Form DCVR "WinTOTAL" appraisal software by a la mode, inc ALAMODE

Transcription

1 File No. WRT10-047(R) September 09, 2010 Asset Appraisal Group W. Roy Tolson, SRA P.O. Box Phoenix, AZ Marcella Pardo, MAI Key Bank Von Karman Ave. #1100 Irvine, CA re: E West Fawn Drive ( and ) Dear Ms. Pardo: At your request, a Summary Appraisal Report has been prepared for the above assignment. The purpose of this appraisal is to develop an opinion of the market value as Is fee simple interest in the subject property, as of date of visual inspection. The subject property was viewed on September 8, 2010 which represent the effective date of the valuation. This report has been prepared in compliance with: the Uniform Standards of Professional Appraisal Practice (effective date January 1, 2010) of the Appraisal Foundation; Title XI of the Federal Financial Institution s Reform, Recovery, and Enforcement Act (FIRREA); and KeyBanks General Appraisal Requirements. After considering all facts available, subject to the underlying assumptions and limiting conditions included, it is concluded the fee simple interest in the subject property as of the effective date: market value as Is fee simple $140,000 The preceding market value as Is fee simple is predicated upon an exposure period and marketing time of under 3 months, and assume the property is adequately marketed at prices commensurate with the respective opinions of value. As in the case of any narrative report, the reader s attention is directed to the underlying Limiting Conditions and Assumptions which are included with the report. This letter, in and of itself, is not an appraisal and only summarizes the value conclusion reached after analyzing the data contained in the accompanying narrative report. Respectfully submitted, W. Roy Tolson, SRA State of Arizona Certified General Real Estate Appraiser #30959 EXTRAORDINARY ASSUMPTIONS The market value as Is fee simple is based on the following extraordinary assumption: (1) market indicators related to the economy's performance are mixed, and forecasts vary widely about what lies ahead. Continued effects of the housing slowdown, increases in unemployment, failure of financial institutions, population flows, and loss of wages will continue to adversely affect real estate values. Unfortunately, lags in data reporting, and how analysts look at recent changes cloud interpretation of these measures and won't reveal a market change until six months after its occurrence. Significant reduction in population, income, wages and jobs could adversely affect the opinion of value; (2) The as is market value is based on the following extraordinary assumption: the interior of the subject was viewed from the outside (windows) as the subject was not accessible by lock-box and accessible to the appraiser; therefore, only a partial viewing of the interior was possible. This report is conditional upon the interior being finished and all appliances installed in substantial conformance as presented and discussed within this report. HYPOTHETICAL CONDITION The market value as is fee simple is based on the following hypothetical condition: The air conditioner units have been vandalized leaving only parts of the units on the ground. This report is conditional upon the repair and replacement of the two air conditioner units in substantial conformance to approved construction specifications. Form DCVR "WinTOTAL" appraisal software by a la mode, inc ALAMODE

2 SUBJECT CONTRACT W. Roy Tolson Uniform Residential Appraisal Report File # E WRT10-047(R) The purpose of this summary appraisal report is to provide the lender/client with an accurate, and adequately supported, opinion of the market value of the subject property. Property Address 7209 West Fawn Drive City LaVeen** State AZ. Zip Code Borrower Atreus Homes Owner of Public Record Homelife Communities Group of Arizona Inc. County Maricopa Legal Description Lot 72, LaVeen Meadows Parcel 16 MCR **Phoenix with a LaVeen mailing ( and ) Assessor's Parcel # Tax Year 2010 R.E. Taxes $ 1, Neighborhood Name LaVeen Meadows Map Reference Census Tract Occupant Owner Tenant Vacant Special Assessments $ PUD HOA $ 44 per year per month Property Rights Appraised Fee Simple Leasehold Other (describe) Assignment Type Purchase Transaction Refinance Transaction Other (describe) Lender/Client Key Bank Address Von Karman Ave #1100; Irvine, CA Is the subject property currently offered for sale or has it been offered for sale in the twelve months prior to the effective date of this appraisal? Yes No Report data source(s) used, offering price(s), and date(s). A search of the ARMLS did not provide an indication of any current listings of the subject property; a sign in the front window indicated the subject property was "available". I did did not analyze the contract for sale for the subject purchase transaction. Explain the results of the analysis of the contract for sale or why the analysis was not performed. A pending purchase agreement is not known to the appraiser and none are know to exist. Contract Price $ Date of Contract Is the property seller the owner of public record? Yes No Data Source(s) Is there any financial assistance (loan charges, sale concessions, gift or downpayment assistance, etc.) to be paid by any party on behalf of the borrower? Yes No If Yes, report the total dollar amount and describe the items to be paid. NEIGHBORHOOD Note: Race and the racial composition of the neighborhood are not appraisal factors. Neighborhood Characteristics One-Unit Housing Trends One-Unit Housing Present Land Use % Location Urban Suburban Rural Property Values Increasing Stable Declining PRICE AGE One-Unit 25 % Built-Up Over 75% 25-75% Under 25% Demand/Supply Shortage In Balance Over Supply $ (000) (yrs) 2-4 Unit % Growth Rapid Stable Slow Marketing Time Under 3 mths 3-6 mths Over 6 mths 120 Low 1 Multi-Family % Neighborhood Boundaries The subject neighborhood is generally bounded by Baseline Road north; Dobbins Road to 155 High 6 Commercial % the south; 75th Avenue to the west and 67th Avenue to the east. 135 Pred. 3 Other 75 % Neighborhood Description The subject neighborhood is located in the south west valley of metropolitan Phoenix; residential improvements are of average tract quality construction with average appeal. Employment centers and residential support facilities, such as shopping, office, medical, branch banking, schools, parks, houses of worship, etc. are located a short driving distance of the neighborhood. Baseline Road is a major east-west roadway with commercial development at 51st Avenue.. Market Conditions (including support for the above conclusions) See page 3 of 6 for comments... Dimensions 45' x 120' Area 5,400 Sq.Ft. Shape Rectangular View Neighborhood Specific Zoning Classification R1-6 Zoning Description Single Family Residential, Phoenix Zoning Compliance Legal Legal Nonconforming (Grandfathered Use) No Zoning Illegal (describe) Is the highest and best use of subject property as improved (or as proposed per plans and specifications) the present use? Yes No If No, describe SITE Utilities Public Other (describe) Public Other (describe) Off-site Improvements - Type Public Private Electricity Gas Water Sanitary Sewer Street Alley Asphalt paved FEMA Special Flood Hazard Area Yes No FEMA Flood Zone X500 FEMA Map # 04013C2580F FEMA Map Date 9/30/2005 Are the utilities and off-site improvements typical for the market area? Yes No If No, describe Are there any adverse site conditions or external factors (easements, encroachments, environmental conditions, land uses, etc.)? Yes No If Yes, describe IMPROVEMENTS General Description Foundation Exterior Description materials/condition Interior materials/condition Units One One with Accessory Unit Concrete Slab Crawl Space Foundation Walls Concrete/good Floors Tile/Carpet/good # of Stories 2 Full Basement Partial Basement Exterior Walls Frame/Stucco/good Walls Painted drywall/good Type Det. Att. S-Det./End Unit Basement Area sq.ft. Roof Surface Concrete tile/good Trim/Finish Unknown Existing Proposed Under Const. Basement Finish % Gutters & Downspouts Overhang/good Bath Floor Tile/good Design (Style) 2-sty/Southwest Outside Entry/Exit Sump Pump Window Type Alum/dual pane/low e Bath Wainscot Unknown Year Built 2007 Evidence of Infestation Storm Sash/Insulated No/Yes/good Car Storage Effective Age (Yrs) 2 (new) Dampness Settlement Screens Yes/good Driveway # of Cars 2 Attic Heating FWA HWBB Radiant Amenities Woodstove(s) # Driveway Surface Concrete Drop Stair Stairs Other Fuel Gas Fireplace(s) # Fence Block Garage # of Cars 2 Floor Scuttle Cooling Central Air Conditioning Patio/Deck Cov Porch Cov entry Carport # of Cars Finished Heated Individual Other Pool Other Att. Det. Built-in Appliances Refrigerator Range/Oven Dishwasher Disposal Microwave Washer/Dryer Other (describe) per listing dated 2/18/2008 Finished area above grade contains: 8 Rooms 5 Bedrooms 2.5 Bath(s) 2,700 Square Feet of Gross Living Area Above Grade Additional features (special energy efficient items, etc.). The subject's features are typical of homebuilder base features and typical upgrades Describe the condition of the property (including needed repairs, deterioration, renovations, remodeling, etc.). The subject is Average Quality construction improved with homebuilder standard features. The livable area of the subject, design, exterior and interior finish and quality of construction conforms to the surrounding neighborhood. Are there any physical deficiencies or adverse conditions that affect the livability, soundness, or structural integrity of the property? Yes No If Yes, describe At the time of inspection, the air conditioner units had been vandalized and components removed. Does the property generally conform to the neighborhood (functional utility, style, condition, use, construction, etc.)? Yes No If No, describe Freddie Mac Form 70 March 2005 Page 1 of 6 Fannie Mae Form 1004 March 2005 Form 1004 "WinTOTAL" appraisal software by a la mode, inc ALAMODE

3 SALES COMPARISON APPROACH Uniform Residential Appraisal Report File # E WRT10-047(R) There are 13 comparable properties currently offered for sale in the subject neighborhood ranging in price from $ 85,000 to $ 160,000. There are 17 comparable sales in the subject neighborhood within the past twelve months ranging in sale price from $ 93,500 to $ 180,000. FEATURE SUBJECT COMPARABLE SALE # 1 COMPARABLE SALE # 2 COMPARABLE SALE # 3 Address 7209 West Fawn Drive 6925 West Beverly Road 6933 West Sophie Land 7426 West Valencia Drive LaVeen**, AZ LaVeen, AZ LaVeen, AZ LaVeen, AZ Proximity to Subject 0.37 miles E 0.36 miles E 0.34 miles W Sale Price $ $ 154,500 $ 152,000 $ 120,000 Sale Price/Gross Liv. Area $ sq.ft. $ sq.ft. $ sq.ft. $ sq.ft. Data Source(s) Verification Source(s) MLS DOM 95 MCR MLS DOM 32 MCR MLS DOM 55 MCR VALUE ADJUSTMENTS DESCRIPTION DESCRIPTION +(-) $ Adjustment DESCRIPTION +(-) $ Adjustment DESCRIPTION +(-) $ Adjustment Sales or Financing Concessions Date of Sale/Time Location Leasehold/Fee Simple LaVeen Meadows Fee Simple Loan $152,446 known-fha 06/18/2010 LaVeen Meadows Fee Simple Down $60,000 known 04/30/2010 LaVeen Meadows Fee Simple Down $10,000 known 06/17/2010 LaVeen Meadows Fee Simple Site View Design (Style) Quality of Construction Actual Age Condition Above Grade 5,400 Sq.Ft. Neighborhood 2-sty/Southwest Average 3 Good Total Bdrms. Baths 6,875 s.f. Neighborhood 2-sty. Southwest 4 Total Bdrms. Baths -2,500 6,900 s.f. Neighborhood 2-sty. Southwest 4 Total Bdrms. Baths -1,500 6,000 s.f. Neighborhood 2-sty. Southwest 4 Total Bdrms. Baths Room Count , , Gross Living Area 2,700 sq.ft. 2,708 sq.ft. 2,708 sq.ft. 2,449 sq.ft. +8,800 Basement & Finished Rooms Below Grade Functional Utility Heating/Cooling Energy Efficient Items Garage/Carport Porch/Patio/Deck Good FWA/Refrig known 2-car garage Patio FWA/Refrig Ceiling fans 2-car garage Patio FWA/Refrig known 2-car garage Patio FWA/Refrig known 2-car garage Patio Rear landscaping Superior -1,000 Net Adjustment (Total) + - $ -8, $ -6, $ 8,800 Adjusted Sale Price Net Adj. 5.5 % Net Adj. 4.3 % Net Adj. 7.3 % of Comparables Gross Adj. 5.5 % $ 146,000 Gross Adj. 4.3 % $ 145,500 Gross Adj. 7.3 % $ 128,800 I did did not research the sale or transfer history of the subject property and comparable sales. If not, explain My research did did not reveal any prior sales or transfers of the subject property for the three years prior to the effective date of this appraisal. Data Source(s) Maricopa County Recorder (MCR) My research did did not reveal any prior sales or transfers of the comparable sales for the year prior to the date of sale of the comparable sale. Data Source(s) Maricopa County Recorder (MCR) Report the results of the research and analysis of the prior sale or transfer history of the subject property and comparable sales (report additional prior sales on page 3). ITEM SUBJECT COMPARABLE SALE #1 COMPARABLE SALE #2 COMPARABLE SALE #3 Date of Prior Sale/Transfer Price of Prior Sale/Transfer Data Source(s) Effective Date of Data Source(s) 09/19/06 $4,951,000 / noted MCR / /07/ /18/ ,000 MCR /07/ /07/2010 noted/bank related MCR /07/2010 noted N/A Public records 09/07/2010 Analysis of prior sale or transfer history of the subject property and comparable sales The transfer date reflected by the Maricopa County Recorder is the recordation date of transfer. Finance concessions are not reflected in the affidavit of value or a part of public records. The research data revealed two transfers of the subject property in the prior 36 months; each of the transfer is builder related. Each of the comparables presented reflected transfers in the prior 12 months except Comparables 2 and 4; the transfers appear to be bank related. Summary of Sales Comparison Approach Each of the comparable sales is located within the subject neighborhood with similar influences. The comparable sales data presented in the Sales Comparison Approach were researched through the local Multiple Listing Service (MLS), and have verified as closed through the use of published (county records). The description of each of the comparable sales is based on data reported by MLS, public records, an exterior viewing and is assumed to be accurate. Any adjustments applied to the sales for features or characteristics which differ from those of the subject are based on the appraiser's observation of the market and their professional judgment. The comparables selected for purposes of this report are the most representative of the current market and subject. See attached addendum for additional comments on adjustments. RECONCILIATION Indicated Value by Sales Comparison Approach $ 140,000 Indicated Value by: Sales Comparison Approach $ 140,000 Cost Approach (if developed) $ 140,428 Income Approach (if developed) $ See comment on page 3 of 6 This appraisal is made "as is", subject to completion per plans and specifications on the basis of a hypothetical condition that the improvements have been completed, subject to the following repairs or alterations on the basis of a hypothetical condition that the repairs or alterations have been completed, or subject to the following required inspection based on the extraordinary assumption that the condition or deficiency does not require alteration or repair: Based on a complete visual inspection of the interior and exterior areas of the subject property, defined scope of work, statement of assumptions and limiting conditions, and appraiser s certification, my (our) opinion of the market value, as defined, of the real property that is the subject of this report is $ 140,000, as of 09/08/2010, which is the date of inspection and the effective date of this appraisal. Freddie Mac Form 70 March 2005 Page 2 of 6 Fannie Mae Form 1004 March 2005 Form 1004 "WinTOTAL" appraisal software by a la mode, inc ALAMODE

4 Uniform Residential Appraisal Report File # E WRT10-047(R) Market Conditions Market conditions of the subject market area generally mirror the greater Phoenix metropolitan market, of which it is a part. The subject market area is currently experiencing slow growth with an over-supply of residential improvements as indicated by continuing foreclosures and little appreciation in property values. Due in part to federal government tax credits, sales activity has improved with noticeable closings and slightly higher property values; the tax credit has expired and new permits and resale volume has decreased. Foreclosures and lender sales still represent a high percentage of all listings and sales in the market area. Based on data reported by MLS for resale property, marketing time of under 3 months are typical for competing properties. An exposure period of under 3 months is assumed in this report. Elliott Homes has begun marketing new homes in the community with updated models, retrofitted specs and sustainable marketing features including: tankless water heater, low e dual pane glass, a 2.52kW solar electric system. The Seville floor plan containing 5 bedrooms, 2.75 baths and 2-car garage has a base price of $161,950. Homebuilder concessions are typically offered by new homebuilders; the highest incentives are offered for speculation (spec) homes and for the use of the homebuilders preferred lender; concessions of up to 3% of sales price is typically offered in the resale market. Due in part to recent failures and closing of local mortgage companies and financial institutions, third-party institutional financing has become unsettled causing higher underwriting guidelines for new homebuyers; however, loans remain attractive, at record low market rates, to qualified borrowers. ADDITIONAL COMMENTS Subject Site Comment The appraiser was not provided a title report for purposes of this report. Upon the appraisers' visual inspection, no adverse easements or encroachments were observed. The subject lot is typical in size for the subdivision with distant mountain views. The site is above street grade and considered level. As vacant land, the subject may be improved with single family residential improvements. The subject is a tract subdivision lot with surrounding single family residential uses similar to the subject. There appears to be only utility easements and building set back requirements, that do not adversely affect development of the lot. The front landscaping is at market with few weeds and trash around front yard and entry. Reconciliation Comment The research data revealed recent closed sales within the subject market area in sufficient quality and quantity for analysis of the subject property. The sales used in the analyses for development of an opinion of value are suitable and considered applicable due partially to location, livable area, quality of construction, and current close of escrow dates. The Sales Comparison Approach reveals an adjusted range of $128,800 to $146,000 and an "as is" market value opinion of $140,000. The Cost Approach is given secondary weight and reveals a replacement value of $140,248. The Income Approach is not applicable in this instance. The subject's reported market value falls within the range of observed property values for the identified market area; the opinion of market value of the subject is slightly above the predominant value due in part to the subjects livable area; this does not appear to adversely effect the marketability of the subject. COST APPROACH TO VALUE (not required by Fannie Mae) Provide adequate information for the lender/client to replicate the below cost figures and calculations. Support for the opinion of site value (summary of comparable land sales or other methods for estimating site value) Application of say, $3.29 per square foot to the area of the subject lot provides an opinion of value of $17,766 ($3.29 x 5,400 = $17,766). As noted, the value per unit was for a bulk purchase and the subject is a single lot; as such, an upward adjustment of 30% is warranted with a concluded opinion of lot value of $23,096 ($17,766 x 130% = $23,096) rounded to $23,000. COST APPROACH INCOME ESTIMATED REPRODUCTION OR REPLACEMENT COST NEW Source of cost data Quality rating from cost service Effective date of cost data Comments on Cost Approach (gross living area calculations, depreciation, etc.) The replacement cost estimate for the building improvements is based on published cost factor data found in the Marshall & Swift Residential Cost Handbook and builder cost data, retained in the appraiser's files. The subject improvements are considered Average Quality construction. As the subject improvements are considered new residential construction, no physical depreciation is quantitied; as the improvements appear functional, no functional OPINION OF SITE VALUE =$ 23,000 DWELLING 2,700 $ =$ 180,900 Appliances and fixtures $ =$ =$ 6,000 Garage/Carport 396 $ =$ 7,920 Total Estimate of Cost-New =$ 194,820 Less Physical Functional External Depreciation 5,572 75,000 =$( 80,572 ) Depreciated Cost of Improvements =$ 114,248 "As-is" Value of Site Improvements =$ 3,000 obsolescence charge. The subject appears to suffer from external obsolescence Estimated Remaining Economic Life (HUD and VA only) Years INDICATED VALUE BY COST APPROACH =$ 140,428 INCOME APPROACH TO VALUE (not required by Fannie Mae) Estimated Monthly Market Rent $ X Gross Rent Multiplier = $ Indicated Value by Income Approach Summary of Income Approach (including support for market rent and GRM) PUD INFORMATION PROJECT INFORMATION FOR PUDs (if applicable) Is the developer/builder in control of the Homeowners Association (HOA)? Yes No Unit type(s) Detached Attached Provide the following information for PUDs ONLY if the developer/builder is in control of the HOA and the subject property is an attached dwelling unit. Legal Name of Project Total number of phases Total number of units Total number of units sold Total number of units rented Total number of units for sale Data source(s) Was the project created by the conversion of existing building(s) into a PUD? Yes No If Yes, date of conversion. Does the project contain any multi-dwelling units? Yes No Data Source Are the units, common elements, and recreation facilities complete? Yes No If No, describe the status of completion. Are the common elements leased to or by the Homeowners Association? Yes No If Yes, describe the rental terms and options. Describe common elements and recreational facilities. Freddie Mac Form 70 March 2005 Page 3 of 6 Fannie Mae Form 1004 March 2005 Form 1004 "WinTOTAL" appraisal software by a la mode, inc ALAMODE

5 Uniform Residential Appraisal Report File # E WRT10-047(R) This report form is designed to report an appraisal of a one-unit property or a one-unit property with an accessory unit; including a unit in a planned unit development (PUD). This report form is not designed to report an appraisal of a manufactured home or a unit in a condominium or cooperative project. This appraisal report is subject to the following scope of work, intended use, intended user, definition of market value, statement of assumptions and limiting conditions, and certifications. Modifications, additions, or deletions to the intended use, intended user, definition of market value, or assumptions and limiting conditions are not permitted. The appraiser may expand the scope of work to include any additional research or analysis necessary based on the complexity of this appraisal assignment. Modifications or deletions to the certifications are also not permitted. However, additional certifications that do not constitute material alterations to this appraisal report, such as those required by law or those related to the appraiser s continuing education or membership in an appraisal organization, are permitted. SCOPE OF WORK: The scope of work for this appraisal is defined by the complexity of this appraisal assignment and the reporting requirements of this appraisal report form, including the following definition of market value, statement of assumptions and limiting conditions, and certifications. The appraiser must, at a minimum: (1) perform a complete visual inspection of the interior and exterior areas of the subject property, (2) inspect the neighborhood, (3) inspect each of the comparable sales from at least the street, (4) research, verify, and analyze data from reliable public and/or private sources, and (5) report his or her analysis, opinions, and conclusions in this appraisal report. INTENDED USE: The intended use of this appraisal report is for the lender/client to evaluate the property that is the subject of this appraisal for a mortgage finance transaction. INTENDED USER: The intended user of this appraisal report is the lender/client. DEFINITION OF MARKET VALUE: The most probable price which a property should bring in a competitive and open market under all conditions requisite to a fair sale, the buyer and seller, each acting prudently, knowledgeably and assuming the price is not affected by undue stimulus. Implicit in this definition is the consummation of a sale as of a specified date and the passing of title from seller to buyer under conditions whereby: (1) buyer and seller are typically motivated; (2) both parties are well informed or well advised, and each acting in what he or she considers his or her own best interest; (3) a reasonable time is allowed for exposure in the open market; (4) payment is made in terms of cash in U. S. dollars or in terms of financial arrangements comparable thereto; and (5) the price represents the normal consideration for the property sold unaffected by special or creative financing or sales concessions* granted by anyone associated with the sale. *Adjustments to the comparables must be made for special or creative financing or sales concessions. No adjustments are necessary for those costs which are normally paid by sellers as a result of tradition or law in a market area; these costs are readily identifiable since the seller pays these costs in virtually all sales transactions. Special or creative financing adjustments can be made to the comparable property by comparisons to financing terms offered by a third party institutional lender that is not already involved in the property or transaction. Any adjustment should not be calculated on a mechanical dollar for dollar cost of the financing or concession but the dollar amount of any adjustment should approximate the market s reaction to the financing or concessions based on the appraiser s judgment. STATEMENT OF ASSUMPTIONS AND LIMITING CONDITIONS: subject to the following assumptions and limiting conditions: The appraiser s certification in this report is 1. The appraiser will not be responsible for matters of a legal nature that affect either the property being appraised or the title to it, except for information that he or she became aware of during the research involved in performing this appraisal. The appraiser assumes that the title is good and marketable and will not render any opinions about the title. 2. The appraiser has provided a sketch in this appraisal report to show the approximate dimensions of the improvements. The sketch is included only to assist the reader in visualizing the property and understanding the appraiser s determination of its size. 3. The appraiser has examined the available flood maps that are provided by the Federal Emergency Management Agency (or other data sources) and has noted in this appraisal report whether any portion of the subject site is located in an identified Special Flood Hazard Area. Because the appraiser is not a surveyor, he or she makes no guarantees, express or implied, regarding this determination. 4. The appraiser will not give testimony or appear in court because he or she made an appraisal of the property in question, unless specific arrangements to do so have been made beforehand, or as otherwise required by law. 5. The appraiser has noted in this appraisal report any adverse conditions (such as needed repairs, deterioration, the presence of hazardous wastes, toxic substances, etc.) observed during the inspection of the subject property or that he or she became aware of during the research involved in performing the appraisal. Unless otherwise stated in this appraisal report, the appraiser has no knowledge of any hidden or unapparent physical deficiencies or adverse conditions of the property (such as, but not limited to, needed repairs, deterioration, the presence of hazardous wastes, toxic substances, adverse environmental conditions, etc.) that would make the property less valuable, and has assumed that there are no such conditions and makes no guarantees or warranties, express or implied. The appraiser will not be responsible for any such conditions that do exist or for any engineering or testing that might be required to discover whether such conditions exist. Because the appraiser is not an expert in the field of environmental hazards, this appraisal report must not be considered as an environmental assessment of the property. 6. The appraiser has based his or her appraisal report and valuation conclusion for an appraisal that is subject to satisfactory completion, repairs, or alterations on the assumption that the completion, repairs, or alterations of the subject property will be performed in a professional manner. Freddie Mac Form 70 March 2005 Page 4 of 6 Fannie Mae Form 1004 March 2005 Form 1004 "WinTOTAL" appraisal software by a la mode, inc ALAMODE

6 Uniform Residential Appraisal Report File # E WRT10-047(R) APPRAISER S CERTIFICATION: The Appraiser certifies and agrees that: 1. I have, at a minimum, developed and reported this appraisal in accordance with the scope of work requirements stated in this appraisal report. 2. I performed a complete visual inspection of the interior and exterior areas of the subject property. I reported the condition of the improvements in factual, specific terms. I identified and reported the physical deficiencies that could affect the livability, soundness, or structural integrity of the property. 3. I performed this appraisal in accordance with the requirements of the Uniform Standards of Professional Appraisal Practice that were adopted and promulgated by the Appraisal Standards Board of The Appraisal Foundation and that were in place at the time this appraisal report was prepared. 4. I developed my opinion of the market value of the real property that is the subject of this report based on the sales comparison approach to value. I have adequate comparable market data to develop a reliable sales comparison approach for this appraisal assignment. I further certify that I considered the cost and income approaches to value but did not develop them, unless otherwise indicated in this report. 5. I researched, verified, analyzed, and reported on any current agreement for sale for the subject property, any offering for sale of the subject property in the twelve months prior to the effective date of this appraisal, and the prior sales of the subject property for a minimum of three years prior to the effective date of this appraisal, unless otherwise indicated in this report. 6. I researched, verified, analyzed, and reported on the prior sales of the comparable sales for a minimum of one year prior to the date of sale of the comparable sale, unless otherwise indicated in this report. 7. I selected and used comparable sales that are locationally, physically, and functionally the most similar to the subject property. 8. I have not used comparable sales that were the result of combining a land sale with the contract purchase price of a home that has been built or will be built on the land. 9. I have reported adjustments to the comparable sales that reflect the market's reaction to the differences between the subject property and the comparable sales. 10. I verified, from a disinterested source, all information in this report that was provided by parties who have a financial interest in the sale or financing of the subject property. 11. I have knowledge and experience in appraising this type of property in this market area. 12. I am aware of, and have access to, the necessary and appropriate public and private data sources, such as multiple listing services, tax assessment records, public land records and other such data sources for the area in which the property is located. 13. I obtained the information, estimates, and opinions furnished by other parties and expressed in this appraisal report from reliable sources that I believe to be true and correct. 14. I have taken into consideration the factors that have an impact on value with respect to the subject neighborhood, subject property, and the proximity of the subject property to adverse influences in the development of my opinion of market value. I have noted in this appraisal report any adverse conditions (such as, but not limited to, needed repairs, deterioration, the presence of hazardous wastes, toxic substances, adverse environmental conditions, etc.) observed during the inspection of the subject property or that I became aware of during the research involved in performing this appraisal. I have considered these adverse conditions in my analysis of the property value, and have reported on the effect of the conditions on the value and marketability of the subject property. 15. I have not knowingly withheld any significant information from this appraisal report and, to the best of my knowledge, all statements and information in this appraisal report are true and correct. 16. I stated in this appraisal report my own personal, unbiased, and professional analysis, opinions, and conclusions, which are subject only to the assumptions and limiting conditions in this appraisal report. 17. I have no present or prospective interest in the property that is the subject of this report, and I have no present or prospective personal interest or bias with respect to the participants in the transaction. I did not base, either partially or completely, my analysis and/or opinion of market value in this appraisal report on the race, color, religion, sex, age, marital status, handicap, familial status, or national origin of either the prospective owners or occupants of the subject property or of the present owners or occupants of the properties in the vicinity of the subject property or on any other basis prohibited by law. 18. My employment and/or compensation for performing this appraisal or any future or anticipated appraisals was not conditioned on any agreement or understanding, written or otherwise, that I would report (or present analysis supporting) a predetermined specific value, a predetermined minimum value, a range or direction in value, a value that favors the cause of any party, or the attainment of a specific result or occurrence of a specific subsequent event (such as approval of a pending mortgage loan application). 19. I personally prepared all conclusions and opinions about the real estate that were set forth in this appraisal report. If I relied on significant real property appraisal assistance from any individual or individuals in the performance of this appraisal or the preparation of this appraisal report, I have named such individual(s) and disclosed the specific tasks performed in this appraisal report. I certify that any individual so named is qualified to perform the tasks. I have not authorized anyone to make a change to any item in this appraisal report; therefore, any change made to this appraisal is unauthorized and I will take no responsibility for it. 20. I identified the lender/client in this appraisal report who is the individual, organization, or agent for the organization that ordered and will receive this appraisal report. Freddie Mac Form 70 March 2005 Page 5 of 6 Fannie Mae Form 1004 March 2005 Form 1004 "WinTOTAL" appraisal software by a la mode, inc ALAMODE

7 Uniform Residential Appraisal Report File # E WRT10-047(R) 21. The lender/client may disclose or distribute this appraisal report to: the borrower; another lender at the request of the borrower; the mortgagee or its successors and assigns; mortgage insurers; government sponsored enterprises; other secondary market participants; data collection or reporting services; professional appraisal organizations; any department, agency, or instrumentality of the United States; and any state, the District of Columbia, or other jurisdictions; without having to obtain the appraiser s or supervisory appraiser s (if applicable) consent. Such consent must be obtained before this appraisal report may be disclosed or distributed to any other party (including, but not limited to, the public through advertising, public relations, news, sales, or other media). 22. I am aware that any disclosure or distribution of this appraisal report by me or the lender/client may be subject to certain laws and regulations. Further, I am also subject to the provisions of the Uniform Standards of Professional Appraisal Practice that pertain to disclosure or distribution by me. 23. The borrower, another lender at the request of the borrower, the mortgagee or its successors and assigns, mortgage insurers, government sponsored enterprises, and other secondary market participants may rely on this appraisal report as part of any mortgage finance transaction that involves any one or more of these parties. 24. If this appraisal report was transmitted as an electronic record containing my "electronic signature," as those terms are defined in applicable federal and/or state laws (excluding audio and video recordings), or a facsimile transmission of this appraisal report containing a copy or representation of my signature, the appraisal report shall be as effective, enforceable and valid as if a paper version of this appraisal report were delivered containing my original hand written signature. 25. Any intentional or negligent misrepresentation(s) contained in this appraisal report may result in civil liability and/or criminal penalties including, but not limited to, fine or imprisonment or both under the provisions of Title 18, United States Code, Section 1001, et seq., or similar state laws. SUPERVISORY APPRAISER S CERTIFICATION: The Supervisory Appraiser certifies and agrees that: 1. I directly supervised the appraiser for this appraisal assignment, have read the appraisal report, and agree with the appraiser s analysis, opinions, statements, conclusions, and the appraiser s certification. 2. I accept full responsibility for the contents of this appraisal report including, but not limited to, the appraiser s analysis, opinions, statements, conclusions, and the appraiser s certification. 3. The appraiser identified in this appraisal report is either a sub-contractor or an employee of the supervisory appraiser (or the appraisal firm), is qualified to perform this appraisal, and is acceptable to perform this appraisal under the applicable state law. 4. This appraisal report complies with the Uniform Standards of Professional Appraisal Practice that were adopted and promulgated by the Appraisal Standards Board of The Appraisal Foundation and that were in place at the time this appraisal report was prepared. 5. If this appraisal report was transmitted as an "electronic record" containing my "electronic signature," as those terms are defined in applicable federal and/or state laws (excluding audio and video recordings), or a facsimile transmission of this appraisal report containing a copy or representation of my signature, the appraisal report shall be as effective, enforceable and valid as if a paper version of this appraisal report were delivered containing my original hand written signature. APPRAISER Signature Name W. Roy Tolson Company Name Asset Appraisal Group Company Address P.O. Box 45496, Phoenix, Arizona Telephone Number Address roytolson@cox.net Date of Signature and Report 09/09/2010 Effective Date of Appraisal 09/08/2010 State Certification # or State License # or Other (describe) State # State AZ Expiration Date of Certification or License 3/31/2011 ADDRESS OF PROPERTY APPRAISED 7209 West Fawn Drive LaVeen**, AZ APPRAISED VALUE OF SUBJECT PROPERTY $ 140,000 LENDER/CLIENT Name Marcella Pardo, MAI Company Name Key Bank Company Address Von Karman Ave #1100; Irvine, CA Address marcella.pardo@keybank.com SUPERVISORY APPRAISER (ONLY IF REQUIRED) Signature Name Company Name Company Address Telephone Number Address Date of Signature State Certification # or State License # State Expiration Date of Certification or License SUBJECT PROPERTY Did not inspect subject property Did inspect exterior of subject property from street Date of Inspection Did inspect interior and exterior of subject property Date of Inspection COMPARABLE SALES Did not inspect exterior of comparable sales from street Did inspect exterior of comparable sales from street Date of Inspection Freddie Mac Form 70 March 2005 Page 6 of 6 Fannie Mae Form 1004 March 2005 Form 1004 "WinTOTAL" appraisal software by a la mode, inc ALAMODE

8 SALES COMPARISON APPROACH Uniform Residential Appraisal Report File # WRT10-047(R) FEATURE SUBJECT COMPARABLE SALE # 4 COMPARABLE SALE # 5 COMPARABLE SALE # 6 Address 7209 West Fawn Drive 7351 West Sophie Lane 6854 West Carson Road LaVeen**, AZ LaVeen, AZ LaVeen, AZ Proximity to Subject 0.27 miles NW 0.63 miles NE Sale Price $ $ 129,900 $ 135,000 $ Sale Price/Gross Liv. Area $ sq.ft. $ sq.ft. $ sq.ft. $ sq.ft. Data Source(s) Verification Source(s) MLS DOM 86 MCR MLS DOM 6 MCR VALUE ADJUSTMENTS DESCRIPTION DESCRIPTION +(-) $ Adjustment DESCRIPTION +(-) $ Adjustment DESCRIPTION +(-) $ Adjustment Sales or Financing Concessions Date of Sale/Time Location Leasehold/Fee Simple Site View Design (Style) Quality of Construction Actual Age Condition Above Grade LaVeen Meadows Fee Simple 5,400 Sq.Ft. Neighborhood 2-sty/Southwest Average 3 Good Total Bdrms. Baths Cash known 03/31/2010 LaVeen Meadows Fee Simple 6,000 s.f. Neighborhood 2-sty. Southwest 4 Total Bdrms. Baths Down $1,794 known-fha 07/15/2010 LaVeen Farms Fee Simple 6,325 s.f. Neighborhood 2-stry/southwest 4 Total Bdrms. Baths -1,000 Total Bdrms. Baths Room Count ,000 Gross Living Area 2,700 sq.ft. 2,449 sq.ft. +8,800 2,565 sq.ft. +4,700 sq.ft. Basement & Finished Rooms Below Grade Functional Utility Heating/Cooling Energy Efficient Items Garage/Carport Porch/Patio/Deck Good FWA/Refrig known 2-car garage Patio FWA/Refrig known 2-car garage Patio FWA/Refrig known 2-car garage Patio Rear landscaping SALE HISTORY Net Adjustment (Total) + - $ 8, $ $ Adjusted Sale Price Net Adj. 6.8 % Net Adj. 0.5 % Net Adj. % of Comparables Gross Adj. 6.8 % $ 138,700 Gross Adj. 6.4 % $ 135,700 Gross Adj. % $ Report the results of the research and analysis of the prior sale or transfer history of the subject property and comparable sales (report additional prior sales on page 3). ITEM SUBJECT COMPARABLE SALE # 4 COMPARABLE SALE # 5 COMPARABLE SALE # 6 Date of Prior Sale/Transfer Price of Prior Sale/Transfer Data Source(s) Effective Date of Data Source(s) 09/19/06 $4,951,000 / noted MCR / /07/ /24/2009 $215,099 Bank related MCR /07/ /29/10; 04/29/10 $255,737; N/A (bank related) MCR ; /07/2010 Analysis of prior sale or transfer history of the subject property and comparable sales A transfer in the prior 12 months was noted for Comparable 5; the transfer appears to be lender related. Analysis/Comments SUPPLEMENTAL CERTIFICATION STATEMENT I certify that, to the best of my knowledge and belief: If a signed copy of this report has been transmitted electronically, the digital signatures used in this report were taken from original signatures furnished by the appraiser(s). The software program utilized in this report provides a security feature that protects the integrity of the appraiser(s) signature by a password protection system and the appraiser has sole personalized control of the affixing signature. DISCLOSURE OF PRIOR SERVICE I have provided the following appraisal services for the subject property in the prior 36 months: 08/18/2009 Summary Appraisal and 12/02/2008 Summary Appraisal; 04/16/2010 Summary Appraisal. ANALYSIS / COMMENTS MARKETING TIME AND EXPOSURE TIME FOR THE SUBJECT PROPERTY Exposure period is typically a function of asking price and marketing techniques. A reasonable exposure time of under 90 days for the subject property utilizing market conditions pertinent to the appraisal assignment. The estimate for exposure period for the subject property has been based on actual exposure periods employed in the approaches contained in the report, as well as discussions with several real estate brokers and market participants active in the southwest Phoenix residential market. A reasonable marketing time of under 90 days for the subject property utilizing market conditions pertinent to the appraisal assignment. Freddie Mac Form 70 March 2005 Fannie Mae Form 1004 March 2005 Form 1004.(AC) "WinTOTAL" appraisal software by a la mode, inc ALAMODE

9 Supplemental Addendum File No. WRT10-047(R) Client Key Bank Property Address City 7209 West Fawn Drive LaVeen** County Maricopa State AZ. Zip Code Borrower Atreus Homes PURPOSE AND INTENDED USE OF THE APPRAISAL The purpose of this appraisal is to develop an opinion of the market value - "as is" - fee simple of the subject as of the date of inspection. The Intended User of this appraisal report is the client KeyBank. The Intended Use of this appraisal is for periodic valuation of the asset for monitoring purposes. No additional Intended Users are identified or intended by the appraiser. The reported conclusion reflects the value of the real estate only; no items of personalty were included in the valuation analysis. This appraisal has been prepared in accordance with the Uniform Standards of Professional Appraisal Practice (USPAP), the Financial Institutions Reform, Recovery, and Enforcement Act (FIRREA), as well as the additional appraisal requirements, if any, of the client. In addition, I certify that, to the best of my knowledge and belief, the reported analyses, opinions and conclusions were developed, and this report has been prepared, in conformity with the requirements of the Code of Professional Ethics and the Standards of Professional Appraisal Practice of the Appraisal Institute. SCOPE OF THE APPRAISAL The scope of the appraisal requires compliance with the Uniform Standards of Professional Appraisal Practice promulgated by the Appraisal Standards Board of the Appraisal Foundation and the Appraisal Institute. The standards contain rules that must be followed and specific guidelines that deal with the procedures to be followed in developing an appraisal, analysis, or opinion. These uniform standards set the requirements to communicate the appraisers' analysis, opinions, and conclusions in a manner that will be meaningful and not misleading in the marketplace. The scope of the assignment further requires compliance with the client's requirements in the order provided to the appraiser. The documentation necessary to arrive at the market value is considered in this appraisal report. If conflicting information is gathered, the source deemed most reliable has been used. Data believed to be unreliable was not included in the report nor used as a basis for the value conclusion. The data is used to consider the highest and best use of the subject property and to conclude an opinion of the market value. A summary appraisal report on the subject property has been prepared. The subject property data including site size, location, zoning, and livable area are considered. The improvement size estimate is derived from homebuilder marketing materials of the subject, and is employed as the basis of valuation in the appraisal. The square footage is assumed to be accurate to maintain consistency with the comparable sales researched and presented. The appraisal is based on the information gathered by the appraiser from public records, viewing of the neighborhood, and physical inspection of the subject and sales presented. The appraiser's viewing included a walk of the exterior of the subject residential improvements, and a partial viewing of the interior from the exterior of the residence. MARKET COMMENT Government stimulus supported a rebound in home sales through the initial phase of the recovery, but in the absence of such incentives, new and existing home sales fell dramatically in July, demonstrating the challenges faced by the housing market as it transitions away from government-stimulated purchases. Although the end of the homebuyer tax credit will suppress home sales in the second half of 2010, favorable housing affordability and historical low interest rates will position well-qualified households to benefit from low housing prices and low interest rates. However, tight lending criteria remains a barrier form any prospective homebuyers and continuing caution will restrain others from entering the market. Additionally, the market continues to reflect a preference for foreclosures and distressed homes among a high percentage of closed transactions. Bank related sales In today s real estate market, the type of homebuyers involved in the sales is important; an owner occupied sale must be weighed against an investor sale in providing a opinion of value. For nearly all real estate sellers, including lenders that have foreclosed, there is a common issue: Who are the buyers for the subject and who will pay the highest price? In most markets, buyers work with real estate professionals in researching their alternatives and then make a decision to buy based on the current options available. If buyers are attempting to buy homes for themselves or their families, the alternative of purchasing a foreclosed or REO (real estate owned), property may not be possible to time constraints, schools, employment and other reasonable factors. Foreclosed property may be the lowest priced, but there may be many buyers-real estate investors that are willing to purchase a property, and invest time and money to make it profitable. Other questions include (1) would the typical owner-occupant buyer have enough cash for a down payment and to cover repairs and replacements, (2) how long will it take complete the repairs, (3) have all replacements and repairs been identified, and (4) what finance options are available. Regardless of whether a property is purchased for occupancy or investment, the concept of buying property to make a profit versus buying property for owner occupy should be recognized by all and therefore considered when analyzing the market. Current listings have been given considerable weight in the subject analysis in considering adjustments to sales selected and presented in this report. Current listings indicate and support a declining market and therefore lender related sales are not adjusted and considered to reflect current market conditions. NEIGHBORHOOD COMMENT The subject is part of the LaVeen Meadows Master Plan Community. The neighborhood is situated in the southwest valley in the incorporated City of Phoenix with a LaVeen mailing address The surrounding area land use is mostly undeveloped agricultural land; noticeable livestock odors were present at the time of viewing. The Proposed South Mountain Freeway/Loop 202 is currently being studied, it appears the proposed route may adversely affect the subject subdivision and market area due in part to noise, pollution, odors, fuel particles and vibrations with construction and traffic of major freeways. Several master planned communities and subdivisions met with good market acceptance within the past several years located to the southwest valley in the general neighborhood of the subject. The area has been adversely affected by the state and national recession and declines in real estate values. SITE COMMENTS The subject master plan community is located approximately 10 miles southwest of the Phoenix central business district. Access to the metropolitan Phoenix area is provided via 67th Avenue to Interstate 10 (I-10) approximately 6 miles north of the subject subdivision. Public records indicate that LaVeen Meadows Master Planned Community contains approximately acres in size including a proposed school site. The amenities include walking trails, open parks, tot lots, and other recreational activities. The subject subdivision is approximately acres in size, containing a total of 77 lots; a base size of 45' x120' +/- containing approximately 5,400 square feet. The subject subdivision is being developed in a single phase. The subject subdivision will be part of the LaVeen Meadows with CC&R's that typically enhance the value of neighborhoods and do not adversely affect the marketability of residential property. The homeowner association fees in the community were reported to the appraiser at $44 per month. The subject subdivision does not include any significant security or view amenity. The subdivision, however, does include landscaped greenbelt areas and park areas. Form TADD "WinTOTAL" appraisal software by a la mode, inc ALAMODE