RethinkRecovery

What is STARS?Skip

Tracing

Asset

Recovery

Solutions

STARS is part of Roquemore’s Rethink Recovery Program.

A pre-paid recovery cost solution that significantly reduces or eliminates the costs to recover and

liquidate collateral

No cost to the lender

Compare

*Repossession $350 Repossession $0

*Skip Tracing $350 Skip Tracing $0

*Coordination fee $100 Coordination fee $0

**Remarketing Cost

$165 Remarketing Cost

$0

Total Average Cost $965 Total Average Cost

$0

Without STARS

With STARS

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*Based on average skip tracing and repossession costs.**Remarketing costs vary by auction and process. Other costs may still apply.

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More Loans=More Cost

Without STARSFor 200 repossessions, skip and repossession costs are about $115,000

More Cost=Lower Returns

For 200 recoveries, remarketing costs add another $33,000

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With STARS

The same 200 repossessions would cost $115,000 to $148,000 less with STARS

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More Loans with lower costs or no costs=Higher Returns

New Loans

• The STARS program fee is paid at loan origination normally from the dealership– The lender could reduce their interest rate from these less

risky loans allowing the dealership to close more loans from the lower rate

– A lower interest rate could allow a dealership to sell a higher priced car to the buyer

– The dealership could make more commission from the lender in the “buy rate” and “sell rate” difference from their dealer reserve

• The dealership completes a one page form and sends it to Roquemore along with the program fee

• Roquemore enters the loan into SkipTrak• Roquemore sends confirmation back to the dealership• The dealership provides the completed form and

confirmation to the lender when the loan closes

Existing Loans

• Existing loans that are delinquent or in default and in the collection process can enter the STARS program

• The STARS program fee is collected from the borrower as part of the costs of collection allowed under their loan agreement and part of their work out plan

• If Roquemore was working the assignment, simply send a secure message to enter the loan into the program and collect the program fee from the borrower along with the work out arrangements

• Roquemore will invoice the program fee along with the repossession invoice or separately if there was no repossession

• Roquemore sends confirmation back to the lender that STARS has been activated on that loan

• If the loan goes into default again, the costs of recovery and liquidation are covered under the program

Starting portfolio size=1,000

Ending portfolio size=1,470

Default Rate=1.00%

New loans/Month=10

Time=48 months

STARS begins in the 11th month

All new loans include STARS

Savings=54%

How would STARS impact recovery costs in an existing portfolio?

Rethink Recovery

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FAQ• How much is the program fee?

– The Program Fee is based on the FICO score for new loan originations at the time of financing. The fee ranges from $55.00 for prime loans to $85.00 for deep subprime loans.

– For existing loans the Program Fee is $75.00• Who pays the Program Fee?

– On new loans, the Program Fee can paid by the dealership, which makes the cost to the lender $0

– For existing loans, the debtor can be charged the Program Fee under the “Costs of Collection” clause contained in most loan agreements under their work out plan.

• Is there a limit to the number of loans that can be entered into the program?– There is no minimum or maximum number of loans

• What reporting is available?– A quarterly report is provided that details all program fees collected, the monthly

default rate, the number of eligible loans and the amount saved during the quarter

– All funds are deposited in a audited trust account and a quarterly statement is issued from this account.

• How much is covered/pre-paid?– Repossession costs up to $350, Skip tracing costs up to $450, including

coordination fees up to $100 and remarketing costs up to $165 for Auto Financial Group remarketing.

• Does any loan qualify?– Yes

FAQ• What if I have CPI coverage?

– STARS works with your existing CPI coverage. Send your service request to recover the collateral prior to submitting a CPI claim. This can significantly reduce your loss ratio.

– Since Roquemore recovers approximately 80% of all assignments, you would only submit 20% of the number of claims you normally would. And, for no cost in most cases.

• What if I have a local agent I would like to use?– Roquemore has approximately 1,100 active repo agents in our system. It is likely we

do business with them already. If we don’t, we can set them up in our system and use them for your assignments. They would bill Roquemore directly for their services

• How do I remarket the collateral?– Roquemore has a strategic relationship with Auto Financial Group (AFG)– After recovery, we will consign the collateral to AFG for you. All sale information is

provided using Roquemore’s SkipTrak online portal.– The cost for remarketing up to $165 is covered under the program.

• How would I explain the program to the dealerships I work with now?– Roquemore can present the program for you to the dealership, provide their

agreement and all documentation to them.• Do sub-prime loans qualify?

– Yes, the Program Fee paid is based on the anticipated default rate for your portfolio. The fee increases by $10 for every 1% increase in the default rate over 3%.

FAQ• What is the advantage for the dealership?

– Since loans that include STARS are considered less risky, the interest rate could be reduced. That would allow the dealership to sell a higher priced car to a buyer from the lower payment

– The dealership may be able to place more loans because of the reduced risk, which means more sales

– If the dealership is making profit from the “buy rate” and “ sell rate” difference from the lender, STARS could increase that spread and profit, “Dealer Reserve”

• What is the next step if a loan goes delinquent or defaults?– Simply log on to SkipTrak and search for your loan. Complete the short

information form with any missing information and click submit. Roquemore will identify the loan as a STARS loan and proceed with recovery. After recovery you will receive an invoice, which in most cases will be $0

• Can I enter an existing loan into the program?– Yes, as part of most standard loan contracts, the lender is allowed to charge for

the “costs of collection.” The program fee is collected from the debtor as part of these costs along with the past due payments. If the loan defaults again, the recovery costs are now pre-paid.

• Is it really free?– The costs of recovery can fluctuate based on specific scenarios, such as

impounded units or units that may require special equipment to recover them. Costs above the standard program would be invoiced to the lender after approval. However, the standard fees for repossession and skip tracing are pre-paid and covered under the program.

• Is there a commitment to a certain number of loans?– No, you can enter as many or as few as you determine. However, the more

loans in the program, the more your overall recovery costs will be reduced.