1. California State Teachers Retirement System CALSTRS Program Training Offered through Affinity Lending Group Desktop Underwriter is a registered trademark of Fannie Mae. Loan Prospector is a registered trademark of Freddie Mac. This presentation is a summary and is not complete. Contact your ALG AE for complete program guidelines. This information is for mortgage professionals only and should not be distributed to or used by consumers or other third-parties. Information is accurate as of the date shown below and is subject to change without notice. 05 /8/2008

6. Quick Facts Affinity Lending Group Topic 06/30/06 06/30/07 Active Members 453,365 455,693 Inactive Members 133,601 141,450 Total Members 586,966 597,143 Service Retirements Disabilities Survivor Benefits 207,846 215,641 Total Members including Benefit Recipients 794,812 812,784

13. Conforming Product Affinity Lending Group Topic Description Term 15 or 30 Year Fixed Loan Amount Up to $417,000 – Fannie Mae Loan Limit Max LTV – 1st 95% (90% in declining markets) Max LTV – 2 nd Standard Fannie Mae Guidelines Max CLTV 95% (90% in declining markets) Loan Purpose Purchases, R&T Refinance, Cash Out Refinance Eligible Properties Owner-occupied SFR ; 2- to 4-units ; Condos ; PUDs Minimum Down Payment 5% Sources of Closing Costs Follow Standard Fannie Mae Guidelines Own Other Properties Borrower can own other properties but with only 1 CalSTRS mortgage at a time

14. Conforming Matrix LTV Restriction: Max LTV allowed when there is secondary financing is 80% Affinity Lending Group Loan Type Units Max Min FICO Loan-Level Pricing Adjustment LTV/CLTV Conf Purch/Rate and Term Refi 1 95% 620 Refer to Fannie Mae guidelines. Conf Purchase/Rate and Term Refinance 2 95% 640 Conf Purchase/Rate and Term Refinance 3-4 80% 660 Conf Cash-Out Refinance 1-2 70% 620 Conf Cash-Out Refinance 1-2 70.01% - 80% 720 Conf Cash-Out Refinance 1-2 80.01% - 90% 720 Conf Cash-Out Refinance 3-4 70% 620 Conf Cash-Out Refinance 3-4 70.01% - 75% 720

16. Non Conforming Product Affinity Lending Group Topic Description Term 15 or 30 Year Fixed Loan Amount $417,001 to $834,000 Max LTV – 1st 95% (90% in declining markets) Max LTV – 2 nd Standard Fannie Mae Guidelines Max CLTV 95% (90% in declining markets) Loan Purpose Purchases, R&T Refinance, Cash Out Refinance Eligible Properties Owner-occupied SFR ; 2- to 4-units ; Condos ; PUDs Down Payment Min. 5% Sources of Closing Costs Follow Standard Fannie Mae Guidelines Own Other Properties Borrower can own other properties but with only 1 CalSTRS mortgage at a time

17. Non-Conforming Matrix LTV Restriction: Max LTV allowed when there is secondary financing is 80% Affinity Lending Group Attached/Detached SFRs, Attached/Detached PUDs, Low-Rise Condos, 2 Units Purchase and Rate and Term Cash Out Max Loan Amount Max LTV/CLTV Min Credit Score Max LTV/CLTV Min Credit Score Max Cash Out $650,000 95/95 620 75/75 620 $200,000 $834,000 90/90 660 75/75 620 $200,000 80/80 620 75/75 620 $200,000 High-Rise Condos and 3-4 Units Purchase and Rate and Term Cash Out Max Loan Amount Max LTV/CLTV Min Credit Score Max LTV/CLTV Min Credit Score Max Cash Out $650,000 90/90 620 75/75 720 $100,000 70/70 620 $100,000 $834,000 80/90 660 75/75 720 $100,000 70/70 620 $100,000

20. 80/17 Program Summary Affinity Lending Group Topic Description Term 30 Years 1 st & 2 nd Conforming Loan Amount Up to $417,000 (Up to $505,612 - 1 st & 2 nd combined) Non Conforming 1 st Loan Amt Up to $536,082 (Up to $650,000 – 1 st & 2 nd combined) Max LTV – 1st 80% Max LTV – 2 nd 17% Max CLTV (Combined 1 st & 2 nd ) 97% Loan Purpose Purchase Only Eligible Properties Owner-occupied SFRs; Condos; PUDs Down Payment 3% (1% min from borrower’s own funds) Sources of Closing Costs Borrower ’ s own funds, seller contributions up to 3%, gift from relative, or unsecured grant from approved government agency 2 nd Mortgage Deferred payments on the 17% 2 nd mortgage for the first 5 years Own Other Properties Borrower cannot own any other properties and only 1 CalSTRS mortgage at a time

22. Zero Down (95/5) Program Summary Affinity Lending Group Topic Description Term 30 Years 1 st & 2 nd Conforming Loan Amount Up to $417,000 (Up to $438, 947 – 1 st & 2 nd combined) Non Conforming 1 st Loan Amt Up to $617,500 (Up to $650,000 – 1 st & 2 nd combined) Max LTV – 1st 95% Max LTV – 2 nd 5% Max CLTV (Combined 1 st & 2 nd ) 100% Loan Purpose Purchase Only Eligible Properties Owner-occupied SFRs; Condos; PUDs Down Payment 0% Sources of Closing Costs Borrower ’ s own funds, seller contributions up to 3%, gift from relative, or unsecured grant from approved government agency 2 nd Mortgage Deferred payments on the 5% 2 nd mortgage for the first 5 years Own Other Properties Borrower cannot own any other properties and only 1 CalSTRS mortgage at a time

24. Second Mortgage Loans (17% & 5%) Affinity Lending Group 2 nd Mortgage Information Interest rates for the second mortgage loans are set by CalSTRS, and carries the same rate as the first mortgage 30-year term with a five-year deferred payment structure Simple interest calculation will be used for years 1 through 5, no principal or interest payments shall be due during the first 5 years / 60 months. Year 6 / Payment number 61: The accrued simple interest balance from the deferral period will be added to the original loan balance. The new loan amount will be amortized over the remaining 25 years / 300 months, and the borrower will then make monthly payments for the remaining life of the 2nd loan. **Down Payment Assistance Program (95/5 & 80/17) has 2 Notes & 2 Deeds of Trust***

26. SMARTMOVE Affinity Lending Group

29. Standard AUS Underwriting Affinity Lending Group

37. CalSTRS Program Fees Affinity Lending Group Topic Description Max Origination Fees Standard Conventional : Up to 1% 80/17 & 95/5 : Up to 1.25% (1 st Loan Only) Discount Points NOT ALLOWED Rebate/Premium Pricing: None available Other Closing Costs Normal and customary fees including an appraisal fee, credit report fee, survey fee, title insurance premium, and other closing costs as permitted by the respective agency. Must be fully disclosed on the HUD-1.

38. CalSTRS Current Interest Rates *Rates are for ALG Training purposes only and are current as of 05/08/08 only. Affinity Lending Group Conventional Loan Program (Up to 1% Origination Fee) Conforming Loans to $417,000 Non Conforming Loans from $417,001 to $834,000 Rates Price Rates Price 30 Yr: 5.875% 100.00 30 Yr: 6.625% 100.00 15 Yr: 5.375% 100.00 15 Yr: 6.250% 100.00 Zero Down 95/5 Program (Up to 1.25% Origination Fee) Conforming Loans to $417,000 Non Conforming Loans from $417,001 to $650,000 Rates Price Rates Price 30 Yr: 6.000% 100.00 30 Yr: 6.750% 100.00 80/17 Program (Up to 1.25% Origination Fee) Conforming Loans to $417,000 Non Conforming Loans from $417,001 to $650,000 Rates Price Rates Price 30 Yr: 6.125% 100.00 30 Yr: 6.875% 100.00