American Homeowner Preservation Deck

American Homeowner Preservation, LLC


8 1 9 S O U T H WA B A S H AV E N U E ∙ S U I T E 6 0 6 C H I C A G O, I L L I N O I S 6 0 6 0 5

A H P I N V ES T.C O M ∙ ( 8 0 0 ) 5 5 5 - 1 0 5 5

High Yield Distressed Mortgage Investments To Strengthen Families & Communities

Series 2014B Unlevered Equity Offering

April 24, 2015


AHP Overview

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Nationwide buyer of non-performing mortgages, focused on low balance and “issue” loans

U.S. market of over $300B in underwater mortgages, with concentrations in low- to- moderate income communities

2,000+ loans acquired since 2011, averaging over 20% gross returns

Social Impact

538 468 $57M $2.8M

Homeowners Retained

Vacant Homes Back In Service

Negative Equity Extinguished

Annual Payment Savings


AHP Team

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Jorge Newbery Founder & CEO

Gregory E.B. Smith

Alysse Romero

Verria Kelly Chief Operations Officer

Jake Laffey

Christal Tarver

Freddy Constante

Shawn Tolu

Alex Thornton Loan Analyst

Eric Bandke

Laura Sorg Marketing Manager

Suzzette Montiel Special Assets

Randall Glenn REO Management

ASSET MANAGEMENT (SECURITY NATIONAL SERVICING)

INVESTOR RELATIONS (WEALTHFORGE)

LITIGATION RESOLUTION

SPECIALITIES

LEADERSHIP

Calvin Holloway Accounting

BROKER-DEALER

TRUSTEE & DOCUMENT CUSTODIAN

SERVICER

Patrick Schuessler Fund Accountant

Chris Dickey Loan Resolution Manager


AHP Evolution

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2008 2009 2011 2013 2014

AHP opens office in Cincinnati, OH and is awarded 501(c)3 non- profit designation by IRS

AHP transitions to for- profit, pioneers short sale lease- back as foreclosure remedy

AHP moves to Chicago, IL and transitions to socially responsible hedge fund

AHP buys first pool of non- performing mortgages

AHP evolves into online investment community to do well by doing good

Establishes in- office branch of Security National Servicing, licensed nationwide

Affiliates with WealthForge, a licensed broker-dealer


Underwriting

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Risks

Valuations Local

Agents

Title Abstrax

Property Taxes

Black Knight

Collateral File Reviews AHP

Analysis Operative

AHP buys mortgages at an average of less than 50% of current property values

• Inaccurate Valuations • Undetected Property Damage/Vandalism • Unsecured Mortgages • Unexpected Liens/Title Issues • Delinquent Property Taxes • Tax Sales • Missing & Deficient Notes, Security Instruments, Title Polices, Assignments , Allonges

This Is a Business of Solving Problems To Generate Solid Returns, We Must Uncover The Problems Before We Buy


A Simple Solution

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Borrower Laid Off

From 17- Year Job

$164,000 Mortgage

Originated

2003 2012 2013 2014

Dec: Prior Lender Denied Modification And Scheduled Foreclosure Sale

Maywood, IL

2007

$32,000

Property

Value

$200,000

2010

Foreclosure

Started July: Applied

To Servicer

For Modification

Jan: AHP

Purchased

For $9,600

Feb: AHP Modified =

$9,600 Loan Acquisition Price

2014 : 54% first-year return

$2,000 to cure delinquency

$3,200 10 x $320 payments

$5,200

Next 18 years: 40% annual return

$3,840 12 x $320 payments


High Performance Strategy

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American Homeowner Preservation Fund November 2011 – November 2013 Predecessor Entity / Same Management

How To Make Money How To Lose Money

• Expeditious, Respectful Borrower Outreach • Simple, Formulaic Solutions • Minimal Documents for any Solution • Consensual Solutions Minimize Legal Costs • Use Foreclosure as a Tool to Provoke Response • In- House Servicer Branch • Customer Service in Chicago • Loans Held in Trust with U.S. Bank as Trustee

“You Don’t Have To Litigate With Us To Get A Good Deal. We’ll Give You The Good Deal Upfront” – CEO Jorge Newbery Bloomberg Business, March 2014

• Abrasive Collection Efforts • Complicated, Customized Solutions • Paper Circus Required for any Solution • Protracted Borrower-Lender Wars Amplify Legal Costs • Foreclosure as a Tool to Acquire Real Estate • Outsource Servicing • Customer Service Overseas • Loans Held in Unlicensed Entity

2012 14.6%* 20.7%* $6,125,998 2013 14.5%* 19.6%* $6,295,881 2014 9%*, 10.2%*, 12%* 21.4% * $7,417,416

Non- Performing Mortgages Lose Value Daily Due to Collateral Deterioration & Tax Accruals; Rapid Resolutions Are Critical

Investor Returns Gross Returns Capital

Transitioned to closed-end fund structure in late 2013

*Past performance is not indicative of future performance.


Series 2014B Loans to be Acquired

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Seller: Big Bank

Total Debt: $12,739,319

Total Property Value: $8,483,443

Acquisition Cost: $3,839,122

Cash Flow Last 12 Months: $799,883

$55,812 average property value

45% acquisition to value

20% + annual return on last 12- months of existing cash flow

Seller: Major Subprime Issuer

Total Debt: $27,809,986

Total Property Value: $6,276,550

Acquisition Cost: $1,000,000

$26,882 average property value

16% acquisition to value

54% of files have extreme issues: HOA Foreclosures, Tax Problems, Title Issues

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AHP in the Media

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"Profit + Purpose: American Homeowner Preservation Proves That Socially Responsible Investing Can Yield a Healthy Return"

“They’re [AHP] a lot more flexible than a bank,” said Ragusa, 48, who ran into financial trouble after losing his job in collections for a cable company in 2007. “They can work with you because they’re a private company and they can basically set their own rules.”

"...you have American Homeowner Preservation using private investor money to buy up mortgage pools and give the borrowers the solutions they need, not the ones that maximize profits for the company...it's an exciting development, and it shows you can do well and do good at the same time. Frankly, it's what the government did with the Home Owners Loan Corporation in the 1930s, and what they should be doing today."

"AHP over the years had evolved into a sort of socially conscious hedge fund. Jorge is relentless, probably steeled in part by his athletic competitiveness, and has continued to press the case for AHP's vision, and, along the way his work has caught the attention of major bloggers like Arianna Huffington, Felix Salmon and Martin Andelman. AHP is hoping to demonstrate that they have better ideas to ameliorating the foreclosure disaster"

FEATURED IN

American Homeowner Preservation, LLC American Homeowner Preservation, LLC

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DISCLAIMER

*Past performance is not indicative of future performance. This investment entails a high degree of risk. No returns are guaranteed. This communication is intended only for those persons with an in-depth understanding of the high-risk nature of alternative investments. The communication is general in nature and should not be considered a full statement of the facts pertinent to this message. The investments shown herein may not be suitable for you. This communication is intended for, and specific to, the person to whom it was sent. The document may not be distributed in either excerpts or in its entirety beyond the intended recipient. American Homeowner Preservation, LLC. ("American Homeowner Preservation") will not be held responsible if this document is used or is distributed beyond its initial recipient or if it is used for any unintended or unauthorized purpose. All investors should make their own determination of whether or not to make any investment, based on their own respective independent evaluation and analysis. To the knowledge of the sender, this document and the relevant pages herein are: (i) current as of the date of distribution; (ii) subject to change without notice; (iii) directed solely at eligible accredited investors; (iv) not directed at, may not be suitable for, and should not be relied on, by general retail clients. American Homeowner Preservation does not do any of the following: (a) produce in-house research; (b) make recommendations to purchase or sell specific securities or provide investment advisory services. All prospective investors are highly encouraged to retain and consult with their own respective independent legal counsel, tax and financial advisers, investment advisers and accountants. By reading this communication, you hereby acknowledge that you are an accredited investor. If you are a general retail client, then this communication is not intended for you. Alternative investments may not be suitable investments for you. You may not possess the sophistication to rely on the contents of this communication, and in such case, you should either shred or return the communication and document to American Homeowner Preservation. Neither American Homeowner Preservation nor any of its directors, officers, employees, representatives, affiliates or agents shall have any liability, howsoever arising, for any error or incompleteness of fact or opinion in, or lack of care in its preparation or publication, the material and communication herein. American Homeowner Preservation, LLC is not a registered broker-dealer, funding portal, or investment advisor and does not conduct any activity that would require such registration. Equity securities are offered through WealthForge, LLC, a Virginia limited liability company (“WealthForge”), which is a securities broker/dealer registered with the U.S. Securities and Exchange Commission and a member of the Financial Industry Regulatory Authority, Inc. Individual personnel of American Homeowner Preservation, LLC are registered representatives of WealthForge. WealthForge has developed a business continuity plan on how they will respond to events that significantly disrupt business. WealthForge is located at 6800 Paragon Place, Suite 237, Richmond, VA 23230, tel: (804) 308-0431.