THE HYBRID APPROACH TO COLLATERAL EVALUATION Artificial Intelligence and “Street Smarts”

1. THE HYBRID APPROACH TO COLLATERAL EVALUATION Artificial Intelligence and “Street Smarts”

2. BEST OF BOTH WORLDS: COMBINING AUTOMATED ESTIMATES WITH “STREET SMARTS” • MI understands the strengths and pitfalls of both automated estimates as well as traditional appraisals. To really meet the needs of real estate lenders, MI combines the speed and data of today’s information providers with the street smarts of veteran real estate appraisers. Through innovative information systems technology, shrewd understanding of real estate, and its position as an independent provider of valuation services, MI has created a unique hybrid solution to meet the needs of its clients. • NATIONAL COVERAGE (ALL 50 STATES) • MI was the first appraisal services provider to develop a national network for the delivery of appraisals and appraisal alternative field reports to major lenders. With over 15,000 appraisers and real estate professionals, and its proprietary vendor management system, MI can deliver a wide range of collateral evaluation products within competitive time frames.

3. FULL RANGE OF PRODUCTS MATCH RISK WITH COST • MI recognized early on that sophisticated lending clients wanted to safeguard their underwriting decisions while at the same time enhancing their competitiveness in service and price. MI product range extends from Automated Valuation Models (AVMs) and hybrid appraisal alternatives to full URAR conventional appraisals. This tiered product structure allows clients to optimize their valuation costs by matching the appropriate valuation product with the level of the underwriting risk. • HYBRID APPROACH INCREASES SAFETY AND SOUNDNESS • MI can economically run property valuation requests through a battery of the major AVM models. Using multiple independent models overcomes the inconsistency inherent in any particular model. Further statistical correlation and review by an experienced real estate appraiser or analyst gives the model a reality check. The result is a more supported estimate of collateral value than can be obtained from a limited model selection. Significant costs are still saved, and turnaround times remain competitive. • SEAMLESS UPGRADES TO DRIVE-BY INSPECTIONS: 100% COVERAGE • Even the best models in the most data rich areas don’t have enough data to generate a reliable conclusion of value all the time. This becomes a real problem in remote areas and non-disclosure states. When a value can not be concluded through available information, MI automatically upgrades the property request to a drive-by in its national field agent network. This seamless upgrade keeps the service momentum going for the borrower, and puts MI in the unique position of being able to deliver a 100% “hit rate” on all requests.

4. 100% QUALITY REVIEW • All evaluations and appraisals are reviewed for quality as part of the MI process. Field work is reviewed and signed off by a qualified real estate appraiser. Random audits of field data are also conducted as part of an on-going review process. • CUT COSTS AND TURNAROUND TIMES • MI evaluations significantly cut costs while improving turnaround. Major lenders have reduced their collateral evaluation costs by over 50% and saved millions. These lenders have also experienced a simultaneous reduction in turnaround times of 50-70%. More competitive service has increased the application yield, as more loan applicants close before losing interest or borrowing from another bank. • STATE OF THE ART SERVICE THROUGH MULTIPLE EDI LINKS • MI offers a complete menu of connectivity solutions for rapid order acceptance and delivery. Current clients communicate with MI through Internet, point to point, and full mainframe to mainframe connections. • PROVEN TRACK RECORD WITH NATIONAL LENDERS • We not only talk about it. We have been doing it for years. Confidential references from major lenders will validate our performance.

5. URAR (7-10 day fax) MATCH RISK WITH COST Tiered Products that Match Underwriting Risk Profile Appraiser Walk-through (5-10 day fax) PRODUCT COST SMPE Interior (3-5 day fax) Appraiser Drive-by (5-7 day fax) SMPE Drive-by (2-4 days) FAV Drive-by (48-72 hours) QCE Desktop (same day) AVMs: HVE Home Value Explorer, Basis 100 PASS & Others (instant) Tax Assessment, AVM’s (same day) LOWER HIGHER Loan Amount, CLTV, Credit Score BANK UNDERWRITING RISK PROFILE

6. HIGHLIGHTS OF SEPARATE METHODOLOGIES Interior Inspection AVM QCE* Drive-by (+) Fastest turnaround Speed (+) Lowest Cost (+) Objectivity (+) High Confidence Potential for Portfolios (-) Limited Coverage (-) Wide Variability - to benchmark appraisal - among competing models (-) Cannot Verify Exterior Condition (-) Cannot Guarantee Property Existence (-) Single Methodology for Value Determination (-) Cannot Verify Interior Condition (+) Faster than Inspection (+) Cost Less than Inspection (+) Multiple Data Providers (+) Correlation for Risk Reduction (+) Independent Analyst Review “Sanity Check” (+) Automatic Upgrade to Inspection (+) Lowest Overhead / Labor Cost for Client (+) Greater Coverage than Single AVM’s (-) Cannot Verify Exterior Condition (-) Cannot Guarantee Property Existence (-) Cannot Verify Interior Condition (+) Faster Turnaround vs Interior (+) Lower Cost vs Interior (+) Local Market Knowledge (+) Local Public Records (+) 100% Coverage (+) Verification of Exterior Condition (+) Guarantee of Property Existence (-) Turnaround vs AVM/QCE (-) Cost vs AVM/QCE (-) Cannot Verify Interior Condition (+) Verification of Exterior Condition (+) Verification of Interior Condition (+) Highest Correlation to benchmark URAR (+) Local Market Knowledge (+) Local Public Records (+) 100% Coverage (-) Highest Cost (-) Slowest Turnaround * QCE is a trademark of Market Intelligence

7. PRODUCT DESCRIPTIONS A computer generated conclusion of value based on available data and single proprietary decision methodology. An Automated Valuation Model (AVM) does not include a drive-by or site inspection; it does not include a review by a qualified real estate analyst. An AVM is not an appraisal and cannot provide information about property condition, or existence. More generally well-known AVM’s are offered by Experian, DataQuick, Solimar, REASONS, HNC and Mortgage Risk Assessment (MRAC). AVMAutomated Valuation Model An independent desktop valuation analysis that utilizes input from multiple real estate data providers. Correlation among various AVM conclusions and raw data points are reviewed on-line by a qualified real estate analyst. When available data does not permit a value conclusion, the QCE is electronically upgraded to a drive-by or interior property inspection, depending on client credit risk policy. The QCE is not an appraisal and cannot provide information about property condition or guarantee physical condition. QCE*Quick Collateral Evaluation * QCE is a trademark of Market Intelligence

8. FAVField Asset Verification A drive-by property evaluation of residential real estate, performed by a licensed real estate agent or appraiser. The Field Asset Verification (FAV), combines the field agent’s drive-by opinion of value with a supporting nearby comparable sale and other available public information about the subject property. The FAV is not an appraisal and does not include (a) a physical inspection of the interior of the subject property, (b) photographs of the interior or exterior, or (c) any representations or warranties regarding Flood Plain certifications or potential environmental hazards. A property evaluation of residential real estate performed by a licensed real estate agent or appraiser. The Second Mortgage Property Evaluation (SMPE) is based on a direct sales comparison approach. The field agent value conclusion is supported by three nearby sold comparable sales and public records information. The SMPE is not an appraisal and does not include any representations or warranties regarding Flood Plain certifications, title, marketability, or potential environmental hazards. An interior inspection is available (SMPEi) and recorded on an addendum form. It may come with photos, depending upon client specifications. SMPESecond MortgageProperty EvaluationSMPEi (with Interior Inspection)

9. Appraisal Services An estimate of value communicated by reporting requirements as set forth in the Standards Rules relating to Standards 2 and 5 of the Uniform Standards of Professional Practice (USPAP) on report forms prepared and used by lending institutions, government agencies and employee transfer firms. Appraisal report forms include: (1) the Uniform Residential Appraisal Report form; (2) the Individual Condominium or PUD Unit Appraisal Report form; (3) the Individual Cooperative Interest Appraisal Report Form; (4) the Small Residential Income Property Appraisal Report form; (5) the Desktop Qualitative Appraisal Report form, Cooperative Appraisal form; and (6) the Residential Appraisal Field Review Report form.

10. COMPANY OVERVIEW • Fidelity National Financial, Inc. (FNF) announced March 20, 2000 that it had completed its acquisition of Chicago Title Corp., uniting two of the top companies in the Title Insurance and Real Estate Services Business to form the market leader. Fidelity is now the largest title insurer and provider of real estate related products and services in the world, distinguished by an unsurpassed distribution system comprising more than 1,000 offices and 7,000 agents. The complimentary strengths of Fidelity National and Chicago Title will create the unparalleled leader in the Real Estate Services Industry. • In July of 1996, Chicago Title and Trust Co. acquired Market Intelligence, Inc., a privately held property evaluation firm located near Boston in Hopkinton, Massachusetts. Founded in 1989, Market Intelligence provides residential appraisal and evaluation products for both the origination and servicing sides of the lending business. A leader in augmenting database research with drive-by/onsite verification, the company has grown rapidly over the last three years. Market Intelligence compliments existing company services, allowing customers to appropriately match their risk with cost by ordering alternative forms of property evaluation or full appraisals, depending upon their needs and regulatory guidelines. • With a national network of over 15,000 licensed real estate professionals and appraisers, Market Intelligence provides a wide array of collateral evaluation products and services throughout the country which include: • Alternatives to Appraisals • Conventional Appraisal Services • Market Intelligence uses state of the art technology that allows for complete electronic transmission of each of its products. Market Intelligence also has the rights to use and sell most of the top Automated Valuation Models (AVM’s) including HNC, Solimar, Experian, REASONS and MRAC. These models offer alternative appraisal software that calculates value from data that includes comps (comparable sales), purchase price, past sales of the property, tax-assessed values, and characteristics of the home. Most real estate markets can thus be tracked by zip code through data sources and proprietary statistical models. For automated evaluations in areas not served by the AVM’s, MI also has access to on-line services, multiple listing services, and public records data.

11. FEDERAL GUIDELINES • Title XI of the Financial Institutions Reform, Recovery, and Enforcement Act of 1989 (FIRREA) and the fair lending regulations included in the Equal Credit Opportunity Act (ECOA), Fair Housing Act (FHA), Community Reinvestment Act (CRA), and Home Mortgage Disclosure Act (HMDA) define appraisal and property evaluation guidelines. A summary selection of important points from this body of legislation is included below. • Interagency Appraisal and Evaluation Guidelines (1994) • The Office of the Comptroller of the Currency (OCC), the Board of Governors of the Federal Reserve System (FRB), the Federal Deposit Insurance Corporation (FDIC), and the Office of Thrift Supervision (OTS) (the agencies) have jointly issued the following guidelines, which supersede each of the agencies’ appraisal and evaluation guidelines issued in 1992. The guidelines: • Address management responsibilities relating to real estate appraisals and evaluations used to support real estate-related financial transactions. • Provide guidance to examining personnel and federally regulated institutions about prudent appraisal and evaluation policies, procedures, practices, and standards. • Background • Title XI of FIRREA requires the agencies to adopt regulations on the preparation and use of appraisals by federally regulated financial institutions. Such real estate appraisals must be in writing and performed in accordance with uniform standards by an individual whose competency has been demonstrated and whose professional conduct is subject to effective state supervision.

12. PROPERTY EVALUATIONS The property evaluation market has changed radically in the last few years. Several historical developments have led to these changes. In 1994 federal regulatory agencies revised Title XI of the Financial Institutions Reform, Recovery, and Enforcement Act of 1989 (FIRREA) to raise the minimum threshold for transactions requiring appraisals from $100,000 to $250,000. Banks were enabled to seek alternatives to appraisals for many loans under $250,000. The ruling was especially intended to facilitate lending for 1-4-family residences, which make up a large majority of the sales and over half the dollar volume of real estate-secured loans in the commercial banking industry. In place of appraisals, the agencies ruled that banks could conduct property evaluations that followed safe banking practices and met a number of basic conditions. For example, evaluations must be written, contain enough information to support an estimate of value, describe the property and its condition and use, and be conducted by individuals with relevant training or experience and knowledge. The agencies also ruled that evaluations need not be conducted only by licensed or certified appraisers. The agencies’ published guidelines for these rulings are discussed in Federal Property Evaluation Guidelines, excerpts are contained in the narrative below. Banks immediately began exploring alternatives to appraisals. Automated estimates drawing on real estate databases and other electronic sources have become common. However, banks also want to supplement automated estimates with on-site field inspections. Inspections help verify the existence of the property and how it has been maintained; current geographic database coverage for automated estimates is also limited. Market Intelligence and other property evaluation companies have combined automated estimates and field inspections in a range of products to meet lenders’ needs. These products have proved accurate and reliable, and can be provided at a cost below that of traditional appraisals.

13. TRANSACTIONS THAT REQUIRE APPRAISALS Although the agencies’ appraisal regulations exempt certain categories of real estate-related financial transactions from the appraisal requirements, most real estate transactions over $250,000 are considered federally related transactions and thus require appraisals. A “federally related transaction” means any real estate-related financial transaction in which the agencies engage, contract for, or regulate, and that requires the services of an appraiser. An agency also may impose more stringent appraisal requirements than the appraisal regulations require, such as when an institution’s troubled condition is attributable to real estate loan underwriting problems.

14. MINIMUM APPRAISAL STANDARDS • The agencies’ appraisal regulations include six minimum standards for the preparation of an appraisal. The appraisal must: • Conform to generally accepted appraisal standards as evidenced by the Uniform Standards of Professional Appraisal Practice (USPAP) promulgated by the Appraisal Standards Board (ASB) of the Appraisal Foundation unless principles of safe and sound banking require compliance with stricter standards. Although allowed by USPAP, the agencies’ appraisal regulations do not permit an appraiser to appraise any property in which the appraiser has an interest, direct or indirect, financial or otherwise. • Be written and contain sufficient information and analysis to support the institution’s decision to engage in the transaction. • As discussed below, appraisers have available various appraisal development and report options; however, not all options may be appropriate for all transactions. A report option is acceptable under the agencies’ appraisal regulations only if the appraisal report contains sufficient information and analysis to support an institution’s decision to engage in the transaction. • Analyze and report appropriate deductions and discounts for proposed construction or renovation, partially leased buildings, non-market lease terms, and tract developments with unsold units.

15. MINIMUM APPRAISAL STANDARDS CONT’D... • Be based upon the definition of market value set forth in the regulation. Each appraisal must contain an estimate of market value, as defined by the agencies’ appraisal regulations. • Be performed by state-licensed or certified appraisers in accordance with requirements set forth in the regulation. This standard is designed to avoid having appraisals prepared using unrealistic assumptions and inappropriate methods. For federally related transactions, an appraisal is to include the current market value of the property in its actual physical condition and subject to the zoning in effect as of the date of the appraisal. For properties where improvements are to be constructed or rehabilitated, the regulated institution may also request a prospective market value based on stabilized occupancy or a value based on the sum of retail sales. However, the sum of retail sales for a proposed development is not the market value of the development for the purpose of the agencies’ appraisal regulations. For proposed developments that involve the sale of individual houses, units, or lots, the appraiser must analyze and report appropriate deductions and discounts for holding costs, marketing costs and entrepreneurial profit. For proposed and rehabilitated rental developments, the appraiser must make appropriate deductions and discounts for items such as leasing commission, rent losses, and tenant improvements from an estimate based on stabilized occupancy.

16. TRANSACTIONS FOR WHICH FORMAL APPRAISALS ARE NOT REQUIRED • A formal opinion of market value prepared by a state-licensed or certified appraiser is not always necessary. Less formal evaluations of the real estate may suffice for transactions exempt from the agencies’ appraisal requirements. The agencies’ regulations allow an institution to use an appropriate evaluation of the real estate rather than an appraisal when the transaction: • Has a value of $250,000 or less. • Is a business loan of $1,000,000 or less, and the transaction is not dependent on the sale of, or rental income derived from, real estate as the primary source of repayment. • Involves an existing extension of credit at the lending institution, provided that (1) there has been no obvious and material change in the market conditions or physical aspects of the property that threaten the adequacy of the institution’s real estate collateral protection after the transaction, even with the advancement of new monies; or (2) there is no advancement of new moneys other than funds necessary to cover reasonable closing costs. • Institutions should also establish criteria for obtaining appraisals or evaluations for the safety and soundness of transactions that are otherwise exempt from the agencies’ appraisal regulations. • An institution should establish prudent standards for the preparation of property evaluations. At a minimum, an evaluation should: • Be written. • Include the preparer’s name, address, signature, and the effective date of the evaluation. • Describe the real estate collateral, its condition, and its current and projected use. • Describe the source(s) of information used in the analysis. • Describe the analysis and supporting information. • Provide an estimate of the real estate’s market value, with any limiting conditions.

17. QUALITY CONTROL Market Intelligence understands that our clients rely on our property evaluation and appraisal products to make important financial decisions. The estimates of market value which we provide are an integral part of both the loss mitigation process, and collateral underwriting for consumer lending. Quality is a function of teamwork, all hands in the organization working together focused on the same goal; serving the client. Quality Control begins with the careful selection and supervision of our field agents, and continues through a 100% review process by qualified real estate analysts and appraisers. The Market Intelligence Quality Control Policies and Procedures Manual, which thoroughly outlines the Market Intelligence Property Evaluation Quality Assurance Program and the Market Intelligence Appraisal Quality Assurance Program, is available upon request. Limiting Conditions While an estimate of Fair Market Value on each property evaluation is deemed a reliable estimate by the local agent assigned by MI, neither the field agent nor Market Intelligence shall be held liable for any damages resulting from reflecting or predicting actual values of the subject properties. MARKET INTELLIGENCE SHALL NOT BE DEEMED TO HAVE MADE ANY REPRESENTATION OR WARRANTY, EXPRESSED OR IMPLIED, AS TO THE MARKETABILITY OF THE SUBJECT PROPERTY OR ITS VALUE.