Case 1:15-cv-00293-LTS-RWL Document 218-3 Filed 08/16/17 Page 1 of 4

Exhibit C
~W&{'iifl-~~"""'""'"'' _ _ _ _ _ _ _ _ _ _ _ _ _ __

From: eddie.s guerrero@chase.com

To: viclor.b.fox@chase.com

Case 1:15-cv-00293-LTS-RWL Document 218-3 Filed 08/16/17 Page 2 of 4

Sent: 11119/2008 7:49:21 PM
Subject: Fw: Isl Lien walks

Hey Vic,

See below, let me know what you would like to do.

Thank you,

Eddie S. Gueirero
Real Estate Recovery Supervisor
eddie.s.gue1Tero@chase.com
Direct 602.627.8140
Fax602.680.1152
1.800.834.9218 Ext. 78140

"I find that the harder I work, the more luck I seem to have."
- Thomas Jefferson

- - Fo1warded by Eddie S Gut:=111:!10/JPMCHASE on 11119/2008 12'48 PM----

To j<edd1e.s.guerrero@chase com>
~Larry Schneider" r
cc

11/1912008 12:42 PM Subject 11st Lien Walks

Hey Eddie,
1000 hours over the past 3 weeks and I personally spent
The analysis of the 1" Lien Walk pool was unbelievably long and tedious project which does not seem to have an end in sight as far as due diligence required. Our firm has invested over
separate the unsecure from the secured, then do second and
over 150 h:lt.rs reviewing, approving and inputting every comment on the spreadsheet identifying the status of the loans. We've had to pull property ID cards for every property available,
third layers of due diligence on the same files while keeping 6000 loans organized.
minute "bank- walks from the foreclosure process due to
The spreadsheet that you sent to me had two different sheets labeled "Prime" and "sub-prime" Initially I was under the impression from our conversation that most of these loans were last
underlying collateral for these loans. After ordering and
the worthess value of the underlying collateral. Our initial due diligence plan was to value the collateral through various on line property valuation services to gel a better understanding of the
st paid off at sale or more commonly taking back the
reviewing hundreds of property I.D reports, we quickly realized many of these loans were not 1 lien walks but rather full foreclosure actions with BankOne or JPMorgan Chase either getting
on our spreadsheet for easy tracking and submission to
property and selling it through HomeSales, Inc .. A few hundred loans are still in the name of BankOne, JPMorgan and it's; subsidiary Homes Sales, Inc. These loans will be clearly indicated
the appropriate divisions for proper coding. The collateral proof that the loan has been foreclosed is numerically sorted by charge off amount and boxed for easy reference.

Here is a summary of my findings:

when determining if there is a new owner of record for a
Prime Loans Our primary mortgage information data base is relatively inexpensive, quick and reliable for current owner searches and property valuations. The system is most effective
property not to prove that a loan is secure.

Confidential Treatment Requested by JPMC JPMC-MRS-00005210

 We have determined that at least 2,300 loans totaung in excess of $110MM in charge off amount have bean 1dant1fied as foreclosed and are no longer owned by the original borrower. After our many discussions about individual loans 11
appears that the charge off amomts on these loans are sometimes the mortgage deficiency after the sale of the asset and sometimes the whole charge off amount not taking into accomt the monies collected from asset sales> There are also
st
over 700 accounts with charge off amounts less than $8,000 which are 99% deficiency amounts as we did a spot check of those. This makes sense as the Bank would have not originated 1 liens in such a small denomination.

Case 1:15-cv-00293-LTS-RWL Document 218-3 Filed 08/16/17 Page 3 of 4

st
Of the remaining 1,800 Prime Accounts, we have identified around 230 as possiblv 1 mortgage walks totaling around $8MM. Wa still need to do approximately 700 more name matches as the list sent to us by JPMChase only contained
about 30% of the borrowers names, the ma1ority of the list only included addresses. We wiH need to order around 1,000 new title search reports ($100 each) which wiH cost an additional $100,000 in order tighten up all the loose ends regarding rest
of the Prime accounts. We have also ordered and received hundreds of BPO's to get a sampling of the underlying collateral. The highest valuation we received was $39,000 and the lowest was $2.000. Most of the BPO's were determined to be
vacant houses, many vandalized and unsecure with no value To make matters worse, most of the properties have 2 to 5 years in back real estate taxes owed which makes any attempt to foreclose an unprofitable proposition. It will be impossible
to convey title to a new owner without coming out of pocket $5,000.00 per accomt or more for real estate taxes, foreclosure and eviction fees, property insurance, costs to secure the property, Realtor commissions, closing costs ard other
possible liens and unforeseeable liabilities.

51
Sub Prime Loans - Since we were given a complete database which included names, we were able to get a much greater gauge on the percentage of secure loans which are more Hkely the 1 lien walks

Upon initial review, we were able to determine that over 500 accounts totaung in excess of $25MM are already foreclosed by Iha bank and no longer secure. In addition, there are over 200 accounts totaling over $4MM wHh charge off
amouits less than $8,000 which are almost all msecure for Iha same reason; the loans were neither originated in that amount nor paid down to that amount. We also did a spot check to confirm this.

Of the remaining accounts 1,600 accounts, we need to run approximately 1,000 title search reports to confirm which loans are stiN secure which will cost an additional $100,000. Many of these loans seem to be "straw buyers" of properties
that were purchased for $20,000 +/. than sold to a "sub-prime'' buyer a few months later for $80,000 +/. who got 100% financing and in many cases had no intention of living in the property. In addition, 78% the charge off amount and Ulderlying
collateral is highly concentrated in a few of the poorest and most depressed economic areas in the country which also have the highest crime rates.

Detroit'Flint, Ml 336 loans $22.0MM 44%

Cleveland/Dayton, Ohio 175 loans $ 9,7MM 17%

Indianapolis/Gary, IN 104 loans $ 4.5MM 9%

Philadelphia/Pittsburg, PA 114 loans $ 4.2MM 8%

Buffalo/Rochester. NY 60 loans $ 2.9Mfvl 5%

Memphis, TN 40 loans $ 1.5MM 3%

In conclusion, when we first looked at the list, there appeared to be a much wider diversification of loans throughout the country. However, most of these "cherries" turned out to be the deals in which JPMChase/BankOne foreclosed and somebody
st
forgot a simple keystroke indicating they were no longer secure. The good news is that a good portion of the money that was believed to baa charge off by JPMChase was actually collected and only the worst of the worst was a 1 lien walk.

Based on the valueless caUateral for the secured loans and the unsecured portion of the deficiency on the others , I project about 95% of the pool is truly unsecured and just a huge potential liability. Due to the limited economic status/employment
opportunities of these borrowers, the unsecured debt is worthless.

The only solution and mutual benefit that we can see is purchasing the pool for a nominal amount, $100,000. We will finish our due diligence and spend the additional monies(several hundred thousand dollars) necessary to determine which loans
st
are still secure and provide JPMChase a list so you can prepare the necessary assignments which we will pay for and record prior to December 31 , 2008. Thus, JPMChase will have this potential liability quckly, effectively and responsibly
eliminated from their books and transferred to party that has been proven to be a responsible business partner over the past four years with a vested interest in maintaining our relationship. There will be no hassles with buy backs, missing files or
customer disputes. As you will see from the amount of due dingence performed and processed by our staff in such a short time, we are extremely organized, professional and able to smoothly handle this transfer if agreeable. After thorough
analysis of title, BPO's and other factors, we will begin to release many of the uans which are deemed to be uncollactabla and we have no interest in attempting to collect any unsecured debt.

Please feel free to call me with any questions or comments.

Sincerly,

Larry Schneider

S & A Capital Partners, Inc.

2101 NW Corporate Blvd

Suite 320

Boca Raton, FL 33431

Tel: (561) 893-9805

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---------------

Fax: (866) 522-4547

Case 1:15-cv-00293-LTS-RWL Document 218-3 Filed 08/16/17 Page 4 of 4

Confidential Treatment Requested by JPMC JPMC-MRS-00005212