FREE WRITING PROSPECTUS
The depositor has filed a registration statement (number 333-131712) (including a
prospectus) with the SEC for the offering to which this communication relates. Before
you invest, you should read the prospectus in that registration statement and other
documents the depositor has filed with the SEC for more complete information about
the depositor, issuing trust and this offering. You may get these documents for free
by visiting EDGAR on the SEC web site at www.sec.gov. Alternatively, the depositor
or any underwriter or any dealer participating in the offering will arrange to send you
the prospectus if you request it by calling toll-free 1-866-718-1649.
The registration statement referred to above (including the prospectus) is
incorporated in this free writing prospectus by reference and may be accessed by
clicking on the following hyperlink:
http://www.sec.gov/Archives/edgar/data/1014299/000114420406012322/0001144204
- -06-012322.txt
Saxon Capital, Inc.
September 2006
FORWARD LOOKING STATEMENTS
Statements in this presentation other than statements of historical fact, are “forward-
looking statements” that are based on current expectations and assumptions. These
expectations and assumptions are subject to risks and uncertainty, which could affect
Saxon’s future plans. Saxon’s actual results and the timing and occurrence of expected
events could differ materially from its plans and expectations due to a number of factors,
such as (i) changes in overall economic conditions and interest rates, (ii) Saxon’s ability
to successfully implement its growth strategy, (iii) Saxon’s ability to sustain loan
origination growth at levels sufficient to absorb costs of production and operational costs,
(iv) continued availability of credit facilities and access to the securitization markets or
other funding sources, (v) deterioration in the credit quality of Saxon’s loan portfolio, (vi)
lack of access to the capital markets for additional funding, (vii) challenges in successfully
expanding Saxon’s servicing platform and technological capabilities, (viii) Saxon’s ability
to remain in compliance with federal tax requirements applicable to REITs, (ix) Saxon’s
ability and the ability of its subsidiaries to operate effectively within the limitations
imposed on REITs by federal tax rules, (x) changes in federal income tax laws and
regulations applicable to REITs, (xi) unfavorable changes in capital market conditions,
(xii) future litigation developments, (xiii) competitive conditions applicable to Saxon’s
industry, and (xiv) changes in the applicable legal and regulatory environment. You
should also be aware that all information in this presentation is as of June 30, 2006.
Saxon undertakes no duty to update any forward-looking statement to conform the
statement to actual results or changes in the Company’s expectations.
INFORMATION & WHERE TO FIND IT
Reg AB static pool data can be found at
www.saxonmortgage.com/staticpool.
Corporate presentations, company financials, corporate SEC filings
and other useful links can be found at www.saxonmortgage.com
(click on the Investor Relations link).
Underwriting guidelines, matrices and product profiles can be found
at www.esaxon.com/wholesale/index.jsp (under Matrices).
Securitization program (SAST) information can be found at
www.saxonmortgage.com (click on the Securitization link).
Information available includes:
Pricing information and the prospectus for our transactions
Remittance statements and transaction profile reports
Monthly CPR analysis and actual vs. pricing CPR
Quarterly loss reports and loss severity report
Prepayment penalty collection and roll rate information
MERGER AGREEMENT
Saxon Capital, Inc. Agrees to be Acquired by Morgan Stanley
On Aug. 9, 2006 Saxon Capital, Inc. ("Saxon" or the "Company")
(NYSE: SAX), a residential mortgage lending and servicing real estate
investment trust (REIT), announced the signing of a definitive merger
agreement pursuant to which Morgan Stanley (NYSE: MS) will acquire
all of the outstanding shares of Saxon for $14.10 per share in cash.
The total value of the transaction is approximately $706 million. The
acquisition is subject to certain terms and conditions customary for
transactions of this type, including receipt of regulatory approvals and
Saxon shareholder approval, and is expected to be completed by the
end of 2006.
SAXON COMPANIES
A nationally recognized
wholesale and correspondent
mortgage lending company
Name under which Saxon Mortgage,
Inc. conducts retail lending business,
through a network of regional lending
centers and centralized lending
platforms.
A premier mortgage
servicing company
Saxon Capital Holdings, Inc.
(TRS)
Saxon Funding Management, Inc.
(QRS)
SASCO
(ABS Issuer)
SAXON STRATEGY
Saxon is building a high-quality non-conforming mortgage loan
portfolio
Portfolio accounting (no on-balance-sheet residual valuation)
Generally hold and securitize 100% of 1st lien production
Holder of the first loss/residual risk (generally below BBB– credit risk)
Proactively manage the credit risk through our “Life of the Loan Credit
Risk Management” philosophy
Nine+ years of performance history in our enterprise data warehouse
Grow 3rd party servicing
Managed growth
Utilize capacity in Texas and Virginia servicing centers
Texas capacity of $30B; currently at approximately 76% capacity
Virginia capacity of $20B; currently at approximately 17% capacity
Initiation of conduit purchase program
Data as of June 30, 2006
SAXON STRATEGY Con’t
Improve efficiencies and reduce costs
Consolidated the back-office operations of the wholesale and retail channels
(2005)
I-deals – new automated underwriting engine (2005)
MRG – automated closing doc generation and delivery (2005)
Netox – new origination platform (May 2006)
elock – automated lock function (4th Quarter 2006)
Data as of June 30, 2006
Total Net Revenue (In Millions)
Net Interest Income (In Millions)
Debt-to-Equity
Shareholders’ Equity (In Millions)
Net Servicing Income (In Millions)
Return on Average Assets
Data as of June 30, 2006
HISTORICAL PERFORMANCE
CONDENSED CONSOLIDATED BALANCE SHEET
Data as of June 30, 2006
30-Jun-06
31-Dec-05
Assets:
Cash
$13,344
$6,053
Trustee receivable
139,937
135,957
Restricted Cash
6,005
147,473
Accrued interest receivable, net of allowance for past due interest
losses of $13,921 and $16,086 respectively
43,055
38,182
Mortgage loan portfolio
6,758,659
6,444,872
Allowance for loan losses
(35,412)
(36,639)
Net mortgage loan portfolio
6,723,247
6,408,233
Servicing related advances
220,101
185,297
Mortgage servicing rights, net
145,327
129,742
Real estate owned
41,079
38,933
Derivative assets
40,023
19,954
Deferred tax asset
53,908
53,724
Other assets, net
70,621
68,530
Total assets
$7,496,647
$7,232,078
Liabilities and shareholders’ equity:
Liabilities:
Accrued interest payable
$10,588
$8,357
Dividends payable
25,468
32,539
Warehouse financing
245,979
378,144
Securitization financing
6,434,332
6,182,389
Derivative liabilities
21,022
8,589
Senior notes
150,000
0
Other liabilities
29,577
28,925
Total liabilities
6,916,966
6,638,943
Shareholders’ equity:
Common stock, $0.01 par value per share, 100,000,000 shares
authorized; shares issued and outstanding: 50,080,215 and
50,001,909 as of June 30, 2006 and December 31, 2005,
respectively
501
500
Additional paid in capital
636,298
634,023
Accumulated other comprehensive loss, net of income tax of $(12)
and $(16), respectively
(277.00)
(355.00)
Accumulated deficit
(56,841.00)
(41,033.00)
Total shareholders’ equity
579,681
593,135
Total liabilities and shareholders’ equity
$7,496,647
$7,232,078
PORTFOLIO SUMMARY
57.24%
Funded volume includes conduit loans
6.83%
116,998,998
VA
8.36%
143,197,701
NY
11.67%
199,982,031
FL
14.18%
242,968,421
MD
16.20%
277,526,308
CA
Percent
Loan Amount - Original
State
Top 5 States by Volume
Funded 1/1/06-6/30/06
Servicing Portfolio
$19.7 billion
= 75%
$6.7 billion
= 25%
Data as of June 30, 2006
100%
100%
100%
100%
100%
100%
7.2%
0.0%
0.0%
0.0%
0.0%
0.0%
Conduit
1.1%
5.6%
5.2%
7.2%
10.2%
24.2%
Correspondent
- Bulk
25.2%
28.0%
24.3%
24.6%
16.6%
15.2%
Correspondent
- Flow
18.7%
21.3%
27.6%
26.8%
28.1%
19.2%
Retail
47.9%
45.1%
42.9%
41.3%
45.1%
41.4%
Wholesale
$1.66
$3.35
$3.49
$2.84
$2.30
$2.33
Volume ($B)
YTD 2006
2005
2004
2003
2002
2001
Volume & Channel Mix
QUARTERLY PRODUCTION STATISTICS
Second Quarter 2006
Data as of June 30, 2006
Funded
% of
Credit
Volume
Total Funded
WAC -
WA CREDIT
Score
(000's)*
Volume
Fixed
WAC - ARM
SCORE
WA CLTV
> 650
$150,521
18.80%
7.94%
8.14%
686
80.38%
601-650
$281,667
35.18%
8.19%
8.14%
623
80.35%
551-600
$277,824
34.70%
8.43%
8.56%
578
77.98%
526-550
$57,566
7.19%
9.48%
9.14%
539
75.57%
< 525
$32,586
4.07%
10.10%
9.67%
511
70.90%
N/A**
$560
0.07%
N/A
10.13%
N/A
68.20%
Totals
$800,645
100%
8.30%
8.50%
608
78.80%
*Funded volume excludes conduit loans
**These loans have unavailable credit scores
WA = Weighted Average
SAST COLLATERAL SUMMARY*
*At settlement
Data as of June 30, 2006
SAST 2005-04
SAST 2005-04
SAST 2005-04
SAST 2006-01
SAST 2006-01
SAST 2006-01
SAST 2006-02
SAST 2006-02
SAST 2006-02
Arm
Fixed
Total
Arm
Fixed
Total
Arm
Fixed
Total
Fixed vs ARM%
78%
22%
100%
80%
20%
100%
75%
25%
100%
Loan Count
2,409
954
3,363
2,032
726
2,758
3,762
1598
5,360
Sched Bal
499,525,880
140,468,569
639,994,449
397,506,961
102,466,119
499,973,080
750,841,529
249,107,508
999,949,037
WTD Avg Credit Score
607.99
613.58
609.22
601.14
610.18
602.99
603.39
612.24
605.6
WTD Avg Coupon
7.74
7.73
7.73
8.25
8.23
8.24
8.42
8.19
8.36
WTD Avg Gross Margin
6.12
6.12
6.22
6.22
6.28
6.28
WTD LTV
79.4
75.67
78.58
79.03
75.89
78.39
79.56
75.57
78.57
WTD CLTV
82.5
77.71
81.45
82.28
77.92
81.38
82.67
76.62
81.16
WTD CLTV Original Adj
79.4
76.43
78.75
79.03
76.7
78.55
79.56
75.57
78.57
LTV > 80%
38.41%
38.51%
38.43%
38.78%
38.06%
38.63%
39.06%
32.75%
37.49%
LTV > 90%
8.82%
8.01%
8.65%
9.29%
10.67%
9.57%
10.55%
8.79%
10.11%
LTV > 95%
3.16%
2.51%
3.02%
3.51%
3.79%
3.57%
3.93%
2.81%
3.65%
Avg Scheduled Balance
207,358.19
147,241.69
190,304.62
195,623.50
141,137.90
181,281.03
199,585.73
155,887.05
186,557.66
Max Schedule Balance
1,000,000
598,431.64
1,000,000
1,247,542.84
747,904.51
1,247,542.84
1,000,000
1,325,000.00
1,325,000
Balloon Loan %
20.81%
15.19%
19.58%
21.97%
11.88%
19.90%
29.20%
15.30%
25.74%
40/30 Balloon %
20.76%
14.25%
19.33%
21.97%
11.28%
19.78%
29.20%
15.30%
25.74%
% Silent 2nds
16.40%
8.50%
14.66%
18.09%
7.91%
16.00%
16.42%
5.61%
13.73%
% Second Lien
0.00%
1.01%
0.22%
0.00%
1.02%
0.21%
0.00%
0.00%
0.00%
WTD Avg Periodic Cap
1.03
1.03
1.05
1.05
1
1
WTD Avg Life Cap
6.07
6.07
6.11
6.11
6.01
6.01
WTD Avg DTI Total
40.94
39.19
40.55
40.83
38.52
40.35
41.04
39.26
40.6
WTD Avg Initial Cap
2.90
2.90
2.84
2.84
2.99
2.99
WTD Avg Life Floor
6.48
6.48
6.7
6.7
6.6
6.6
WTD Avg Life Ceiling
13.8
13.8
14.35
14.35
14.43
14.43
Total DTI > 40%
62.81%
53.31%
60.68%
60.91%
49.98%
58.65%
63.05%
52.87%
60.52%
Total DTI > 50%
5.32%
3.34%
4.88%
4.69%
4.00%
4.55%
7.73%
6.23%
7.35%
% Full Doc
62.21%
78.69%
65.83%
60.86%
73.64%
63.48%
60.73%
71.93%
63.52%
% Stated Doc
32.66%
16.45%
29.10%
32.03%
16.17%
28.78%
31.42%
17.38%
27.92%
% Stated Wage Earners
11.69%
7.45%
10.76%
11.19%
7.03%
10.34%
14.97%
11.71%
14.15%
% Purchase
20.63%
5.46%
17.30%
19.74%
6.52%
17.03%
19.71%
5.02%
16.05%
% Cash Out
74.63%
89.14%
77.81%
76.61%
86.17%
78.57%
76.80%
88.53%
79.72%
% Owner Occ
95.68%
97.13%
95.99%
95.43%
96.16%
95.58%
93.62%
96.80%
94.41%
% Second Home
0.34%
0.94%
0.47%
0.81%
0.75%
0.79%
0.86%
0.37%
0.74%
% Investor
3.99%
1.93%
3.53%
3.77%
3.08%
3.63%
5.51%
2.83%
4.84%
% IO
34.57%
1.95%
27.41%
27.82%
1.86%
22.50%
29.68%
1.91%
22.76%
% with PPMT Penalty
62.38%
81.43%
66.56%
59.47%
73.64%
62.38%
57.83%
75.22%
62.16%
Single Family Att/ Det
72.70%
83.55%
75.08%
70.38%
80.07%
72.36%
74.43%
80.85%
76.03%
Single Family Det
70.86%
82.71%
73.46%
68.86%
79.26%
70.99%
72.20%
78.89%
73.87%
A- or Better
88.67%
90.45%
89.06%
86.58%
90.51%
87.38%
88.47%
90.66%
89.02%
A+
65.91%
71.63%
67.17%
61.44%
70.22%
63.24%
66.32%
70.44%
67.35%
A
12.11%
11.33%
11.94%
13.01%
11.61%
12.73%
11.68%
12.33%
11.84%
A-
10.65%
7.49%
9.96%
12.13%
8.69%
11.42%
10.47%
7.90%
9.83%
B
3.77%
2.84%
3.57%
5.14%
4.54%
5.02%
4.79%
3.76%
4.53%
C
3.87%
2.33%
3.53%
4.25%
2.40%
3.87%
3.94%
2.34%
3.54%
D
0.00%
0.00%
0.00%
0.00%
0.00%
0.00%
0.00%
0.00%
0.00%
Data as of June 30, 2006
CREDIT SCORE MIGRATION
Credit
Score
2006
2005
2004
2003
2002
2001
2000
WTD Avg
Credit Score
608
614
622
618
605
593
580
> 650
19.16%
24.98%
31.11%
44.32%
29.19%
17.94%
6.61%
601-650
34.64%
33.90%
30.94%
20.56%
24.56%
18.48%
11.19%
551-600
34.19%
28.02%
23.35%
23.22%
29.28%
35.65%
40.93%
526-550
7.32%
7.22%
7.84%
7.35%
11.08%
16.60%
23.06%
< 525
4.62%
5.74%
6.40%
4.16%
5.89%
11.33%
18.21%
Other
0.06%
0.13%
0.36%
0.39%
-
-
-
STATIC POOL DELINQUENCEY
Outstanding Portfolio Balance by Year:
2001 = 3.30% 2004 = 27.80%
2002 = 5.67% 2005 = 40.75%
2003 = 11.17%
© Saxon Capital, Inc. 2006- All Rights Reserved- Duplication Prohibited
Data as of June 30, 2006
STATIC POOL LOSSES BY FUNDED YEAR
Data as of June 30, 2006
2003 actual
2004 actual
2002 actual
2001 actual
LOSS SEVERITY
Data as of June 30, 2006
LOSS SEVERITY Con’t
Data as of June 30, 2006
UNDERWRITING
Underwriting
3 operations centers – VA, TX, CA
Automated U/W system
Automated review for borrower fraud using Appintell’s DISSCO system
Automated review of property valuation using Appintell’s VALVERIFY
system
Automated review of appraisers against bad appraiser list
Full file review by underwriters (post automated u/w approval) to:
Identify misrepresentation
Review appraisals
Ensure satisfaction of conditions
Exceptions to Automated U/W system:
Approximately 20% of production (Saxon tracks # exceptions and will adjust
pricing on # of them)
Require countersignature from senior underwriters or management
Performance monitoring drives pricing engine rate adjustments
QUALITY CONTROL
Post Funding Quality Control
Adversely selects 10+% of closed loans submitted for purchase based upon LTV
ratio, seller, geographic location, product and collateral
Use a statistically based software, Cogent, which allows an adverse selection
while maintaining a statistical sampling of the entire month’s production.
Subjects audited files to re-verification of all major underwriting components such
as income, employment, collateral value and cash to close.
DRIP
Monthly meetings of senior managers of Underwriting, QC and Servicing
Review loans recommended for foreclosure to determine any adverse trends
Investigation Unit
Performs pre-funding investigations of loans referred by underwriting
Performs 100-150 investigations a month on average
Reviews 100% of early payment default loans (loans which are 60 days
delinquent within the first 90 days) for material misrepresentation/fraud
Performs investigations on loans referred by the DRP Committee at SMSI and
every first and second payment default
Sellers
Minimum tangible net worth of $1,000,000
Minimum of (3) years experience in mortgage origination
$100MM in originations in prior 12 Months
Warehouse lines of at least $10MM
Pools:
Minimum Pool size of $10MM
Target $20MM to $100MM
Program provides a new infrastructure that would allow SAX to be competitive on
pools much larger than $100MM if desired
Cost Structure:
Mostly a variable cost structure: Outsourcing the underwriting and post-closing
functions
Provides for an easy transition from a supplemental strategy to an opportunistic
strategy as market conditions dictate
CONDUIT PROGRAM (NON-SAST)
Full analysis of seller guidelines prior to bid for risk-based pricing
Exclusion of high cost loans, LTV’s over 100%, negative amortization loans
etc.
100% re-underwriting on loan pool by third-party contract underwriters
Fraud Prevention:
100% borrower fraud review and scoring using Appintell’s electronic fraud
prevention tool (DISSCO).
Additional reviews on loans with DISSCO scores that indicate a high risk for
borrower fraud
Property Valuation:
100% property valuation review using Appintell’s automated valuation tool
(VALVERIFY)
Collateral Risk Solutions (CRS) property valuation for 1) Saxon QC targeted
areas and 2) High risk VALVERIFY scores
100% compliance review of legal docs and disclosures
Expected loss forecasting through LPS Risk Model, and Saxon’s own
performance data warehouse
CONDUIT PROCESS – MITIGATING RISK
SERVICING
Rating:
Category Rating
Primary Servicer of Subprime Loans SQ2
Special Servicer SQ2-
Commentary:
Strong collection abilities
Above average loss mitigation results
Above avg. foreclosure and REO timeline management
Review of borrower’s collection history at 75th day of delinquency
Effective borrower contact and timeline management
Contact through behavioral score
NICE call recording technology
Postal tracking of borrower payments
RATING AGENCY SUMMARY
Standard and Poor’s
Ratings:
Category Rating
Residential Mortgage Subprime Servicer Above Average
Residential Mortgage Special Servicer Average
Commentary:
Solid management
Sound application of technology
Effective and dynamic training programs
Effective borrower contact and timeline management
Satisfactory oversight of outsourced functions
Corporate credit rating desirable
Fitch Ratings
Rating:
Category Rating
Rated IBCA RPS2+
Commentary:
Continued to refine servicing platform through
operational and technological improvements which
enhanced efficiencies and productivity
Continued to build strong management team
Restructured management and workflows in servicing
center
Effective loan administration practices
Commitment to technology enhancements
Reliable default management practices
Moody’s Investor Service
Total 2006 portfolio growth 6.45%
Portfolio Performance: Total Portfolio
Delinquency 60+: 7.95%
Loss Severity: 38.86%
Cost to service 17 bps (2Q06)
Annualized employee turnover rate 27.98%
SCI: Organic Origination
3rd Party: Purchased
Data as of June 30, 2006
MORTGAGE LOAN SERVICING
Top 10 states equal 65.88% of servicing portfolio
Bottom 20 states equal 4.55% of servicing portfolio
1. California 28.55%
2. Florida 9.00%
3. New York 4.64%
4. Texas 4.47%
5. Illinois 3.67%
Top 10 States
(based on Total Portfolio)
6. Maryland 3.64%
9. Michigan 3.00%
7. Virginia 3.08%
8. Georgia 3.00%
10. Arizona 2.83%
TOTAL PORTFOLIO
Data as of June 30, 2006
GEOGRAPHIC SERVICING CONCENTRATION
SERVICING STRUCTURE
CUSTOMER SERVICE & EARLY COLLECTIONS
Predictive Modeling
Calling Campaigns
The Call Center uses the Freddie Mac Early Indicator Scores product monthly on the entire 0 – 59 portfolio
The scores range from 000 – 099 with the lower numbers having a higher probability of serious delinquency
The current month loans are queued in the auto dialing campaigns with higher risk loans taking priority in the dialing order as follow:
Day 3: 000 – 006
Day 10: 007 – 044
Day 17: 045 – 099
The Call Center also risk weights geographic areas and sorts the call campaigns by Unpaid Principal Balance (UPB)
Efficiency Gains
The scoring and dialing matrix provides SMSI with efficiency gains by focusing on loans with higher risk of delinquency and higher
service levels by not contacting those borrowers who have a history of timely payment
Successes
Cure Ratios
Current Month: 94.21% (2006Q2)
2 Month: 75.37% (2006Q2)
Answer Rate: 98.08% (2006Q2)
Successful customer service survey
Higher customer service level
Lower employee turnover for Texas call center – 22.84% voluntary turnover (2006Q2)
Looking Forward
Customers can create a work-out plan via the web and Integrated Voice Response (IVR)
Speech Recognition and Touch Tone IVR upgrade
Centralized Command Center for real-time adherence and traffic monitoring
LOSS MITIGATION
Department Structure
The Loss Mitigation department is focused on curing
delinquencies through aggressive collection efforts and
workout options.
Staffing
5 Loss Mitigation Teams
All staff are skilled in managing delinquency types from 60 to
120+ days
Workout Team
Specializes in all workout options as foreclosure alternatives
Loan Recovery Specialist
Focuses on 2nd lien monitoring, collections, and
repurchases
Loan Support Team
Supports Default Resolution Plan (DRP), Broker Price Opinion
(BPO) orders, property preservation, code compliance, and
insurance claims
Administrative Support Team
Posting exception payments
Prepare reinstatement letters and repayment plans
Imaging
Delinquency is tracked in buckets by UPB and loan
count
60 – 89 Days
90 – 119 Days
120+ Days
Workout Options
Forbearance and Repayment Plans
Modifications
Short Sales and Assumptions
Deeds-in-Lieu
Target staffing: 135 loans per FTE
Actual: 142 loans per FTE (2006Q2)
Incentive Structure
Monthly Incentive Breakdown
28% Delinquency (Team)
45% Cure Rate (Team)
15% Answer Rate (Team)
12% Quality Control (Individual)
Management Levels
Average of 16+ years of industry experience in the Loss
Mitigation management team
LOSS MITIGATION Con’t
Predictive Modeling
Early Indicator Scores are utilized in daily collections to identify higher
risk delinquencies and to delay foreclosure referrals for lower risk
borrowers.
Foreclosure referrals are delayed according to scores:
EIS below 200 (higher risk) refer at 76 days past due
EIS above 200 (lower risk) refer at 90 days past due
Allows for increased cure rates on lower risk loans prior to referral
Improves probability of cures by delaying advances
Titanium Solutions
Third party resource used to provide face-to-face borrower contact and
skip-tracing specifically, targeting no-contact loans
Improved contact results for no-contact loans
Submission of financial packages
Success rate of 42% on loans submitted during 2005
LOSS MITIGATION Con’t
eDRP (Default Resolution Plan)
A web-based proprietary system that provides access to information used in monthly Risk
Management meetings for pre-foreclosure reviews
Automated recovery analysis
Review
Loss Analysis Property Valuation
Credit Report/Summary HUD-1 Closing Statement
Meeting attendees include Underwriting Management, Risk Management, Collections, and the Loss
Mitigation staff
Specific reviews are targeted for loans with a variance of 25% or more between origination appraised
value and current value
Saxononline.com
Our customers have the ability to submit financial packages on-line
Venture Mailing
Brochures with financial packages are mailed on loans that roll 90 days delinquent on first day of each
month
FastBatch – FastData Suite of Information Solutions
A vendor-based system used to compile information from national databases for use in skip-tracing
Returns most current information available
Swift return of data – generally within 5 hours
Eliminates manual skip-trace work
LOSS MITIGATION Con’t
Data as of June 30, 2006
Results
Cure Rates (based on UPB)
2006
YTD
2005
2004
2003
2002
60
–
89 Days
56.76
%
54.33
%
58.38
%
57.62
%
54.78
%
90
–
119 Days
41.83
%
39.19
%
44.04
%
35.00
%
34.80
%
120
–
149 Days
28.81
%
25.19
%
26.44
%
23.87
%
25.23
%
150+ Days
13
.18
%
13.47
%
12.14
%
10.08
%
11.82
%
TIMELINES
0 DPD
40 DPD
60 DPD
75 DPD
76 DPD
90 DPD
Property Inspection
AVM/BPO/CBR
Ordered
DRP Meeting
EIS Below 200:
Refer for F/C
EIS Above 200:
Refer for F/C
F/C Sale Date
Work on Collecting Concurrent with the Foreclosure Process
F/C: Electronic Foreclosure Referral
BPO: Broker's Price Opinion
CBR: Credit Bureau Report
EIS: Early Indicator Score
Default
33 DPD
76 DPD
90 DPD
90 DPD
Breach
EIS Below 200:
Refer for F/C
EIS Above 200:
Refer for F/C
Delay for Bankruptcy Filing
Equal to Approximately 100 Days
F/C Sale Date
Work on Collecting Concurrent with the Foreclosure Process
Foreclosure Timeline
Approx 270 DPD
F/C Sale
Date
60 Days After F/C
Receive
Marketable Title
List the Property
Contract to
Sell Property
REO Timeline
75 Days After F/C
165 Days
Close on Sale
195 Days After F/C
FORECLOSURE/BANKRUPTCY
Data as of June 30, 2006
REO TIMELINE
2001 2002 2003 2004 2005 2006
Average Days on Market 117 130 131 120 123 115
Data as of June 30, 2006
Strong
Management
Existing
Portfolio
Servicing
Platform
Discipline
Saxon’s
management team
has one of the
strongest
reputations in the
industry
Team is made up
of seasoned
professionals in the
mortgage industry
Saxon has been
building its on-
balance sheet
portfolio since
2001
Portfolio at
6/30/06 was $6.7
billion
Saxon does not
use gain on sale
accounting for
securitizations
Saxon has a
servicing platform
that is highly rated
and scalable
Servicing
business will
produce stable
cash flow and
offset any
slowdown in
mortgage
originations
Saxon has a
culture of
discipline in
growth, credit,
and servicing
Creating assets
for our balance
sheet and
managing a REIT
require similar
discipline
© Saxon Capital, Inc. 2006- All Rights Reserved- Duplication Prohibited
SUMMARY