Paper Assets Capital, LLC

◦Who Are We?◦Purchasing Notes◦Working Notes Out

BUSINESS OVERVIEW

•Company founded in 2014

•Buy distressed 2nd mortgages at a discount

•Re-work these mortgages to create value by solving problems to bring them back to performing status

•Resell performing mortgages for profit

The management team is comprised of four managing members, all with previous note investing experience through his/her private portfolio of notes and prior joint ventures.

Senior Asset Manager

Al SansoniVP, Investor

Relations

Dennis DikovVP, Business Administration

Cathie JeffsCEO

Client Relations

Cathy Cray

OUR TEAM

COMPANY GOALS

•To provide secure investment opportunities for Investors like YOU

•To provide solutions to our homeowner clients who might otherwise lose their homes

•To stay current with mortgage market trends through continuous investment in knowledge and training

•To expand our operations to include all types of mortgages

BUSINESS MODEL

•We buy non-performing mortgages secured by the real estate ▪ These assets are secured by the real property and by the borrowers personally

•We create value by working with borrowers to modify the loan

•We offer these ‘seasoned’ assets to investors seeking passive income

WHO ARE OUR BUSINESS PARTNERS ?

• Those who desire built-in equity with little to no risk

• Investors desiring long-term passive income

• Self-Directed Retirement Funds

• Other note investors looking to perform workouts

Distressed MortgageLife Cycle

Banks sell the distressed mortgages to investment funds for pennies on the dollar to free up their reservesInvestment funds are obligated to earn money and therefore resell the distressed mortgages These mortgages then fall into our hands!

We buy a non-performing second note with a performing first note where there is equity in the home per FMV (Fair Market Value) to cover both notes

Emotional equity on the homeowner’s part Credit reports ensure that the homeowner can meet his/her obligations This is the ultimate “cherry” and it’s priced accordingly

We rework the loan to create value by “seasoning” it (re-performing for 6 months)

Restructuring of the loan (or) Securing a full pay-off

If a full pay-off is not secured, the seasoned note is offered as a low risk opportunity to investors

It doesn’t always go this smoothly!

Sell seasoned performing notes Collateralize performing notes Hold notes for passive income Re-sell non-performing notes Foreclose, deed-in-lieu, or cash for keys on the

property, then sell or rent the property

Note Clearing Houses Private Individuals Hedge Funds Banks

A “Tape” is received from a Note Seller Due Diligence is performed◦ Skip Tracing Report◦ Credit Report◦ AVM (Automated Valuation Model) or BPO is obtained◦ Demographics of the Neighborhood

Crime Rate Unemployment

◦ Pacer.gov is checked for Bankruptcy status◦ County Website is searched for:

Other Lienholders Assignment Chain Tax Status (Firsts Only)

◦ Internal financial analysis to determine investment worthiness

A Bid is placed with the Seller Sit back and wait to see if the offer is

accepted Close the deal by:◦Executing a PSA, LSA, or contract (whatever

you like to call it)◦Fund the transaction

Wait to receive your collateral

(This is your MONEY!)

From Seller to Buyer◦Note◦Allonge Trail◦Mortgage◦Assignment Trail◦Accounting

From Buyer to Borrower◦RESPA / TILA Letter◦Welcome PackageHomeowner Options, …◦Monthly Billing Statements

Senior Lien StatusBorrower Management◦Finding the Borrower◦Determine their Intentions◦Negotiate the Win-Win◦Implement Agreement

Date & Amount of Last PaymentNext Payment Due DatePrincipal BalanceTax/Insurance Escrows

Find the BorrowerDetermine Homeowner IntentNegotiate a Win‐Win SolutionImplement Agreement

Public Searches◦ 411.com◦Anywho.com, etc.

Credit ReportPacer for BankruptcySkip Tracing

Cost Range $50-$150Door Knock Occupancy Status and Pictures of

house, property condition, cars…Leave Letter or Speak with

Homeowner by Phone

The 3 Most Important Questions:What happened?Where are you now?How would you like to move forward?

What happened?Job LossDivorceIllness / Injury

The idea is for them to tell their story

Where are you now?

How has you situation changed?Is this temporary or permanent?

How would you like to move forward?

‘I want to stay in my home’Discounted PayoffReinstatementReinstatement Payment ProgramRefinance Program

How would you like to move forward?

‘I just want to be done with it…’Deed-in-LieuCash for Keys

Determine which path the Homeowner wants to take…

Cooperate and Keep the HomeCooperate and Leave the Home‘Go underground’ ◦Try to keep home via stalling (Ex: Bankruptcy)◦Walk away, in denial, etc.

Cooperate and Keep the Home

Create Dialogue – speaking like a friend, not a client, non-judgmentalKeep their best interests at heartDiscuss Payment and ArrearsReview All Homeowner OptionsAssist them in developing their plan

Cooperate and Leave the Home

Deed-in-Lieu / Cash for Keys

Assist with moving expenses…Bonus for leaving the home undamaged

Go UndergroundHomeowner ◦ Ignores all contact◦ Stalls Foreclosure◦Files Bankruptcy

Note Investor◦ Initiate Foreclosure◦Continue to contact Homeowner

Present Plan to “Management”

Review Homeowner FinancialsEvaluate Interest Rate, Monthly Payment Amount, Arrears, FeesDetermine Discount, ‘Matching’, Balloon Payment Forgiveness Prepare Counter Options

Review “Management” Plan with Homeowner

Accepted Agreement Signed & ReturnedHire ServicerMonitor Senior Lien StatusWork to Refinance Homeowner

Individuals who desire built-in equity with little to no risk

Individuals desiring long-term passive income

Self-Directed Retirement Funds Other note investors looking to perform

workouts

Private Investor Program -How it Works?

• We acquire investment funds from private investors

• We purchase a mortgage(s) that fits our business model

• We provide our investors with a loan agreement secured by the mortgage(s)

YOU are the BANK

and cash in on interest!

WHO ARE OUR BUSINESS PARTNERS ?

• Those who desire built-in equity with little to no risk

• Investors desiring long-term passive income

• Self-Directed Retirement Funds

• Other note investors looking to perform workouts

HOW DO YOU BENEFIT ?

• Safe investment secured by Mortgages and Real Estate

• Secured 10% return on your money

• No management costs

• No daily headaches or responsibilities

What Happens to The Investment In a Worst Case Scenario?

• The business is structured to sell notes supported by mortgages on the property –

▪ Your loan is always secured by the mortgage

• The mortgage will be sold and your principal and interest will be paid as agreed

RECAP SECURE INVESTMENT OPPORTUNITIES!

•PAC buys distressed mortgages at a discount

•We rework the loan with the homeowner

•You utilize personal capital or your Self-Directed IRA

• To buy the re-performing mortgage notes for passive incomeOR

• To simply enjoy 10% return by investing in our fund