fairway advisory services capabilities

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Advisory Services Capabilities Fairway Financial Solutions, LLC 400 E Royal Lane Suite 290 Irving, TX 75039 972.869.7659 www.fairwayfinancial.net [email protected] 1

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Advisory Services Capabilities

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Page 1: Fairway Advisory Services Capabilities

Advisory Services Capabilities

Fairway Financial Solutions, LLC

400 E Royal Lane

Suite 290

Irving, TX 75039

972.869.7659

www.fairwayfinancial.net

[email protected]

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Page 2: Fairway Advisory Services Capabilities

Company

Fairway Financial Solutions (“Fairway” or “Company”) provides a broad range of advisory services in the consumer debt and mortgage industries. Financial services clients include creditors, servicers, portfolio investors, commercial banks, mortgage lenders and other members of the capital markets.

Fairway has extensive experience as an Accounts Receivable Management (ARM) company, with its founders having held senior management positions with firms such as Bank of America, HSBC, JP Morgan Chase, Washington Mutual and GE Capital.

The Company has also provided high-level consulting in the valuation and management of performing and non-performing real estate portfolios. The company has deep operational expertise in analytics, process flow development & documentation, business plan development & implementation and program management.

Fairway utilizes Six Sigma and Lean Principals in the establishment of new processes and skills- based performance management models to drive employee performance improvements.

The Company has achieved significant results with a proven track record of success. Detailed project-specific historical performance information is available upon request.

Fairway is incorporated in the State of Texas as a Limited Liability Company with domestic and offshore facilities to support client engagements.

Fairway Advisory Services Core Capabilities

1) Financial Advisory Services – Financial analysis, valuation, management, sales, and disposition of a wide variety of assets.

2) Loan Servicing Oversight – Proactively monitor servicer performance with the objective of improving cash flow, mitigate loss severities and ensure that proper liquidity is maintained over serviced assets.

3) Due Diligence – Operational audits to review process flows and portfolio analysis to prepare them for eventual purchase or sale.

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Page 3: Fairway Advisory Services Capabilities

4) Operational Assessments – Full scale evaluation of operational efficiency aimed at identifying gaps, defects and areas of risk. Measurement of the quality and adequacy of output and assessment of the reliability and predictability of the operation. Full credit cycle expertise in consumer, single family, multi-family and commercial loan products.

5) Business Plan Development and Implementation – Business plan development, assessment and implementation that delivers improved cash flow, lower loss rates and expenses. Fairway works with the management team to ensure all business plan objectives are met.

6) Process Flow Documentation – The Company has had significant experience with documenting process flow, policies, procedures and training materials.

7) Interim Management Assignments – Fairway can provide on-site executive leadership at the executive or front-line level. The Company has extensive experience with project and systems conversion and comprehensive vendor management and oversight.

8) Portfolio Management – Fairway provides full service management of performing and non-performing loan portfolios that maximizes cash flow and minimizes expenses.

9) Project Management – Prioritization, leadership and delivery of all projects on time and within budget. Process and practices development and reengineering.

Fairway Recent Engagements

Clayton Holdings / Quantum Servicing, Shelton CT & Tampa, FL – May 2008 to March 2009

Engaged to conduct a full operational assessment of Claytons Mortgage Servicing Business, develop the business plan to improve cash flow and client service, and implemented and executed all elements of the plan.

Fairway reengineered Loan Administration, Front End Collections, Closing, Records Center, Loss Mitigation, Foreclosure and Bankruptcy Processing, REO and Recovery. Additionally, Fairway moved the 70-person operation from Shelton CT to Tampa FL.

Fairway provided long term interim Senior Vice-President through Team Manager level leadership. The Company managed new client integration and service delivery and engaged in hiring, training, performance management, contact management development and vendor selection and management.

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Page 4: Fairway Advisory Services Capabilities

Fairway also managed the oversight and conversion of their combined “home grown” and outsourced servicing platform to an internally managed Fidelity MSP solution. This initiative was projected to deliver an expense reduction of $1.7m over the initial five years of service. Requirements included coordination of test environment, initial small scale concurrent processing environment, followed by full conversion of the entire portfolio. Establishment of new policies and procedures were required with new processes previously managed by the outsourced provider. Negotiation and coordination of enhancements, training activities, and features was successfully completed by the established target date.

Washington Mutual Retail Bank- April 2007 – March 2008

Fairway was contracted to conduct a full operational assessment on WAMU’s collection operation in its Retail Bank Demand Deposit Account Group. Fairway reengineered both pre- and post-charge off collections and managed the operation until a capable internal management team could take over responsibility.

A full analysis and valuation was done of the existing portfolio post charge off. Fairway facilitated the sale of over $620 million in receivables in bulk and forward flow deals. A new servicer network was established and Fairway conducted loan servicing oversight of the network. While establishing this new network, Fairway negotiated updated contracts with best-in-class fee structures, reducing agency expenses primary and secondary fees by 16% and 12.6% respectively, resulting in a post charge off annual cost avoidance of $1.475 million. In addition, liquidation rate improvements of more than 5% during the initial 6 months of activating the new network generated additional net revenue of $1.8 million.

Fairway also reengineered the pre-charge off operation and performed oversight activities during our contract term, eliminating a poor performing vendor and replacing it with an industry leading 1st party vendor. Fairway established new Service Level Agreements with robust minimal call and lettering events, while improving the pricing structure 18.6% for a monthly expense reduction of $30,300 against an active monthly placement volume of 17.600 accounts.

Cerberus Capital – GMAC – May 2007 – July 2007

Fairway was asked to assist with the establishment of a preemptive loan modification program. High risk accounts were identified well in advance of the interest reset date on ARM loans. These customers were proactively called and a mail marketing initiative was also established.

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Cerberus Capital – Aegis Mortgage - March 2007 to May 2007

Fairway was utilized to conduct due diligence on Option One’s collection operation for a potential sale of this company to Cerberus Capital. A full operation assessment was conducted on its United States and India operations.

Fairway Principal Corporate Experience

Washington Mutual –

Loan Servicing Management - Washington Mutual Finance –

Mr. Hannold was the senior manager in charge of this WAMU operation, where he managed Underwriting, Customer service, Payment Processing , Records Management, Early and Late Stage Collections , Loss Mitigation , Foreclosure, Bankruptcy , Recovery and REO. Portfolios managed were sub-prime consumer, sales finance, single family and HELOC’s.

Mr. Warden led residential real estate Risk Management and Servicing Operations which included Bankruptcy, Skip Tracing, Collections, Loss Mitigation, Foreclosure and REO for single family and HELOC portfolios. He also directed activities to install a performance management framework throughout the organization.

Loan Servicing Management – Washington Mutual Commercial Real Estate-

Mr. Hannold ran the National operation center in charge of Appraisal, Closing, Escrow, Customer Service, Payment Processing and Collections. Portfolios serviced were Multi-Family and Commercial real estate. During Mr. Hannold’s tenure, efficiencies and turn times were dramatically improved and WAMU received rating improvements from Fitch and S&P.

Mr. Warden built and led Optimization and Support organization designed to support Commercial’s Closing, Servicing, Portfolio Management and Appraisal operations. Mr. Warden managed various projects in Quality Assurance Management, Risk/Audit Management, Project Management Office, Performance Improvement Management, Process Improvement Management, Operational Excellence (Six-Sigma), Financial Planning, Analysis and Reporting, Business Continuity, Disaster Recovery, Emergency Response, Facilities Administration Management, Procedures Writing and Significant Event Management.

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Page 6: Fairway Advisory Services Capabilities

Mr. White was Senior Manager, heading up Washington Mutual’s Commercial National Operations Center (NOC) which included Loan Closing, Servicing, Escrow Management, Collections, Portfolio Risk Management, Records Retention and Mortgage Banker Finance operations. The portfolio managed was in excess of $40 billion of Multi-Family, CRE, and MBF business. Responsible for all day-to-day operations activities with a staff of 283 FTE.

Mr. White, Mr. Hannold and Mr. Warden collectively led initiatives which resulted in improved ratings by Fitch and S & P, improved OTS audit results, and the historically highest customer satisfaction scores as measured by J. D. Power’s Voice of the Customer Surveys.

Why Partner with Fairway

Experience and Expertise – Principals have a combined 80+ years of experience

Exceptional Industry Reputation

Proven Track Record – Delivers on Commitments

Ease of Interaction – No Hassle approach

Highly Reliable – On Budget , On Time and Results Oriented

Nimble and Flexible

Conceived, Developed and Executed Strategies that Drive Bottom Line Results

Robust Analytics

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Principals

Ken Hannold

Mr. Hannold has over 28 years of experience working for companies such as Household International (Now HSBC), Bank One (now Chase) and Washington Mutual. He has held senior leadership positions with all of these companies with responsibility for Accounts Receivable Management, portfolio sales, servicing, collection agency management and collection strategies. Mr. Hannold also served on the Board of Directors for Consumer Credit Counseling of Washington D.C.

While at Washington Mutual, Mr. Hannold provided senior leadership oversight for operations in commercial servicing and credit card collection operations. His leadership led the commercial servicing and appraisal group to achieve industry-leading efficiency ratios, reducing “cost of servicing” over a two year period by 40%, (from 2004 to 2006). He established a management philosophy and culture that led the division to achieve a best-in-class employee retention rate of 88% and a 40% improvement in employee satisfaction.

During his tenure at Bank One Card Services, Mr. Hannold managed the Recovery and Fulfillment operations, controlling a budget of over $92 million that generated over $400 million net revenue per year in recoveries. His scope of responsibility spanned multiple collection call centers and recovery operations as Regional Manager with over 700 employees at three sites. His efforts led to production and efficiency gains that resulted in a 25% reduction in staffing.

Mr. Hannold executed the largest bad debt sale in March 1999 by selling over $2 billion in charged off receivables that garnered over $175 million in recoveries. He is uniquely qualified to lead Fairway Financial Solutions based upon both his multi-decade operational successes and his proven ability to build large employee-centric organizations.

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Page 8: Fairway Advisory Services Capabilities

Fred White

Mr. White spent over 25 years managing credit card receivables with two leading credit card issuers, Bank One/Chase and Bank of America (formerly InterFirst). Mr. White spent three years managing Washington Mutual’s commercial loan fulfillment and servicing operation. While there, he was accountable for servicing its $40 billion commercial loan portfolio, which included all aspects of loan closing, portfolio management and risk assessment, customer service, and escrow management. His oversight included a staff of 283 full time employees with a budget in excess of $32 million. Accolades included leading the operation to achieve upgrades in its ratings from Fitch and S&P to above average Master Servicer, as well as developing a complete set of dashboard metrics to monitor all operations effectively.

Prior to Washington Mutual, Mr. White spent more than 15 years at Chase/Bank One Card Services where he managed several collection operations across the country, embedding ”Skill Based Management Systems” to manage operations and drive results effectively. He was a key member of the card groups’ collections design team for developing a proprietary collections system, spending eight months designing and developing an industry leading system that is still considered to be a competitive advantage today. In addition, he was responsible for its $9 billion charge off portfolio with an annual budget of $97 million which included agency fees. During his tenure there, the operation was running as an industry best, low-cost provider, based on industry benchmark data provided through Visa’s monthly IRKI report (Industry Risk & Key Indicators).

Other major responsibilities and accomplishments while at Chase include the management of more than $9 billion in charged off credit card debt, evaluating opportunities and devising strategies to generate the highest net revenues. Mr. White also negotiated and closed in excess of 40 debt portfolio sales transactions, totaling more than $7 billion.

Mr. White served as a panelist for several industry forums and has been instrumental in developing many of Fairway’s proprietary systems to source and manage consumer debt.

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Page 9: Fairway Advisory Services Capabilities

Tony Warden

Mr. Warden possesses unique qualifications and experience in the financial services industry developed during the 23 years he has worked for Discover Card, GE Capital, Bank One (now Chase), Metris (now HSBC) and Washington Mutual (now Chase).

He has held senior leadership positions with all these companies with core competencies in Asset Management for Prime/Sub-prime, Retail, Private Label and Business consumer cards, Commercial and Residential Real Estate Servicing, Loss Mitigation, Default and Collections. Mr. Warden has background in Six Sigma (GE Black Belt Certified) and Lean Process Reengineering.

Conceiving, developing and executing the strategies and initiatives that drive bottom line results, continuous operational improvement, employee and customer satisfaction and retention is what Mr. Warden does best. Throughout his career, in senior leadership positions with diverse industry leaders, he has earned a track-record of success in managing complex business initiatives, turnarounds and startups.

Mr. Warden effectively led the transformation of the poorest performing collection operation for a $10 billion sub-prime issuer, elevating every key performance indicator from 5th place to 1st or 2nd , while driving down annualized employee attrition from 79% to 19%. This occurred with 500 full time employees in two locations. Mr. Warden also led the startup of a collections call center operation for a premier credit card issuer successfully beating delinquency, loss and expense plans for a $1.9 billion portfolio.

Mr. Warden plays a critical role in managing the various partners with whom Fairway works.

George Muller

Mr. Muller is the former President and COO of Subaru of America, Inc., where he managed all day-to-day operations for this multi-billion dollar company. Prior to his role as the top executive of the company, Mr. Muller also held the positions of CFO, President of Subaru Financial Services and President of Subaru Foundation.

Mr. Muller is a former principal in a private equity organization and has a very strong financial and analytical background. Having held numerous Board seats for early stage and mature enterprises, Mr. Muller’s organizational leadership and guidance is a tremendous asset to Fairway Financial Solutions.

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Glenn Goldberg

Glenn Goldberg is a seasoned marketing and business development executive with experience that spans several industries, including financial services, mortgage banking, computer software & hardware, e-commerce, telecommunications, retail and adult beverages.

Mr. Goldberg was the Chief Marketing Officer for Freedom Mortgage, one of the country’s largest independent originating & servicing platforms. He was in charge of a multi-billion dollar portfolio retention program and helped design workflow procedures which positively impacted retail, wholesale and branch operations. More recently, Mr. Goldberg designed and implemented a streamlined loan origination process using online loan pricing & eligibility determination software to quickly and cost-effectively grow the business.

Prior to his work in the mortgage industry, Mr. Goldberg co-founded an early stage technology company and held senior positions at Anheuser Busch and Grey Advertising.

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References and Testimonials

Clayton Holdings:

Conrad Vasquez – EVP Operations

203.926.5788, [email protected]

Washington Mutual Retail Bank:

Conrad Vasquez – EVP Operations

203.926.5788, [email protected]

Cerberus and Washington Mutual Finance

Dan Gilbert – President

813.335.6513, [email protected]

Ken Hannold worked for me with Washington Mutual Financial Services as our Senior Executive for our Servicing Operation. His knowledge, understanding and ability to build an excellent management team were superior. He developed measurements for the business and he was instrumental in developing new processes which increase our efficiency and productivity. He has strong communication skills and he was very proactive to look for business solutions for business problems. His efforts help enable us to sell our business for a 400 million dollar profit. Without a doubt, if I ever need help, advice or the opportunity to work with Ken, I would jump at the opportunity. Without a doubt, a first class operator.

Dan Gilbert

Cerberus Capital

Mark Hillis – Risk Management

206.719.5227, [email protected]

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Contact Information

Ken Hannold

972.869.7659

[email protected]

Fred White

972.869.7660

[email protected]

Tony Warden

682.667.9698

[email protected]

George Muller

856.216.7295

[email protected]

Glenn Goldberg

856.216.7297

[email protected]

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