Customer Service Initiatives

Excellence in customer service is a requirement for any successful business. Most of the loans we make at Hollander Financial are secured by the borrower's home. As a financial institution, Hollander Financial understands the special sensitivity our customers have to issues touching their finances and their homes. For this reason, our Customer Service Initiatives focus on principles that demonstrate our commitment to excellence in all phases of customer service.

• Commitment to Borrower Satisfaction
• Access to Lower Cost Credit
• Commitment to Privacy
• Responsible Consumer Marketing
• Reasonable Net Tangible Benefit
• Arbitration and Mediation

Effective communication with our borrowers is the cornerstone of these Initiatives. Most importantly, borrowers are provided with a toll free telephone number they can use to voice any concerns or complaints they may have concerning Hollander Financial.

In addition to various special disclosures, notices and other communications discussed throughout these Initiatives, we provide all prospective borrowers a notice or disclosure, which explains the benefits, obligations and risks of borrowing against their home and informs the borrowers of the availability of independent third-party credit or homeownership counseling. This notice is provided as part of required initial loan-related disclosures and again at loan closing. Also in the notice, we inform prospective borrowers of specific unethical and illegal activities that borrowers, loan officers and mortgage originators should avoid during the processing of a loan application, and we provide a toll free telephone number for customers to call if it appears that something improper is being done in processing or closing their loan.

When we originate a loan and plan to service the loan after it is sold to the banker, we call the new borrowers within 30 days after loan closing to verify the information in the loan file, and to ensure that the borrowers have a clear understanding of the loan terms.

Hollander Financial periodically surveys a sample of our customers, to determine their satisfaction with our services, as well as their satisfaction with the services they received from third parties involved in the loan process. We use the information we receive from these surveys in an ongoing effort to improve the services we provide.
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At Hollander Financial, we provide borrowers with a variety of competitive mortgage programs from which they may select. We do not offer all kinds of loans available from all other mortgage lenders. For example, we do not offer HOEPA loans.

The cornerstone of our approach is this: Consistent with our policy of only offering loan programs that can be originated within established profit guidelines, every Hollander Financial borrower is offered the loan program containing the lowest rate and point combination for which they qualify, given borrower preferences on loan maturity, prepayment options, and interest rate adjustment features.

Unless it is clear that a loan does not meet automated underwriting program guidelines, loans are typically submitted to underwriting through HF's EZ-Qual program or another automated underwriting program. If a loan is not approved by EZ-Qual or another automated underwriting program, then the loan is underwritten manually and sent to the appropriate banker(s). All approvals are based on the best program available for which the borrower qualifies. This underwriting process translates into lower rates and points for the majority of our customers, while also permitting us to improve our underwriting efficiency.

Hollander Financial's rate sheets are designed to allow the loan officer to present multiple rate and point combinations, and to present rate and point combinations both with and without a prepayment penalty. Loan officers cannot raise points without commensurately reducing the interest rate, nor raise the interest rate without likewise reducing the points. All loans must be priced to the published rate sheets, although exceptions are sometimes granted (within pre-approved levels) to lower points or the interest rate, as necessary. Where required for certain loan programs in a few states, the loan fee may be calculated and disclosed as a percentage of the loan amount instead of as a set dollar amount. Other fees generally are limited to actual costs or charges imposed by third party service providers. Hollander Financial does not require a borrower to finance any portion of fees and/or points, although most of our borrowers prefer to do so.

In order to ensure that the borrower has received complete disclosure regarding loan costs and terms, Hollander Financial does not sign, and we do not allow a borrower to sign, any loan document containing blanks intended to be completed at a later time.

Hollander Financial continues to develop and implement systems that minimize the chance that we might make a loan that does not comply with all applicable laws or that is not in conformity with company policy. Additionally, we continue to search for ways to improve execution and underwriting processes, to enhance our ability to deliver competitively priced loans. We believe that the procedures outlined in these Initiatives allow us to deliver lower cost mortgages to thousands of borrowers, many of whom might not have access to traditional sources of financing due to blemished credit.

Each month, Hollander Financial reports to appropriate credit bureaus both good and bad credit information about substantially all loans we service. This practice affords a borrower who maintains a good payment history more opportunity to obtain lower cost credit in the future. We may exclude a small number of loans in any given month because we are aware of some circumstance, not of the borrower's making, that would distort the payment data in a way that would not fairly represent the way in which the borrowers handle their credit obligations. Furthermore, we do not encourage any prospective borrower to default on any existing loan.
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Privacy Statement and Policy - At Hollander Financial, we collect certain categories of nonpublic personal and financial information about our customers from the following sources:

• Information we receive from you on loan applications, internet communications and other forms and communications we receive;
• Information about your transactions with us and with others; and
• Information we receive from consumer reporting agencies.

When we process loan applications and when we sell loans to bankers, we must share certain elements of our customers' nonpublic personal or financial information, as described above, with unaffiliated third parties, in order to complete the transaction. We sometimes also share certain nonpublic personal or financial customer information with unaffiliated third parties in connection with servicing of loans we hold in our own portfolio after origination. We may disclose all of the information we collect to companies that perform marketing services on our behalf or to other financial institutions with whom we have joint marketing agreements. We require any third parties with whom we share nonpublic personal or financial customer information, for any purpose other than completing a transaction initiated by our customer, to agree that the shared information is to be kept strictly confidential and is not to be further disclosed or disseminated.

We restrict access to our customers' personal, financial and account information to those employees who need to know that information to perform their job duties or to provide products or services to our customers. We maintain physical, electronic, and procedural safeguards, which comply with applicable laws and regulations, to safeguard our customers' nonpublic personal, financial and account information.
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In order to ensure that all Hollander Financial advertising and marketing materials are in compliance with state and federal laws, as well as our own corporate policies, all marketing materials are reviewed by our Legal Department before publication. In our advertising, we do not unfairly target any group, and we take care to design advertising campaigns that are not deceptive and that avoid confusing the intended recipients. We also require originators with whom we do business to subscribe to these same principles.

In addition to complying with all applicable laws and regulations, Hollander Financial takes steps to clearly identify exclusions, limitations, and conditions in all advertising and marketing materials. We sometimes send "pre-approval" letters to prospective customers whose credit profiles have been pre-screened to verify that their available credit data meets our underwriting guidelines. Pre-approval letters are meant to be firm offers of credit up to a certain amount, expiring at a specified time, but they are sent before we have obtained all the information that may be required to completely underwrite the loan and approve the collateral. We therefore inform the recipient of a pre-approval letter that final approval may be contingent upon the recipient's meeting specific underwriting guidelines and collateral requirements.

At Hollander Financial, we use information we gather from our customers and information we purchase from third parties, as allowed by law, to prepare advertising solicitations and marketing lists. We try not to send our advertising to anyone who does not want it, and we therefore regularly screen our marketing lists against our own internally compiled do-not-call and do-not-solicit lists and also against certain externally compiled lists mandated by certain states. If for any reason a customer does not wish to receive advertising solicitations from Hollander Financial, we will remove the customer's name from our marketing lists and records on request, and we will make every effort to assure that the customer will not receive future mailings or telephone calls from anyone representing Hollander Financial for at least 10 years or as otherwise required by applicable state or federal law. Requests for removal may be submitted by telephone, although a written request is recommended. If a customer's name, address, or telephone number change after a request is submitted, we must receive a new request for removal, with the customer's new name, address or telephone number.

We process requests to be removed from our solicitation lists within 48 hours. Some marketing programs, especially print advertising, require several weeks of planning and preparation before implementation. Once a print advertising program is released for printing, we cannot remove a customer's name or address from that program, but a customer who requests to be removed from our solicitation lists should not receive any further advertising from Hollander Financial beginning 60 days after we receive the customer's request.
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As part of our commitment to ensure that borrowers receive appropriate home financing, Hollander Financial provides each prospective borrower with a list of factors that should be considered before the borrower accepts a loan, to help the borrower decide if the proposed loan provides a reasonable net tangible benefit, in light of the borrower's particular circumstances. The borrower is asked to consider:

• The terms of both the current mortgage and other loans, and the new or refinanced loan;
• The cost of the new loan;
• The borrower's personal financial circumstances;
• The interest rate on the new loan;
• The monthly payment on the new loan;
• The interest rate and monthly payment on existing loan(s) and debt(s), if the borrower is consolidating debt;
• The borrower's living expenses;
• The borrower's disposable income after taxes and living expenses and debts, including the monthly payment amount on the new loan;
• The ability to purchase real estate; and
• Any other factors that the borrower feels are important.

The information we provide the borrower on refinance or debt consolidation loans includes a cautionary suggestion that although the borrower's monthly payments or overall interest rate may decrease, the payments on the new loan may continue for a longer period of time than the payments on the refinanced loan or the unconsolidated debt. If, after considering these factors and disclosures, borrowers believe they are not receiving a reasonable net tangible benefit, then the borrowers need not accept a new loan. If the borrowers believe they are receiving a reasonable net tangible benefit from the new loan, then we provide an acknowledgment for them to sign, which becomes a part of the permanent loan file.

While there is no precise standard to determine what constitutes a reasonable net tangible benefit, Hollander Financial considers that a loan may benefit a borrower by:

• Reducing monthly payments on existing loans or debts;
• Providing additional cash for use as the borrower wishes;
• Paying off other creditors;
• Lowering the interest rate on existing loans or debts;
• Allowing the borrower to cure defaults on other loans or debts; or
• Allowing the borrower to purchase real property.

At Hollander Financial, we do not make any loan unless the weight of the criteria above appears to show that the loan benefits the borrower. However, because everyone has different circumstances and priorities, we apply these tests liberally, to avoid making subjective judgments that deny borrowers the right to manage or control their own financial affairs. We give each prospective borrower information to assist in reaching an independent decision about whether a loan provides a reasonable net tangible benefit in light of their individual circumstances and priorities, and we respect the borrower's decision, as long it appears that the loan provides some degree of benefit to the borrower.
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Arbitration and mediation can provide an efficient and convenient method for borrowers and lenders to resolve disputes, and we generally favor these procedures. However, our loan documents do not require arbitration or mediation.
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