GMAC-RFC
Chris Nordeen
Presentation to the IFC – March 2006
Worldwide Capital Partner
Corporate Structure
ResCap has obtained investment grade credit ratings as an
independent finance subsidiary of GMAC
Organizational Structure
ResCap History (RFC & Resi)
1982
1991
1997
Residential Funding
Corporation (RFC)
Founded as a private
mortgage conduit
Acquired Warehouse
Lending Business
Established U.K.
Broker-Dealer
1985
Acquired Master Loan
Servicing Business
1992
1998
Established Residential
Construction Finance
Business
Established Residential
Equity Business
1999
1995
1989
Acquired Model Home
Finance Business
Acquired Wholesale
Lending Business
Established U.S.
Broker-Dealer
2004
1990
1996
2001
2002
Established
Manufactured
Housing Finance
Business
GMAC
Acquires RFC
Acquired Distressed Asset
Resolution Business
Entered The
Netherlands
Entered Canada &
Germany
Acquired Primary Loan
Servicing Business
Acquired Healthcare
Finance Business
Established Resort
Finance Business
Entered the U.K. &
Mexico
1995
1998
1999
2000
2001
2002
2003
2005
2006
GM Family Members:
Family First Offered
GMAC Mortgage
Acquires Wells
Fargo’s portfolio &
Servicing
GMAC Mortgage Becomes
largest Servicing-Only
Acquisition in Company’s
History
GMAC Residential
Homeownership
GMAC Bank Opens
GMAC Mortgage Achieves
Record Volume
GMAC Residential launches
CalDirect
GMAC Residential 20th
Year with GMAC
ResCap Continues its
Amazing Race
GMAC Residential Sponsors
Ditech NASCAR
ResCap is Launched
GMAC Home
Services
GMAC Mortgage Acquires
DiTech
1996
GMAC Commercial
Mortgage largest US
commercial lender
GMAC Mortgage Issues
First Asset Backed Security
Better Homes & Gardens
Real Estate Service
Network Acquired
GMAC Home Services
purchases Argonaut
Relocation
GMAC Mortgage Enters
Correspondent Business
Better Homes & Gardens Real
Estate Service Network Transitions
to GMAC Real Estate
GMAC Bank formed
GMAC Residential
Purchases Warehouse
Group
GMAC Mortgage Forms
Home Connects Lending
Services
2004
GMAC Residential Converts
Servicing to Single Platform
(DSU).
GMAC Home Services
Acquires GMAC Global
Relocation Services
GMAC Mortgage Enters
Broker Business
Enterprise Named GMAC
Residential
GMAC Residential Acquires
Pacific Republic Mortgage
Mission - International Business Group
Create Sustainable growth for ResCap through product
and market diversification
Market Leader
Become a market leader in each market in which
we operate
Sustainable Growth
Create sustainable growth through diversification
Disciplined Leadership
Extend ResCap’s core competencies into new markets through disciplined leadership
Traditional Mortgage Market
Borrower
BANK
Saver
GMAC-RFC Business Model
We move capital between businesses and investors in select global markets.
Government can influence along the value chain
Borrower
Bank
Investor
Direct subsidies
Tax breaks
Mortgage insurance
Lender
Capital requirements
Pension reform
Tax laws
Guarantee debt
Mandate lending
Asset/liquidity
Common standards
oversight
All of these actions can positively or negatively affect the development
of a securitization market.
Sustainable Growth
Why did GMAC-RFC go International?
Provide sustainable growth
International Parent
GSE Expansion
Diversification
Why go Beyond U.S. Border?
GSE encroachment in US market
Loan Size (USD)
1 million
* Approximate conforming
loan limit in 1990
417,000**
*
** 2005 Conforming Loan
Limit
360,000**
*** 2006 Conforming loan limit
187,000*
FNMA
FHLMC
Credit Grade
A
A-
B
C
What ResCap brings to New Markets
Value both local and Enterprise
perspective in expanding our
Global Reach
Where is GMAC-RFC Internationally?
Sweden
Russia
Canada
United KingdomNetherlands
Germany
Poland
Switzerland
Czech Rep.
Hungary
France
Italy
Turkey
Spain
Greece
United States
Egypt
South Korea
China
India
Mexico
Japan
Taiwan
Thailand
Brazil
Australia
Chile
South Africa
Argentina
RFC Established Businesses
Joint Ventures
Where is GMAC-RFC Internationally?
Sweden
Russia
Canada
United KingdomNetherlands
Germany
Poland
Switzerland
Czech Rep.
Hungary
France
Italy
Turkey
Spain
Greece
United States
Egypt
South Korea
China
India
Mexico
Japan
Taiwan
Thailand
Brazil
Australia
Chile
South Africa
Argentina
RFC Established Businesses
Joint Ventures
RFC Personnel in Country
Where is GMAC-RFC Internationally?
Sweden
Russia
Canada
United KingdomNetherlands
Germany
Poland
Czech
Switzerland
Czech Rep.
Rep.
Hungary
France
Italy
Turkey
Spain
Greece
United States
Egypt
South Korea
China
India
Mexico
Japan
Taiwan
Thailand
Brazil
Australia
RFC Established Businesses
Chile
South Africa
Joint Ventures
Argentina
RFC Personnel in Country
Countries Under Consideration
GMAC-RFC Screening process
Size of the Opportunity
–
–
–
–
Size of Current (Outstanding) Mortgage Market
Margins Available
Size of Projected Mortgage Market
State of Development of Debt and Securitization Market
Regulatory Environment
–
–
–
–
–
Regulatory Framework for Securitization
Foreign Ownership Regulations
Profit Repatriation Regulations
Foreclosure Regulations
Licensing Requirements
GMAC-RFC Screening process (cont)
Business Environment
– Role of Government
– Intermediaries
– Ability of GMAC to fund locally
Others
– Macroeconomic stability
– Level of corruption
Government can influence along the value chain
Borrower
Bank
Investor
Direct subsidies
Tax breaks
Mortgage insurance
Lender
Capital requirements
Pension reform
Tax laws
Guarantee debt
Mandate lending
Asset/liquidity
Common standards
oversight
All of these actions can positively or negatively affect the development
of a securitization market.
Assessing the countries in each screen helps us quantitatively evaluate the relative
attractiveness of countries
10
8
Final Scores
10 most attractive
11 least attractive
7.35
6.70
6.66
6
5.56
5.34
4.72
4.59
4.39
4.29
4.12
4
3.96
3.75
3.68
3.61
3.45
3.36
3.29
3.16
2.85
2.10
2
1.62
0
AU
CH
JP
IT
SE
CL
TW
ZA
KR
BR
GR
IN
CZ
HU
CN
AR
TR
TH
PL
EG
RU
As one would expect, the attractiveness varies by bucket
Size of
(40%)
Reg.
(20%)
Buss.
(30%)
Others
Australia
2
1
2
2
Switzerland
3
5
3
1
Japan
1
7
13
4
Low local funding of GMAC. Market concentration
Italy
4
11
7
6
Foreclosure difficult
Sweden
5
2
6
3
Chile
15
4
4
7
Taiwan
8
8
7
5
South Africa
12
13
1
14
Significant (and growing) intermediary channel
Korea
6
3
19
13
High government involvement
Brazil
9
6
12
18
Unstable macroeconomic environment
Greece
11
10
9
10
India
10
15
11
12
Czech Republic
18
18
4
11
Small market. Regulations yet to “develop”
Hungary
17
9
10
15
Small market but good buss. and regulatory environment
China
7
19
18
9
Argentina
13
11
14
19
Turkey
14
13
14
20
Thailand
16
16
16
17
Poland
19
17
17
16
Egypt
21
20
21
8
Russia
20
21
20
21
Country
Comments
Small market but scores high on other factors
Market Leader
United Kingdom Overview
Began with purchase of small B2B Lending platform in 1998
First bond issue September 1999 - Mix of own origination and Acquired
Loans
First UK non-conforming mono-line wrapped deal
November 2000
First major UK lender to make whole loan trading an active business
strategy
Development of self-cert. market (Low Doc.)
First Point Of Sale Decision system in UK
Launch of securitization/whole loan hybrid program
in 2005
Netherlands Overview
De novo start up in 2000
Created a risk-based approach to lending in the Netherlands
Offered products through multiple channels
Innovated European securitizations with EMAC program
Germany Overview
Began in 2002 with the purchase of Creditweb
Expanded Broker offerings with product from
GMAC-RFC Bank gmbh
Focus on underserved product sectors
Creation of new mortgage instruments - briefgundschulden
Issued Germany’s first true sale securitization
in 2005 (E-MAC DE 2005-I)
Latin America Overview
Mexico
Operate as two entities: GMAC Financiera & GMAC Hipotecaria
First private warehouse lender to mortgage banks (Sofoles)
Construction Lending to Sofoles and Large Developers
First ever Mexican RMBS completed in December 2003
Partnership with regional and multi-national bodies to actively develop MBS market (IFC/IADC/FMO)
Established whole-loan trading market with first acquisition in 2004
Expanded investor base including international investors
Bi-National Mortgages
Brazil and Chile
Joint Ventures in Brazil and Chile to continue growth
Canada Overview
Purchased Mortgage Intelligence in 2002, the largest independent
mortgage broker in Canada
Formed GMAC RFoC to lend expanded criteria and expanded credit
products in Canada
Offered products through Mortgage Intelligence and expanded to
other institutions
Completed three securitizations through the GMAC RFoC program
Crafted a structure funding program for pipeline assets
United Kingdom (Production and Sales)
GMAC-RFC Origination, Securitization and Portfolio Sale Volumes
U.K. and Continental Europe RMBS Issuer rankings - 2004 and 2005
Originator
Total EURm
No of Issues
Share (%)
1
HBOS
20,727
3
17.7
2
Northern Rock
16,263
3
13.9
3
GMAC-RFC
6,614
6
5.7
4
Abbey National
5,963
1
5.1
5
Fortis
Originator
4,397
2
3.8
6
Paragon
3,932
3
3.4
7
Kensington Mortgages
1
Northern
3,326 Rock
3
2.8
8
Bradford & Bingley
2
HBOS
2,881
1
9
3CIF Group
3
GMAC-RFC*
2,871
10
Bancaja
4
Bancaja
2,590
Total
5
Period: 1 January 2004 to 22 December 2004
Includes: MBS, ABS and CDO’s
Source: MCM and RBS
No of Issues
Share (%)
18,184
4
20.5
2.5
12,605
2
14.2
2
2.5
5,144
6
5.8
2
2.2
3,680
2
4.1
SNS
Bank
116,911
3,056
2
3.4
6
UniCredit Banca
2,990
1
3.4
7
Bankinter
2,775
2
3.1
8
Standard Life Bank
2,056
1
2.3
9
Caja de Ahorros del Mediterraneo
2,000
1
2.3
10
3CIF Group
1,834
1
2.1
Total
* Includes EMAC NL and EMAC-DE transactions & RMAC 2005-NC3
Period: 1 January 2005 to 21 September 2005
Includes: MBS
Source: MCM and RBS
Total EURm
89,030
Disciplined Leadership
Why we have been successful
Success driven by “disciplined leadership” approach to
market expansion
Common risk management practices
Common lending policies
Common approach to capital factors and financial metrics
Worldwide relationships with rating agencies and strategic funding partners
Ability to share credit and prepayment data across different markets
New markets – what’s next
Spain/Australia
Dedicated Personnel
B-to-B Alt “A” Products
Future Work
• Eastern Europe
• India
• China
Mission – International Business group
Market Leader
Multiple channel mortgage banking businesses
Risk-based pricing
Sustainable growth
Diversification
• Market
• Income source fee gain-on-sale, financing
• Lending and Mortgage Banking
Disciplined leadership
Expand ResCap Core competencies into selected new markets
Control over the front and back of the mortgage process