First Fractional Funding Attributes Continued Growth to Use of Guardian Mortgage Services Outsource Fulfillment for Back-Office Operations.

National Luxury Resort Property Lender Grows During Mortgage Industry Slump; GMS' Reliable Back-Office Outsource Processing, Experienced Staff and Proven Technology Cited as Factors

BOSTON -- While many in the mortgage industry are trying to survive the recent market unrest by cutting back on offered products, First Fractional Funding, a Denver-based lender specializing in fractional ownership mortgages, has experienced continued growth. First Fractional Funding management cite their relationship with Guardian Mortgage Services (GMS), a division of Guardian Mortgage Documents (GMD) and a provider of back-office outsource closing services for the lender, as one of the reasons for their continued growth.

"We considered many factors when setting our lending parameters and credit requirements for borrowers," said Erik Anderson, account executive at First Fractional Funding. "The market plays a part in the decision, as does the property and the type of borrower we normally work with. This type of planning has helped our lending volume grow month over month."

First Fractional Funding opened its doors in May 2006 and specializes exclusively in fractional, or partial interest, funding of properties. Because First Fractional Funding's business is not tied to the secondary market, the current market status has had a minimal effect on its business. The company, which is a division of National Bank Of Kansas City, currently services all of its loans rather than selling them once they are funded. And, when considering the First Fractional Funding customer has a higher credit, asset and income profile than the average real estate purchaser, it has more stability in its customer base as well.

"We are fortunate because we have the backing of a stable, FDIC-insured national bank," Anderson said. "National Bank Of Kansas City's liquidity has allowed us to increase our staff to meet the demand for fractional mortgages. The concept for fractional ownership has taken off in the last year. It's becoming more mainstream."

The lender partnered with GMS on day one because of its reputation as an outsource provider for back-office operations, Anderson explained. He added that GMS' back-office outsource business model allowed the lender to have low overhead, which ultimately has a positive effect on the lender's bottomline. GMS' ability to provide First Fractional Funding with a variable cost on a per loan basis, as well as the low risk associated outsourcing these services, led the lender to select GMS as a business partner.

"We offer our partners a complete package that includes technology, staff and proven services to help lenders realize their strategic goals in any type of market conditions," said Tim Anschutz, vice president of marketing for GMD.

Jonathan Kunkle, vice president of GMS added, "GMS outsource closing services enable First Fractional Funding the advantage of operating on a 100 percent variable cost, loan-by-loan, basis. First Fractional has strategically built their business model to ensure low risk with high growth potential, and we're happy to be part of the solution. By allowing GMS to handle the back office closing and post-closing services, companies such as First Fractional Funding will continue their growth strategy."

Without a back office to manage, First Fractional Funding can focus on building relationships with resort developers and brokers. Approximately 95 percent of the lender's loans are originated through brokers in resort areas around the country. The other five percent of First Fractional Funding's business comes from current fractional owners wanting to refinance their high priced loan or buyers in the process of purchasing their first fractional property.

"We focus on developers;" Anderson said, "those who have heard of us and those who are entertaining the idea of using fractional funding. Many decide to do business with First Fractional Funding because they want to be more efficient in their financing offerings and know that we bring our specialized expertise to the deal."

The number of people turning to fractional real estate as an option to provide the benefits of owning a luxury second property without having to pay for it when they do not use it continues to rise.

Fractional ownership is different than a time-share. With fractional properties, the owner receives a deed and all the rights of ownership, including some tax deductions. With timeshares, people own a specific number of weeks per year and pay for maintenance of the property. Often they can spend their time at different properties throughout the United States.

Although fractional ownership properties are not a new concept, financing these properties is. In the past, buyers of these hotly-sought-after properties would use a seller-carried loan, second mortgage on their primary home, margin loan on their stock accounts, or cash to pay for their ownership. Because buyers didn't want to tie up the equity in their primary home, or sell a piece of their stock portfolio, there was a void in the buying process. While fractional funding is growing in popularity, it is not trendy like other loan products, such as option ARMS, Anderson noted.

"This is a win-win situation for everyone involved," he said. "The developer can generate more revenue from multiple owners and the owners only pay for a portion of the house cost. Furthermore, the communities can enjoy additional sales revenue as more owners dine, shop and spend money in their community.

"GMS' ability to expedite deals has been invaluable to us," Anderson continued. "Our GMS team provides us with seamless, personalized service, and they understand the importance of getting loans closed quickly, which results in repeat business from developers."

About First Fractional Funding

First Fractional Funding focuses exclusively on funding mortgages for fractional ownership properties. And, because it is a division of National Bank Of Kansas City, First Fractional can fund loans in all 50 states.

First Fractional started in 2006 and works with national real estate developers and brokers to provide funding for well-qualified customers.

The company has simplified the product selection and straightforward underwriting guidelines. Because of this, they are able to issue funding approvals within 48 hours of underwriting submission. For more information on the company or fractional funding, call 303.221.3130.

About Guardian Mortgage Services

GMS, a division of Guardian Mortgage Documents, provides the national lending community with mortgage fulfillment outsource services that focus on back-office operations including: vendor management, title and escrow, closing coordination, document preparation and post-closing. Since 1987, GMS has been a privately owned and operated U.S. company, with all employees and operations located and performed within the United States.

GMS' mortgage fulfillment services simplify business by immediately providing efficiencies that increase total closing capacity, provide 100 percent pipeline management visibility and eliminates errors. Outsourcing this back-office capability enables the lender to aggressively focus on its front-end profit generator - origination. GMS' breadth of mortgage fulfillment services, from closing to the sale of loans, has earned it a national reputation for providing outsource solutions that are fast, reliable and economically smart.

By offering mortgage closing and post-closing services, GMS meets the varying operational needs of mortgage brokers, bankers and investors. This is accomplished through GMS' Transaction Management System (TMS). TMS' 360o Loan Technology provides a collaborative web portal that enables all participants 24/7 access to monitor and/or participate in the workflow status of any loan within the pipeline. The GMS back-office solution eliminates repetitive phone calls and provides a paperless environment that enables the lender to initialize and drive the loan process while maintaining total visibility and control.

GMS executes transactions according to customized, client-defined procedures and objectives to provide solutions that maximize profits. The overall critical ingredient to GMS' success is a blend of more than two decades of industry experience, the capability to customize solutions, the newest technologies and attention to detail with a service-minded team that understands the financial services industry. For more information, visit www.gmd.com/gms or contact GMS at 800-521-3960, or 303-942-2004.