HOME LOAN SERVICING SOLUTIONS, LTD. - FORM 8-K - EX-99.1

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8-K - 8-K - HOME LOAN SERVICING SOLUTIONS, LTD.	d607832d8k.htm

HLSS Servicer Advance Receivables Trust

Investor Presentation

Exhibit 99.1

* * * *

FORWARD-LOOKING

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PRESENTATION

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PRESENTATION

OTHER

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HISTORICAL

FACTS

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FORWARD-

LOOKING

STATEMENTS.

THESE

FORWARD-LOOKING

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ARE

SUBJECT

INHERENT

RISKS

AND

UNCERTAINTIES

PREDICTING

FUTURE

RESULTS

AND

CONDITIONS

THAT

COULD

CAUSE

THE

COMPANY’S

ACTUAL

RESULTS

DIFFER

MATERIALLY

FROM

THOSE

PROJECTED

THESE

FORWARD-LOOKING

STATEMENTS.

HAVE

INCLUDED

IMPORTANT

FACTORS

THE

CAUTIONARY

STATEMENTS

MADE

OUR

ANNUAL

REPORT

FORM

10-K,

PARTICULARLY

UNDER

THE

HEADINGS

“RISK

FACTORS”

AND

“MANAGEMENT’S

DISCUSSION

AND

ANALYSIS

FINANCIAL

CONDITION

AND

RESULTS

OPERATIONS,”

THAT

BELIEVE

COULD

CAUSE

OUR

ACTUAL

RESULTS

EVENTS

DIFFER

MATERIALLY

FROM

THOSE

EXPRESSED

IMPLIED

THE

FORWARD

LOOKING

STATEMENTS

THAT

MAKE

THIS

PRESENTATION.

LIGHT

THE

SIGNIFICANT

UNCERTAINTIES

THESE

FORWARD-LOOKING

STATEMENTS,

YOU

SHOULD

NOT

REGARD

THESE

STATEMENTS

REPRESENTATION

WARRANTY

ANY

OTHER

PERSON

THAT

WILL

ACHIEVE

OUR

OBJECTIVES

AND

PLANS

ANY

SPECIFIED

TIME

FRAME,

ALL.

UNLESS

REQUIRED

LAW,

UNDERTAKE

OBLIGATION

PUBLICLY

UPDATE

REVISE

ANY

FORWARD-LOOKING

STATEMENTS

REFLECT

NEW

INFORMATION

FUTURE

EVENTS

OTHERWISE.

NON-GAAP

MEASURES:

OUR

PRESENTATION

CONTAINS

REFERENCES

SERVICING

REVENUE

AND

SERVICING

EXPENSE,

WHICH

ARE

NON-GAAP

PERFORMANCE

MEASURES.

BELIEVE

THESE

NON-GAAP

PERFORMANCE

MEASURES

MAY

PROVIDE

ADDITIONAL

MEANINGFUL

COMPARISONS

BETWEEN

CURRENT

RESULTS

AND

RESULTS

PRIOR

PERIODS.

NON-GAAP

PERFORMANCE

MEASURES

SHOULD

VIEWED

ADDITION

TO,

AND

NOT

ALTERNATIVE

FOR,

THE

COMPANY’S

REPORTED

RESULTS

UNDER

ACCOUNTING

PRINCIPLES

GENERALLY

ACCEPTED

THE

UNITED

STATES.

Disclaimer

Table of Contents

Agenda

HLSS Overview

Ocwen Overview

HSART Master Trust Overview

Appendices

HLSS Overview

HLSS Overview

Earned $27.9mm, or $0.48 per ordinary share

Declared dividends totaling $25.9mm for the quarter, or $0.45 per average share outstanding during the period

Increased UPB to $99.9bn and improved the ratio of advances to UPB to 3.71%

Earnings include a $0.02 per share benefit from reduced amortization due to several factors that reduced the prepayment

speed to 12.50% from the benchmark rate of 13.50%

Total market capitalization of $1.6bn as of October 3, 2013 and total equity of $1.2bn as of June 30, 2013

HLSS Overview

Company Overview

Second Quarter 2013 Financial Highlights

HLSS has built a portfolio of high quality mortgage servicing assets and continues to grow

through its strategic relationship with Ocwen

HLSS is an independent acquirer of high quality mortgage servicing assets

Mortgage servicing advances

Rights to fees from servicing non-agency mortgage loans (rights to MSRs)

HLSS launched in March 2012 using the $180.5mm in net proceeds from its IPO and Private Placement to acquire rights to

MSRs with $15.2bn UPB from Ocwen

Since the IPO, HLSS has raised an additional $1.1bn of total equity in three follow-on offerings and an additional $350.0mm

from the issuance of a senior secured term loan. Proceeds, along with cash generated available for reinvestment, were

primarily used to purchase rights to MSRs and servicing advance assets from Ocwen with $177.6bn UPB

The company has engaged Ocwen to service the mortgage loans underlying its mortgage servicing assets. HLSS does not

intend to develop its own mortgage servicing platform and does not originate or purchase mortgage loans

The company’s primary objective is to deliver attractive and consistent risk-adjusted returns to shareholders. HLSS intends

to distribute at least 90.00% of its net income over time to shareholders in the form of a monthly cash dividend

2012 Portfolio Acquisitions and Milestones

HLSS has steadily acquired the rights to MSRs and related servicer advances from Ocwen which

continue to be serviced by Ocwen via servicing/subservicing agreements

HLSS Overview

HLSS has acquired $6.7bn of servicer advance receivables since its IPO in March 2012

September 2012

Purchased rights to MSRs with

$21.2bn UPB

Included $702.7mm of servicer

advance receivables

July

August

June

May

April

March

October

September

November

December

September 2012

Priced a follow-on equity offering

with gross proceeds of

approximately $249.9mm

September 2012

Acquired rights to MSRs with

$6.7bn UPB

Included $225.4mm of servicer

advance receivables

December 2012

Priced a follow-on equity offering

with gross proceeds of

$499.1mm

May 2012

Acquired rights to MSRs with

$2.9bn UPB

Included $92.2mm of servicer

advance receivables

March 2012

Gross proceeds of $196.6mm from

an IPO and Private Placement and

acquisition of rights to MSRs with

$15.2bn UPB

Acquired HomEq servicer advance

facility with $413.4mm of servicer

advance receivables

August 2012

Acquired rights to MSRs with

$2.1bn UPB

Included $68.2mm of servicer

advance receivables

October 2012

Issued $250.0mm in one-year

and $450.0mm in three-year

fixed rate term notes at a

weighted average spread over

LIBOR of 1.55%

December 2012

Acquired rights to MSRs with

$34.6bn UPB

Included $1.7bn of servicer

advance receivables

May

June

January 2013

Issued $650.0mm in one-

year, $350.0mm in three-

year and $150.0mm in

five-year notes at a

weighted average spread

over LIBOR of 0.94%

March 2013

Acquired rights to MSRs with

$15.9bn UPB

Included $703.2mm of servicer

advance receivables

April

March

February

January

2013 Portfolio Acquisitions and Milestones

May 2013

Issued $375.0mm in two-year

and $475.0mm in four-year notes

at a weighted average spread

over LIBOR of 1.04%

Goals and Plans

Remaining Ocwen portfolio, including announced acquisitions, includes similar assets with over $58bn UPB as of June 30, 2013

available for purchase by HLSS, and Ocwen has acquisition pipeline of over $400.0bn UPB at June 30, 2013

HLSS

intends

use

cash

flow

excess

dividends

purchase

MSR

servicing

advances

from

Ocwen

flow

basis

HLSS

may

complete

additional

large

bulk

purchases

using

proceeds

from

capital

raises

Currently focused on the Alt-A and Subprime sectors

May purchase assets from third-parties, but view Ocwen-serviced assets as a priority in the near-term

Developing efficient funding sources for the servicer advance assets will be a key focal point, and HLSS intends to access the Term

ABS markets frequently with multiple issuances expected per year

July

May 2013

Acquired rights to MSRs with

$10.6bn UPB

Includes $376.6mm of servicer

advance receivables

June 2013

Priced a follow-on equity

offering with gross

proceeds of $325.7mm

Entered into a $350.0mm

senior secured term loan

facility

July 2013

Acquired rights to MSRs with

$83.6bn UPB

Includes $2.4bn of servicer advance

receivables

August 2013

Issued $350.0mm in one-year

notes at a weighted average

spread over LIBOR of 0.98%

HLSS Overview

August

September

September 2013

Issued $200.0mm in one-year and

$200.0mm in three-year notes at a

weighted average spread over

LIBOR of 1.05%

Veteran management team with extensive mortgage servicing experience

HLSS Overview

Served as Chairman since the

inception of HLSS

Chairman of Ocwen since September

1996 and Altisource since 2009

CEO of Ocwen Financial from

January 1988 to May 1998

Managing General Partner of The

Oxford Financial Group (predecessor

of Ocwen) from 1983 to 1995

HLSS Leadership Team

Served as a director since October 2011

and was appointed President in March

2012

Previously served as CFO and Chief

Accounting Officer and EVP at Ocwen

Financial, Ocwen Asset Management

and Ocwen Loan Servicing

Duties included directing Ocwen's

Advance Facility

Serves as CFO and

SVP

Previously served as VP of Ocwen

Financial

Duties included directing Ocwen's

Advance Facility

Previously held several positions at

AT&T, including CFO of National

Business Markets, Online Markets

and BellSouth Community

Technologies

Serves as Treasurer and SVP

Previously served as Senior VP and

Treasurer of Ocwen Financial

Worked at Ocwen since 1995,

primarily in Treasury, Capital Markets

and Servicing Acquisitions

Previously employed by Deloitte as a

Senior Analyst on the CMO team

New York Certified Public Accountant

SVP of Investor Relations and Capital

Markets

Previously served as investment

banker at UBS and J.P. Morgan

Duties included capital raising for

financial services companies,

including Ocwen

Ran Alternative Capital Markets

group at UBS

William C. Erbey

John P. Van Vlack

James E. Lauter

Richard Delgado

Bryon E. Stevens

Assets are a 5% First-Priority Claim

HLSS Overview

HLSS Assets

Assets exclude proceeds of $661.5 million from the June issuance of

debt and equity that was deployed on July 1

Reserves associated with the Advance Financing Facility

Cash &

Reserves

1,2

$0.1 Billion

or 3%

Rights to MSRs

$0.4 Billion or 10%

~95% decline in real estate value would be required to impair HLSS’

assets

HLSS’

total

assets

are

times

over

collateralized

ending

UPB

$99.9

billion

90% of assets are servicing advances or cash which are carried at par and have no MTM

10% of assets are non-agency MSRs that have a stable valuation history

No change in servicing asset valuations since inception

Advances

are

recovered

“top-of-the-waterfall”

from

loan

proceeds

Servicing Advances

$3.7 Billion or 87.00%

On January 22, 2013, HLSS issued a series of term notes that were utilized to refinance VFN balances associated with the

December bulk purchase

$1.15bn of combined one-year, three-year and five-year term notes rated AAA to BBB (S&P)

–

Marked the first five-year offered note secured by servicing advance receivables (“SAR”)

On May 21, 2013, HLSS issued two series of term notes that were utilized to reduce borrowing on VFN notes and acquire

an additional $377.0mm of servicing advances from Ocwen

$850.0mm of combined two-year and four-year notes rated AAA to BBB (S&P)

On August 8, 2013, HLSS issued two series of term notes that were utilized to pay down VFN balances

$400.0mm of combined one-year and three-year notes rated AAA to BBB (S&P)

September

20,

2013,

HLSS

issued

one

series

term

notes

that

were

utilized

pay

down

VFN

balances

$350.0mm of one-year notes rated AAA to BBB (S&P)

HLSS Term Note Issuance Program

HLSS

expected

continue

its

presence

the

Term

ABS

market

order

efficiently

finance

future acquisitions of servicing advance assets and refinance existing notes as they mature

HLSS Overview

HLSS Overview

HLSS Portfolio Details

___________________________

Performing loans include those loans that are current or have been delinquent for less than 90 days in accordance with their original terms and those loans for which borrowers are making

scheduled payments under loan modification, forbearance or bankruptcy plans. We consider all other loans to be non-performing.

HLSS Portfolio Overview

($ in thousands)

Residential Assets Serviced

Unpaid Principal Balance

Performing Loans

(1)

77,853,961

77.9%

60,788,667

76.6%

11,867,430

78.9%

Non-Performing Loans

20,097,023

20.1%

16,714,970

21.1%

2,630,919

17.5%

Non-Performing Real Estate

1,961,039

2.0%

1,857,237

2.3%

533,339

3.5%

Total Residential Assets Serviced

99,912,023

100.0%

79,360,874

100.0%

15,031,688

100.0%

Loan Count

Performing Loans

(1)

545,336

83.3%

451,255

82.1%

80,104

83.9%

Non-Performing Loans

98,554

15.1%

88,534

16.1%

12,836

13.4%

Non-Performing Real Estate

10,811

1.7%

10,160

1.8%

2,546

2.7%

Total Residential Assets Serviced

654,701

100.0%

549,949

100.0%

95,486

100.0%

Percent of total UPB

Non-Performing

22.1%

23.4%

21.1%

Average CPR

June 30, 2013

December 31, 2012

March 31, 2012

12.5%

13.2%

14.2%

Ocwen Overview

The HLSS-Ocwen subservicing relationship allows HLSS to benefit from Ocwen’s industry

expertise and previous experience servicing the assets

Ocwen Overview

HLSS holds the contractual right to receive all servicing

fees related to mortgage servicing rights with UPB of

$99.9bn as of June 30, 2013

July 1, 2013, HLSS purchased $83.6bn in UPB of

mortgage loans with $2.4bn in servicing advances from

Ocwen

HLSS

has

engaged

Ocwen

service

the

HLSS

portfolio.

Ocwen is also expected to be engaged as subservicer on

foreseeable future asset acquisitions

The majority of Ocwen’s subservicing fee is structured as

an incentive fee which rewards collateral performance

thereby reducing HLSS’s cost of advance financing

All current HLSS assets were acquired from Ocwen. As a

result, Ocwen has previous experience servicing the HLSS

portfolio

HLSS

does

not

have

and

does

not

intend

develop

its

own mortgage servicing platform

Ocwen has begun to migrate to a fee-for-service model

with lower leverage and lower balance sheet requirements

HLSS-Ocwen Subservicing Relationship

Pure play mortgage servicer with over $7.4 bn¹

in market

capitalization and total equity of $1.7bn at June 30, 2013

Ocwen services loans across all 50 states, the District of

Columbia and two U.S. territories providing geographic

diversification for its servicing portfolio

Servicing portfolio of 2,785,925 loans and real estate assets

with $436.2bn UPB as of June 30, 2013

Ocwen has completed over 300,000 loan modifications since

January 2008

20+ years of innovation in loss mitigation

#1 in servicing quality in third party studies of servicers

Low cost, scalable servicing platform and technology

HLSS-Ocwen Relationship Overview

Ocwen Servicing Highlights

As of October 3, 2013, based upon a share price of $54.24 and outstanding shares of 135.8mm.

27 bps

Subservicing Fee

paid to Ocwen

21 bps Incentive

Fee

6 bps

Base Fee

~76%

Downside

Protection

~24%

Base Fee

Incentive fee establishes an effective floor on yield while maintaining upside potential

Subservicing Fee Adjusts to

Support Targeted Yield

HLSS largest expense can be

reduced by up to 76% to stabilize

earnings

Protects against higher interest

expense if servicing advances

increase

HLSS benefits from lower interest

expense if servicing advances

decrease

Subservicing Fee

Amounts

based

bps

servicing

fee

earned

and

bps

retained

fee

2013.

The

incentive

fee

the

servicing

fee

minus

the

base

fee

and

the

retained

fee.

Ocwen Overview

Ocwen Overview

Global Servicing Platform

Ocwen employs approximately 10,000 professionals and staff worldwide

Houston, TX

Bangalore, India

Mumbai, India

Montevideo, Uruguay

Atlanta, GA

West Palm Beach,

St. Croix, US

Virgin Islands

As of June 30, 2013.

Mount Laurel, NJ

Dallas, TX

Pune, India

Waterloo, IA

Burbank, CA

Fort Washington,

Ocwen

has

successful

history

boarding

and

managing

mortgage

servicing

portfolios

Ocwen Overview

Ocwen Servicing Portfolio History

Performance and Proven Ability to Ramp Up

Date

Portfolio

Number of Loans

UPB ($bn)

Days to Board

2009 Q3

Freddie Mac -

TBW DQ Loan Subservicing

24,000

$4.2

11 days

2009 Q3

to 2010 Q3

Freddie Mac -

TBW DQ Loan -

Monthly Flow

1,500

to 5,000

Varied

30 days

2009 Q4

Undisclosed -

Subprime Subservicing

62,000

$9.6

45 days

2010 Q1

Saxon -

MSR Purchase

36,000

$6.7

45 days

2010 Q3

HomEq -

MSR Purchase

134,000

$22.3

90 days

2011 Q2

Undisclosed -

Subprime Subservicing

13,000

$3.2

45 days

2011 Q3

Litton -

MSR Purchase

156,000

$ 23.2

90 days

2011 Q4

Litton -

MSR Purchase

87,000

$14.7

150 days

2012 Q2

Saxon and JPMorgan Chase -

MSR Purchases

104,000

$20.2

90 days

2012 Q2

Bank of America -

MSR Purchase

53,000

$10.7

90 days

2012 Q2

Aurora Bank -

MSR Purchase

3,316

$1.8

75 days

2012 Q2

Large Bank Subservicing -

Held For Investment Loans

9,000

$1.8

120 days

2012 Q3

Fannie Mae / Freddie Mac –

MSR Purchases

1,700

$0.3

45 days

2012 Q3

Fannie Mae –

MSR Purchases

7,100

$2.2

45 days

2012 Q4

Homeward –

MSR Purchase

421,000

$77.0

90 days

2013 Q1

ResCap –

MSR Purchase

$175.3

2013 Q2

OneWest Bank, FSB –

Announced MSR Purchase

$78.0

1. Only includes the PLS portion of the acquisition.

Note: Number of Loans are not exact values, rather show approximated value.

Ocwen Overview

Litton

Acquisition exceeding pro forma expectations

Delinquencies have been reduced substantially since boarding, 9 point drop in delinquencies

Boarded approximately 240,000 loans of which 1/3 were 60+days delinquent while quickly improving performance and proving the

scalability of Ocwen’s servicing platform

Saxon

MSR portfolio of approximately $22.2bn UPB of Agency and Non-Agency mortgages acquired April 2, 2012

Also included acquisition of subservicing agreements relating to

$2.7bn UPB of Agency and Non-Agency mortgages

Ocwen already sub-serviced approximately $9.9bn of this UPB

Acquisition already showing good results in delinquency and advance reduction

JPM Chase

Acquired MSRs for approximately $8.0bn UPB of non-prime loans on April 2, 2012

Simultaneous close of 104,000 Saxon and Chase loans demonstrates

the flexibility and scalability of Ocwen’s platform

Aurora Commercial Portfolio

Acquired servicing of 3,316 commercial mortgage loans with $1.8bn UPB on May 31, 2012

Bank of America

Boarding completed for the GSE portfolio of $10.7bn UPB acquired

on May 22, 2012

Homeward

Acquired Homeward Residential Holdings, Inc., existing origination and residential mortgage loan servicing platform of approximately

421,000 loans and $77.0bn in UPB on December 27, 2012

Boarding of PLS portfolio completed on March 15, 2012

ResCap

On February 15, 2012, acquired MSRs to “private label”

loans of approximately $49.6bn in UPB, $19.2bn of Freddie Mac loans, $38.5bn

of Ginnie Mae loans, $42.1bn of loans under master servicing agreements, and assumed subservicing contracts of $25.9bn in UPB

Genworth

Acquired Genworth Financial Home Equity Access, Inc. reverse mortgage business (Liberty) on April 3, 2013

OneWest

On June 13, 2013, announced the planned acquisition of mortgage servicing rights with $78.0bn in UPB from OneWest Bank, FSB

Ocwen Servicing Portfolio Update

For acquired portfolios, superior loss mitigation processes enable Ocwen to reduce delinquency rates and advances

Ocwen Servicing Effectiveness

Ocwen Overview

90+ Days Delinquent by Portfolio

Advances as a % of UPB

1,2

Reducing delinquencies and advances creates value through lower capital requirements, lower interest expense and

lower operating costs

Excludes Homeward GSE loans on the ResCap platform

Includes advances not on Ocwen’s books due to transfer to HLSS

Ocwen Overview

Ocwen Servicing Portfolio Details

Performing

loans

include

those

loans

that

are

current

(less

than

days

past

due)

and

those

loans

for

which

borrowers

are

making

scheduled

payments

under

loan

modification,

forbearance

bankruptcy plans. We consider all other loans to be non-performing.

June

30,

2013,

Ocwen

serviced

889,248

subprime

loans

with

UPB

$128.7bn.

This

compares

747,908

subprime

loans

with

UPB

$113.4bn

December

31,

2012

and

615,811

subprime

loans with a UPB of $94.4bn at June 30, 2012. Excludes Alt-A and other non-prime categories available for purchase by HLSS.

Excludes Freddie Mac loans serviced under special servicing agreements where we have no obligation to advance.

The increase in average CPR compared to prior periods relates primarily to changes in portfolio composition.

($ in thousands)

Ocwen reduced delinquencies even while adding highly delinquent portfolios

Residential Assets Serviced

Unpaid Principal Balance

Performing Loans

(1)

373,239,600

85.6%

153,824,497

75.5%

71,900,689

70.4%

Non-Performing Loans

56,372,087

12.9%

43,568,536

21.4%

24,097,130

23.6%

Non-Performing Real Estate

6,643,696

1.5%

6,272,683

3.1%

6,201,403

6.1%

Total Residential Assets Serviced

(2)

436,255,383

100.0%

203,665,716

100.0%

102,199,222

100.0%

HLSS Assets Serviced by Ocwen

99,912,023

22.9%

79,360,874

39.0%

Loan Count

Performing Loans

(1)

2,415,692

86.7%

982,391

80.5%

516,923

77.0%

Non-Performing Loans

334,122

12.0%

204,325

16.7%

123,584

18.4%

Non-Performing Real Estate

36,111

1.3%

33,240

2.7%

31,116

4.6%

Total Residential Assets Serviced

(2)

2,785,925

100.0%

1,219,956

100.0%

671,623

100.0%

Percent of total UPB

Servicing Portfolio

78.9%

86.0%

77.5%

Subservicing Portfolio

21.1%

14.0%

22.5%

Non-Performing, Excl. FHLMC

(3)

14.4%

18.4%

21.2%

Average CPR

(4)

June 30, 2013

December 31, 2012

20.8%

14.7%

December 31, 2011

14.4%

HSART Master Trust Overview

The SAR ABS market has grown in size from less

than $1.0bn in the first half of 2011, marked by the

issuance

solitary

transaction

SART

$4.75bn as of October 2013, with issuances

spread between two different issuers

The increased float in the market has led to an

active secondary market across the capital stack

Since October, the investor base has expanded

from 34 accounts in the inaugural HSART offering

to a cumulative total participation of 69 accounts

Investors have taken a great deal of interest in the

growth prospects of this market as there appears

to be a robust forward pipeline, given the

acquisition announcements by several specialty

finance companies of servicing portfolios

The trend toward more frequent issuance has

enticed investors to commit more resources to the

SAR asset class

SAF Market Update

HSART Master Trust Overview

HSART Structural Summary

Master Trust Overview

HSART is structured as a master trust facility that provides HLSS the flexibility to periodically issue different debt series secured by a common

collateral series

Cross collateralized receivables pool backing all series consists of approximately $5.5bn in receivables related to approximately $160.5bn in UPB on

1,567 non-agency PSAs

Twelve series have been issued thus far, and eleven are currently outstanding

September 2012

Series 2012-VFN1—variable funding note series ($550.0mm max balance)

Series 2013-MM1—WFS structured series providing for the issuance of 2a-7 money market eligible class ($293.5mm)

2a-7 note was reissued on September 26, 2013 and was priced at 1ML + 0.20%

Included AA rated term notes directly purchased by Wells Fargo Bank (WFB)

Series 2012-T1—original medium term notes series ($600.0mm) refinanced with the

issuance of the Series 2012-T2

October 2012

Series 2012-T2—Two group term note $700.0mm series (1 and 3-year) broadly marketed to ABS term investors

December 2012

Series 2012-VF2 & VF3—variable funding note series ($1,100.0mm max balance for both series)

January 2013

Series 2013-T1—3 groups of term notes $1,150.0mm (1, 3 and 5-year) broadly marketed to ABS term investors

May 2013

Series 2013-T2—$375.0mm (2-year) broadly marketed to ABS term investors

Series 2013-T3—$475.0mm (4-year) broadly marketed to ABS term investors

August 2013

Series 2013-T4—$200.0mm (1-year) broadly marketed to ABS term investors

Series 2013-T5—$200.0mm (3-year) broadly marketed to ABS term investors

September 2013

Series 2013-T6

$350.0mm (1-year) broadly marketed to ABS term investors

HSART Master Trust Overview

Current HSART Master Trust

Series:

2012

VF1 -

VF3

2012

2013

MM1

Note Holder

BC/WFS/CS

ABS

Investors

ABS

Investors

ABS

Investors

ABS

Investors

ABS

Investors

ABS

Investors

ABS

Investors

WFB

Variable

Funding Notes

Medium Term Notes

Medium

Term Notes

2a-7

($ in Millions)

Max Capacity

$1650.0

$700.0

$1,150.0

$375.0

$475.0

$200.0

$350.0

$293.5

Lowest

Rating

BBB

Revolving Period

For

any

class

series,

commences

the

issuance

date

and

ends

the

earlier

occur

(i)

targeted

amortization

event and (ii) an early amortization event

MTN Holders

–

Interest-only period for MTNs, no principal is due or paid

Targeted Amortization Period (“TAP”)

For

any

class

series,

commences

upon

the

occurrence

targeted

amortization

event.

During

TAP

for

any

class or

series, new receivables are still funded while collections are used to amortize such class or series on a scheduled basis

MTN Holders

–

Holders of MTN series notes will be contractually entitled to repayment over a six or twelve-month

repayment

principal

which

are

paid

from

collections.

the

event

collections

are

unable

support

the

scheduled

amortization of all notes in TAP, the full transaction would enter the early amortization period described below

Facility Early Amortization Period (“EAP”)

For all

classes within the HSART facility, commences upon the occurrence of an early amortization event. During the

EAP,

new

advances

are

not

funded

and

all

collections

are

used

fully

turbo

all

outstandings

series

pro-rata

and

pari passu basis

MTN Holders

–

Upon an early amortization event, all series are allocated a pro-rata portion of collections according to

their respective “Invested Amounts”. Classes within each series are paid sequentially according to seniority

Transaction Phases

HSART Transaction Phases

HSART Master Trust Overview

Advances in excess of the below established thresholds are excluded from the collateral base calculation thereby reducing the effective Advance Rate

Target Amortization Events

Earlier of the related expected repayment date or the occurrence

of the following events:

Monthly reimbursement rate < 5.00%

The interest coverage ratio is < 5.00x as determined on the payment date and the two (2) proceeding payment dates

Servicer termination events on servicing agreements represents >

15.00% of all eligible servicing agreements included in the facility

Redemption Option Trigger Condition (Collateral Value of all Facility Eligible Receivables / Aggregate Note Balance) < 100.00% for 2 months

Facility Eligible Receivables and Servicing Agreements

Criteria includes but not limited to:

Mortgage loan is secured by a first lien on the property

All PSAs provide for “first-in, first-out”

or “FIFO”

reimbursement of advances

Only 15.00% of PSAs provide for non-pool level recoverability provisions, which are subject to further loan level collateral tests

Investor Protections

HSART Investor Protections

Collateral Value Exclusions

HSART Master Trust Overview

Test

Threshold

Explanation

Advance Ratio

>100.00%

For each designated servicing agreement, stressed non-recoverable advances divided by

scheduled P&I remittances for a given month cannot exceed 100.00%

Market Value Ratio

>25.00%

PSA level test -

ratio of funded receivables to aggregate mortgage net property market value

cannot exceed 25.00%

Small UPB and mortgage loan sublimit

>2.50%

Advances from Small Threshold PSAs cannot exceed 2.50% of all eligible receivables

Low UPB and mortgage loan sublimit

>7.50%

Advances from Small Threshold PSAs and Low Threshold PSAs cannot exceed 7.50% of all

eligible receivables

Middle UPB and mortgage loan sublimit

>15.00%

Advances from Small Threshold PSAs, Low Threshold PSAs, and Middle Threshold PSA cannot

exceed 15.00% of all eligible receivables

Single PSA funded limit

>15.00%

Total receivables balance associated with any one PSA cannot exceed 15.00% of all master trust

receivables funded

Loan level PSA sublimit

>15.00%

Advances from Loan-Level Receivables cannot exceed 15.00% of all eligible receivables

Loan Level Market Value Ratio

>50.00%

The total loan level receivables with respect to any loan, cannot exceed 50.00% of the net property

value of such mortgaged property

Restricted DSFs

>3.25%

Loan-level DSFs and not immediately recoverable (upon termination) DSFs cannot exceed 3.25%

of all master trust receivables

1. Low UPB sublimit is cumulative to include Small UPB test; Middle UPB sublimit includes both Small and Low tests.

All

HSART

series

feature

two

structural

mechanisms

(with

similar

sounding

names)

that

provide

significant

protection

monthly

reimbursement rates (“MRR”) slow

Targeted Amortization Event Trigger -

MRR threshold of 5.00%; series begins a 12 month amortization period upon trigger

Trigger Advance Rate (“TAR”) -

an additional independent performance based test described below

The Trigger Advance Rate serves as an advance rate reduction mechanism based on MRR performance

Formulaic approach to measure collateral reimbursement speed adequacy will be the lessor of:

(i) the S&P issued Advance Rate; or

(ii) The Trigger Advance Rate (as shown below)

The formula is designed to measure the amount of haircut required to support the negative carry associated with an extended recovery

timeline. Such extended timeline is a function of the actual MRRs observed but stressed further for conservatism

HSART Trigger Advance Rate

HSART Series 2013-T6

HSART Master Trust Overview

HSART 2013-T6 TAR

AAA

BBB

MRR

S&P A/R

TAR

A/R

S&P A/R

TAR

A/R

12.00%

87.68%

92.76%

0.00%

95.20%

97.20%

0.00%

11.00%

87.68%

92.10%

0.00%

95.20%

96.94%

0.00%

10.00%

87.68%

91.31%

0.00%

95.20%

96.64%

0.00%

9.00%

87.68%

90.34%

0.00%

95.20%

96.26%

0.00%

8.00%

87.68%

89.14%

0.00%

95.20%

95.79%

0.00%

7.00%

87.68%

87.58%

-0.06%

95.20%

95.19%

-0.01%

6.00%

87.68%

85.51%

-2.13%

95.20%

94.39%

-0.79%

5.00%

87.68%

82.62%

-5.02%

95.20%

93.27%

-1.91%

4.00%

87.68%

78.27%

-9.35%

95.20%

91.59%

-3.59%

3.00%

87.68%

71.03%

-16.58%

95.20%

88.79%

-6.39%

Master Trust Receivables Distribution

HSART Master Trust Overview

Estimated

balance

August

15,

2013.

HSART Collateral Base

Receivables Distribution

Series 2013-T6

2013-T6 Advance Rate (BBB)

Receivables Balance

% of Receivables

Judicial Escrow

94.25%

$ 1,833,530,063

33.27%

Judicial P&I

96.00%

1,286,500,982

23.34%

Non-Judicial P&I

96.75%

710,247,456

12.89%

Judicial Corporate

94.25%

661,039,461

11.99%

Non-Judicial Escrow

96.25%

485,582,786

8.81%

Non-Judicial Corporate

95.25%

292,816,169

5.31%

Judicial DSF

92.75%

151,796,193

2.75%

Non-Judicial DSF

96.25%

89,502,282

1.62%

Loan-Level Judicial P&I

95.50%

N/A

0.00%

Loan-Level Non-Judicial P&I

96.50%

N/A

0.00%

Loan-Level Judicial Escrow

93.00%

N/A

0.00%

Loan-Level Non-Judicial Escrow

95.75%

N/A

0.00%

Loan-Level Judicial Corporate

93.00%

N/A

0.00%

Loan-Level Non-Judicial Corporate

94.50%

N/A

0.00%

Total Receivable Amount

95.20%

$ 5,511,015,393

100.00%

Appendices

Appendix: Past Transactions

Capital Structure

HSART Series 2013 –

Marketing Summary

Appendices

One Year

Class

Rating (S&P)

Note Balance

Advance Rates

Spread

Yield

WAL

Repay Date

A-T6

AAA(sf)

$ 322,900,000

87.68%

1.29%

0.99

9/15/2014

B-T6

AA(sf)

$ 13,800,000

91.53%

115

1.49%

C-T6

A(sf)

$ 7,000,000

93.46%

140

1.74%

D-T6

BBB(sf)

$ 6,300,000

95.20%

190

2.24%

Total

$ 350,000,000

1.32%

Capital Structure

HSART Series 2013 –

T4/T5

Marketing Summary

Appendices

One Year

Class

Rating (S&P)

Note Balance

Advance Rates

Spread

Yield

WAL

Repay Date

A-T4

AAA(sf)

$ 184,500,000

87.91%

0.85%

1.19%

1.02

8/15/2014

B-T4

AA(sf)

$ 7,900,000

91.68%

1.20%

1.54%

C-T4

A(sf)

$ 4,000,000

93.56%

1.45%

1.79%

D-T4

BBB(sf)

$ 3,600,000

95.27%

2.00%

2.34%

Total

$ 200,000,000

1.23%

Three Year

Class

Rating (S&P)

Note Balance

Advance Rates

Spread

Yield

WAL

Repay Date

A-T5

AAA(sf)

$ 182,100,000

85.32%

1.15%

1.99%

3.02

8/15/2016

B-T5

AA(sf)

$ 9,300,000

89.66%

1.45%

2.29%

C-T5

A(sf)

$ 4,500,000

91.73%

1.70%

2.54%

D-T5

BBB(sf)

$ 4,100,000

93.63%

2.50%

3.34%

Total

$ 200,000,000

2.04%

Cumulative Total

$ 400,000,000

1.84%

Duration WA COF

Capital Structure

HSART Series 2013 –

T2/T3

Marketing Summary

Appendices

Two Year

Class

Rating (S&P)

Note Balance

Advance Rates

Spread

Yield

WAL

Repay Date

A-T2

AAA(sf)

$ 323,339,000

80.25%

0.78%

1.15%

1.98

5/15/2015

B-T2

AA(sf)

$ 26,269,000

86.77%

1.13%

1.50%

C-T2

A(sf)

$ 13,064,000

90.02%

1.48%

1.85%

D-T2

BBB(sf)

$ 12,328,000

93.08%

2.03%

2.40%

Total

$ 375,000,000

1.24%

Four Year

Class

Rating (S&P)

Note Balance

Advance Rates

Spread

Yield

WAL

Repay Date

A-T3

AAA(sf)

$ 406,276,000

78.56%

1.09%

1.80%

3.98

5/15/2017

B-T3

AA(sf)

$ 35,358,000

85.40%

1.44%

2.15%

C-T3

A(sf)

$ 17,220,000

88.73%

1.69%

2.40%

D-T3

BBB(sf)

$ 16,146,000

91.85%

2.44%

3.15%

Total

$ 475,000,000

1.89%

Cumulative Total

$ 850,000,000

1.61%1

Duration WA COF

Capital Structure

HSART Series 2013 –

Marketing Summary

Appendices

One Year

Class

Rating (S&P)

Note Balance

Advance Rates

Spread

Yield

WAL

Repay Date

A-1-T1

AAA(sf)

$ 562,355,000

79.84%

0.59%

0.90%

0.98

1/15/2014

B-1-T1

AA(sf)

$ 44,887,000

86.21%

0.94%

1.25%

C-1-T1

A(sf)

$ 22,303,000

89.38%

1.34%

1.65%

D-1-T1

BBB(sf)

$ 20,455,000

92.28%

2.19%

2.50%

Total

$ 650,000,000

1.00%

Three Year

Class

Rating (S&P)

Note Balance

Advance Rates

Spread

Yield

WAL

Repay Date

A-2-T1

AAA(sf)

$ 302,807,000

79.84%

1.02%

1.50%

2.98

1/15/2016

B-2-T1

AA(sf)

$ 24,170,000

86.21%

1.27%

1.75%

C-2-T1

A(sf)

$ 12,010,000

89.38%

2.02%

2.50%

D-2-T1

BBB(sf)

$ 11,013,000

92.28%

2.77%

3.25%

Total

$ 350,000,000

1.61%

Five Year

Class

Rating (S&P)

Note Balance

Advance Rates

Spread

Yield

WAL

Repay Date

A-3-T1

AAA(sf)

$ 129,774,000

79.84%

1.44%

2.30%

4.98

1/16/2018

B-3-T1

AA(sf)

$ 10,359,000

86.21%

1.89%

2.75%

C-3-T1

A(sf)

$ 5,147,000

89.38%

2.64%

3.50%

D-3-T1

BBB(sf)

$ 4,720,000

92.28%

3.64%

4.50%

Total

$ 150,000,000

2.44%

Cumulative Total

$ 1,150,000,000

1.70%

Duration WA COF

HSART Series 2012 -

Marketing Summary

Capital Structure

Appendices

One Year

Class

Rating (S&P)

Note Balance

Advance Rates

Spread

Yield

WAL

Repay Date

A-1

AAA(sf)

$ 215,067,000

78.00%

1.04%

1.35%

1.00

10/15/2013

B-1

AA(sf)

$ 17,807,000

85.00%

1.44%

1.75%

C-1

A(sf)

$ 8,903,000

88.00%

2.94%

3.25%

D-1

BBB(sf)

$ 8,223,000

91.00%

3.69%

4.00%

Total

$ 250,000,000

1.53%

Three Year

Class

Rating (S&P)

Note Balance

Advance Rates

Spread

Yield

WAL

Repay Date

A-2

AAA(sf)

$ 387,121,000

78.00%

1.50%

2.00%

3.00

10/15/2015

B-2

AA(sf)

$ 32,053,000

85.00%

2.00%

2.50%

C-2

A(sf)

$ 16,026,000

88.00%

3.50%

4.00%

D-2

BBB(sf)

$ 14,800,000

91.00%

4.50%

5.00%

Total

$ 450,000,000

2.21%

Cumulative Total

$ 700,000,000

2.10%

Duration WA COF

Appendix: Performance

Remittance Report Excerpt

Appendices

HSART Remittance Report

Investor

1st Lien Gross

Advance

Funded Advance

Receivable Balance

UPB

Loan Count

Small

Threshold

Servicing

Small

Threshold

Servicing

>2.50%

Low

Threshold

Servicing

Low

Threshold

Middle

Threshold

Servicing

Middle

Threshold

Low

Threshold

>7.50%

Middle

Threshold

> 15%

Market Value Ratio

> 25%

UPB Ratio

> 20%

15% Adv of Global

2011

$329,624

$272,257

$9,681,708

174

0.00%

2.81%

0.00%

2012

$95,831

$85,857

$3,104,375

0.00%

2.77%

0.00%

2013

$419,639

$365,284

$5,441,618

118

0.00%

0.01%

6.71%

0.01%

2014

$419,901

$337,846

$7,931,190

161

0.00%

0.01%

0.00%

0.01%

4.26%

0.01%

2039

$22,938

$17,901

$1,212,079

0.00%

1.48%

0.00%

2041

$116,432

$95,596

$3,055,828

0.00%

3.13%

0.00%

2042

$136,991

$117,091

$2,267,676

0.00%

5.16%

0.00%

2119

$343,823

$9,699,581

140

0.00%

0.01%

0.00%

0.01%

3.54%

0.01%

2131

$163,745

$148,224

$5,231,340

0.00%

0.01%

2.83%

0.00%

2132

$49,798

$49,594

$2,242,164

0.00%

2.21%

0.00%

2139

$311,231

$253,977

$4,592,450

0.00%

0.01%

5.53%

0.00%

2144

$564,001

$558,666

$8,209,861

109

0.00%

0.01%

0.02%

6.80%

0.01%

2154

$284,708

$255,430

$7,886,027

126

0.00%

3.24%

0.00%

2158

$80,789

$70,434

$2,266,757

0.00%

3.11%

0.00%

2159

$214,545

$176,440

$7,304,157

116

0.00%

0.01%

2.42%

0.00%

2161

$1,375,231

$1,118,002

$13,756,300

193

0.00%

0.02%

0.00%

0.02%

8.13%

0.02%

2164

$113,671

$97,044

$3,934,590

0.00%

2.47%

0.00%

2166

$108,371

$82,520

$3,655,069

0.00%

2.26%

0.00%

2172

$1,131,242

$862,670

$34,842,567

491

0.00%

2.48%

0.02%

2178

$374,063

$320,455

$11,059,786

212

0.00%

0.01%

0.00%

0.01%

2.90%

0.01%

2182

$465,200

$393,958

$14,744,143

178

0.00%

0.01%

0.00%

0.01%

2.67%

0.01%

2183

$992,130

$846,568

$18,144,079

322

0.00%

0.01%

0.00%

0.01%

4.67%

0.01%

2189

$521,879

$453,602

$13,214,240

160

0.00%

0.01%

0.00%

0.01%

3.43%

0.01%

2192

$320,731

$291,983

$10,909,776

128

0.00%

0.01%

0.00%

0.01%

2.68%

0.01%

2194

$123,897

$102,897

$7,109,443

0.00%

1.45%

0.00%

2196

$976,379

$741,480

$17,828,041

254

0.00%

0.01%

0.00%

0.01%

4.16%

0.01%

2197

$188,300

$171,460

$7,478,625

106

0.00%

0.01%

2.29%

0.00%

2199

$365,400

$333,962

$14,880,689

171

0.00%

0.01%

0.00%

0.01%

2.24%

0.01%

2200

$502,357

$444,399

$8,576,141

103

0.00%

0.01%

0.02%

5.18%

0.01%

2201

$413,207

$16,585,515

200

0.00%

0.01%

0.00%

0.01%

2.49%

0.01%

2203

$651,627

$592,630

$8,531,181

115

0.00%

0.01%

0.02%

6.95%

0.01%

2210

$637,750

$573,666

$22,335,484

250

0.00%

0.01%

0.00%

0.01%

2.57%

0.01%

2212

$924,618

$711,018

$18,859,259

258

0.00%

0.01%

0.00%

0.01%

3.77%

0.01%

2220

$1,086,284

$1,033,699

$18,716,435

202

0.00%

0.02%

0.00%

0.02%

5.52%

0.02%

2224

$958,182

$834,866

$27,474,708

342

0.00%

3.04%

0.01%

2225

$939,861

$786,665

$33,389,997

424

0.00%

2.36%

0.01%

2227

$496,680

$411,213

$19,743,793

234

0.00%

0.01%

0.00%

0.01%

2.08%

0.01%

2228

$1,182,070

$951,995

$21,704,490

290

0.00%

0.02%

0.00%

0.02%

4.39%

0.02%

2229

$444,042

$379,661

$8,029,212

0.00%

0.01%

4.73%

0.01%

2232

$118,086

$109,213

$5,508,624

0.00%

1.98%

0.00%

2237

$1,608,594

$1,408,955

$29,531,496

383

0.00%

4.77%

0.02%

2238

$174,282

$5,974,509

0.00%

0.01%

2.92%

0.00%

2242

$903,356

$633,177

$26,644,668

339

0.00%

2.38%

0.01%

2243

$408,568

$368,752

$15,233,655

213

0.00%

0.01%

0.00%

0.01%

2.42%

0.01%

2244

$163,458

$133,936

$16,528,119

200

0.00%

0.81%

0.00%

2245

$358,010

$303,959

$7,611,996

0.00%

0.01%

3.99%

0.01%

2252

$32,145

$4,341,055

0.00%

0.74%

0.00%

2253

$219,955

$161,145

$9,097,323

0.00%

0.01%

1.77%

0.00%

2256

$246,811

$206,406

$6,463,466

0.00%

3.19%

0.00%

Monthly Reimbursement Rate

Appendices

Historical Monthly Reimbursement Rate

*Monthly

reimbursement

rates

reflected

from

Ocwen

performance

history

Jan 12

Feb 12

Mar 12

Apr 12

May 12

June 12

July 12

Aug 12

Sep 12

Oct 12

Nov 12

Dec 12

Jan 13

Feb 13

Mar 13

Apr 13

May 13

June 13

13.52%

11.98%

12.97%

13.52%

13.84%

13.30%

12.55%

12.20%

11.90%

12.57%

12.66%

12.76%

12.50%

12.26%

13.84%

14.93%

16.82%

16.87%

P&I Judicial and Non-Judicial Recovery Curves at Pool and Loan Level

Appendices

P&I Recovery Curves

Period

Judicial -

Pool Level

82.57%

88.68%

92.55%

95.05%

96.84%

98.02%

98.98%

99.58%

99.87%

99.94%

Non-Judicial -

Pool Level

88.20%

95.26%

97.89%

98.94%

99.47%

99.70%

99.81%

99.84%

99.91%

99.97%

Judicial -

Loan Level

71.05%

82.38%

89.55%

93.81%

97.94%

99.31%

100.00%

Non-Judicial -

Loan Level

79.72%

91.30%

95.67%

97.45%

99.05%

99.86%

100.00%

Non-agency advance recovery data as of May 2013

Corporate Judicial and Non-Judicial Recovery Curves at Pool and Loan Level

Appendices

Corporate Recovery Curves

Non-agency advance recovery data as of May 2013

Period

Judicial -

Pool Level

56.17%

77.04%

87.02%

91.88%

94.88%

96.89%

98.01%

98.96%

99.43%

99.44%

Non-Judicial -

Pool Level

70.97%

88.73%

94.67%

97.11%

98.56%

99.13%

99.45%

99.55%

99.74%

99.54%

Judicial -

Loan Level

56.41%

76.66%

86.53%

91.70%

95.81%

98.21%

99.76%

100.00%

Non-Judicial -

Loan Level

67.62%

86.11%

92.99%

95.58%

97.85%

99.29%

99.89%

99.86%

100.00%

DSF Judicial and Non-Judicial Recovery Curves at Pool and Loan Level

Appendices

DSF Recovery Curves

Non-agency advance recovery data as of March 2013

Period

Judicial -

Pool Level

41.47%

54.20%

63.81%

71.02%

76.67%

81.26%

84.90%

87.92%

90.49%

92.65%

94.24%

95.71%

96.81%

97.73%

98.31%

Non-Judicial -

Pool Level

53.48%

69.05%

79.43%

85.92%

90.09%

92.91%

94.89%

96.33%

97.40%

98.21%

98.73%

99.13%

99.45%

99.64%

99.77%

Period

Judicial -

Pool Level

52.23%

71.63%

82.67%

89.34%

93.64%

96.35%

98.01%

98.77%

99.27%

99.65%

Non-Judicial -

Pool Level

66.62%

86.43%

94.02%

96.97%

98.45%

99.14%

99.51%

99.71%

99.88%

99.99%

Judicial -

Loan Level

54.28%

73.18%

85.36%

91.75%

96.09%

98.81%

99.76%

100.00%

Non-Judicial -

Loan Level

65.52%

85.66%

92.87%

95.91%

97.80%

98.81%

99.93%

99.96%

100.00%

Escrow Judicial and Non-Judicial Recovery Curves at Pool and Loan Level

Appendices

Escrow Recovery Curves

Non-agency advance recovery data as of May 2013

HLSS Servicer Advance Receivables Trust

HOME LOAN SERVICING SOLUTIONS, LTD. - FORM 8-K - EX-99.1 - October 7, 2013

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