new century capital corporation secondary marketing policies

8/7/2019 NEW CENTURY CAPITAL CORPORATION SECONDARY MARKETING POLICIES

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SECONDARY MARKETINGPolicies Table Of Contents

Page 1 of 77 (10/13/05) Latest revised items in bold blue.

Knowledge Management

Table of Contents

General ................................................. ........................................................ ...................... 4 Mission Statement......................................................................................................... 4

Secondary Marketing ................................................................................................... 4

Secondary Marketing Functions ................................................................................. 5

Organization Chart..................................................................................................... 10

Secondary Marketing Functions ............................................................................... 11

Data Management............................................................................................................ 17

Overview...................................................................................................................... 17

General Policy ............................................................................................................. 20 Import of Funded Loans ............................................................................................ 20

General Policy ............................................................................................................. 22

Import of Servicing Data............................................................................................ 22

General Policy ............................................................................................................. 24

Forward Commitment Pool Formation.................................................................... 24

General Policy ............................................................................................................. 27

Premium Loan Bid Pool Formation.......................................................................... 27

General Policy ............................................................................................................. 30

Discount Loan Pool Formation.................................................................................. 30

General Policy ............................................................................................................. 33

Update Sold Loan Inventory Information................................................................ 33

Update Sold Loan Inventory Information................................................................ 34

General Policy ............................................................................................................. 35

Repurchase Import ..................................................................................................... 35

Repurchase Import ..................................................................................................... 36 General Policy ............................................................................................................. 37

Sweeps.............................................. ............................................................................ 37

General Policy ............................................................................................................. 42

Periodic Inventory Reporting.................................................................................... 42


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Periodic Inventory Reporting.................................................................................... 43

Transaction Management................................................................................................ 44

Overview...................................................................................................................... 44

General Policy ............................................................................................................. 48

Assist in Establishing Forward Commitments......................................................... 48

Assist in Establishing Forward Commitments......................................................... 49

General Policy ............................................................................................................. 49

Forward Commitment and Premium Pool Formation............................................ 50

General Policy ............................................................................................................. 51

Review and Analyze Discount Loans ........................................................................ 51 Review and Analyze Discount Loans ........................................................................ 52

General Policy ............................................................................................................. 53

Submit Applicable Discount Loans for Re-Underwriting....................................... 53

Submit Applicable Loans for Re-Underwriting....................................................... 54

General Policy ............................................................................................................. 54

Discount Loan Pool Formation and Bid Process ..................................................... 55

Discount Loan Pool Formation and Bid Process ..................................................... 56

General Policy ............................................................................................................. 57 Analyze Bids and Award Sale.................................................................................... 57

Analyze Bids and Award Sale.................................................................................... 58

General Policy ............................................................................................................. 59

Schedule Due Diligence............................................................................................... 59

General Policy ............................................................................................................. 60

Coordinate and Finalize Pool Sale Population......................................................... 61

General Policy ............................................................................................................. 62

Review and Verify Funds ........................................................................................... 63 Loan Repurchases Overview ..................................................................................... 66

General Policy ............................................................................................................. 68

Receive and Record Initial Repurchase Requests.................................................... 68

General Policy ............................................................................................................. 70


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Forward Repurchase Requests and Track Progress............................................... 70

General Policy ............................................................................................................. 73

Coordinate the Return of Repurchased Loan Files................................................. 73

General Policy ............................................................................................................. 75

Coordinate the Wire Request for a Repurchased Loan.......................................... 75

General Policy ............................................................................................................. 77

Coordinate Repurchase Information with Data Management............................... 77


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Secondary MarketingPolicies General



General

Mission StatementPrimary Mission The primary mission of Secondary Marketing is to accumulate

and analyze mortgage assets held by New Century CapitalCorporation and either hold such assets within inventory asinvestment assets or selectively aggregate such assets intogroups available for sale to third party Investors or asecuritization trust.

Secondary Marketing

Objectives The objectives of Secondary Marketing are to ensure adequateliquidity on existing warehouse lines of credit and to maximizethe value received, to the extent possible, for each loan or poolof loans sold by NCCC.

Responsibilities As part of its primary mission, Secondary Marketing isresponsible for:

Downloading closed loan information from the LoanOrigination System (LOS) and maintenance of aSecondary Marketing database that includes informationon all loans previously sold and available for sale.

Monthly clearing of warehouse funding facilities. Aggregation of loans into pools for sale to third party

Investors. Negotiation of the pricing of pools with third party

Investors. Coordination of transfer of loan pools to the purchasing

Investor Receipt of verification of funds from the sale of such loan

pools Repurchasing loans that may breach the

Representations and Warranties established with thirdparty investors.

Aggregation of loans for sale to a securitization trust(See Securitization Policy and Procedures)


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Secondary Marketing Functions

Functions President of NCCC Responsible for the management of NewCentury Capital Corporation. Also responsible for negotiatingcommitments with largest Investors.

Senior Vice-President of Secondary Marketing Responsiblefor the oversight of the Secondary Marketing Department. Alsoresponsible for inventory management and negotiation of commitments with largest Investors.

NCCC Loan Sales Management Includes both the Presidentof NCCC and the Senior Vice-President of SecondaryMarketing, both of which are authorized to approve and monitor loan sales transactions for NCCC.

Secondary Marketing Analyst Responsible for maintainingthe Secondary Marketing Database, PowerSeller, that (i) tracksfunded loans available for sale, (ii) creates pools of loans for sale to Investors, and (iii) tracks the pricing paid for such loansor pools. In addition to loan inventory management and poolcreation, the Secondary Marketing Analyst is also responsiblefor the monthly clearing of the warehouse funding facilities toensure adequate liquidity for the funding of future loans.

Trader/Trading Activities (VP of Secondary Marketing or Above) Responsible for (i) negotiation of purchasecommitments by Investors, (ii) the process of bidding premiumwhole loan pools or discount loan pools to investors to maximizethe value received from those sales, and (iii) on-going Investor relations.

Transaction Management Responsible for scheduling duediligence, reviewing commitment letters, coordinating thecorrection of collateral problems with the ShippingDepartment, finalizing the sale population, verifying thefinal sale price, and producing wire instructions andobtaining warehouse line payoffs an releases.

Repurchase Specialist (Reports to Manager of Transaction Management) Responsible for communication andcoordination with the legal department and with Investorsconcerning loans that are repurchased by NCCC due to abreach in certain representation and warranty agreements.


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Approval,AuthorityLimits, andAccess

Pool Sales may be authorized by the following personnel: AVP and VP of Secondary Marketing are approved to

enter into transactions of up $ 50 million. SVP of Secondary Marketing is approved to enter

into transactions of up to $ 400 million The President of NCCC has the authority to enter

into transactions of up to $ 1 billion . Any amount over $ 1 billion must be authorized by

the SVP or President of NCCC and one member of the Executive Committee. The President of NCCC(as a member of the Executive Committee)cannot be the approving member of theExecutive Committee.

Repurchases NCCC Loan Sales Management is authorized to

approve the repurchase of any loan from an Investor.

Access to Systems and FilesAccess to PowerSeller, containing NCCC loan inventoryinformation, will be limited to designated users by user accessrights and passwords. Passwords should be changed every 6months and should also be changed immediately following atermination or personnel change within Secondary Marketing.The following personnel are designated to have access rightsto PowerSeller:

Secondary Marketing Analyst Secondary Marketing Business Analyst Trader NCCC Loan Sales Management

Finalized sold loan pool data files should be saved on theNCCC network and should be kept within limited access folderson the network. The following personnel are designated tohave access rights to such folders:

Secondary Marketing Analyst Secondary Marketing Business Analyst Trader NCCC Loan Sales Management


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Monitoring andOversight

Monitoring and oversight of Secondary Marketing is achievedthrough secondary reviews, transaction approval limits,reconciliation, documentation, and internal audit. Specificmonitoring responsibilities include:

Data Management : The Trader and NCCC Loan Sales Management review

uncommitted inventory reports on a weekly basis Inventory reports are reconciled with accounting records

on a monthly basis Sweeps are reconciled with accounting records each

month

Commitment Loan Sales : Commitment Letters are approved by NCCC Loan Sales

Management and the NCCC Legal Department Transactions have authority levels and require final

review by NCCC Loan Sales Management Transaction details and files are saved on the NCCC

network for no less than 1 year after the sale Sold loans are reconciled with Loan Administration

records and Custodian Records

Loans sales are reconciled by the AccountingDepartment using accounting records and fundingschedules

Premium and Discount Loan Sales : Transactions have authority levels and require final

review by NCCC Loan Sales Management Transaction details and files are saved on the NCCC

network for no less than 1 year after the sale Sold loans are reconciled with Loan Administration

records and Custodian records

Loans sales are reconciled by the AccountingDepartment using accounting records and fundingschedules


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Monitoring andOversight

Loan Repurchases Loan Repurchases are reviewed and approved by

NCCC Loan Sales Management Loan Repurchases are reconciled with the Legal

Department by the Repurchase Specialist Loan Repurchases are reconciled by Data Management

and Loan Administration

Other Areas Relating to Secondary Marketing : Internal Audit and/or NCCC Loan Sales Management

may periodically review procedures and documentationfor accuracy and consistency The Trader and Loan Administration are responsible for

notifying the New Century Product Development Teamand the Credit Committee in writing of the results of Investor due diligence reviews as they pertain tocollateral, credit, and appraisal findings.

Disaster Recovery andBack-UpProcedures

The following personnel are approved to perform designatedfunctions in the event that the primary authorized person isunable to perform such duties:

Data Management: The designated alternate for

performing Data Management functions is theSecondary Marketing Business Analyst. Loan Sales: The designated alternate for performing

Loan Sales and Trader functions is NCCC Loan SalesManagement.

Loan Repurchases: The designated alternate for performing loan repurchase functions is the Trader.

NCCC has established corporate business contingency andsystems back-up procedures for continuing operations duringextraordinary circumstances. See Attachment 1 for a copy of the NCCC Disaster Recover Plan.


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SecondaryMarketingsRole in ProductPricing

NCCC Secondary Marketing plays a vital role in theestablishment of pricing for new products. NCCCs businessstrategy is to sell all funded loans at a premium price to either athird party Investor or a securitization trust. As third partyInvestors purchase a large portion of NCCC funded loans,Secondary Marketing is responsible for communicating to theNCCC Product Pricing Committee current Investor buy ratesand Investor loan requirements.

Investor buy rates are the interest rate at which the Investor willpay par value for a loan. To the extent that the interest rate ona loan exceeds the buy rate, the Investor will pay a premiumdetermined by the amount of excess interest rate over the buyrate. In addition, Investors seek to purchase loans with certaincharacteristics or certain product types. In the event thatNCCC originates a loan outside of Investors purchaseparameters, such loans may not be sellable to an Investor.

NCCC Secondary Marketing has established a representativeon the Product Pricing Committee. This representative willreport to the committee the necessary Investor expectationsand market information to allow the committee to adjust NCCCloan products and pricing to meet the revenue requirementsestablished by NCCC Management.


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Organization Chart

NCCC

Kevin Cloyd

SVPLoan

AdministrationRobin Cook

VPStructuredFinance

Warren Licata

VPAlternativeProducts

Rick Holguin

Financial AnalystJeff Klein

Financial AnalystMatt Mullins

VPCapital Mkts Orig

Lee Holbein

VPProduction

PerformanceRick Rhinehart

New Century Capital CorporationOrganizational Chart

(NCCC Organization Chart Pending Revision As Of 9/2005.)


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Summary of Key SystemsUtilized bySecondaryMarketing

The following systems are used by Secondary Marketingpersonnel:User Manual

System Revision Date PowerSeller Microsoft Excel Microsoft SQL Server Microsoft Access MortgageServ (Servicing System) Investor Reporting Database

The Investor Reporting Database is maintained by the Investor Reporting Department and captures all loan kickoutsinformation from an Investor Due Diligence. This information isgenerated through system reports and provided to DataManagement to be reconciled with PowerSeller.

An updated copy of each systems user manual should belocated on the NCCC network (electronic version) or in theSecondary Marketing files (hard copy).

SecondaryMarketingExecutionStrategies

NCCC utilizes three Secondary Marketing execution strategies:whole loan sales, securitization, and held for investment inNCCC portfolio (on balance sheet). Whole loan sales occur when loan pools are sold into the whole loan market shortly

after origination and results in a premium being paid for soldloans. Securitizations are financing vehicles where securities(typically in the form of bonds) are issued and secured bymortgage loans. Principal and Interest payments received fromthe loan are used to repay the issued securities. The differencein the interest rates received on the collateral and the interestpaid on the securities are the proceeds paid to the Securitizer.Held for investment in the NCCC portfolio results in NCCCholding the loan until the loan matures, thereby retaining allprincipal and interest payments made on such loans.


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SecondaryMarketingExecutionStrategies

Due to the timing of profit receipt under each strategy,decisions on whether to hold loans in portfolio or to securitizeloans should be made by NCCC Loan Sales Management. Inthe case of loans held in portfolio, NCCC Loan SalesManagement is responsible for determining the desired loancharacteristics of the loans to be held in portfolio. The loancharacteristics should be documented through meetingminutes. Loans that meet the requirements established byNCCC Loan Sales Management will be randomly selected fromcurrent inventories.

As the loan pool characteristics have a large impact on theeconomics of a securitization transaction, the Vice President of Structured Finance will dictate the loan characteristics desiredto achieve the best securitization transaction pricing. Theseloan characteristics should be documented and communicatedto NCCC Loan Sales Management. Loans that meet therequired loan characteristics set by the Vice-President of Structured Finance will be randomly chosen from currentinventories until the desired volume is reached.

Investor WholeLoan Sales

Bidding andPricingGuidelines

Premium loan pools are submitted to several Investors toensure competitive pricing conditions. However, loan poolsmay be submitted to fewer Investors should the poolcharacteristics limit the number of available Investors within themarket.

Performing discount loan pools and Non-Performing discountloan pools are also to be submitted to several Investors toensure competitive pricing conditions.

All Investor bid proposals (or at least a summary of each bidproposal) should be saved within NCCC files for a minimum of 1 year. The two primary factors in awarding the sale of a poolare pricing and projected sales execution. The Trader isresponsible for tracking and analyzing historical Investor salesexecution rates. The bid with the highest pricing with respect toexecution rates should be awarded the sale of the pool, exceptin instances where NCCC is developing a relationship with anew Investor as approved by NCCC Loan Sale Management.


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Investor WholeLoan SalesBidding andPricingGuidelines

A summary description of the reasons/support for awarding thesale of a pool to an Investor should be saved within NCCC filesand provided to NCCC Loan Sales Management for approval if authority limits require such approval.

Staff TrainingRequirements

Continued training for all Secondary Marketing personnel isrequired to maintain or advance skill sets at each staff level.The number of hours of training or continuing professionaleducation (CPE) should be established each year by NCCCLoan Sales Management (a minimum of 8 hours of training per year) and communicated to each member of staff during their annual review. Recommended training areas include:Advanced SQL Server Training, PowerSeller update andrefresher courses, underwriting training, product reviews, andmortgage related seminars or conferences.

Guidelines for EstablishingNew Investorsand Re-qualifyingExisting

Investors

With the exception of Global Financial Institutions such asMorgan Stanley, Barclays, Lehman Brothers, GMAC/RFCand domestic federal and state chartered banks, newInvestors will be required to submit the following at thetime of or prior to bidding: Summary Financial Statementsand Management Information and Descriptions. Thisinformation will be reviewed and approved by thePresident and SVP of NCCC and Legal Counsel.


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Guidelines for ServicingRelease or ServicingRetained

As NCCCs servicing operations continue to develop, NCCChas the option of selling its loans while retaining the right toservice such loans (servicing retained) or selling its loansalong with their servicing rights (servicing released), to thirdparty Investors. As the value of a loan includes the feesreceived in connection with the servicing of that loan, selling aloan servicing released will decrease the sale value of suchloan.

In the event that New Century Management establishes adirective to increase its servicing portfolio, the Trader is toobtain a bid from its Investors for each pool based on bothservicing retained and servicing released. These bid pricings,coupled with historical sales executions and servicing volumerequirements, are to be taken into considerations during theaward process. An analysis is be performed for each pool thatcompares the bid value of the sale of the pool, servicingreleased, to the bid value of the sale pool, servicing retained,plus the discounted present value of the servicing feesprojected to be received for retaining the servicing.


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Repurchases Periodically, funded loans that are sold to Investors or asecuritization trust may be repurchased by NCCC due tobreaches of certain covenants in the purchase agreement.These covenants include, but are not limited to:

first payment defaulted loans fraudulent loans loans that violate the representations and

warranties as stated n our agreements.

Requests for NCCC to repurchase a loan from an Investor or asecuritization trust should be communicated with the NCCCLegal Department. The decision to repurchase a loan will bemade by NCCC Loan Sales Management. In some cases,loans will be forwarded to the Legal Department for review.Upon agreement by the Legal Department that such loans arerequired to be repurchased under such representation andwarranty agreements, the Repurchase Specialist is responsiblefor notifying the Secondary Marketing Analyst that suchrepurchased loan is to be re-added to inventory. Anyrepurchase request made concerning a loan that does notbreach representation and warranty agreements must beapproved by NCCC Loan Sales Management withdocumentation of the reasons for the repurchase. A report of allloan repurchases and their status should be provided to NCCCLoan Sales Management each month.

ReportingRequirements

The following reports are to be supplied to NCCC Loan SalesManagement each month:

Report Provider Uncommitted Inventory (Detailed) SM Analyst Bid Pool Summaries Traders Amounts Paid for Pools Traders Investor declines (Detailed) Loan Administration Non-Performing Loans (Detailed) SM Analyst

Repurchased Loans (Detailed) Repurchase Spec.


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ReportingRequirements

The following reports are to be included in the Board of Directors report each month:

Report Provider Uncommitted Inventory Summary SM Analyst Premiums Paid Summaries Traders Non-Performing Loan Summary SM Analyst Repurchased Loan Summary Repurchase Spec. Market Pricing Update VP-Sec. Marketing New Investor Product Update VP-Sec. Marketing

Changes toAuthorizedCompanySignatories

Any additions or deletions of approved signatories for thefollowing documents must be approved by the NCCC Board of Directors:

Commitment Letters Purchase and Sale Agreements (Bid Awards) Bailment Letter Agreements Request for Release (Custodian) Request for Release (Warehouse Credit Facilities) Repurchase Agreements

Any changes to Sale Authority Limits established in thesePolicies and Procedures are to be approved by the NCCC

Board of Directors.


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Secondary Marketing PoliciesData Management



Data Management

OverviewThe primary responsibilities of the Secondary Marketing Analyst relating to datamanagement include:

Import funded loan information from the Data Warehouse into the SecondaryMarketing Database, PowerSeller

Research loans with exceptions or missing data by obtaining correctinformation from the originator or the servicer, by reviewing documentation,etc.

Update funded loan outstanding balances and servicing information for fundedloans maintained in PowerSeller by importing loan level information from

applicable servicing systems Create Commitment Pools required to fulfill sales commitments between

NCCC and certain Investors Create Premium Loan Bid Pools for bid by Investors Create Discount Pools for bid by Investors Update Sold Loan Information within PowerSeller Remove repurchased loans from the loans shipped database and import

repurchased loans back into NCCC inventory At the direction of the Controller of NCCC, loans held in individual bank

warehouse lines are to be moved to either the Citigroup or Morgan Stanleyaggregated warehouse lines

Periodic inventory reporting

The systems utilized by the Secondary Marketing Analyst include: PowerSeller Data Warehouse Microsoft Excel Microsoft Access Microsoft SQL Server Encompass

Skills required to perform Data Management functions include: Proficiency in Database Management (MS SQL Server and MS Access) Expertise in Excel Extraction of information from the Ocwen and MortgageServ servicing

systems


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Overview

The following summarizes the Data Management processes for Secondary Marketing:

Import of Funded Loans: The Secondary Marketing Analyst utilizes anautomated process to import funded loan information from the data warehouse tothe Secondary Marketing Database, PowerSeller , on a daily basis. Early eachTuesday through Friday of the business week, a text file of all funded loans or loans with a field change made within the last 5 days is extracted from the LoanOrigination System (LOS) to the data warehouse. After the extraction, the textfile is imported from the data warehouse into PowerSeller . This processaggregates all loans funded by NCCC on a daily basis for purposes of pooling theavailable loans for sale.

Import of Servicing Data: Each morning, the Secondary Marketing Analyst is toupdate the individual loans in PowerSeller with current loan balances and paymentstatus through a manual or automated import of information from either the Ocwen or MortgageServe servicing systems. This will ensure that loan information usedby the Secondary Marketing Analyst is timely and up to date.

Forward Commitment Pool Formation: In some instances, NCCC enters intoforward commitments with its Investors to maximize the premiums received fromthe sale of such loans. These forward commitments, which can be in effect for 1 or more months, dictate a specified loan pool size and certain loan characteristicrequirements to be sold to the Investor in a particular period. The SecondaryMarketing Analyst interacts with the Trader to create a pool of available loans fromNCCC inventory that meet the commitment requirements.

Premium Loan Bid Pool Formation: Loans held in inventory by NCCC may bepooled together and subsequently bid on by Investors wishing to purchase suchpools of loans. The Secondary Marketing Analyst, at the direction of the Trader,creates pools of loans that are performing and that meet Investor requirements.

Discount Pool Formation: Closed loans that are not performing or that may havebeen rejected from prior premium loan bid pools may be combined together andsubsequently bid on by Investors wishing to purchase such pools of loans. TheSecondary Marketing Analyst, at the direction of the Trader, creates pools of loansthat meet such criteria.


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Overview Update Sold Loan Information: Once the final purchase of pooled loans occurs,

the Secondary Marketing Analyst is responsible for updating sold loaninformation within PowerSeller .

Repurchase Imports: Periodically, funded loans that are sold to Investors may berepurchased by NCCC due to breaches of certain covenants in a purchaseagreement. These covenants include, but are not limited to, first paymentdefaulted loans, fraudulent loans, or loans that do not meet other Investor criteria.Such repurchased loans are re-added to the NCCC inventory of assets.

Sweeping of funded loans from individual bank warehouse lines to theCitigroup/Morgan Stanley aggregated funding line: On a monthly basis, NCCCmust create funding capacity by selectively moving loans financed by certain bankwarehouse credit facilities and transferring them to Citigroup, Morgan Stanley,Bear Stearns, Barclays, CSFB, or Von Karman aggregated warehouse creditfacilities. The Staff Accountant is responsible for selecting the loans to bemoved, notifying the individual banks of the removal of such loans from their warehouse lines, and notifying the banks with the aggregate warehouse lines of the addition of such loans.

Periodic Inventory Reporting: The Staff Accountant is responsible for allfunded loan inventory reporting.


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General Policy

Import of FundedLoans

The Secondary Marketing Analyst is responsible for ensuring theimport of funded loan information from the Data Warehouse to theSecondary Marketing Database each business day.

Import of Funded Loans

Process The Secondary Marketing Analyst is responsible for ensuring theimport of funded loan information from the data warehouse to theSecondary Marketing Database, PowerSeller . This process hasbeen automated for Tuesday through Friday mornings through theuse of a macro function that will import a text file from the datawarehouse at a designated time. A manual import is typicallyperformed on Monday mornings. In this case, the SecondaryMarketing Analyst uses PowerSeller to manually update andappend funded loans information from the text file produced by thedata warehouse. (See [detailed procedures] for the manual importof funded loans)

The information imported includes prior day funded loan data andan update of loan information on funded loans where a data fieldhas changed during the past five (5) days. By importing any datachanges to prior funded loans (which may have already beenimported into PowerSeller ), Secondary Marketing ensures that alldata stored within PowerSeller is the most current information

available.

It is possible that some records will not be imported during the initialimport due to data inconsistencies, such as a missing loan number or the incorrect formatting of a loan number. Any records notimported are available on an error report screen within PowerSeller after the import is run. The records that are not imported will haveto be manually researched and corrected within the original text file.Once the information is added or corrected in the original text file,the import process is manually run again to import the correctedloan information.

Continued


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Import of Funded Loans

Timing Between 3:00 am and 8:00 am on Tuesday through Friday of eachbusiness week, a text file is extracted from the Loan OriginationSystem (LOS) and imported into the Data Warehouse. After theinitial extraction, the timed macro function importing funded loaninformation from the Data Warehouse to PowerSeller should be run.The manual import of funded loan information from the DataWarehouse to PowerSeller that occurs on Monday morning shouldbe performed early in the day. All records not imported due to datainconsistencies should be investigated and cleared promptly.

ReviewRequire-ments

A periodic review of imported loan information should be performedby NCCC Internal Audit to ensure inventory accuracy. Availableinventory reports are reconciled with accounting and originationreports by the Secondary Marketing Analyst.

ApprovalRequire-ments

The Secondary Marketing Analyst is approved to perform all importfunctions. Any other personnel performing the import of fundedloans must be approved by NCCC Loan Sales Management.Access to PowerSeller is password protected and limited by user access rights. Passwords should be changed every six months or in the event of a change in personnel.

Back Up

Procedures

If the Secondary Marketing Analyst is unable to perform the import

function and clear the import errors by the end of the business day,an auxiliary approved person should perform these duties. Refer tothe disaster recovery document in Attachment 1 for NCCCapproved procedures in the event of a business disruption.

In the event of database or system problems, contact the NewCentury DBA Department.


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General Policy

Import of ServicingData

The Secondary Marketing Analyst is responsible for ensuring theupdate of loans in PowerSeller with current loan balances andpayment status through a manual or automated import of information from both the Ocwen and MortgageServe servicingsystems.

Import of Servicing Data

Process On a weekly basis, the Secondary Marketing Analyst will updatePowerSeller with servicing information obtained from both theOcwen and MortgageServe servicing system. Ocwen is anindependent company that performs collections and servicing dutieson certain NCCC funded loans. MortgageServe is the servicingsystem used by NCCC for those funded loans where NCCCperforms collections and servicing duties.

Each morning, the Secondary Marketing Analyst will receive anemailed file (an Excel file in the case of Ocwen or a text file in thecase of MortgageServe ) containing current loan level information onserviced loans within the NCCC portfolio. In the case of the filereceived from Ocwen , the Secondary Marketing Analyst mustconvert such file to a text format.

The Secondary Marketing Analyst runs an import of the text filesinto PowerSeller using a pre-defined import map. This import mapdefines the location of where data attributes are located within thetext file and imports such data to the correct fields withinPowerSeller . This import must be performed once each day for loans designated as available for sale and for loan designated asshipped to investors. The Secondary Marketing Analyst mayperform the import manually or may utilize an import macro functionprovided by PowerSeller . (See [detailed procedures] for importinstructions and creating the import macro)

Continued


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Import of Servicing Data

Process Once the servicing data is imported into PowerSeller , theSecondary Marketing Analyst manually updates payoff statusinformation within PowerSeller . (See [detailed procedures] for instructions on updating payoff status).

Timing The import of servicing information into PowerSeller should beperformed at least twice each business week or prior to the creationof a sales pool.

ReviewRequire-

ments

A periodic review of servicing information imports should beperformed by the Secondary Marketing Business Analyst to ensuredata integrity and data mapping consistency. A reconciliation maybe performed by the Secondary Marketing Analyst using additionalinformation provided by Ocwen or the Servicing Department.


The Secondary Marketing Analyst is approved to perform allservicing data import functions. Any other personnel performingthe import of servicing information must be approved by NCCCLoan Sales Management. Access to PowerSeller is passwordprotected and limited by user access rights. Passwords should bechanged every six months or in the event of a change in personnel.

Back Up

Procedures

If the Secondary Marketing Analyst is unable to perform the

servicing import functions, an auxiliary approved person shouldperform these duties. Refer to the disaster recovery document inAttachment 1 for NCCC approved procedures in the event of abusiness disruption.

In the event of database or system problems, contact the NewCentury DBA Department.


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General Policy

ForwardCommit-ment PoolFormation

The Secondary Marketing Analyst is responsible for creating a datafile, which represents a pool of loans from the available funded loaninventory that meet the commitment requirements dictated by theForward Commitment Letter.

Forward Commitment Pool Formation

Process In some instances, NCCC enters into forward commitments with itsInvestors to maximize the premium received for such loans. Theseforward commitments, which can be in effect for 1 or more months,dictate a specified loan pool size and certain loan characteristicrequirements to be sold to a specific Investor. The SecondaryMarketing Analyst interacts with the SVP and Trader to create adata file, which represents a pool of available loans from the NCCCinventory that meet the forward commitment requirements. (See[detailed procedures] for creating a pool data file)

Prior to establishing the forward commitment pool data file, theSecondary Marketing Analyst updates PowerSeller with informationfrom the Investor Reporting Database. This is to ensure that eachloan within PowerSeller has an up to date account of whichInvestors have previously reviewed and declined such loans for purchase and to ensure that previously reviewed loans that aredeemed to be within NCEN Underwriting policy are notinadvertently re-submitted to the same Lender/ Investor. (See[detailed procedures] for instructions on updating Investor reviewinformation)

The Secondary Marketing Analyst will be provided the forwardcommitment requirements (either verbally or written) from either NCCC Loan Sales Management or the Trader. Using the desiredloan characteristics and total loan amounts established in thecommitment letter, the Secondary Marketing Analyst uses the filter tools within PowerSeller /Astera to comprise a list of loans that meetthe commitment requirements. Astera is the optimizationsoftware used in conjunction with PowerSeller and used for pooling purposes.

Continued


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Process Once the loans that meet the forward commitment requirementshave been identified within PowerSeller , the Secondary MarketingAnalyst will produce a Pool Characteristic Report in PowerSeller that details specific information about the pool, such as total loanamounts, weighted average interest rate, percentage of first liens tosecond liens, etc. The Trader /SVP will review the PoolCharacteristic Report to ensure that the requirements of the forwardcommitment are met.

After the Trader /SVP approval, the Secondary Marketing Analystexports the loans from the created pool into an Excel spreadsheet.Some loan characteristic data that is exported is not needed for thedata file that will be sent to the Investor. The spreadsheet requiresmanual deletion of certain loan attributes and formatting for other certain loan attributes. (See [detailed instructions] on the manualdeletion of loan attributes)

After the establishment of the forward commitment pool data file inExcel, such file is forwarded to the Trader (via electronic mail) for review and finalization, where upon approval, the Trader will submitthe data file to the Investor (s) (via electronic mail).

Timing The Forward Commitment Pool Trade Information is to beobtained immediately (within 24 hours) from NCEN Loan SalesManagement or the Trader. The initial forward commitment poolcreation is typically performed by the 10th business day of themonth. If a Forward Commitment Letter is not finalized by the bothNCCC and an Investor by the first day of the business month, but isexpected by NCCC Loan Sales Management to be finalized in ashort time period, NCCC Loan Sales Management may provideverbal or documented projected forward commitment requirementsto the Secondary Marketing Analyst so that the pool creationprocess can begin.


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ReviewRequire-ments

The Transaction Manager/ Trader/ SVP is responsible for reviewing the forward commitment pool data file and finalizing thefinal forward commitment pool loan population prior to approval of the pool for submitting to the Investor.


The Secondary Marketing Analyst is approved to perform all forwardcommitment pooling functions. However, final approval of theforward commitment pool is to be given by NCCC Loan SalesManagement/ the AVP of Transaction Management/ or theTrader , depending on their authority limits [see section Section 1 of the Secondary Marketing Policies and Procedures for Authority

Limits] if all characteristics do not deviate significantly from theoriginal pool characteristics. Should the pool characteristicsdeviate significantly from original pool characteristics, NCCCLoan Sales Management needs to approve.

Back UpProcedures

If the Secondary Marketing Analyst is unable to perform the forwardcommitment pool creation function, an auxiliary approved personshould perform these duties. Refer to the disaster recoverydocument in Attachment 1 for NCCC approved procedures in theevent of a business disruption.

RequiredDocumen-tation

The Secondary Marketing Analyst keeps a copy of the ForwardCommitment Letter, in their files along with written approval (trade ticket) by the approved authority, of the final commitment data filesubmitted to the Investor. Final forward commitment loan pool datafiles are to be saved on the NCCC network can be broad accessbut, access limited to view only.

DistributionRequire-ments

The forward commitment pool data file is distributed to theTransaction Manager/Trader and NCCC Loan Sales Managementupon finalization of the pool. A copy of the final forwardcommitment pool data file, as determined by the Trader, will bedistributed by the Secondary Marketing Analyst to the TransactionManager (for sending to the Investor) and the Loan AdministrationDepartment (in order for Vault personnel to pull the files for theInvestors due diligence review) by electronic mail.


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General Policy

PremiumLoan BidPoolFormation

The Secondary Marketing Analyst is responsible for creating datafiles, which represent pools of loans from the available funded loaninventory, that meet the purchase requirements of Investors.

Premium Loan Bid Pool Formation

Process Closed loans held in inventory by NCCC may be pooled together and subsequently bid on by Investors wishing to purchase suchpools of loans. The Secondary Marketing Analyst, at the directionof the Trader, creates pools of loans that are non-delinquent at thattime and that meet general Investor requirements.

Prior to establishing a premium loan bid pool data file, theSecondary Marketing Analyst updates PowerSeller with informationfrom the Investor Reporting Database. This is to ensure that eachloan within PowerSeller has an up to date account of whichInvestors have previously reviewed such loans for sale and toensure that previously reviewed loans that are deemed to bewithin NCEN Underwriting policy are not inadvertently re-submitted to the same Lender/ Investor. (see [detailed procedures]for instructions on updating Investor review information)

The Secondary Marketing Analyst receives pool characteristicrequirements and pool size recommendations from either NCCCLoan Sales Management or the Trader. Using the provided loancharacteristics and pool size recommendations, the SecondaryMarketing Analyst uses the filter tools within PowerSeller /Astera tocompile a list of loans that meet premium loan bid poolrequirements. Astera is the optimization software used inconjunction with PowerSeller and used for pooling purposes.

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Premium Loan Bid Pool Formation

Back UpProcedures

If the Secondary Marketing Analyst is unable to perform thepremium loan pool creation function, an auxiliary approved personshould perform these duties. Refer to the disaster recoverydocument in Attachment 1 for NCCC approved procedures in theevent of a business disruption.


The Secondary Marketing Analyst keeps a copy of the premiumloan bid pool requirements in their files along with written approval(trade ticket), by the approved authority, of the final premium loanbid pool data file submitted to the Investor. Final premium loan bidpool data files are to be saved on the NCCC network.


The premium loan bid pool data file is distributed to theTransaction Manager/Trader and NCCC Loan Sales Managementas needed. A copy of the final premium bid pool data file will bedistributed by the Secondary Marketing Analyst to the TransactionManager (for sending to the Investor) and the Loan AdministrationDepartment (in order for Vault personnel to pull files for theInvestors due diligence review) by electronic mail.


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General Policy

DiscountLoan PoolFormation

The Secondary Marketing Analyst is responsible for creating datafiles, which represent pools of loans from the available funded loaninventory that may not be to Premium Investors due to delinquencyor some other underwriting exception that excludes it from theInvestors requirements.

Discount Loan Pool Formation

Process Closed loans that are not performing or that have been rejectedfrom prior premium loan pools may be combined together andsubsequently bid on by Investors wishing to purchase such pools of loans. The Secondary Marketing Analyst, at the direction of theTrader, creates pools of loans that meet such criteria and that canbe sold to Discount Investors. (see [detailed procedures] for creating loan pools)

Prior to establishing a discount loan pool data file, the SecondaryMarketing Analyst updates PowerSeller with information from theInvestor Reporting Database concerning prior file reviews by eachInvestor. This is to ensure that each loan within PowerSeller has anup to date account of the number of times it has been reviewed byan Investor. Loans that have been reviewed and rejected by one or more Investors may be submitted in a discount loan pool. Thedetermination of which loans that are to be included in the pool thatis presented to potential Discount Investors are made by the Trader.(see [detailed procedures] for instructions on updating Investor review information)

The Secondary Marketing Analyst receives discount loan poolformation instructions from either NCCC Loan Sales Managementor the Trader.

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Process Using the provided pool attribute recommendations, the SecondaryMarketing Analyst uses the filter tools within PowerSeller tocomprise a list of loans that meet discount loan pool requirements.

Once the loans that meet the discount loan pool requirements havebeen identified within PowerSeller , the Secondary MarketingAnalyst exports the loan characteristics associated with identifiedloans to an Excel spreadsheet, the discount loan pool data file.The discount loan pool data file requires formatting prior tofinalization (See [detailed procedures] for instructions on the datafile formatting)

The discount loan pool data file is forwarded to the Trader for review, where upon approval, the Trader will submit the data file tothe Investor.

Timing Timing expectations will be set by NCCC Loan Sales Managementor the Trader dependent on negotiations with Investors. TheSecondary Marketing Analyst will be notified of the timing of thepool sale via electronic mail and be tracked by the SecondaryMarketing Analyst on the secondary marketing calendar.

ReviewRequire-ments

The Trader is responsible for reviewing the discount pool data fileand finalizing the discount pool population prior to approval of thepool for submission to the Investor.


The Secondary Marketing Analyst is approved to perform alldiscount loan pooling functions. However, final approval of thediscount pool is to be given by NCCC Loan Sales Management /theAVP of Transaction Management/ or the Trader, depending ontheir authority limits. [see Section 1 of the Secondary MarketingPolicies and Procedures for Authority Limits] if all characteristicsdo not deviate significantly from the original poolcharacteristics. Should the pool characteristics deviatesignificantly from original pool characteristics, NCCC LoanSales Management needs to approve.


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Back UpProcedures

If the Secondary Marketing Analyst is unable to perform thediscount loan pool creation function, an auxiliary approved personshould perform these duties. Refer to the disaster recoverydocument in Attachment 1 for NCCC approved procedures in theevent of a business disruption.


The Secondary Marketing Analyst keeps a copy of the discountpool requirements in their files along with written approval, (trade ticket) by the approved authority, the final discount loan pool datafile submitted to the Investor. Final discount pool data files are to besaved on the NCCC network with access limited to NCCC Loan

Sales Management, the Trader, and the Secondary MarketingAnalyst through password protection.


The discount loan pool data file is to be distributed to theTransaction Manager/Trader and NCCC Loan Sales Managementas needed. A copy of the final discount loan pool data file, asdetermined by the Trader, will be distributed by the SecondaryMarketing Analyst to the Transaction Manager (for sending to theInvestor) and the Loan Administration Department (in order for Vaultpersonnel to pull the files for the Investors due diligence review) byelectronic mail.


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General Policy

Update SoldLoanInventoryInformation

Once the purchase of pooled loans become final, the SecondaryMarketing Analyst is responsible for updating sold loan informationwithin PowerSeller .

Update Sold Loan Inventory Information

Process After a pool has been sold and funds have been received from theInvestor, the Secondary Marketing Analyst is responsible for importing the sold loan level information into PowerSeller . Thisinformation includes purchaser name, purchase date, unpaidprincipal at time of purchase, and the amount paid for the loan. Inmost instances, a single price percentage is applied to an entirepool and therefore each loan within the pool is applied that sameprice percentage. However, some Investors will price individualloans within a pool at different pricing rates.

The Secondary Marketing Analyst is to obtain from the Trader anExcel spreadsheet containing the sale information. With thisinformation, the Secondary Marketing Analyst will update theShipped Table (which represents all loans shipped to Investors)within PowerSeller by importing the spreadsheet and mapping theinformation to the individual sold loan profiles. (see [detailedprocedures] for instructions on updating sold loan inventory)

Timing The recording of sold loan information is to be performed promptlyafter the receipt of funds from the sale of a pool.

ReviewRequire-ments

The Trader is responsible for reviewing the discount pool data fileand finalizing the discount pool population prior to submitting to theInvestor.

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General Policy

RepurchaseImport

Upon notification of a repurchased loan by the RepurchaseSpecialist, the Secondary Marketing Analyst is required to removethe repurchased loan from the shipped loan table and add therepurchased loan to the NCCC Loan Inventory in PowerSeller .

Repurchase Import

Process Periodically, funded loans that are sold to Investors may berepurchased by NCCC due to breaches of certain covenants in apurchase agreement. These covenants include, but are not limitedto, first payment defaulted loans, fraudulent loans, or loans that donot meet other Investor criteria. Such repurchased loans must bere-added to the NCCC inventory of assets.

The Repurchase Specialist is to provide to the Secondary MarketingAnalyst the loan number, the repurchase date, and the reason for repurchase as soon as the repurchase procedures for a loan arecompleted. This information should be provided in a spreadsheetthat has been converted to a text format. With this information, theSecondary Marketing Analyst should update PowerSeller throughan import of the spreadsheet into the PowerSeller database. Animport map has been established within PowerSeller that allows theSecondary Marketing Analyst to remove the repurchased loan fromthe loan shipped table and transfer it to the loan table. The loantable represents all loans in inventory that are available for sale.

Timing The repurchase procedures should be performed within 24 hours of notification of a repurchase by the Repurchase Specialist. An emailresponse should be provided to the Repurchase Specialist by theSecondary Marketing Analyst indicated that such loans have beentransferred to NCCC inventory.

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Repurchase Import

ReviewRequire-ments

NCCC Loan Sales Management and the Repurchase Specialist areresponsible for reviewing monthly Repurchased added toinventory reports to ensure that all repurchases have beenaccounted for.


The Secondary Marketing Analyst is approved to perform all importsof repurchased loans.

Back UpProcedures

If the Secondary Marketing Analyst is unable to perform the importof repurchased loans into PowerSeller , an auxiliary approvedperson should perform these duties. Refer to the disaster recoverydocument in Attachment 1 for NCCC approved procedures in theevent of a business disruption.


The Secondary Marketing Analyst is to save a copy of therepurchase spreadsheet on the NCCC network. Repurchaseinformation should be stored of the network for a minimum of 1 year in the case that there are errors in the import process.


A summary report of repurchased loans should be distributed toNCCC Loan Sales Management, the Trader, Loan Administration,and the Servicing Department at the end of each month. Asummary report of repurchased loans should be prepared by the

Secondary Marketing Analyst and included in the Board of Directorsreport each month.


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General Policy

Sweeps At the direction of the Controller, the Staff Accountant isresponsible for removing funded loans, referred to as sweeping,from the bank warehouse credit facilities (also referred to as banklines) and transferring them to one of the aggregated warehousecredit facilities. This will ensure that there is capacity on the bankwarehouse credit facility to continue to fund loans. A sweep usuallyremoves the prior months funded loans from the individual bankwarehouse credit facilities. All loans removed from the bankwarehouse credit facilities are to be alternately placed in one of thesix aggregated warehouse credit facilities. However, eachaggregated warehouse credit facility may have sub-limits or specificloan acceptance criteria. Only those loans which meet the

aggregated warehouse credit facility requirements should betransferred to such accounts.

Sweeps

Process On a periodic basis, NCCC will create funding capacity byselectively moving closed loans financed by certain bankwarehouse lines and transferring them to Citigroup, MorganStanley, Bear Stearns, Barclays, CSFB, or Von Karman aggregated warehouse lines. The Secondary Marketing analyst isresponsible for selecting the loans to be moved, notifying theindividual banks in writing of the removal of such loans from their warehouse lines, and notifying the banks with the aggregatewarehouse lines in writing of the addition of such loans.

Upon notification by the Controller, the Secondary MarketingAnalyst will identify funded loans currently on the warehouse lines inthe Line Totals Report and save such loans in a separate file inExcel. This file represents all funded loans currently held by

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Sweeps

Process Deutsche Bank as custodian for the files. This data file will beemailed to the designated Deutsche Bank personnel as DeutscheBank must prepare the actual files for shipment to the designatedcustodian for the aggregated warehouse lines. An exception reportmust also be requested.

From the above created file, a separate excel file is also created for import into PowerSeller . This report, which is to be saved in textformat, should contain only the loan numbers of the selected loansin a 10 digit format. (see [detailed procedures] for instruction onproducing and formatting the data file)

An import map has been established in PowerSeller for use in theimport. The purpose of this import is to identify the loans to beremoved from the bank warehouse lines in PowerSeller so that amore complete file, containing numerous loan characteristics, canbe created to submit to the designated bank warehouse personnel.An export map and filter have been established in PowerSeller toassist with the creation of this file. (See [detailed procedures] for importing information into PowerSeller )

The new Excel file requires some manual manipulation, or scrubbing, prior to its completion as blank fields may need to beresearched or additional calculations may need to be performed.(see [detailed procedures] for data scrubbing) This data file is thensubdivided into separate files containing loans from each bankwarehouse credit facility. Each data file is then submitted to thedesignated bank warehouse personnel along with a Request for Release Letter signed by the proper NCCC authority (see ApprovalRequirements). This release letter must be submitted to each bank48 hours prior to any activity and must be signed by approvedNCCC personnel.

Finally, after the bank warehouse personnel have been alerted tothe removal of certain loans from such facilities, the SecondaryMarketing Analyst must also notify the aggregated warehouse linepersonnel of the intended transfer. A complete file containing all of the loans to be transferred will be sent to the designated aggregatedwarehouse line personnel. The Secondary Marketing Analystshould alternate each month between aggregated credit facilities.


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Sweeps

Process The data file sent to Citigroup is required to be in a specific format.(See [detailed procedures] for formatting the file)

Timing The timing of the sweep is to be dictated by the Controller of NCCCto ensure that there is adequate capacity to fund future loans on theexisting bank warehouse lines. Such timing will by communicatedby the Controller of NCCC to the Staff Accountant in writing viaelectronic mail.

ReviewRequire-

ments

Review of the loans to be swept should be performed by either theController of NCCC or NCCC Loan Sales Management prior to thenotification of transfer. This approval should be documented andsaved in Secondary Marketing files.


Approval of the loans to be swept should be obtained by either theController of NCCC or NCCC Loan Sales Management prior to thenotification of transfer. This approval should be documented andsaved in Secondary Marketing files.

Current authorized signers for the Bank of America, CDC, UBS,Morgan Stanley, and Citigroup Request for Release Letters are asfollows:

Kevin Cloyd Pat Flanagan Robyn Cook-Auerbach Komarith Touk Bob Lent

Back UpProcedures

If the Secondary Marketing Analyst is unable to perform the importof pricing information into PowerSeller , an auxiliary approvedperson should perform these duties. Refer to the disaster recoverydocument in Attachment 1 for NCCC approved procedures in theevent of a business disruption.


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Sweeps


The Staff Accountant is to save a copy of the data files sent to alldesignated warehouse line personnel on the NCCC network withaccess limited to NCCC Loan Sales Management, the Controller,and the Secondary Marketing Analyst through password protection.Also, a signed copy of the Request for Release Letter should bemaintained in Secondary Marketing files.


The following contact information is to be used for transfer notifications:

Deutsche Bank (Custodian)

Aimee Kemmeter -- 714-247-6052 Andrew Hays -- 714-247-6036 Scott Tofukufi -- 714-247-6046 Vishal Karingada -- 714-247-6029

Deutsche Bank (New York/Von Karman) Jessica Richmond -- 212-250-5861 Orinthia Skeete -- 212-250-7876

Bank of America Chris Young -- 704-388-8403 Jennifer Kovish -- 704-386-3614CDC John Racy -- 212-891-5816 Chris Matzelle -- 212-891-5826 Robert Les -- 212-891-5828

UBS Steve D'Orazio -- 212-352-8881 Cheryl Johnson -- 212-352-8883

Citigroup Bobbie Theivakumaran -- 212-723-6753 Ellen Simone -- 212-615-7725 Lou Rebecchi -- 212-615-9264

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Sweeps


Morgan Stanley Donna Garcia -- 212-537-1795 Christine Grippo -- 212-537-1733

Bear Stearns Cynthia Knowles -- 212-272-7015 Nick Wells -- 212-272-3368 Lars Berg -- 212-272-3676 Matt Lederman -- 212-272-5686

Barclays Glenn Pearson -- 973-576-3179 Hansel Nieves -- 973-576-3189 Walter Kunisch -- 973-576-3321

CSFB Tim Callahan -- 609-627-5053 Kelly Corby -- 609-627-5032 Gary Timmerman -- 609-627-5026


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General Policy

PeriodicInventoryReporting

The Secondary Marketing Analyst is responsible for all funded loaninventory reporting.

Periodic Inventory Reporting

Process The Secondary Marketing Analyst is responsible for maintaining theNCCC inventory database within PowerSeller . Reports concerninginventory information will be requested by Management periodically.Additionally, standard queries have already been established in thedatabase to run general reports such as Unsold Inventory Reports,Unsold Inventory Current Pools Reports, and Unsold InventoryHold.

Timing Inventory Reports may be requested by NCCC Loan SalesManagement, the Trader, or other members of NCCC at any time.A Total Unsold Inventory Report and an Aged Inventory CommittedReport must be able to be created and distributed to NCCC LoanSales Management anytime it is requested . A Total UnsoldInventory Report is also created for the Board of Directors Packageat the end of the month.

Review

Require-ments

The Secondary Marketing Analyst should cross reference eachperiodic inventory report produced with accounting and servicingrecords for data consistency.

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Periodic Inventory Reporting


The Secondary Marketing Analyst is approved to perform allinventory reporting.

Back UpProcedures

If the Secondary Marketing Analyst is unable to perform the periodicinventory reporting function, an auxiliary approved person shouldperform these duties. Refer to the disaster recovery document inAttachment 1 for NCCC approved procedures in the event of abusiness disruption.


The Secondary Marketing Analyst is to save copies of any reportsproduced on the NCCC network. These reports should be kept for a minimum of 1 year and may be used for subsequent historicalreporting.


The Total Unsold Inventory and Aged Investor Committed Reportsshould be distributed to NCCC Loan Sales Management by the endof each business day. The month end Total Unsold Inventoryshould be distributed to the person responsible for preparing theBoard of Directors Package.


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Secondary Marketing Policies Transaction Management



Overview

The systems utilized by the Trader include: PowerSeller Microsoft Excel Microsoft Access Microsoft SQL Server

Skills required to perform Transaction Management include: Proficiency in Database Management Expertise in Excel Knowledge of NCCC product characteristics, Investor loan requirements, and

loan pricing


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OverviewThe following summarizes the processes for the Trader:

For Premium Loan Pools: Assist in Establishing Forward Commitments: For certain Investors, NCCC

may enter into forward sale commitments with such Investors. In many cases, theterms of any forward commitments are negotiated by NCCC Loan SalesManagement with the assistance of the Trader. However, in some instances, theTrader may negotiate a forward commitment directly with an Investor with NCCCLoan Sales Managements approval.

Forward Commitment and Premium Loan Bid Pool Formation: At thebeginning of each month, NCCC Loan Sales Management and the Trader willdiscuss and coordinate forward commitments and premium loan bid pool sales

strategies. From these discussions, NCCC Loan Sales Management or theTrader will provide the Secondary Marketing Analyst with the loan characteristicsor parameters to create forward commitment pool(s) and/or premium loan bidpools. The Secondary Marketing Analyst will combine pools of loans within theNCCC Inventory to meet the pool requirements. The Trader will submit to thecommitment Investor or to bid Investors, based upon the pool, an electronic filecontaining loan level information of the pool.

For Discount Loan Pools: Review and Analyze Discount Loans: Each month, the Trader will request from

the Secondary Marketing Analyst reports of all uncommitted inventory that havebeen previously declined by Premium Investors, are outside of Premium Investor

guidelines, or which are non-performing. With these reports, the Trader willreview such loans to determine whether they are available for sale to DiscountInvestors.

Submit Applicable Discount Loans for Re-Underwriting: The Trader isresponsible for submitting newly identified performing discount loans to the VicePresident Loan Enhancement for re-examination. In some instances, anidentified discount loan may be re-underwritten or modified within companyguidelines and subsequently presented to Premium Investors.

Discount Loan Pool Formation and Bid Process: The Discount Loan Trader will provide the Secondary Marketing Analyst with the loan characteristics or

parameters to create discount loan pools. With knowledge of various DiscountInvestors purchase requirements, purchase history, and pricing, the DiscountLoan Trader will create discount pools to maximize the pricing paid and saleexecution for such discount loans. An electronic file containing loan levelinformation on the discount pool will be submitted to Discount Investors for their review and subsequent bid for purchase.


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OverviewFor Premium and Discount Bid Pools:

Analyze Bids and Award Sale: Once a premium loan pool or discount loan poolis created, it will be submitted to several Investors for bidding (No bid process isnecessary for forward commitment pools). The Trader is responsible for analyzing and reviewing each bid by the Investors to maximize the pricing paidand the sale execution for each loan pool. The Trader, with approval of NCCCLoan Sales Management, will award the sale of a pool to the appropriate Investor and create a Trade Ticket.

For All Pools: Schedule Due Diligence: Each Investor awarded the sale of a loan pool (or the

forward commitment pool) will perform a file review on a sample of the loanpopulation proposed for sale. The Transaction Manager will notify the Loan

Administration Department of the loans included in the pool and will coordinatethe timing of the due diligence review with the Investor. The Loan AdministrationDepartment is responsible for preparing the loan files for Investor review.

Coordinate and Finalize Final Pool Population: During the due diligenceprocess, certain loans may be added or removed from the proposed pool. After review of loan files, the Investor will determine which loans they will purchase fromthe pool. The Transaction Manager will then prepare a final tape of the loanpool. The Trader must also request the collateral of the final pool population beshipped to the Investors custodian.

Review and Verify Funds Received from Sale: Once the final purchase of loan

pool occurs, the Transaction Manager will verify that the agreed upon funds havebeen received from the sale of the pool. The Transaction Manager will also notifyvarious NCCC departments of the closing of the transaction.


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For Premium and Commitment Pool Creation

General Policy

Assist inEstablishingForwardCommit-ments

From time to time, NCCC may enter into forward commitments withInvestors. These commitments dictate specific loan characteristicsand volumes requested by the Investor for purchase. TheTransaction Manager is responsible for assisting NCCC LoanSales Management in negotiating forward commitments or establishing forward commitments within authority limits. SeeSection 1 of the Loan Sales Policies and Procedures for AuthorityLimits.

Assist in Establishing Forward Commitments

Process For certain Investors, NCCC may enter into forward salecommitments. In many cases, the terms of any forwardcommitments are negotiated by NCCC Loan Sales Managementwith the assistance of the Transaction Manager . However, insome instances, the Trader may negotiate a forward commitmentwith an Investor with NCCC Loan Sale Managements approval.

Assistance with the establishment of a forward commitmentincludes researching historical Investor premiums paid for loanpools, analyzing current loan inventories, analyzing expected NewCentury future originations, and examining current marketconditions. Once a commitment is negotiated, NCCC Loan SalesManagement or the Transaction Manager will prepare acommitment letter dictating the terms of the commitment andforward to an Investor for their signature.

Timing Typically, commitments are established at the beginning of themonth. However, a commitment may be established at any time.

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Assist in Establishing Forward Commitments


NCCC Loan Sales Management is responsible for approving allcommitments with Investors.

Back UpProcedures

If the Trader is unable to assist in the establishment of acommitment, NCCC Loan Sales Management may requestassistance from other members of Secondary Marketing.

General Policy

ForwardCommit-ment andPremiumPoolFormation

The Trader is responsible for providing the pool characteristicrequirements and pool amounts for forward commitments and

premium loan pools to the Secondary Marketing Analyst. TheSecondary Marketing Analyst will create pools of loans from NCCCInventory that meet such requirements.


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Forward Commitment and Premium Pool Formation

Process At the beginning of each month, NCCC Loan Sales Managementand the Trader will discuss and coordinate forward commitmentsand premium loan bid pool sales strategies. From thesediscussions, NCCC Loan Sales Management or the Trader willprovide the Secondary Marketing Analyst with the loancharacteristics or parameters to create a commitment pool or premium loan bid pool. If available, the Secondary MarketingAnalyst will be provided the commitment letter stating the poolrequirements. However, NCCC Loan Sales Management or theTrader may communicate the pool parameters to the SecondaryMarketing Analyst either verbally or through an electronic mail file.The Secondary Marketing Analyst will prepare an electronic data file

containing information on loans that meet the pool requirements.Upon the receipt of the electronic pool data file from the SecondaryMarketing Analyst, the Trader will review the data file and deleteany loan information not necessary for the Investors review. Thedata file will then be emailed to the commitment Investor (if the poolis a commitment pool) or to multiple Investors for independent salebids (if the pool is a bid pool). The Trader will maintain aspreadsheet to track specific pools, Investors that the pools are sentto, and for bid pools, the cut off date and times for Investors torespond by. This spreadsheet, as well as contact information for allInvestors, should be maintained on the NCCC network in an

Investor subdirectory.Timing Forward commitment and premium loan bid pools are created and

sent to Investors during the first half of the month to allow adequatetime for the sales process. For premium bid pools, bid responsesare requested from Investors approximately 3 to 4 days after thepremium loan pool is initially sent to the prospective Investors.

ReviewRequire-ments

The Trader is responsible for reviewing the forward commitment or premium loan bid pool data file accuracy or missing data prior tosubmitting to Investors.

Back UpProcedures

If the Trader is unable to perform the pool formation or bid process,an auxiliary approved person should perform these duties.


The Trader is to save the commitment pool and premium loan biddata files on the NCCC network. For premium loan bid pools, theTrader should also save the spreadsheet containing Investor contact information and the cutoff date and times on the NCCCnetwork. (See Approval, Authority Limits, and Access section of theLoan Sales Policies and Procedures for authorized access)


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For Discount Pool Creation

General PolicyReview andAnalyzeDiscountLoans

The Trader is to review monthly reports containing all uncommittedinventory. This inventory may include funded loans that have beendeclined by Premium Investors or loans that are non-performing.

Review and Analyze Discount Loans

Process Each month, the Trader will request from the Secondary MarketingAnalyst reports or data files of all uncommitted inventory that havebeen previously declined by Premium Investors or which are non-performing. The reports produced by the Secondary Marketing willbe saved on the NCCC network. With these reports, the Trader willreview such loans to determine whether they are available for saleto Discount Investors.

Loans eligible for sale to Discount Inventors include loans that arenot delinquent more than 59 days, but include one or more of thefollowing characteristics: LTV exception, debt ratios outside of standard limits, BPO exceptions, compliance issues, missing docs,or prior Premium Investor declines. Pools of non-performing loans,which include loans delin

new century capital corporation secondary marketing policies

Documents