We buy discounted mortgages. How much is the discount? For a performing note the discount can be 20% to 50% of the note. Cash now is worth more than cash in the future so there is a discount. For a nonperforming note the discount can be 40% to 70% of the note. We demand a greater discount because we have to find a solution. A solution for the borrower and the investor.

The credit crisis continues to persist. Lenders did not adequately provide for their losses. Banks loss mitigation departments are larger than their origination departments. There is a large inventory of defaulted loans that the lenders have not faced. The loans are still on their books but regulation will force the lenders to sell the loans or pursue their remedies.

Commonwealth is committed to the success of our joint venture partners and the success of the homeowners we work with. If our partners are not successful we are not successful. We create success by buying discounted mortgages and then work with homeowners to find the best solution and then selling the mortgages or property to private investors or non-governmental agencies.