PROGRAM OVERVIEW

A review of the current real estate climate reveals unprecedented challenges in the US residential real estate market. In recent years, over 50% of homeowners financed or refinanced their property utilizing subprime loans. The easy availability of 2, 3 and 5 year adjustable rate mortgages that were acquired with “stated income” lending guidelines have created significant market problems as the payments for these homeowners are now adjusting to a level borrower’s cannot afford. As a result, mortgage defaults, short sales and foreclosures are at record highs driving home values downward as lenders liquidate enormous inventories of bank owned properties at discounted rates.

It is been well documented and verified that that loss of subprime loan options and overall tightening of credit guidelines over the past 6-9 months alone, have created these record-braking defaults and there is no end in site. But new set of problems are arising. As energy inflation and rising unemployment contribute to a faltering economy, there will be an estimated 500 billion of option arm re-sets beginning in April 2009. All of these parts have all combined to create the “perfect storm” opportunity for ACMHS. As even the credit worthy borrowers, let alone the non-credit worthy borrowers, are going to be struggling to keep the American dream of home ownership alive in the months ahead.

Lenders and Banks are struggling for survival. Most recently, our Nation’s third largest Bank, Indy Mac, was taken over by FDIC and our Government had to prop up Bear Sterns, Fannie Mae and Freddie Mac all due to the mortgage crisis. As spiraling non-performing mortgage notes rise, this requires significantly higher bank reserves. These required higher reserves mean fewer funds for products and services that generate much needed income. As most are publically held companies, it is imperative they seek ways to mitigate their losses.

Most all economic forecast and experts agree that all of these factors will be further adding to the record-braking rate of mortgage defaults and declining home values, thus insuring a current and future need for Au Courant Mortgage Hope Solutions (ACMHS) and our joint ventures.

SERVICES

ACMHS provides services for all aspects of non-performing note portfolios. In partnership, ACMHS / JV acquires non-performing note portfolios and our qualified experts work with the borrower or property, using a number of loss mitigation and corporate asset products and services to determine the best exit for the note.

One of the newest loss-mitigation services we have created has come from recent government legislation in the “Stimulus Package Bill”, signed into law in December. 2007 and the very recent “Housing and Economic Recovery Act of 2008” (HR3221) signed into law, July, 31 2008 in regards to Government insured FHA (Federal Housing Administration) loan programs.

Once our Loss Mitigation Consultant has identified a solution, the borrower qualified and their loan is refinanced through one of the FHA program.

For example, if a non-performing note with a face value of $150,000.00 was purchased for $52,500.00 (50% of value) and through our Loss Mitigation Consultant, a Loan Modification was structured that reduced the note face value by 15%, the new note value would be $125,500.00. Assuming the original note interest rate was 10% and it was reduced to 6%, the borrower would experience the following savings: