The name of the city to which physical mail is directed.
126	Servicer Bank State	The 2-character postal abbreviation of the state, province, or region to which physical mail is directed or which corresponds to a physical location.
127	Servicer Bank Postal Code	The code designated by the postal service to direct the delivery of physical mail or which corresponds to a physical location. In the USA, this can take either a 5 digit form (ZIP Code) or a 9-digit form (ZIP + 4).

© 2008 Nationstar Mortgage LLC. “The information within this document is confidential and provided solely for the internal use of Nationstar Mortgage LLC. This document is an intellectual property of Nationstar Mortgage LLC, and is protected under copyright laws of the United States. This material should not be released to any third party supplier without the Previous written approval Nationstar Mortgage LLC.”

Page 60

EXHIBIT B

HAFA Requirements

The Previous Servicer must provide HAFA document and data requirements as posted in Supplemental Directive 09-09 on March 26, 2010.

A copy of each executed document must be provided based on document requirements outlined under section ‘Records and Files’. An electronic report in Excel format is required for each report defined in this section. Each report in this section should be delivered as defined under Delivery of Final Loan Level Data & Reports.

Data Elements Required for HAFA Loans

1. Reporting based on HAFA letter being sent on a loan.

• Each loan that did meet HAMP eligibility but did not fulfill HAMP obligations

• Reason code/reason for HAMP fall out

• Date Letter Sent

• Type of HAFA Letter Sent (e.g. Solicitation Letter or SSA, RASS, ALT Rass, or DIL agreement)

• If postpone foreclosure for the 14 day solicitation letter, need date foreclosure postponed

2. Reporting based on response to HAFA letter.

• Each loan that responded to the letter

• Date responded to letter

• Which alternative borrower agreed to fulfill (short sale and/or deed-in-lieu)

• Executed documents received by Servicer(Y/N Flag)

• Status of Request (e.g. Talked to borrower about alternatives, borrower is interested and documents sent but not received, documents sent by servicer, executed documents in mail, etc...)

• Date foreclosure was postponed

• Any completed request for Approval of Short Sale (RASS) or Alt Request for Approval of Short Sale (Alt Rass)

3. Treasury Reporting Requirements

Logical Data Element	Description
HAMP Registration Number	The unique identifier for the servicer participating in the HAMP program
HAMP Servicer Number	A unique identifier assigned to each servicer that is participating in the HAMP program
Servicer Loan Number	The unique identifier assigned to the loan by the lender that is servicing the loan for the first lien

© 2008 Nationstar Mortgage LLC. “The information within this document is confidential and provided solely for the internal use of Nationstar Mortgage LLC. This document is an intellectual property of Nationstar Mortgage LLC, and is protected under copyright laws of the United States. This material should not be released to any third party supplier without the Previous written approval Nationstar Mortgage LLC.”

Page 61

EXHIBIT B

GSE Servicer Number	The Fannie Mae or Freddie Mac unique servicer identifier
GSE Loan Number	A unique identifier assigned to each loan by a GSE
Investor Code	Owner of the Mortgage
Borrower Last Name
Borrower First Name
Borrower SSN
Co-Borrower Last name
Co-Borrower First Name
Co-Borrower SSN
Program Type/Campaign ID	A new program type that will identify campaign types. The unique identifier of a Loan Workout Campaign.
Submission Status	Status of loan data being submitted
Property Street Address
Property City
Property State
Property Zip Code
Date of original Note
Front Ratio Before Modification	The front-end DTI (principal, interest, taxes, insurance and association dues) housing ratio as of the HAMP modification evaluation.
Property usage type code	A code identifying the use by the borrower of the property
Loan Status type code	A code specifying whether the loan is in default, imminent default, or current status as of the HAMP modification evaluation.
Borrower execution date	This is the date that the borrower signed the SPO agreement or DIL agreement
Agreement issue Date	This is the date that the SPO agreement or the DIL agreement was issued
agreement experiation date	The expiration date of the SPO agreement or DIL agreement.

© 2008 Nationstar Mortgage LLC. “The information within this document is confidential and provided solely for the internal use of Nationstar Mortgage LLC. This document is an intellectual property of Nationstar Mortgage LLC, and is protected under copyright laws of the United States. This material should not be released to any third party supplier without the Previous written approval Nationstar Mortgage LLC.”

Page 62

EXHIBIT B

SPO or DIL reason code	A field identifying the reason for the borrower entering into a SPO or DIL transaction
SPO or DIL Reason date	For loans that do not qualify for a HAMP trial modification or the borrower declines a mod, this is the date that a trial mod was not offered to the borrower or was not accepted by the borrower. For a borrower who did not successfullly complete a trial p
Property List Price	At notification this is the original list price of the property. At extension or correction, it is the latest list price of the property as of the extension or correction. At loan set up, it is the ending list price of the property as of the transaction
Property Vacancy Date	The SPO agreement or DIL agreement will state the date by which the property must be cacated, which in no event will be less than 30 calendar days from expeiration day of the SPO agreement (or any exstension thereof) or the date of a separate DIL agreement
Minimum net return to investor amount	The mimimum net return is the minimum acceptable net proceeds that the investor will accept from the transaction. The minimum net return must be reported as a dollar amount.
Mortgage insurance waiver approval indicator	For loans with MI coverage, this attribute indicates whether the MI provided delegations of authority to execute a SPO or DIL in accordance with the forreclosure alternative guidelines and waives any right to collect additional sums from the borrower.

© 2008 Nationstar Mortgage LLC. “The information within this document is confidential and provided solely for the internal use of Nationstar Mortgage LLC. This document is an intellectual property of Nationstar Mortgage LLC, and is protected under copyright laws of the United States. This material should not be released to any third party supplier without the Previous written approval Nationstar Mortgage LLC.”

Page 63

EXHIBIT B

UPB amount	The UPB of a loan as of the time of the SPO or DIL
Property sale or transaction amount	The sale or transfer price of the property.
Total Allowable Costs	The total allowable costs associated with selling the property that can be deducted from the gross sale price at closing. Allowable costs may include subordinate lien release amount, borrower relocation assistance, sales commission, closing costs for tax
Transaction Closing Date	the date on which the SPO or DIL transaction is closed
Subordinate Lien release reimbursement amount	The total amount of reimbursement paid by the ser4vicer to subordinate lien holder to secure release of subordinate lien. This amount may not exceed $3000
SPO or DIL cancellation reason code	A field indicating the reason why a SPO or DIL transaction was cancelled.

© 2008 Nationstar Mortgage LLC. “The information within this document is confidential and provided solely for the internal use of Nationstar Mortgage LLC. This document is an intellectual property of Nationstar Mortgage LLC, and is protected under copyright laws of the United States. This material should not be released to any third party supplier without the Previous written approval Nationstar Mortgage LLC.”

Page 64

EXHIBIT C

[RESERVED]

EXHIBIT D

PRICING SCHEDULE

Exhibit D

Nationstar Special Servicing Pricing — American General

Pricing			Description
	Base Fee	•	Loans less than 30 days delinquent	[*]
		•	Loans 30-59 days delinquent	[*]
		•	Loans 60-89 days delinquent	[*]
		•	Loans >= 90 days delinquent	[*]
	Boarding Fee	•	Fee + actual out of pocket expenses (tax, flood, mers, assignments)	[*]
	DeBoarding Fee	•	Fee + actual out of pocket expenses (shipping, tax, flood, mers, assignments, etc)	[*]0-12 mos[*]> 12 mos
	Collections/Loss Mitigation Incentives:		If Opting into Treasury MHA Program	[*]
•	Qualified Modifications	•	Payable to subservicer under Federal Program Workout Activity
•	Qualified Short Sales	•	Payable to subservicer under Federal Program Workout Activity
•	Qualified Deed in Lieus	•	Payable to subservicer under Federal Program Workout Activity
•	Qualified H4H	•	Payable to subservicer under Federal Program Workout Activity
	Collection/Loss Mitigation Incentives:		Eligible for accounts greater than or equal to 60 days delinquent - Non Treasury MHA:	Incentive Fee:
•	Reinstatement via lump-sum or repayment plan	•	Full reinstatement of all past due amounts as a result of collections, loss mitigation or other negotiation methods	[*]
•	Paid in full	•	Pay-off of all amounts due under the then existing note terms as a result of collections, loss mitigation or other negotiation methods	[*]
•	Third Party Sales	•	Asset sold to third party at foreclosure sale	[*]
•	Redemption	•	Borrwer exercises right of redemption according to state specific guideline	[*]
•	Deed-in-Lieu	•	Property deeded over to Asset owner	[*]
•	Short Sales	•	Receipt of funds pursuant to client approved plan	[*]
•	Note Sales	•	Receipt of funds pursuant to client approved plan	[*]

*        [Confidential treatment requested]

Pricing			Description
•	Modifications — < 60 Days Delinquent	•	Receipt of funds pursuant to client approved modification; requires AmGen pre-approval	[*]
•	Modifications — 60+ Days Delinquent	•	Receipt of funds pursuant to client approved modification	[*]
	REO Sale Fee		Liquidation of REO Asset	Incentive Fee:
•	Referral Fee	•	HSSS will negotiate and earn a referral fee of 1% or $1,250 from the real estate transaction	[*]
	Recovery Incentive	•	Collection of charged-off deficiency balance	[*]
delinquencies are reflected using MBA delinquency method

*        [Confidential treatment requested]

EXHIBIT E

[RESERVED]

EXHIBIT F

TAX AND FLOOD LIST OF PREFERRED VENDORS

EXHIBIT F

Tax and Flood List of Preferred Vendors

First American Real Estate Tax Service, LLC (Tax)

First American Flood Data Services, a division of First American Real Estate Solutions of Texas, L.P. (Flood)

EXHIBIT G-1 and EXHIBIT G-2

MONTHLY AND DAILY REPORTS AND FILES

EXHIBIT G1 and EXHIBIT G2

		Expected Delivery
G-1 Monthly Reports		Time (CST)	Report Group	AGF Report Names
Appendix A HAMP INITIAL LOAN SETUP DATA — Split by Securitizations & Unencumbered	Existing	8:00 am (2)	BI	Hamp
Appendix B HAMP LOAN TRIAL PERIOD PAYMENTS — Split by Securitizations & Unencumbered	Existing	8:00 am (2)	BI	Hamp
Appendix C HAMP LOAN SETUP DATA FOR OFFICIAL MOD - Split by Securitizations & Unencumbered	Existing	8:00 am (2)	BI	Hamp
Appendix D HAMP LOAN PAYMENTS FOR OFFICIAL MODS - Split by Securitizations & Unencumbered	Existing	8:00 am (2)	BI	Hamp
HAMP Master Recon	New	Midnight (3)	BI	Hamp Master Recon File
SR410UR-02 TRIAL BALANCE	Existing	8:00 am (1)	LSAMS	P139
SR410UR-03 CUTOFF TRANSACTION JOURNAL	Existing	8:00 am (1)	LSAMS	S215
SR410UR-05 CURTAILMENTS / PREPAYMENTS	Existing	8:00 am (1)	LSAMS	S213 and S212
SR410UR-06 LOANS REMOVED	Existing	8:00 am (1)	LSAMS	S214
SRV120C-01 MONTHLY ACCRUED INTEREST	New	8:00 am (1)	LSAMS	New — Mortgage accruals
SRV126C-01 ACCRUED INTEREST TRIAL BALANCE	New	8:00 am (1)	LSAMS	S2TT and T3TQ
IR Reporting Package with Latitude Reports	Existing	Midnight (2)	Investor Reporting	IR reports/latitude - P4CG, P4CQ and Escrow Advances. Must contain a new Daily Remittance Tie Out Report and HAMP Cash Recon.
Custom File	New	6:00 am (1)	BI	Custom
LPMA File For 2010-1 Portfolio	New	Midnight (3)	BI	12 Oversight Reports
Securitization remittance files for 2010-1 and 2006-1	New	Midnight (3)	BI & Investor Reporting	Remittance 06 & 10 deal
Monthly modification data file for 2010-1	New	Midnight (3)	BI & Investor Reporting	Compliment for 2010 securitization remittance
REO Monthly Client Package	New	Midnight (3)	BI & Investor Reporting	LPS Monthly Client Package
Annual LSAM’s Masterfile Extract for 2010-1	New	Midnight (4)	BI & Investor Reporting	Oversight Report

	Expected Delivery
G-2 Daily Reports	Time (CST)		Report Group	AGF Report Names
SRV105C-01 LOAN TRANSFER REPORT	Existing	8:00 am (1)	LSAMS	P129 and P130
SRV111C-01 ACCRUED INTEREST REPORT	Existing	8:00 am (1)	LSAMS	S2TT
SRV403C INVESTOR REMITTANCE DAILY PAYOFF REPORT	Existing	8:00 am (1)	LSAMS	P110
SRV511C-01 DAILY TRANSACTION JOURNAL	Existing	8:00 am (1)	LSAMS	P102 and HELOC Advances
SRV583AR-01 DETAIL MORTGAGE TRIAL BALANCE	Existing	8:00 am (1)	LSAMS	P181 detail
SRV583AR-02 SUMMARY MORTGAGE TRIAL BALANCE	Existing	8:00 am (1)	LSAMS	P181 summary
LPMA Portfolio Oversight Files for Total Portfolio	Existing	6:00 am (1)	BI	Oversight
Custom File	New	6:00 am (1)	BI	Custom
Daily ACCRUED INTEREST	New	6:00 am (1)	BI	New “SRV120 Daily Like”
REO Reporting Detail	New	6:00 am (1)	BI	REO
HELOC Reporting Detail	New	6:00 am (1)	BI	FM’s, Applied/unapplied and trend report

(1)	Delivered Tuesday through Saturday, except company holidays, or in more general terms — available the morning following ENDDAY, if month end falls on a Saturday or Sunday and additional ENDDAY is ran — reports would be provided the next morning; Delivery method = SFTP
(2)	Delivered by the end of business on the 3rd business day of the month. Delivery method = secure email
(3)	Delivered by the end of business on the 5th calendar day of the month. Delivery method = secure email
(4)	Delivered annually by the end of business on the 5th calendar day of April. Delivery method = secure email. Starting April 2011.

EXHIBIT H

SECURITY ASSESSMENT

EXHIBIT H — Security Assessment — Nationstar

The AGFS Security Office has completed a review of Nationstar Security Assessment Questionnaire responses and conducted an onsite assessment for physical and information security on December 8, 2010. Based on the observations from the review, the Security Office has concluded that the following actions are required within the next 12 months.

				Date
Number	Control Category	Issue Description	Remediation Required	Remediated
1	Access Controls	a) Sufficient controls are not currently in place to ensure that access to premises and systems by terminated employees is revoked in a timely fashion. The following action items must be completed.	a) Implement controls to integrate the termination process across HR, management, and IT / Security to provide timely removal of physical and logical user access rights for all terminated employees. Termination processing should be weekly at a minimum. Application and system access should be recertified by management on an annual basis at minimum.
		b) Contractors are currently not reviewed for access termination	b) Implement a formal review / recertification process for contractors. Review and renewal of access rights should be performed by management on a quarterly interval at minimum.
2	Access Controls	Personally identifiable information (PII) is not comprehensively scrubbed in test / development environments.	All sensitive data in test / development should be scrubbed.
3	Access Controls	Currently, Nationstar technical staff have open access to production data	Access to production data by technical support staff should only be granted upon appropriate management approval, limited in scope to the specified purpose, and revoked when no longer justified. Access to production data should be reviewed and recertified quarterly.
4	Access Controls	All developers have read / update access to all source code.	Access to source code for each application should be restricted to only those employees assigned to an application. A formal process for approvals and promotion of changes from development to separate and controlled QA and production environments should be implemented.

				Date
Number	Control Category	Issue Description	Remediation Required	Remediated
5	Network Security Controls	The Nationstar network is protected by a single Nokia Checkpoint firewall and configured with 2 zones, core and external DMZ. A project is in place to create an additional DMZ zone to house the ecommerce application servers. The plan is to utilize the existing firewall for the new zone in addition to the current zone in place. Completion is scheduled for end of January 2011. While this offers greater protection and controls than currently in place, a vulnerability exploit in the Nokia Checkpoint would expose Nationstar to data compromise within both DMZ’s and the core.	A second firewall from another vendor should be implemented to strengthen protection of sensitive data.
6	Network Security Controls	Remote access by employees is allowed through the Nationstar VPN from non-company owned devices with no checks for patch levels, virus scanning, or firewall. Dual factor authentication is not deployed.	Deploy dual factor authentication for remote users. Implement remote device scanning and block utilization of devices that do not meet minimum security requirements for antivirus, firewall, and operating system patch levels.
7	Policy/Governance	Application updates for Remedy are currently released on an ad hoc basis as updates become available. Consistent change management controls are not in place for all applications.	Change management processes for all applications need to be formalized to scheduled, controlled release cycles and incorporate a formal QA process.
8	Policy/Governance	Use of USB devices for removable media is permitted by exception approval only. Although a corporate, encrypted thumb drive is issued, there is no facility to prevent approved employees from using their own non-company devices.	Policy should be clearly defined and protection should be deployed to limit USB devices to company-issued only.
9	Policy/Governance	No retention policy for personally identifiable information (PII) or business confidential data is currently defined and documented.	A policy governing retention guidelines should be created and enforced.
10	Policy/Governance	Passwords are not allowed to repeat within the last 5 passwords used.	Increase the threshold on re-use of passwords to prevent repeating within the last 12 passwords used.

				Date
Number	Control Category	Issue Description	Remediation Required	Remediated
11	Policy/Governance	Data owners are not currently identified to approve creation, access rights, or classification of data groups. No formal process exists for classification of data, structured or un-structured. Policies and procedures are defined but execution is ad hoc.	Ownership of data groups should be documented and a formal process established to classify company and customer confidential (sensitive) data. Formal processes for new data group creation, annual review, and recertification of access to sensitive data should be implemented.
12	Disaster Recovery/Business Continuity	BIA’s have not been completed with the business areas. Business Continuity is not currently integrated into the disaster recovery testing process to ensure that all business critical applications and resources are included and successfully tested on an annual basis.	Complete BIA’s for all critical business areas. Document business continuity plans for each business area and ensure that all critical personnel and applications are included in annual testing. Table-top exercises should be completed fro each business area in scope.
13	Disaster Recovery/Business Continuity	The disaster recovery site is located within 21 miles from the Nationstar data center.	An alternate location within a different region of the US should be established to decrease the probability of losing both primary and secondary locations during a catastrophic event.
14	External Audit/Certification	A SAS 70 audit or equivalent has not been performed for Nationstar.	A SAS 70 audit or equivalent should be performed to assess overall Nationstar security posture.

EXHIBIT I

DELEGATED AUTHOITY GUIDELINES AND APPROVAL MATRIX

EXHIBIT I

DELEGATED AUTHORITY GUIDELINES

The following constitutes the Delegated Authority Guidelines (the “DAG”) relating to the servicing of the Mortgage Loans by the Servicer under the Pooling and Servicing Agreement, dated January 31, 2010 (the “Agreement”), among Sixth Street Funding LLC as Depositor, Wells Fargo Bank, N.A., as Master Servicer, Custodian and Securities Administrator, US Bank, N.A., as Trustee, MorEquity, Inc., as Servicer, and Green Tree Servicing LLC, as Designated Successor Servicer. Reference is also made herein to American General Finance Corporation (“AGFC”), and revised as of February 1, 2011. These guidelines have been developed by Depositor and Servicer; (the “DAG Parties”) are meant to be part of and an Exhibit to the Agreement and shall apply to MorEquity, Inc. and any and all servicers, subservicers and substitute servicers that may be appointed from time to time under the Agreement.

1. Delinquency and Default.

1.1. Collections/Early Stage Delinquency: The DAG Parties acknowledge that all delinquencies will first be referred to the Servicer’s front-end collections unit (the “Collections Unit”) for the purpose of working to cure the delinquency, rehabilitate the Mortgagor’s performance, reinstate the Mortgage Loan and prevent continued or further delinquency (such efforts, “Collections”) on Mortgage Loans that are 0 — 89 days delinquent (in each case, an “Early Stage Delinquency”).

1.1.1.	The Servicer will maintain the Collections Unit and ensure that it is properly staffed and operating under appropriate procedures to address any level of delinquency suffered by the Mortgage Pool.
1.1.2.	As part of its Collections process, the Servicer will implement one or more “Calling Campaigns” designed to minimize and cure Early Stage Delinquencies. Calling Campaigns will be established according to the Servicer’s policies, procedures and guidelines as they relate to the Mortgage Loans (the “Servicer Procedures”), and subject to review by the DAG Parties as provided herein.

1.2. Early Stage Default: Upon the occurrence of an Early Stage Delinquency, the Servicer shall attempt to ascertain the reason for the delinquency and whether the delinquency is likely to be temporary or of a longer nature, and work with the Mortgagor to cure the delinquency and thereafter maintain performance. As part of this determination, the Servicer must evaluate whether the Early Stage Delinquency is due to a Life Event (as defined below) and if that Life Event is likely to impact adversely the Mortgagor’s long-term ability to pay, resulting in a status where, barring a material change in circumstances, Foreclosure is likely to occur (such status, “Default,” further delineated below as “Early Stage Default,” or “Advanced Default”).

1.2.1. If the Servicer, based on initial conversations with a Mortgagor in Early Stage Delinquency, believes in good faith that such Mortgagor is likely to Default, the Servicer shall review the Mortgagor’s financial condition to evaluate whether the Mortgagor’s claimed financial hardship is valid and severe enough to classify the Mortgagor as actually being in Default or at imminent risk of Default within the next 90 days (“Imminent Default”). Following the Mortgagor financial evaluation, if the Servicer determines that a Mortgagor in Early Stage Delinquency is in Default or Imminent Default due to a Life Event, then the Mortgagor is considered to be in “Early Stage Default” for purposes of the DAG.

1.3. Advanced Default: In the event a Mortgage Loan becomes 90 days delinquent or is in Foreclosure, the related Mortgagor shall be deemed to be in Default (an “Advanced Default”), and the Servicer shall undertake a Mortgagor financial evaluation to the extent one has not already been completed (or, if completed, the Servicer has reason to believe that the information contained therein may have materially changed).

1.4. [Reserved]

1.5. Notwithstanding anything contained herin to the contrary, prior to pursuing any Loss Mitigation Alternative (as defined below) with respect to an Early Stage Default, the Servicer shall have made commercially reasonable efforts at Collections during Early State Delinquency.

2. Mortgagor Financial Evaluation.

2.1. With respect to an Early Stage Delinquency and the Servicer’s determination of whether the related Mortgage Loan is in Early Stage Default:

2.1.1. Based on its review of the Mortgagor’s financial situation, the Servicer must make a good faith determination as to whether the related Mortgagor is in Default or Imminent Default. In making this determination, the Servicer must evaluate the Mortgagor’s financial condition to determine the reason for the Mortgagor’s Early Stage Delinquency, and whether the Mortgagor demonstrates a materially diminished ability to pay on the basis of a combination of financial factors, which may include an analysis of the Mortgagor’s (i) income, (ii) cash flow, including the Mortgagor’s debt-to-income ratio (DTI), (iii) net disposable income after all expenses, (iv) cash reserves, and (iv) principal, interest, taxes and insurance ratio (PITI), plus related factors. Such factors may include employment status, recent delinquency history and similar factors but only insofar as they relate to the Mortgagor’s current overall financial condition. The foregoing analysis shall collectively be called the “Financial Analysis” for purposes of the DAG.

2.1.1.1. Neither home price depreciation nor a recent determination (through whatever means) that a Mortgage Loan has an LTV greater than 100% shall serve as an acceptable basis in itself on which to classify a Mortgage Loan as in Default or Imminent Default.

2.1.1.2.

Determination of Early Stage Default must be made through the Financial Analysis described above on the basis of whether or not the Mortgagor is able to continue making Monthly Payments on the Mortgage Loan. Additionally, an Early Stage Delinquency must be due (in the Servicer’s good faith opinion) to a documented “life event” (such as divorce, death, disability or loss or material reduction of income) that results in a significant and lasting adverse impact on the Mortgagor’s ability to pay (a “Life Event”) in order to qualify as an Early Stage Default for purposes of evaluating and pursuing Appropriate Loss Mitigation Alternatives.

2.1.1.3.

Notwithstanding anything contained in the DAG to the contrary, if the Servicer determines that a Mortgagor in Early Stage Delinquency exhibits an unequivocal unwillingness or inability to pay, such that the Servicer, under the Servicer Procedures and in accordance with the attached “Approval Matrix”, is authorized to commence and in fact commences Foreclosure proceedings on the related Mortgaged Property prior to the 90th day of delinquency, such Early Stage Delinquency, notwithstanding the absence of a Life Event, shall be treated as an Advanced Default for purposes of evaluating and pursuing Appropriate Loss Mitigation Alternatives; and provided further, that at the time of such loss mitigation the Foreclosure proceedings are still active and the Mortgagor has not reinstated or begun to re-perform.

2.2. With respect to an Advanced Default, the Servicer need not determine the existence of a Life Event to pursue Loss Mitigation Alternatives.

2.3. The expected net present value to the Trust of a Loss Mitigation Alternative, as calculated at any given time in the commercially reasonable discretion of the Servicer or Depositor, as the case may be, shall be the “Expected NPV Return.” The “Optimal NPV Return” shall refer to the largest Expected NPV Return for any Loss Mitigation Alternative in comparison to other Appropriate Loss Mitigation Alternatives with respect to a Mortgage Loan in Early Stage Default or Advanced Default, including potential Bulk Loan Sales as described in Section 7.1 herein.

3.

Servicer Documentation of Default. The Servicer must document its findings in connection with a Mortgagor financial evaluation, which may be reflected in the Servicer’s notes contained in its servicing system. Such documentation or notes must provide clear evidence of the Servicer’s good faith belief and underlying analysis that, among other things, the Mortgagor will be unable to continue making payments in such a manner and to such an extent that such Mortgagor is unlikely to avoid Foreclosure under the Servicer Procedures in accordance with the Approval Matrix.

4.

Loss Mitigation Alternatives. The following constitute “Loss Mitigation Alternatives” that the Servicer may pursue in accordance with the provisions set forth herein and, to the extent not inconsistent with such provisions, the Servicer Procedures in accordance with the Approval

Matrix. The Servicer may implement a Loss Mitigation Alternative only in connection with a Mortgage Loan in Early Stage Default or Advanced Default. Upon such Default, generally, the Servicer must evaluate the Expected NPV Return of Foreclosure to establish a baseline Expected NPV Return, and against this baseline evaluate the Expected NPV Returns of Appropriate Loss Mitigation Alternatives. Based on this analysis and subject to the terms of the DAG, the Approval Matrix and the Servicer Procedures, the Servicer shall pursue the option that achieves the Optimal NPV Return. Notwithstanding the foregoing, the Servicer may pursue more than one Loss Mitigation Alternative at a time in accordance with the Servicer Procedures, Approval Matrix and the terms of the DAG and in the process of doing so shall consider the Expected NPV Returns of such different Loss Mitigation Alternatives.

4.1. Repayment Plans. A plan, including any forbearance plan, entered into between the Servicer and the Mortgagor for repayment of the Mortgage Loan outside the terms of the related Mortgage Note.

4.2. Servicer Modification. Any agreement between the Servicer and the Mortgagor pursuant to which the terms of the related Mortgage Note are modified or amended, including but not limited to capitalization, forgiveness, or deferment of past-due interest and/or advances; changes to the Maturity Date (provided any such change must not extend beyond the “latest possible maturity date” as set forth in Section 9.01(k) of the Agreement), Monthly Payment and Mortgage Interest Rate; and principal forbearance or forgiveness.

4.3. Refinance. The payoff of the Mortgage Loan by the Mortgagor using the proceeds of a new mortgage loan provided by the Servicer or any third party.

4.3.1. In the event of any Refinance, the party making such refinance shall own the new mortgage loan. In no event shall the Trust, the Servicer, or any Depositor Affiliate (as defined below) be required to accept or purchase the new mortgage loan.

4.4. Short Sale. A sale of a Mortgaged Property to a third party in which the proceeds from the sale fall short of the Stated Principal Balance of the related Mortgage Loan, where the Servicer in accordance with the Approval Matrix agrees to accept such lesser amount in satisfaction of the Mortgage Loan.

4.4.1. In the event of a Short Sale that results in a Realized Loss to the Trust, the Servicer will be entitled to pursue a “Deficiency Note” where allowable under and strictly in accordance with applicable law, if the related Financial Analysis or other information contained in the related Mortgage File or servicing file indicates the Mortgagor has sufficient income and cash reserves to pay the Deficiency Note. For avoidance of doubt, the Servicer will not be required to create a new note in connection with its pursuit of deficiency amounts.

4.5. Deed-in-Lieu. A Mortgage Loan in Default where title (free and unencumbered) to the Mortgaged Property is surrendered by the Mortgagor to the Servicer on behalf of the Trust.

4.5.1. A Deed-in-Lieu will include surrendering of title in exchange for a cash

incentive (“Cash-for-Keys”), to be provided at the commercially reasonable discretion of the Servicer.

4.6. Foreclosure / REO Sale. Process by which the Servicer, on behalf of the Trust, or a third-party bidder at sale or auction seizes title from a Mortgagor pursuant to applicable law following uncured Default. In the event the Servicer takes title to the Mortgaged Property on behalf of the Trust, the Servicer shall maintain and dispose of the related REO Property in accordance with the terms of the Agreement and applicable law and, to the extent not inconsistent therewith, the Servicer Procedures and the Approval Matrix.

4.7. Bulk Loan Sale. A sale of a pool of Mortgage Loans as described in Section 7 herein.

5. Authorized Application of Loss Mitigation Alternatives. The DAG Parties agree that the table below sets forth the Loss Mitigation Alternatives that are available to a Mortgagor upon the determination by the Servicer or Depositor, as the case may be, that such Mortgagor is in Early Stage Default or Advanced Default. The Servicer will evaluate these available Loss Mitigation Alternatives to determine which ones are Appropriate Loss Mitigation Alternatives, in accordance with the terms of the DAG, the Servicer Procedures and in accordance with the Approval Matrix. In evaluating Expected NPV Returns of Appropriate Loss Mitigation Alternatives, the Servicer may consider the Mortgagor’s financial condition as well as the condition, status, location and other relevant features of the related Mortgaged Property, consistent with the tables set forth below. The Servicer must conduct all loss mitigation in such a manner that complies with the terms of the DAG and the Agreement and, in its commercially reasonable opinion, results in the Optimal NPV Return.

DELINQUENCY, DEFAULT AND LOSS MITIGATION ALTERNATIVES

Status	Servicer Determines Default?	Authorized Loss Mitigation Alternatives
Early Stage Delinquency with no Life Event	N/A — cannot qualify as Early Stage Default	None [Excepting HAMP]
Early Stage Delinquency with Life Event	No — Servicer determines Early Stage Default does not exist	None [Excepting HAMP]

Early Stage Delinquency with Life Event	Yes — Servicer determines Early Stage Default exists	All, provided that Servicer must first evaluate the Expected NPV Return of and attempt Appropriate Loss Mitigation Alternatives pursuant to DAG and Servicer Procedures in accordance with the Approval Matrix and pursue the Optimal NPV Return
90+ Days Delinquent and/or in Foreclosure	Advanced Default exists	All, provided that Servicer must first evaluate the Expected NPV Return of and attempt Appropriate Loss Mitigation Alternatives pursuant to DAG and Servicer Procedures in accordance with the Approval Matrix and pursue the Optimal NPV Return

6. Additional Refinance and Servicer Modification Provisions. With respect to Refinances and Modifications:

6.1. In connection with a Refinance pursued as a Loss Mitigation Alternative, and in accordance with the Approval Matrix, the Servicer may grant “Concessions” to the Mortgagor to reduce, or possibly eliminate, related closing costs not to exceed 200 basis points to be paid by the Mortgagor. These Concessions will be withheld from the gross proceeds of the Refinance remitted to the Trust, resulting in a Short Refinance as described above in Section 4.3. The Servicer must make a good faith effort to grant Concessions only where the Servicer, through its Financial Analysis conducted under the related Mortgagor financial evaluation, determines that the Mortgagor is unable to pay for the costs of the Refinance. Additionally, (i) Concessions shall be granted only to the point where the Refinance becomes affordable to the Mortgagor in accordance with the Servicer’s Financial Analysis, and (ii) the Servicer will not offer or allow a Refinance where Concessions are granted unless the Refinance proceeds, net of all Concessions, produces the Optimal NPV Return in comparison to other available and Appropriate Loss Mitigation Alternatives.

6.2. All Refinances and Servicer Modifications shall comply with the Servicer Procedures in accordance with the Approval Matrix, to the extent not inconsistent with the terms of the DAG. The guidelines relating to Refinances and Modifications under the Servicer Procedures in accordance with the Approval Matrix shall be subject to change upon mutual agreement of the DAG Parties as provided herein.

6.3. With respect to any Modification offered pursuant to the U.S. Treasury’s Home Affordable Modification Program (“HAMP”) as contemplated under Section 15 hereof, in the event the “Net Present Value Test” result (as described under HAMP), applied to an eligible Mortgage Loan that is either in “imminent default” (as defined under HAMP) or 31 or more days delinquent, is greater for the “no modification” scenario than for the “modification” scenario, the modification result shall be deemed “negative” (as described in HAMP). In such instance, the Servicer shall not offer the proposed modification under HAMP but shall instead follow the terms of the DAG in evaluating and pursuing available and Appropriate Loss Mitigation Alternatives.

7. Bulk Loan Sales. As part of its loss mitigation activity, if the Servicer determines in its reasonable commercial judgment that a sale of a pool of Mortgage Loans in Early Stage Default or Advanced Default to a third-party investor at fair market value would be expected to result in the Optimal NPV Return for the Trust with respect to such pool, and that such a sale is operationally feasible subject to the procedures set forth below, the Servicer may pursue a potential sale of such assets in the secondary whole loan market as a Loss Mitigation Alternative.

7.1. The Servicer will determine, using commercially reasonable judgment, whether certain Mortgage Loans in Default, when pooled together (such Mortgage Loans, “Sale Loans”), would be expected to result in the Optimal NPV Return for the Trust if sold to an unaffiliated third-party investor at arms length and at fair market value in a bulk loan sale (a “Bulk Loan Sale”). The Servicer will notify Depositor of its determination prior to offering out a bid tape of Sale Loans to potential investors. Potential Bulk Loan Sales shall consist of an aggregate of no less than $5,000,000 and no more than $50,000,000 current Stated Principal Balance of Sale Loans. The Servicer will be entitled to receive a fee no greater than 100 basis points for any consummated Bulk Loan Sale (the “Servicer Loan Sale Fee”) in an amount to be negotiated by the DAG Parties in good faith that reasonably reflects the characteristics of the pool of Sale Loans, the responsibilities of the Servicer in conducting the sale and relevant market factors at the time of sale. Servicer will notify Depositor and Trustee upon completion of a sale, and that the transaction has occurred.

7.2. In providing the data tape for such offering to potential investors, the Servicer will exercise due care with respect to privacy laws and confidentiality provisions under the DAG and the Agreement (including requiring the bidders to execute a confidentiality agreement that also contains a non-solicitation clause). The Servicer will provide the bid tape to Depositor simultaneously with its distribution to potential investors.

7.3. The data tape for such offering will contain the most recent “Broker Price Opinion” values for the Sale Loans. Bidders will be instructed to bid off of such values and to provide “value fade” pricing at levels selected by the Servicer. Bidders must submit their initial bids to the Servicer, and the Servicer shall share such indications with Depositor.

7.3.1.	Depositor may approve or reject any initial bid in its sole discretion. The Servicer will cooperate with Depositor to evaluate submitted initial bids upon Depositor’s request.
7.3.2.	If Depositor approves of any initial bid from a bidder (the “Winning Bidder”), the Servicer will work with the potential investor to execute such Bulk Loan Sale (a “Loan Trade”).

7.4. Any Loan Trade shall be transacted on an “as is, where is” basis, with no representations or warranties or other recourse to the Trust, Depositor or any Depositor Affiliate, the Servicer or any other party.

7.5. The Servicer will prepare loan files and other standard due diligence materials for the Winning Bidder, with a copy of such files and materials delivered to Depositor. Any bid requests shall stipulate that the Winning Bidder will be required to share its due diligence results (including any valuation due diligence results) with Depositor.

7.6. Depositor shall review the post-due diligence, final bid submitted in connection with any Loan Trade. The Servicer will cooperate with Depositor to evaluate the final submitted bid upon Depositor’s request. In the event Depositor determines in its

commercially reasonable discretion that the Loan Trade does not provide the Optimal NPV Return to the Trust in comparison to the Expected NPV Returns of alternate likely Loss Mitigation Alternatives, it will notify the Servicer and the Servicer will promptly reject such Loan Trade. In the event of such rejection, the Servicer will be entitled to payment of one half of the negotiated Servicer Loan Sale Fee (as the DAG Parties may have negotiated) and to reimbursement for its out-of-pocket expenses (“Servicer Loan Sale Expenses”), and authorized to reimburse the Winning Bidder its due diligence costs capped at a maximum of $300 per Sale Loan actually subject to a due diligence review, in each case from the Servicer Custodial Account as Servicing Advances.

7.7 In analyzing the Expected NPV Return to the Trust from any Loan Trade verses the Expected NPV Returns from other available and appropriate Loss Mitigation Alternatives with respect to the Sale Loans at the time of initial bid and final bid, the Servicer and Depositor shall net the cost of the expected Servicer Loan Sale Expenses and Servicer Loan Sale Fee from the Expected NPV Return of the Loan Trade.

7.8. Nothing herein shall be construed to obligate the Servicer to pursue any Bulk Loan Sale or Depositor to approve of any Bulk Loan Sale including, without limitation, if such party, in its commercially reasonable discretion, determines that a Bulk Loan Sale is not likely to produce the Optimal NPV Return to the Trust when compared to other available and Appropriate Loss Mitigation Alternatives.

8.

No Solicitation. The Servicer may engage in marketing activities that solicit borrowers for Refinance or other programs offered by the Servicer using (i) information derived from sources other than the Mortgage Loan Schedule or Mortgage Files or (ii) knowledge acquired other than from its capacity as Servicer under the Trust. Under no circumstances shall any such marketing activities or solicitations specifically target any Mortgagor, provided, however, that this prohibition shall not be construed to preclude strategic marketing activities or solicitations of the Servicer designed to reach a class of borrowers sharing certain characteristics of which a Mortgagor may be a part. This provision shall not be construed, however, to permit any such marketing activities or solicitations that are included in monthly statements or other in-house or outsourced communications to Mortgagors that the Servicer would otherwise be precluded from engaging in under this paragraph. Notwithstanding the foregoing, it is understood and agreed that strategic marketing activities or solicitations undertaken by the Servicer or any agent of the Servicer which are directed to the general public at large, including, without limitation, mass mailings based on commercially acquired mailing lists and newspaper, radio and television advertisements, shall not constitute solicitation under this Section 8. Additionally, this Section 8 shall not be construed to prohibit the Servicer from advertising its Refinance or other programs on its website. Further, nothing in this Section 8 shall be construed to modify the terms of Section 1.5 hereof or to permit the offering or approval of a Loss Mitigation Alternative to a Mortgagor who does not qualify therefore under the terms of the DAG.

9.

Payoff Inquiries. In the event a Mortgagor contacts the Servicer for a payoff inquiry:

9.1. The Servicer may offer to waive the application of any related Prepayment Charge, if the Servicer reasonably believes doing so would maximize proceeds to the Trust.

9.2. The Servicer may offer the Mortgagor a Refinance in response to a payoff inquiry by the Mortgagor provided that such Refinance does not cause a loss or shortfall to the Trust.

10. Periodic Depositor/Servicer Review. The DAG Parties shall review the DAG, as well as the Servicer Procedures, including the Approval Matrix, no less than quarterly to determine whether either party believes the DAG, the Servicer Procedures and the Approval Matrix, as the case may be, should be revised to increase Mortgage Loan performance and Optimal NPV Returns to the Trust, and to ensure compliance by the Servicer with the terms of the Agreement (including without limitation the DAG). Among other things:

10.1. Depositor and Trustee shall be entitled to review the Servicer’s operations, the Servicer Procedures and the Approval Matrix, including without limitation the Servicer’s Collections and loss mitigation practices and performance, including conformance with Customary Servicing Procedures and applicable law. Depositor and Trustee shall be authorized to evaluate the incentive structure with respect to the Collections Unit to ensure that representatives in the Collections Unit are incented to cure Early Stage Delinquencies.

10.2. Depositor and Trustee may place personnel or agents onsite at the Servicer for the purposes of such review.

10.3. The Servicer shall provide Depositor and Trustee with data and performance information, including, without limitation, information and files relating to Collections, Loss Mitigation Alternatives, delinquency migrations, customer contact audits (e.g., phone calls, etc.), Defaults, Foreclosures, bankruptcies, and other information as Depositor and Trustee may reasonably request.

10.4. In the absence of mutual agreement on revisions to the existing DAG, the Servicer shall be required to follow the existing DAG, the Servicer Procedures and the Approval Matrix. The Servicer shall notify the Securities Administrator of any revisions to the existing DAG and forward the revised DAG to the Securities Administrator for inclusion in the next succeeding Distribution Date Statement.

10.5. In the event Depositor is the owner of any Class of Certificates, and desires to sell any Certificates of such Class, the Servicer agrees to provide the same data to the potential buyer that it provides to Depositor under the Agreement; provided, however, that such potential buyer must first sign a nondisclosure agreement acceptable to Depositor and the Servicer that includes, among other provisions, covenants to comply with all applicable securities and privacy laws.

11. The provisions of Section 10 shall apply for so long as Depositor (or, subject to the provisions of Section 13 hereof, an affiliate or successor-in-interest of (each, a Depositor

“Affiliate”)) holds any Class CE or Class R Certificate. If neither Depositor nor any applicable Depositor Affiliate is the holder of any such Certificates, the Servicer shall constitute the sole DAG Party and may unilaterally, from time to time in its sole discretion, revise the terms of the DAG; provided, however, that the purpose of any such revision must be to maximize proceeds to and otherwise service the Mortgage Loans in the best interest of the Trust pursuant to the terms of the agreement.

11.1. Depositor may appoint a designee to conduct its review under Section 10.

12.	Compliance with REMIC; Conflict. The Servicer may service the Mortgage Loans in accordance with the terms of the Servicer Procedures in accordance with the Approval Matrix to the extent not inconsistent with the terms of the Agreement. All actions of the Servicer in servicing the Mortgage Loans must not violate REMIC Provisions or any other applicable law. In the event of a conflict between the REMIC Provisions or any other applicable law and any of the Agreement, the DAG or the Servicer Procedures in accordance with the Approval Matrix, the Servicer shall comply with REMIC Provisions and other applicable law and the DAG Parties shall negotiate in good faith to revise the Agreement, the DAG or the Servicer Procedures in accordance with the Approval Matrix, as the case may be, to correct such inconsistency in the manner that the DAG Parties mutually agree is in the best interest of the Trust and resolves such non-compliance. In the event of an inconsistency between the Agreement or the DAG, the Approval Matrix and the Servicer Procedures , the Servicer shall follow the terms of the Agreement or the DAG, as the case may be, and either disregard the inconsistent part of the Servicer Procedures in servicing the Mortgage Loans or revise the Servicer Procedures to comply with the Agreement or the DAG, as applicable.
13.	Assignment. So long as AGFC or any affiliate of AGFC holds any of the Class R Certificates or Class CE Certificates, the Depositor shall remain a DAG Party. In the event of an assignment or transfer of any such Class of Certificates to Depositor’s Affiliate or to an unaffiliated third party, Depositor shall remain a DAG Party unless, following such assignment or transfer, neither Depositor nor Depositor’s Affiliate holds any such Class of Certificates, in which case the terms of Section 11 hereof shall apply. In the event that neither AGFC nor any of its affiliates holds the Class R Certificates or Class CE Certificates, the Servicer shall constitute the sole DAG Party.
14.	Servicer Procedures. The Servicer is obligated at all times to ensure that the Servicer Procedures comply with Customary Servicing Procedures, the Approval Matrix and all applicable law.
15.	Compliance with HAMP. In the event a Servicer is (i) a Participating Servicer in HAMP and (ii) servicing a Mortgage Loan eligible for and pursuant to HAMP, if any applicable provision of HAMP is inconsistent with any applicable provision of the DAG, then such HAMP provision shall control. Notwithstanding the foregoing, with respect to any Mortgage Loan eligible for and being serviced pursuant to HAMP:

15.1. The Servicer must otherwise follow the DAG to the extent any provision is not inconsistent with the requirements of HAMP. For avoidance of doubt, however, fees payable to the Servicer for any particular loss mitigation activity on a Mortgage Loan shall

be available only pursuant to HAMP, if done under HAMP, or the DAG, if done under the DAG, but not both.

15.2. Upon termination of HAMP or the depletion of the Servicer’s delegated HAMP funds, the Servicer shall no longer follow the terms of HAMP and thereafter shall comply fully with the DAG to the extent permitted by federal law.

15.3. In the event of the transfer of servicing of a Mortgage Loan that is being serviced pursuant to HAMP, the succeeding Servicer shall sign the Assignment and Assumption Agreement (in the form of Exhibit C of the Servicer Participation Agreement) with respect to such Mortgage Loan.

16. Capitalized Terms. Capitalized terms used but not defined herein shall have the respective meanings ascribed to them in the Agreement.

Approval Matrix

		Servicer Approval
Action	Delegated Authority	Required	Terms and Conditions
			Process Payments by requiring Principal, Interest and Escrow portions of the payment before calling it a contractual payment and rolling the due date subject to the below exceptions. Exception for if an Escrowed loan, allow a $50 shortage and pull the shortage out of Escrow.
Modified Payment Logic	X
			Exception for if not an Escrowed loan, allow a $5 shortage and pull the shortage out of Recoverable Corporate Advance. Followed Servicer Guidelines for Payment Overages.
Paid In Full Loans with Balances	X		If paid in full loan has a remaining balance of Escrow or Suspense, hold funds for 30 days to ensure any returned payments are received and netted out of the refund.
Pre-Payment Penalty (PPP) Waivers	X		Subservicer may waive the application of any related PPP if Subservicer reasonably believes doing so would maximize proceeds for the account.
Releasing Liens	X		Subservicer will release liens in accordance with the state requirements on paid in full and short sale loans.
Servicemembers Civil Relief Act	X		Subservicer will service loans qualified for the Servicemembers Civil Relief Act in accordance with the provisions of the law.

		Servicer Approval
Action	Delegated Authority	Required	Terms and Conditions
			Subservicer will consider a customer’s request for a Subordination of a Second Lien base upon the below criteria. Must have a current Interior Appraisal — Appraisal from Lender acceptable. CLTV must be less than 80% if greater than $1,000 Cash Out or between 80 — 95% with less than $1,000 Cash Out. CLTV calculated by (the Good Faith Estimate Loan Amount + the Second Credit Limit) divided by the As Is Appraisal Value. Based upon Subservicer judgment, the customer must have good pay history on the Second lien and on the credit bureau. Based upon Subservicer judgment, Subservicer can also approve Subordination with the stipulation of closing the line of credit.
Subordinations	X
			Subservicer will respond promptly to any written inquiry from any Federal, State, County or City Agency or Organization as well as the Better Business Bureau with a copy to Servicer. Subservicer will follow all applicable laws, Subservicer’s written Complaint Resolution Process and good servicing practices as it relates to customer written complaints and disputes.
Responding to Disputes and Written Complaints	X
Credit Bureau reporting	X		Subservicer will report loans in compliance with the Fair Credit Reporting Act.
Setting Up Escrow	X		Subservicer will set up Escrow for customers who make the request. Subservicer will set up Escrow for customers who are not set up for Escrow but are modified under the HAMP program. Subservicer will set up Escrow for customers who are not set up for Escrow but Subservicer has had to pay delinquent taxes or establish a Creditor Placed Insurance Policy. Subservicer will follow all RESPA Requirements in relation to servicing Escrow Loans on behalf of Servicer.
Dissolving an Escrow Account	X		Subservicer will use its best judgment when a customer requests to dissolve an Escrow Account. At a minimum, customer should have a perfect pay history (0 x 30) for the past 24 months and the LTV should not be greater than 80%.
Interest on Escrow	X		Subservicer will follow all state requirements when by paying Interest On Escrow on a quarterly basis.

		Servicer Approval
Action	Delegated Authority	Required	Terms and Conditions
Creditor Placed Insurance	X		For loans that are not set up for Escrow on Insurance, Subservicer will annually receive proof that the customers have a valid and paid for Hazard Insurance Policy. If the customers do not provide proof, Subservicer will set up a Creditor Placed Insurance Policy to cover the principal balance of the loan. Subservicer will set up an Escrow Account so Advance can be repaid over 12 months.
Payment of Delinquent Real Estate Taxes	X		As a rule of thumb, Subservicer should only pay delinquent taxes on behalf of a customer only if there is a risk of a Tax Sale within the next year (High Severity). However, Subservicer should use good business judgment when paying delinquent taxes on loans that are not Escrowed for Taxes. For example, if the delinquent taxes are given to a private company to collect with a high interest rate, it would be prudent to go ahead and pay those taxes even though they might not go to a Tax Sale. Would want to look at value of property and Balance as well. Subservicer will set up an Escrow Account so Advance can be repaid over 12 months.
Release of Hazard Insurance proceeds	X		Consistent with Subservicer Servicing Guidelines.
Applicable 1098, 1099A and 1099C IRS Reporting	X		Subservicer will provide customers and appropriate end of year reporting as required by law. This would include, but not be limited to, 1098, 1099A and 1099C reporting.
Hardship / Disaster		X	Servicer must be informed and approve approach / arrangements.

		Servicer Approval
Action	Delegated Authority	Required	Terms and Conditions
Collections Efforts	X		Subservicer will follow all applicable collections laws including, but not limited to, FDCPA. Subservicer will have a dedicated staff assigned to Servicer Loans. Subservicer will staff with low spans of control for each delinquency bucket of Servicer Loans. Subservicer will make at least 1 collection phone attempt every 3 days on Servicer Loans. Subservicer will make multiple phone attempts using different strategies to contact customer beginning when a loan is 1 — 29 days past due. Subservicer will start collections attempts no later than 16 days past due (as early as 5 days past due for higher risk loans). Upon contact, Subservicer will ascertain reason for delinquency and ask for payment. Subservicer will continue to make collection calls for payments even if loan is in Foreclosure and/or Loss Mitigation. Subservicer will utilize a letter strategy that is consistent with Subservicer Guidelines.
Timing of Breach Notice	X		Typically at day 45 or at day 35 for loans in states that have implemented laws that require longer timeframes for NOI Letters. Consistent with Subservicer Servicing Guidelines.
Delinquent Loans Deferment Plans for	X		After 2 consecutive monthly contractual payments and no deferment in the last 12 months, deferment can be offered. Must collect the Escrow and Principal portions of the delinquent and current month payments in order to roll to the Next Due Date to Current (due for the next month). Exception, Deferments as described above are not approved for the Servicer Mortgage Loan Trust 2010-1 Securitization loans.
Repayment Plans for	X		Loan must be greater than or equal to 30 days delinquent. 1/2 of arrears should be collected prior to the forbearance, if possible. Remaining arrears to be collected over a 3 — 6 month period. 6 month max repayment plan term.
HAMP Modification	X		Follow all HAMP rules / process / reporting / guidelines including new required Directives. Participate in only the required programs unless approved by Servicer. Principal reductions not approved unless approved by Servicer at loan level.

		Servicer Approval
Action	Delegated Authority	Required	Terms and Conditions
HAFA Short Sale/DIL	X		Follow all HAFA rules / process /reporting / guidelines including new required Directives. Subservicer must use the Minimum Net Proceeds calculation Approved by Servicer.
HAUP Program	X		Follow all HAUP (Unemployment) rules /process / reporting / guidelines including new required Directives.
Custom Modification	X X X	X	HAMP must always be the first alternative for Loan Modifications. For loans less than 90 days past due and not eligible for HAMP, Subservicer will submit all Loan Modification packages to Servicer for approval. Loans greater than or equal to 90 days past due and not eligible for HAMP, a minimum of a 3 month Forbearance Plan is required before loan can be modified. NPV must exceed Foreclosure / REO, Short Sale and DIL best case.
Forgiveness of principal, interest or other amounts outstanding / owed		X	All debt forgiveness of principal, interest or other outstanding arrears must be approved Servicer.
Short Sale	X X X X X X	X X	HAFA always the first alternative for Short Sales. Interior Appraisal Value less than 60 days old is required along with Hardship Letter from Customer. NPV must exceed Foreclosure / REO, Loan Modification and DIL base case. Realtor commissions not to exceed 5%. No cash out to seller. Sale Amount is compared to Appraisal to ensure value received. Servicer approval required on loans less than 90 Days past due. Servicer approval required on loans greater than or equal to 90 Days past due where Expected Loss exceeds $125,000.
Deed — in — Lieu (DIL)	X X X X		HAFA always the first alternative for DIL. Interior Appraisal Value less than 60 days old is required along with Hardship Letter from Customer. Updated Title required. NPV must exceed Foreclosure / REO, Loan Modification and Short Sale base case.

		Servicer Approval
Action	Delegated Authority	Required	Terms and Conditions
		X X	Servicer approval required on loans less than 90 Days past due. Servicer approval required on loans greater than or equal to 90 Days past due where Expected Loss exceeds $125,000.
Cash for Keys — DIL	X		Delegated authority up to 3 monthly payments or 1% of the Unpaid Principal Balance, whichever is greater. Property must be left vacant and broom swept clean. Customer must permit an Interior Appraisal or BPO and execute DIL before receiving Proceeds.
Recoverable Corporate Advances	X		As allowed by law, Subservicer will charge any legal foreclosure or bankruptcy attorney cost or expense to the loan in the Recoverable Corporate Advance bucket so that the borrower will be responsible for paying these amounts back.
Foreclosure Referral 1st Liens 2nd Liens	X	X X	1st liens will be referred within 3 days upon expiration of demand notice and no longer active in HAMP. 1st liens with Principal Balances less than $60,000 or recent Interior Appraised/BPO Value of less than $15,000 must be approved by Servicer. Servicer to approve all 2nd lien referrals based on equity analysis.
HELOCs	X		For any Advance that is presented for payment of $10,000 or more, Subservicer will do a Signature Verification prior to acceptance of the advance. For any Advance that is presented for payment that is in the form of a Draft, Subservicer will decline payment and not post the transaction to the loan. For any Advance that is presented for payment less than $100, Subservicer will decline the payment and not post the transaction to the loan. If a HELOC loan that is still in the Draw Period goes 60 days past due, the line of credit will be shut down and an Adverse Action Notice will be sent to the customer.
Securitized Loans	X		For loans in the two Securitized Pools — 2006-1 and 2010-1, prior to the initiation of a Foreclosure Action, Subservicer will perform all actions necessary to transfer ownership of such Mortgage Loan to the appropriate Owner or Owner Designee Name.

		Servicer Approval
Action	Delegated Authority	Required	Terms and Conditions
MERS	X		Prior to initiation of a Foreclosure Action, Subservicer will perform all actions necessary to transfer ownership of such Mortgage Loan from MERS to the appropriate Owner or Owner Designee Name.
Foreclosure Valuations	X		Within 180 days of Foreclosure Sale, an Interior Appraisal (if Vacant, Short Sale or DIL) is required or a BPO (prefer this to be done within 2 months of the Foreclosure Sale date if possible for the most current value). Upon Completion of Foreclosure Sale, an Interior Appraisal (if Vacant, Short Sale or DIL) is required if the last Interior Appraisal is older than 180 days. If property occupied, a BPO is required if previous BPO is older than 180 days.
Foreclosure Bidding Instructions	X	X	85% of the most recent Interior Appraisal (vacant property) or BPO or the Pay-off, whichever is lower. Foreclosure Bids with Estimated Loss greater than $125,000 should be approved by Servicer.
Property Preservation	X		Delegated authority up to a cumulative $10,000 for each property.
Foreclosure and Bankruptcy Fees and Costs	X		Must comply with most recent FNMA Fee Matrix.
Bankruptcy	X X	X	Subservicer will file for Motion For Relief after 2 missed payments on bankrupt loans. Subservicer will solicit all Active Bankruptcy Chapter 7 loans for Reaffirmations and will receive court approval. Subservicer cannot approve principal reductions on bankrupt loans without prior approval from Servicer.
Charge-off Approval	X X	X	Accounts should be charged-off in the month in which the loan is 180 days past due and the lien is determined to no longer be valid. (e.g. senior lien foreclosure, third party sale foreclosure (3rd party outbids Servicer) or short sale completed). Subservicer has the authority to make charge-off decisions on 2nd liens with less than $30,000 equity. Charge-offs greater than $125,000 should be approved by Servicer.

		Servicer Approval
Action	Delegated Authority	Required	Terms and Conditions
Registering of REO Properties	X		Subservicer will follow all local jurisdiction property registering requirements as required by local ordinances and statutes.
Dwelling Insurance	X		Subservicer will adequately provide for dwelling insurance of all REO properties up to and including the value of the property.
			Limit of $2,000 for First Attempt.
Relocation Assistance to shorten Eviction - Cash For Keys	X		Second and greater Attempts limit is $2,500 for most recent Value of $0 — $250,000 or 1% of the most recent Value greater than $250,000. Property must be left in broom swept condition to receive proceeds.
REO List Price	X		An Interior Appraisal is required either for the Foreclosure Bid process, the Foreclosure Sale process or upon Vacancy once in REO. A BPO should also be received from the Real Estate Agent who is assigned the property to sell. REO Initial List Price should be set at the higher of the Interior Appraisal or BPO “As Is” value. If property being repaired, list using the “Repaired” value vs. the “As Is” value is acceptable. At 1 year and every year thereafter from the last Interior Appraisal Date, order a new Interior Appraisal unless the property is under contract.

REO List Price Reductions	X	Every 30 Days. After 60 Days, use best judgment.
		Property Value	30 Day Reduction			60 Day Reduction
		$0 — $24.9k		18	%		14	%
		$25 — $49.9k		14	%		12	%
		$50 — $99.9k		8	%		6	%
		$100k+		5	%		5	%
REO Repairs /Improvements	X	Delegated authority up to cumulative $10,000 for each property. Rule of thumb should be that the repair should increase the selling price by two times the expense.

		Servicer Approval
Action	Delegated Authority	Required	Terms and Conditions
Property Preservation /Emergency Repairs	X		Delegated authority up to cumulative $10,000 for each property. Rule of thumb should be that the repair should increase the selling price by two times the expense.
Acceptance of REO Sales Offer	X X	X	Offer must be greater than or equal to 92% of current list price. All other offers less than 92% will require Servicer approval. All REO Sales Contracts should be executed “As Is” and “Final”.
Settlement of Litigated Accounts		X	Subservicer will provide monthly updates to Servicer as the status of any litigation loan in process. Servicer to approve all litigated files (initiated from outside party) based on recommendation by Subservicer and outside counsel.
Approval of any Form Letters	X		Subservicer will have Legal Approval of all Form Letters being sent to customers for any servicing reasons.
Regulatory Requests for Information or Exams	X		If Servicer receives data and/or exam requests from a State Regulatory Agency (for example: A Bureau of Financial Institutions), the request will be sent to Subservicer to retrieve data and/or provide answers and, with timely prior approval from Servicer, will provide the data or complete the exam or will send the information to Servicer for their response (Servicer decision). If Subservicer receives data and/or exam requests from a State Regulatory Agency on American General loans (for example: VA Bureau of Financial Institutions), Subservicer will notify American General within 10 days, will retrieve the data and/or complete the exam and, with timely prior approval from Servicer, will provide the data or exam to the requesting agency.
Solicitation of Customers		X	Subservicer will seek approval of any offer of any third party product or origination offer from Servicer prior to solicitation. In the event that Servicer approves of a Solicitation, Subservicer will eliminate any Do Not Solicit loans.

This Approval Matrix may have items added to it, items revised or items deleted at any time with mutual consent of both Subservicer and Servicer.

EX-12.1

Exhibit 12.1

Nationstar Mortgage
RATIO OF EARNINGS TO FIXED CHARGES
$ in thousands

	July 11, 2006
	to						Year Ended December 31,
	December 31, 2006			2007			2008			2009			2010
Calculation of income/(loss) from continuing before income taxes and fixed charges
Net income/(loss) from continuing operations		(60,258	)		(284,478	)		(157,610	)		(80,877	)		(9,914	)
Fixed Charges		60,309			129,894			70,255			73,431			119,288
Earnings as adjusted		51			(154,584	)		(87,355	)		(7,446	)		109,374
Calculation of fixed charges
Interest expense		55,172			118,553			65,548			69,883			116,163
Interest on lease obligations		5,137			11,341			4,707			3,548			3,125
Total fixed charges		60,309			129,894			70,255			73,431			119,288
Calculation of Earnings to Fixed Charges		0.00			(1.19	)		(1.24	)		(0.10	)		0.92
Coverage deficiencies		60,258			284,478			157,610			80,877			9,914

EX-23.1

Exhibit 23.1

Consent of Independent Registered Public Accounting Firm

     We consent to the reference to our firm under the caption “Experts” and to the use of our report dated March 28, 2011 in Amendment No. 2 to the Registration Statement (Form S-4 No. 333-171370) and the related Prospectus of Nationstar Mortgage LLC for the registration of the $250,000,000 10.875% Senior Notes due 2015.

     /s/ Ernst & Young LLP

Dallas, Texas
March 28, 2011