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    Fred Small

    Research Analyst at Compass Point

    Fred Small's questions to Park Ha Biological Technology (PHH) leadership

    Fred Small's questions to Park Ha Biological Technology (PHH) leadership • Q3 2017

    Question

    Fred Small of Compass Point requested a breakdown of the $70 million PHH 2.0 earmark, questioned the market's valuation of PHH 2.0 relative to potential cash returns, and asked about REO marketing responsibilities if MSR transfer consents are not obtained.

    Answer

    Michael R. Bogansky, CFO, confirmed the earmark increased to $70 million, with $30 million designated for 2017 and 2018 operating losses, but did not provide a yearly split. Robert B. Crowl, President and CEO, acknowledged the math suggesting the market values PHH 2.0 at a fraction of its book value. He also clarified that if MSRs do not transfer, PHH would retain the servicing and continue to service the loans as before.

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    Fred Small's questions to Park Ha Biological Technology (PHH) leadership • Q2 2017

    Question

    Fred Small from Compass Point asked for clarification on why the MSR sale to NRZ did not qualify for true sale accounting, what strategic options exist if PHH 2.0 proves unviable, and if achieving profitability goals has become more challenging.

    Answer

    CFO Michael Bogansky stated that the long-term nature of the subservicing contract with NRZ requires it to be treated as a secured borrowing under GAAP. President and CEO Robert Crowl noted it was premature to discuss alternatives to the PHH 2.0 strategy, acknowledging headwinds in portfolio retention but confirming that expense reduction efforts remain on track.

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