• Effective credit card utilization monitoring and portfolio retention initiatives.

• Demonstrate effective fraud detection procedures.

• Customer service environment that provides satisfactory degree of customer care, including an automated call distribution system, voice response unit, and Internet site for customer inquiries, transactions and overall productivity management.

• Management of delinquent portfolios including monitoring roll rate migration, FICO scoring and behavior modeling, loss mitigation counseling, and effective skip tracing.

• Demonstrate sound collection procedures with appropriate staff allocations and product-specific experience levels.

• Collection staff training including extensive Fair Debt Collection Practices Act (FDCPA) requirements and testing, soft skills instruction and negotiation techniques.

• Satisfactory oversight of collection staff, including continuous call monitoring, scoring, and feedback as well as periodic refresher training and certification courses.

• Effective procedures for payment plans, and matrix of approval levels for staff, middle and senior management. Satisfactory history of cure rates, promise-to-pay success rates versus recidivism rates.

• Demonstrate procedures for timely charge-off of delinquent accounts between 120 to 180 days and review by senior management.

• Maintain effective procedures for recovery of postcharge-off assets including internal and external initiatives.

• Demonstrate controls for tracking sales tax, personal property tax, and UCC filings. Maintain sufficient staff, systems, and expertise to proactively monitor lessee compliance and credit positions, administer lease modifications, perform lease-end re-marketing and dispositions of used equipment, and engage in reasonable inventory valuation practices.

• Demonstrate sound collection procedures with experienced staff allocated to higher delinquency levels.

• Demonstrate an adequate recovery performance history through channels such as equipment resales, deficiency collections, and lease modifications. Realized residual values should be tracked and reasonable.

• Maintain an appropriate charge-off policy, typically between 120 and 180 days, and monitoring of charge-off recoveries, which should have a neutral effect on earnings and reserves.

• Demonstrate sufficient procedures and documentation controls regarding resolution approvals.

• To the extent applicable, based on the loan’s collateral, monitor the status of real estate taxes and other levies against the loan collateral/borrower that could negatively affect lien position, and take appropriate measures.

• Maintain sound procedures to track the status of all applicable security interest filings and take appropriate action to ensure that security interest filing renewals are completed before their expiration dates.

• Collect and analyze franchisee’s operating statements at least semiannually (preferably quarterly) and identify negative trends. The financial review process should include a fixed charge coverage ratio analysis calculated at the unit and corporate borrower level.

• Maintain watchlist functions so that loans experiencing negative trends or potential default issues are monitored more intensively.

• Follow proactive collection procedures for borrowers with past due payments.

• Monitor borrowers’ loan covenant compliance and take prudent action regarding any such nonmonetary defaults.

• Perform collateral site inspections no later than after a loan enters the watchlist stage.

• Possess acceptable credit analysis skills among staff for identifying and evaluating key elements of franchise concept, unit, and borrower performance.

• Proactively identify and implement the optimal strategy and tactics for recovering troubled franchise assets.

• Have sufficient staffing levels and asset manager industry experience for executing franchise loan workout plans.

• Management staff experience demonstrates success in resolving troubled franchise credits, including credits in bankruptcy.

• Acceptably track all key activities covering the special servicing process.

• Demonstrate expertise in evaluating the correct course of action relating to each asset, and with adequate documentation substantiate asset recovery recommendations and decisions.

• Asset business plans are prepared within the first 90 days or less of delinquency.

• Show acceptable controls regarding decision-making and approval processes.

• Control third-party vendor engagements through standardized agreements, competitive bidding, management approvals, and centralized tracking.

• As applicable, perform all duties according to Commercial Mortgage Securities Association industry standards, and regulatory requirements (i.e. REMIC rules) for CMBS portfolios.

• Maintain adequate procedures for monitoring and disbursing real estate taxes. Penalties for late payments should be tracked separately on a dollar-per-loan count basis.

• Have acceptable procedures for tracking security interest filing expirations and obtaining continuations with adequate lead-time, usually six months.

• Have sound procedures for obtaining, spreading, normalizing and analyzing property financial data. Including net operating income (NOI) adjustments and debt service coverage ratio (DSCR) calculations.

• Maintain sound procedures for obtaining periodic inspection reports and monitoring related follow up actions.

• Maintain tracking of borrower requests, and act promptly and expeditiously in responding to those requests.

• Have formalized loan watchlist procedures.

• Have adequate early delinquency/default collection efforts. This includes sufficiently proactive time lines for telephone and written borrower contact.

• Properly track individual pooling and servicing agreement’s requirements on specific deals and closely track subservicer compliance.

• Have procedures for wire remittance from subservicers, and their reconciliation, including procedures for tracking and balancing reports received from subservicers having more than one securitization issue.

• Have good procedures in place for tracking and monitoring principal and interest (P&I) advances.

• Monitor special servicer performance in handling its assets, updating valuations/appraisal reductions, and recoverability testing of advances.

• Monitor material fluctuations in collateral value, taking such fluctuations into account as part of the decision-making process regarding advances and determination of nonrecoverability.

• Demonstrate understanding of the impact of nonrecoverability determination, and take reasonable steps to prevent, cash flow interruptions to investment-grade certificate-holders.

• Monitor late reporting/remitting and tax disbursement penalties incurred by subservicers.

• Routinely monitor subservicer tracking and disbursement reports relating to taxes, insurance, reserves, and Uniform Commercial Code (UCC) refilings to identify exceptions.

• Routinely monitor and require subservicers have adequate D&O, E&O, and force-placed insurance coverage in place on all loans as a matter of policy.

• Maintain sound procedures for tracking insurance loss drafts and claims disbursements.

• Track subservicer delinquency reporting and collection activity.

• Have adequate procedures for overseeing subservicer handling of borrower/property financial statements and property inspections.

• Maintain an integrated watchlist for all master serviced loans (i.e., primary plus subserviced loans).

• Have adequate procedures for authorizing advances and tracking reimbursements.

• Maintain appropriate staffing and procedures for approving borrower requests such as modifications and assumptions.

• Have an adequate subservicer onsite audit program conducted with a frequency commensurate with each subservicer’s volume.

• Routinely ensure that all compliance certificates, financial statements, and reports required by the pooling and servicing agreement are forwarded and reviewed on a timely basis.

• The company should have a demonstrated track record of resolving problem assets. If the company’s track record is of short duration, the achievements may be based on the prior experience of key managers for overseeing and disposing of troubled loans or real estate owned (REO).

• Possess expertise in handling a variety of assets types, although company may have a concentration of experience with one particular property type.

• Demonstrate an ability to evaluate the correct course of action relating to each asset. Policies are in place to maximize the recovery proceeds of each asset, taking into account the interests of all certificate-holders and outlined within the framework of the resolution business (loan or REO) plans.

• Exercise judicious management of all trust assets and expenses during the workout process.

• Require the creation of individual asset (loan) business plans within 90 days of transfer to the special servicer (usually a 150-day delinquency benchmark). Plans are approved through proper delegations of authority.

• Properly document all specific asset management recommendations, including foreclosures, restructures, note sales, and borrower settlements, with proper delegation of authority for approvals.

• Have procedures in place for transferring assets from loan to REO status with timely notifications to all internal and external parties.

• Have procedures in place for REO management. REO business plans and budgets should be prepared within 60 to 90 days of acquisition of title.

• Maintain procedures for selecting, engaging, and overseeing third-party property managers.

• Require formalized procedures for property management company financial reporting.

• Review monthly property manager financial reporting, which is done by in-house staff having accounting and audit backgrounds.

• Maintain procedures for monitoring property manager reporting compliance and bank account activity and reconciliations.

• Follow formalized and sound procedures for REO dispositions.

• Follow recovery actions that are consistent with REMIC rules and time constraints.

• Select, engage, and monitor brokers with adequate controls. Listing agreements should not be longer than six months, and can be canceled by notice from the property owner. Sales offers are substantiated and approved by senior management.

• Control third-party vendor engagements through standardized agreements, competitive bidding, management approvals, approved vendor lists, and system tracking.

• Maintain an acceptable process for review of appraisal and environmental reports. No foreclosure actions are completed without an environmental review from a qualified expert.

• Manage the legal function through an approved counsel list. Billings are closely monitored.

• As applicable, perform all loan servicing-related duties in accordance with investor guidelines and prudent industry practice.

• Demonstrate acceptable and efficient loan boarding procedures that maximize automation and ensure acceptable data integrity controls.

• Demonstrate satisfactory controls in payment processing environment with proper handling of live checks and research items as well as solid oversight of vendor relationships.

• Maintain an investor accounting, reporting, and remitting structure that is functionally driven providing for the requisite segregation of duties among reporting, remitting, and reconciling functions.

• Maintain satisfactory investor accounting and default management ratings from the respective government-sponsored entities (GSEs).

• Maintain satisfactory Uniform Single Attestation Program (a Mortgage Bankers Association standard) rating and compliance.

• Perform rate adjustments on ARM loans in accordance with investor and regulatory guidelines.

• Maintain satisfactory compliance with Real Estate Settlement Procedures Act (RESPA) guidelines in all escrow administration functions.

• Demonstrate solid oversight of vendor relationships for escrow administration functions (i.e., hazard and flood insurance, real estate tax bill procurement).

• Maintain provisions for force placed hazard and flood insurance coverage via an insurance carrier with an acceptable claims paying ability rating.

• Demonstrate satisfactory compliance with lien release statutes in all 50 states.

• Maintain effective customer service, and depending on volumes, provide an automated call distribution system, voice response unit, and Internet site for customer inquiries, transactions, and overall productivity management.

• Demonstrate sound collection procedures and timelines in accordance with minimum standards specified by investors and agencies.

• Have satisfactory training in FDCPA and other applicable regulations.

• Maintain acceptable collection technology including an autodialer or powerdialer for calling campaigns and call center productivity management.

• Maintain additional technology as needed, including credit scoring and behavior modeling, workflow automation, advanced telephony, and call scripting.

• Perform periodic property inspections on delinquent loans to ensure that all collateral is sufficiently monitored and protected against loss.

• Demonstrate sound collection procedures and timelines in accordance with minimum standards specified by investors and GSEs.

• Maintain acceptable collection technology including an autodialer or powerdialer for calling campaigns and call center productivity management.

• Have appropriately aggressive and proactive focus on loss mitigation via mailing and calling campaigns.

• Maintain demonstrated ability to perform net present value analysis to determine best exit strategy.

• Demonstrate acceptable foreclosure and bankruptcy timeline management pursuant to investor guidelines.

• Maintain proactive case management and attorney oversight.

• Maintain effective REO property management marketing and disposition procedures including asset management guidelines, marketing plan, vendor organization and oversight, eviction and marketing timeline management, and sale results.

• Develop and implement aggressive collection timelines that address the credit profile of various nonconforming borrowers.

• Hire and retain experienced nonconforming collectors.

• Implement and encourage employee career-pathing to retain experienced collectors and minimize turnover.

• Provide in-depth collection training, including extensive FDCPA instruction, soft skills training and negotiation techniques, as well as role-playing in a simulated call center environment.

• Nonconforming servicers should perform welcome calls within five to 10 days of a new loan closing to reinforce terms of the repayment obligation and to encourage positive pay habits.

• The nonconforming servicer should track the contact rate on welcome calls.

• Bilingual collectors should be on staff in accordance with specific portfolio demographics.

• Expanded collection calling hours, including evenings and weekends, should be in place to optimize contact with recalcitrant borrowers.

• Credit scoring and behavior modeling technology should be in place to strategically align calling campaigns with the latest borrower profiles.

• Advanced telephony should be utilized for optimum contact opportunities including inbound call volume.

• Consistent and frequent call monitoring to ensure that collectors remain effective and are following regulatory guidelines.

• Monthly property inspections to ensure that collateral is not compromised.

• Demonstrate advanced analytical environment capable of measuring and tracking roll rate migrations and promise-to-pay.

• Success rates, short-term repayment plan cure rates, prime-time calling percentage, and best time-to-call criteria.

• Effective skip tracing environment, including skip-tracing-locate-rate percentage.

• Demonstrate early loss mitigation initiative in advance of foreclosure referral. Advanced loss mitigation analytics should include fully automated net-present-value analysis, including updated borrower financial statement and property valuation, resulting in best-exit-strategy-workout plan.

• Full and complete file review prior to foreclosure to ensure that the collection effort has been exhaustive and that all regulatory guidelines have been met.

• Automated (electronic) file referral to approved counsel.

• Maintain corporate-approved list of external counsel for representation in foreclosure and bankruptcy cases.

• Maintain dual track of loss mitigation and foreclosure to ensure that foreclosure sale is the last resort.

• Closely manage foreclosure and bankruptcy timelines with external counsel. Issue monthly report cards on attorney performance.

• Highly experienced default management team to perform due diligence on distressed asset portfolios.

• Demonstrate proficiency at portfolio triage, including rapid assessment of incoming distressed portfolios, identification of assets requiring immediate attention, development of action plans, and assignment of resources for new assets.

• Effectively manage flow of new assets into servicing stream.

• Identify reasons for default and make loan cash positive if possible.

• Demonstrated advanced portfolio analytics and attorney oversight methodologies.

• Demonstrated skip-tracing abilities, including advanced technology tools, and skip-tracing-locate rate.

• Highly experienced collection staff averaging more than five years industry experience.

• Implementation of early and proactive loss mitigation approach.

• Fully automated net-present-value analysis based on current borrower financial statement and property valuation, best exit strategy developed.

• Highly experienced foreclosure and bankruptcy team that can track problem assets, court delays, chronic filers, and maximize timeline compliance. Expeditiously move for lift of stay in all cases.

• Aggressive dual-path strategy combining loss mitigation efforts with proactive foreclosure timeline management.

• Provide adequate documentation to substantiate asset recovery strategies and decisions.

• Exhibit acceptable controls over decision-making and approval processes.

• Demonstrate strong vendor management methodologies, including standardized agreements, competitive bidding process, management approval matrix, and independent monitoring and tracking.

• Exhibit formalized and prudent procedures for REO management and disposition.

• Asset managers should have extensive REO management experience.

• Utilize cash for keys to expedite property vacancy where cost-effective.

• Select, engage, and monitor brokers with adequate controls. Sales offers are substantiated and approved by senior management.

• Demonstrated ability to track individual pooling and servicing agreements on specific deals and closely monitor subservicer compliance.

• Master servicing guide published on the Intranet.

• Exhibit adequate procedures for establishing wire remittance arrangements with new subservicers as well as reconciling incoming wires from subservicers.

• Exhibit satisfactory segregation of duties among the investor accounting and reporting functions.

• Satisfactory procedures and system security for reconciling unpaid principal balances to scheduled balances.

• Sound procedures for tracking and balancing reports received from subservicers administering multiple issues.

• Sound procedures for tracking and monitoring principal and interest advances.

• Monitor late reporting and remitting penalties incurred by subservicers.

• No unreconciled items aged more than 90 days.

• Routinely monitor subservicer tracking and disbursement reports for escrow items.

• Master servicers routinely monitor requirements that subservicers have adequate insurance coverage in force on all loans.

• Maintain sound procedures for tracking insurance loss drafts and claims disbursements.

• Routinely review subservicer delinquency reporting and collection activity.

• Exhibit sound procedures for authorizing advances and tracking reimbursements.

• Ensure adequate staffing, expertise, and procedures for administering special requests such as modifications and assumptions.

• Adequate subservicer review program mandating periodic on-site audits based on loan volume and criteria watchlist as well as routine desk reviews.

• Annual compliance process for all subservicers pursuant to master servicing participation program. Ensure that all compliance certificates, financial statements, and required reports are received on a timely basis.

• Maintain exception-based tracking system for trailing documents.

• Maintain web site for investor downloads and access to pool level transaction data.