Long overdue...

Implications: [FULL DISCLOSURE: MR MARIOTTI IS NOT CURRENTLY (BUT HAS BEEN IN THE PAST) ENGAGED BY CFC] 1) On or about January of 2003 our financial systems firm was solicited by the major real estate financial services firms to increase automation for compliance, predatory lending and loss mitigation. 2) Finally today... the actual real estate investors are reeling from the foreclosures.

Analysis: Many of our sub-prime real estate originators, lenders and secondary market sellers anticipated a overbought and lower loan to value ratio rapidly approaching. These statistics were supported by Federal HOEPA and state and municipality 'High Cost' lending restrictions. The attempt was to prevent excessive fess, margins and APR for the lower income paper.

These compliance restrictions were translated by our systems firm into automated 'policing agents' with the cost born by the lender.

Yes, the government and private industry was aware of the possibilities of the current sub-prime issues we are seeing today... and they did make an attempt to preempt this current situation by stronger underwriting back at the turn of the millennium.

Nonetheless... even with very sophisticated systems in place (such as CFCs High Cost Compliance Systems) were not enough to wether the daemons of a true real estate market and fed cost of funds. Our current real estate investors are now looking at automation to help ease the pain of liquidation.