Statement from GMAC Financial Services

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Statement from GMAC Financial Services

Question: What has GMAC ResCap actually agreed to do as part of Governor Schwarzenegger's foreclosure prevention initiative?

Response: We believe Gov. Schwarzenegger's initiative sets a standard in creating a partnership between mortgage servicers and government agencies in addressing the California's foreclosure problem. We believe it's a model that other states may want to consider. As a major mortgage servicer, we encourage the assistance of state and federal agencies in helping us encourage homeowners to seek help and to avoid foreclosure.

Our company is dedicated to assisting our customers who are struggling with their mortgages. We have already implemented the some of the principles outlined by Gov. Schwarzenegger. For example:

- We already offer foreclosure prevention counseling. Our HOPE-Keychain Alliance program, established in 2003, features specially trained loss mitigation specialists who meet face to face with homeowners to help our customers avoid foreclosure through loan modifications and loss mitigation efforts. Our HOPE-Keychain team members are located in major cities across the country, including San Diego (we are looking at adding another California market within the near future, based on need). In addition, our company helped to launch the Homeownership Preservation Foundation in 2004. The foundation provides free telephone counseling to homeowners throughout the U.S., including California, through a nationwide hotline, 1-888-995-HOPE. We also offer free employment counseling and job placement assistance to our customers who a struggling with their mortgage payments because of job loss.

- For a number of years, GMAC ResCap has invested in developing loss mitigation capabilities to increase our ability to reach and connect with our customers in a more efficient and timely manner. These investments include technology upgrades, system enhancements and employee training programs that when combined, allow us to better assist our customers in preserving their homeownership. We have a wide variety of modification programs designed to assist homeowners who are struggling with their mortgage payments. We have dedicated staff who are focused on working with each of our customers. We are continually striving to improve and perfect our programs.

- We already notify ARM borrowers five months in advance of their reset date, and again at 100 and 45 days.

- ResCap is one of the founding members of the HOPE NOW Alliance -- an alliance of major servicers, the Homeownership Preservation Foundation, NeighborWorks, and the U.S. Departments of Treasury and Housing and Urban Development, which is dedicated to providing coordinated, third-party outreach to borrowers at risk of foreclosure, including metrics by which to measure progress of the effort.

We will continue to work with the State of California and other states to continue to develop partnerships that will allow us to better assist our customers who are struggling with their mortgage payments.

Q. How important is it for GMAC ResCap�s primary servicing operations to help homeowners who are struggling with paying their mortgages?

A. It is very important to us. We have developed a number of proactive loss mitigation tools to help customers struggling with their mortgages.

For example, five years ago, we formed the HOPE-Keychain Alliance, a special team of loss mitigation specialists whom we have embedded in over 12 cities (and expanding in 2008) throughout the United States. The HOPE-Keychain Alliance teams works directly with customers to help maintain their homeownership through face-to-face meetings, workshops conducted by HOPE-Keychain Alliance associates, and other customer education initiatives. These specialists are part of a broader, outreach strategy that we use to help homeowners who are facing financial challenges.