Exhibit 99.1

[   ], 2012

Dear Shareholders of Altisource Portfolio Solutions S.A.:

In April 2012, Altisource Portfolio Solutions S.A., which we refer to as Altisource, announced a plan to separate two closely-related development stage companies.  Upon the separation, both companies will become separate public companies.  The enclosed information statement specifically addresses one of the two new companies that will, following the separation from Altisource, conduct its operations as Altisource Asset Management Corporation (“AAMC”).

AAMC will provide asset management and corporate governance services from its headquarters in Frederiksted, St. Croix, in the United States Virgin Islands to Altisource Residential Corporation, a Maryland corporation recently formed to acquire and own single-family rental assets.  AAMC will also invest in and provide similar services to NewSource Title Reinsurance Company Ltd., a title insurance and reinsurance company domiciled in Bermuda that will be formed following the separation.

The separation of AAMC is expected to occur in the fourth quarter of 2012, subject to certain customary closing conditions, by way of a taxable pro rata stock distribution of AAMC common stock to Altisource shareholders. Each Altisource shareholder will receive 1 share of AAMC common stock for every 10 shares of Altisource common stock held by such shareholder as of [    ], 2012, the record date for the Separation.

As an Altisource shareholder, you will automatically receive AAMC common stock unless you sell your Altisource shares before the separation date in the “regular way” market as described in the enclosed information statement. If the number of shares of Altisource common stock that you own is not a multiple of 10, you will receive a cash payment in lieu of any fractional share that you otherwise are entitled to receive. The number of shares of Altisource common stock that you currently own will not change as a result of the separation.  You do not need to take any action or pay any consideration to receive the shares of AAMC common stock in the separation.

AAMC has applied to have its common stock quoted on the OTCQX market tier operated by OTC Markets Group, Inc. under the symbol “AAMC.” The common stock of Altisource will continue to trade on the NASDAQ Global Select Market under the symbol “ASPS.”

The enclosed information statement, which is being mailed to all Altisource shareholders, describes the separation in detail and contains important information about AAMC. We encourage you to carefully read this information statement.

We believe the separation will enable Altisource and AAMC management to maximize the strengths of their respective core businesses.  We are proud of what we have built at Altisource and want to ensure you that we will continue to capitalize on innovative ideas and business opportunities.  This is an exciting time for Altisource and AAMC, and we believe this separation is in the best interest of Altisource shareholders.  We remain committed to working on behalf of you, our shareholders, to build long-term value.

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[   ], 2012

Dear Prospective Shareholders of Altisource Asset Management Corporation:

We look forward to welcoming you as a shareholder of Altisource Asset Management Corporation (“AAMC”).  We believe that our independence will allow us to focus on establishing our core business of providing asset management and corporate governance services to Altisource Residential Corporation, a Maryland corporation (“Residential”).  Residential was recently formed to acquire and own single-family rental assets.  We intend to support Residential, and other future customers, in developing and executing their business strategies.

We expect AAMC to become a stand-alone public company on or about [    ], 2012, upon receipt of all required approvals and the satisfaction of any other conditions.  We anticipate that our shares of common stock will be quoted on the OTCQX market tier operated by OTC Markets Group, Inc. under the symbol “AAMC.”

I encourage you to learn more about AAMC and the objectives we will pursue as a stand-alone public company by reading the enclosed information statement. It describes the separation in detail, including the conditions to the separation.

We look forward to creating long-term value for you, our shareholders.

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Information contained herein is subject to completion or amendment. A Registration Statement on Form 10 relating to these securities has been filed with the Securities and Exchange Commission.

Subject to Completion, Dated December 5, 2012

INFORMATION STATEMENT RELATING TO THE DISTRIBUTION OF COMMON STOCK OF

ALTISOURCE ASSET MANAGEMENT CORPORATION
by
ALTISOURCE PORTFOLIO SOLUTIONS S.A.
to Shareholders of Altisource Portfolio Solutions S.A.

This information statement is being furnished in connection with the spin-off (the “Spin-Off”) of Altisource Asset Management Corporation (“AAMC”) from Altisource Portfolio Solutions S.A. (“Altisource”) by way of a taxable pro-rata distribution of all of the common stock of AAMC to the Altisource shareholders (the “Distribution”).  We refer to the Spin-Off and the Distribution collectively as the “Separation.”  Immediately after the Separation is completed, AAMC will be a stand-alone public company.

For every 10 shares of Altisource common stock, par value $1.00 per share, which we refer to as Altisource common stock, that you hold as of 5:00 p.m. Eastern Time on [    ], 2012, the record date for the Distribution (the “Record Date”), you will receive 1 share of AAMC common stock, par value $0.01 per share, which we refer to as AAMC common stock or our common stock. We expect Altisource to distribute shares of our common stock to Altisource’s shareholders at 5:00 p.m. Eastern Time on or about [    ], 2012 (the “Separation Date”). As discussed more fully in this information statement, if you sell shares of Altisource common stock in the “regular way” market, and the sale of the shares settles before the Separation Date, you will be selling your right to receive shares of AAMC common stock in the Separation. For additional information, see “The Separation.”

You will not be required to pay any consideration for the AAMC common stock or to surrender any of your Altisource common stock.  We are not asking you for a proxy and request that you do not send us one.

All of the outstanding shares of our common stock are currently owned by Altisource.  Accordingly, there is no current trading market for our common stock.  We expect, however, that a limited trading market for our common stock, known as a “when-issued” trading market, will develop [    ] days prior to the Separation Date, and we expect that “regular way” trading of our common stock will begin on the first trading day after the Separation Date. We expect the AAMC common stock to be quoted on the OTCQX market tier operated by OTC Markets Group, Inc. (“OTCQX”) under the symbol “AAMC.”

In reviewing this information statement, you should carefully consider the matters described under the caption “Risk Factors” beginning on page 11.

We are an Emerging Growth Company as defined in the Jumpstart Our Business Startups Act.  See “Risk Factors—Risks Related to our Business in General,” “Business—Emerging Growth Company Status” and “Critical Accounting Policies and Estimates—Emerging Growth Company Status.”

Neither the Securities and Exchange Commission nor any state or territory securities commission has approved or disapproved these securities or determined if this information statement is truthful or complete. Any representation to the contrary is a criminal offense.

This information statement does not constitute an offer to sell or the solicitation of an offer to buy any securities.

The date of this information statement is [    ], 2012.

This information statement was first mailed to Altisource shareholders on or about [   ], 2012.

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We are furnishing this information statement solely to provide information to Altisource shareholders who will receive shares of our common stock in the Separation. It is not and should not be construed as an inducement or encouragement to buy or sell any of our securities or any securities of Altisource. This information statement describes our business, the relationship between Altisource and AAMC, and how the Separation affects Altisource and its shareholders, and it also provides other information to assist you in evaluating the benefits and risks of holding or disposing of our common stock that you will receive in the Separation. You should be aware of certain risks relating to the Separation, our business and ownership of our common stock, which are described under the heading “Risk Factors.”

You should not assume that the information contained in this information statement is accurate as of any date other than the date on the cover. Changes to the information contained in this information statement may occur after that date, and we undertake no obligation to update the information except in the normal course of our public disclosure obligations and practices.

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SUMMARY

This summary highlights selected information contained elsewhere in this information statement relating to the separation of AAMC from Altisource and the distribution of AAMC common stock by Altisource to Altisource’s shareholders. This summary may not contain all of the information that is important to you. To better understand the Separation and AAMC, you should carefully read this entire information statement including the risks described in “Risk Factors” and the financial statements and the notes thereto beginning on page F-1.

Except as otherwise indicated or unless the context otherwise requires, “Altisource Asset Management Corporation,” “AAMC,” “we,” “us,” “our” and “the Company” refer to Altisource Asset Management Corporation, a United States Virgin Islands corporation; all references to “Altisource” are to Altisource Portfolio Solutions S.A., a Luxembourg société anonyme and its subsidiaries.

Our Business

We are organized as a United States Virgin Islands corporation and were formed by Altisource on March 15, 2012 to provide asset management and corporate governance services (the “Services”) to Altisource Residential Corporation (including Altisource Residential, L.P., its operating partnership through which it will acquire and hold its assets, “Residential”) under a 15-year asset management agreement (the “Residential Asset Management Agreement”).  Residential was recently formed to acquire and own single-family rental assets.  In addition, we intend to make an investment in NewSource Reinsurance Company Ltd., a title insurance and reinsurance company that will be formed following the Separation and domiciled in Bermuda (“NewSource”).

Ours is a capital light strategy with profits available for share repurchases and dividends, although we have no current plans to pay dividends or repurchase shares.  Initially, Residential will be our primary source of revenue and will drive our potential future growth.  The Residential Asset Management Agreement will entitle us to incentive fees that will give us an increasing share of Residential’s cash flow as distributions to its shareholders increase as well as reimbursement for certain overhead and operating expenses.  Accordingly, our operating results will be highly dependent on our ability to help Residential achieve positive operating results.

AAMC’s Business Strategy

Our business strategy is to:

·             assist Residential in generating a growing stream of dividends to Residential’s shareholders, thereby growing our earnings;

·            assist Residential in generating a steady, stable cash flow stream from NewSource’s title insurance and reinsurance business and

·             develop other scalable investment strategies and vehicles by leveraging the expertise of our management team.

Residential’s Business Strategy

Residential’s business strategy is to provide a growing stream of dividends to its shareholders by:

·             Acquiring single-family rental assets at an attractive cost relative to the market for acquiring residential real estate at or following the foreclosure sale (“REO” or “REO Properties”) through the purchase of non-performing loan portfolios.  Residential’s goal will be to capture what it views as the positive arbitrage in today’s market between the price of non-performing loans, adjusted for carrying costs, and the value of the underlying real estate assets when sold as REO and

·             Managing single-family rental assets nationwide at a lower cost than that of its competitors.

To help Residential achieve this strategy, we have leveraged our strategic relationships with Altisource and Ocwen Financial Corporation (“Ocwen”). These relationships will provide Residential with what we believe are two significant competitive advantages.

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First, we have arranged for Residential’s 15-year servicing agreement with Ocwen (the “Ocwen Servicing Agreement”), which we expect will enable Residential to obtain single-family rental assets at a discount to the typical REO acquisition price by acquiring sub-performing and non-performing loans.  This arbitrage exists because there are extended timelines, complexities and uncertainties in managing non-performing and sub-performing loans resulting from the loan modification, foreclosure and REO sale processes.  We believe that Ocwen’s extensive mortgage servicing experience will enable Residential to shorten non-performing loan resolution timelines by effectively and efficiently (1) converting a portion of the non-performing loan portfolio to performing status and (2) managing the foreclosure process and timelines with respect to the remainder of the portfolio.

Based on the industry experience of our management team, we believe non-performing loans often sell for as low as 55% of the estimated value of the underlying property securing the loan.  We expect that a portion of the non-performing loans will be returned to performing status primarily through loan modifications.  After the loans are modified, and following a short seasoning period, we expect the borrowers to refinance these loans near the estimated value of the underlying property — generating very attractive returns for Residential.

We expect that, despite efforts to modify or return the mortgage loans to a performing status, a portion of these mortgage loans will enter into foreclosure, ultimately becoming REO that can be converted into single-family rental assets.  Even after considering the foreclosure expenses and the time value of money, Residential should be able to acquire REO through the mortgage loan default process at a discount to the typical REO acquisition price.  Additionally, as Residential intends to retain the majority of the underlying real estate assets, it will avoid some of the typical REO costs (such as real estate brokerage commissions).

Second, we have arranged for Residential’s 15-year Master Services Agreement with Altisource for Altisource to provide construction management, leasing and property management services (the “Altisource Master Services Agreement”).  We believe that Altisource’s real property management experience and centralized vendor management model will allow Residential to operate single-family rental assets at a lower cost than its competitors.  Residential’s goal is to minimize its property management expenses for a single-family rental asset so that those expenses will be similar to that for an apartment unit managed by a multi-family REIT.  Further, because of Altisource’s distributed vendor model, Residential can acquire assets without regard to their location or density.  This allows Residential to competitively bid on large sub-performing or non-performing mortgage portfolios with assets dispersed throughout the United States.  Altisource has extensive property management operational experience, managing and maintaining over 90,000 REO Properties for others over the last three years, which represents approximately $9 billion of estimated value in such properties.

While the Ocwen Servicing Agreement and Altisource Master Services Agreements are not exclusive arrangements, we believe that these relationships will provide Residential with significant competitive advantages with respect to acquiring and maintaining single-family rental assets, which represent a $3 trillion growth market.  We intend for Residential to acquire single-family rental assets with the intention to hold these assets over the long-term with a focus on developing brand and franchise value.  We also believe that the forecasted growth for the single-family rental marketplace, in combination with Residential’s projected asset management and acquisition costs and its ability to acquire assets without concern as to their location or density provide us with a significant opportunity to establish Residential as a leading, externally-managed residential REIT.

AAMC’s Competitive Strengths

To enable Residential to execute on its business strategy, we will leverage the following competitive strengths:

·                   Experienced Management Team.   We have a cohesive management team with extensive industry experience in real estate, non-performing loan portfolios and mortgage loan servicing .  The management team also has strong relationships in the mortgage industry to help source single-family residential rental assets and mortgage loans. Our team possesses years of experience in negotiating complex real estate and loan portfolio acquisition and disposition transactions and a history of success overseeing service providers on behalf of institutional and other sophisticated investors;

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·                   Strategic Relationships .  We have strategic relationships with Ocwen and Altisource which we expect will provide us with significant competitive advantages with respect to the servicing of non-performing and sub-performing loans and the management of REO properties ;

·                   Proprietary Valuation Models and Data .  We have significant experience developing and applying complex proprietary valuation models that leverage an extensive historical database.  Our knowledge and understanding of diverse real estate related investment assets and their complexities and inter-relationships allows us to develop appropriate strategies to assist Residential in maximizing returns and

·                   Tax Efficient Structure.   AAMC is headquartered in Frederiksted, St. Croix, in the United States Virgin Islands.  The United States Virgin Islands has an economic development program that provides significant tax benefits, including, but not limited to, a 30-year credit against our corporate income tax equal to 90 percent of the otherwise applicable tax on eligible income (“EDC Benefits”) for certain qualified businesses located in Frederiksted.  We applied for the EDC Benefits from the United States Virgin Islands Economic Development Commission (“EDC”) and received final approval of our application from the Governor of the United States Virgin Islands on August 10, 2012.  As a result of our approval, our eligible income will be subject to income tax at an effective rate of 3.85%, and we will be exempt from (i) the United States Virgin Islands gross receipts tax which would otherwise be imposed at the rate of 5%, (ii) taxes on AAMC’s real property and (iii) certain territorial excise taxes.

The Separation

We describe in this information statement the assets of AAMC that will be contributed by Altisource in connection with the Spin-Off as if AAMC were a separate business.  As AAMC is a development stage company and has not commenced operations, no historical results of operations are presented.  For additional information, see “The Separation—Introduction.”

Altisource sent this document to you because you are the holder of Altisource common stock on the Record Date for the distribution of shares of AAMC common stock. On April 26, 2012, Altisource announced its intention to spin-off a development stage company specializing in providing asset management and corporate governance services into a stand-alone public company. Accordingly, upon consummation of the Separation, you will be entitled to receive 1 share of AAMC common stock for every 10 shares of Altisource common stock that you held on the Record Date.  We expect the Separation to occur at 5:00 p.m. Eastern Time on or about [    ], 2012.

You do not have to surrender or exchange your shares of Altisource common stock or pay cash or any other consideration to receive your shares of AAMC common stock.  The number of shares of Altisource common stock that you currently own will not change as a result of the Separation.

This information statement describes our business, our relationship with Altisource and how this transaction affects Altisource and its shareholders.  In addition, it provides other information to assist you in evaluating the benefits and risks of holding or disposing of our common stock that you will receive in the Distribution.

References in this information statement to our historical assets generally refer to the historical assets of Altisource and its subsidiaries before the Separation. As we are a development stage company and have not commenced operations, there are no historical financial results of operations contained in this information statement.  We cannot predict what our financial results will be in the future as a stand-alone public company.

Reasons for the Separation

Altisource’s Board of Directors determined that separating the AAMC asset management and corporate governance services business from Altisource is in the best interests of Altisource’s shareholders. In arriving at its decision, the Board considered, among other factors, the following:

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Differing Business Strategies

The Company will specialize in providing asset management and corporate governance services to its clients and will be focused on developing scalable investment strategies and vehicles for its clients by leveraging the expertise of its management team. By contrast, Altisource does not engage in the business of asset management and corporate governance services.  Altisource is primarily a provider of fee based services focused on high value, technology-enabled, knowledge-based functions principally related to real estate and mortgage portfolio management, asset recovery and customer relationship management.

Greater Strategic Focus of Financial Resources and Management’s Efforts

The Company will have different financial and operating characteristics than Altisource’s other businesses. Owing to these and other factors, we and Altisource will employ different capital structures and financing strategies. Consequently, Altisource has determined that its current structure may not be optimized to design and implement the distinct strategies necessary to operate its businesses in a manner that maximizes the long-term value of each business. We and Altisource believe that our respective management resources would be more efficiently utilized if Altisource’s management concentrates solely on its success as a provider of services focused on high value, technology-enabled, knowledge-based functions and our management concentrates solely on our business. The dilution of attention involved in managing these businesses with competing goals and needs will thus be eliminated.

Enhanced Investor Choices by Offering Investment Opportunities in Separate Entities

We believe investors in the Company will be better positioned to evaluate our financial performance and strategy within the context of our particular field of operations and peer groups, and that this will enhance the likelihood that we achieve an appropriate market valuation. Both we and Altisource believe that our investment characteristics may appeal to types of investors who differ from Altisource’s current investors. Both we and Altisource expect that, as a result of the Separation, our management will be better positioned to implement goals and evaluate strategic opportunities in light of investor expectations within the context of our particular field of operation.

Improved Management Incentive Tools

Where appropriate, we expect to use equity to compensate current and future employees. It is more difficult for multi-business companies such as Altisource to structure equity incentives that reward managers in a manner directly related to the performance of their respective business units. By granting equity compensation linked to the performance of AAMC’s business, we will be able to offer our managers equity compensation that is linked more directly to their work product.

In determining whether to effect the Separation, Altisource’s Board of Directors also considered the costs and risks associated with the transaction, including:

·                   the risk that the Separation might not be completed and the one-time and ongoing costs of the Separation; and

·                   certain other risks associated with the Separation and the operation of our business following the Separation, as described under the heading “Risk Factors” of this information statement.

Regulatory Approval

Apart from the registration under U.S. federal securities laws of the AAMC common stock that will be issued in the Separation, we do not believe that any other material governmental or regulatory filings or approvals will be necessary to consummate the Separation.

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No Appraisal Rights

Altisource shareholders will not have appraisal rights in connection with the Separation.

Risk Factors

You should carefully consider the matters discussed under the heading “Risk Factors” of this information statement.

Corporate Information

AAMC is incorporated and conducts its operations in the United States Virgin Islands.  Our principal executive offices are located at 402 Strand St., Frederiksted, United States Virgin Islands 00840-3531, and our main telephone number is (340) 692-1055.  Our corporate website is located at www.altisourceamc.com. The information contained in, or that can be accessed through, our website is not part of this information statement.

Emerging Growth Company Status

We are an “emerging growth company,” as defined in the Jumpstart Our Business Startups Act of 2012 (the “JOBS Act”), and we are eligible to avail ourselves of certain exemptions from various reporting requirements of public companies that are not “emerging growth companies,” including, but not limited to, an exemption from complying with the auditor attestation requirements of Section 404 of the Sarbanes-Oxley Act of 2002 and reduced disclosure obligations regarding executive compensation in our periodic reports and proxy statements. We have not made a decision whether to avail ourselves of certain of these exemptions.

In addition, the JOBS Act provides that an “emerging growth company” can utilize an extended transition period for complying with new or revised accounting standards, allowing it to delay the adoption of certain accounting standards until those standards would otherwise apply to private companies. However, we are choosing to “opt out” of such extended transition period, and as a result, we will comply with new or revised accounting standards on the relevant dates on which adoption of such standards is required for all public companies which are not emerging growth companies. Section 107 of the JOBS Act provides that our decision to opt out of the extended transition period for complying with new or revised accounting standards is irrevocable.

We could remain an “emerging growth company” for up to five years, or until the earliest of (i) the last day of the first fiscal year in which our annual gross revenues exceed $1 billion, (ii) the date that we become a “large accelerated filer” as defined in Rule 12b-2 under the Securities Exchange Act of 1934, which would occur if the market value of our common stock that is held by non-affiliates exceeds $700 million as of the last business day of our most recently completed second fiscal quarter, or (iii) the date on which we have issued more than $1 billion in non-convertible debt during the preceding three year period.

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RISK FACTORS

RISKS RELATED TO OUR BUSINESS IN GENERAL

We are a development stage company and have generated no revenue since our inception. If we are unable to implement our business strategy or operate our business as we currently expect to do, our operating results may be adversely affected.

We are a development stage company and our business model is untested. Businesses like ours, which are starting up or in their initial stages of development, present substantial business and financial risks and may suffer significant losses. We cannot predict what our results of operations, financial condition and cash flows will be once we commence operations and operate as a stand-alone public company. We have generated no revenue to date and may not have sufficient capital to implement our business model. In addition, there are increased costs associated with being a stand-alone public company, including maintaining a separate Board of Directors and obtaining a separate audit, in addition to accounting, tax, legal, insurance and compliance costs and other professional fees.  Currently, we are unable to estimate the amount of such expenses. As a result of these circumstances, we cannot assure you that the business will become profitable, or, if we become profitable, that it will be sustainable. The income potential of our proposed business is unproven, and the absence of an operating history makes it difficult to evaluate our prospects. We may not be able to execute our business strategy as planned which may adversely impact our financial performance.

We are initially dependent on Residential, another development stage company, as our only customer, the loss of which, or Residential’s inability to pay for our Services, could reduce our revenues.

On the Separation Date, Residential will be our sole customer.  The loss or failure of this key customer, its failure to pay us or its termination of the Residential Asset Management Agreement would adversely affect our revenues, results of operations and financial condition.  Residential is also a development stage company and has not generated any revenue to date.

Residential may not have sufficient working capital to implement its investment strategies. Residential may need to utilize a variety of funding sources to provide sufficient capital to effectively carry out its business plan over the long term. Our success is dependent on Residential’s ability to obtain such capital. Currently, the primary source of Residential’s liquidity will be the cash on hand subsequent to its Separation from Altisource. In the future, Residential may need to utilize various secondary sources of liquidity, including without limitation accessing the capital markets to issue debt or equity securities, or engaging in collateralized or other borrowings from third party banks, all or any of which may not be available or have terms that are not cost-effective, therefore having an adverse impact on our financial performance.

The asset management business is intensely competitive.

The asset management business is intensely competitive, driven by a variety of factors, including asset performance, the quality of service provided to clients, brand recognition and business reputation. Our asset management business will compete with a number of other asset managers. A number of factors serve to increase our competitive risks:

·                   a number of our competitors may have greater financial, technical, marketing and other resources and more personnel than we do;

·                   our clients may not perform as well as the clients of our competitors;

·                   several of our competitors and their clients have significant amounts of capital and many of them have similar management objectives to ours which may create additional competition for management opportunities;

·                   some of these competitors’ clients may also have a lower cost of capital and access to funding sources that are not available to our clients which may create competitive disadvantages for us with respect to funding opportunities;

·                   some of our competitors’ clients may have higher risk tolerances, different risk assessments or lower return thresholds which could allow them to facilitate the acquisition and management by their clients of a wider variety of assets and allow them to advise their clients to bid more aggressively than our clients for assets on which we would advise our clients to bid;

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·                   there are relatively few barriers to entry impeding new asset management firms, and the successful efforts of new entrants into the asset management business is expected to continue to result in increased competition;

·                   some of our competitors may have better expertise or be regarded by potential clients as having better expertise with regards to specific assets; and

·                   other industry participants will from time to time seek to recruit members of our management team and other employees away from us.

The risks associated with Residential’s business that could adversely affect its ability to generate revenue and pay distributions to its shareholders are risks to our business.

Initially, Residential will be our primary source of revenue and will drive our potential future growth.  Any risk associated with Residential’s business that would adversely affect its ability to generate revenue and pay distributions to its shareholders is a risk to our business, as our revenues, results of operations and financial condition significantly depend upon incentive fees paid to us as a percentage of cash distributions made by Residential to its shareholders.

The risks associated with NewSource’s business that could adversely affect its ability to generate revenue and pay our asset management fee are risks to our business and the value of our investment in NewSource.

Shortly after the Separation Date, we intend to invest in the voting common stock of NewSource.  In conjunction with our investment in NewSource, we intend to provide our Services to NewSource in exchange for an annual asset management fee pursuant to an asset management agreement (the “NewSource Asset Management Agreement”).  Any risk associated with NewSource’s business that would adversely affect its ability to generate revenue and pay our asset management fee is a risk to our business, as our revenues, results of operations and financial condition will depend upon our investment in NewSource and our ability to generate fee revenue.

Failure of Residential to qualify as a REIT would have significant adverse consequences to us.

Residential intends to elect and qualify to be taxed as a REIT for U.S. federal income tax purposes. Residential’s qualification as a REIT will depend upon its ability to meet, on an ongoing basis, requirements regarding its organization and ownership, distributions of its income, and the nature and diversification of its income and assets as well as other tests imposed by the U.S. Internal Revenue Code of 1986, as amended (the “Code”).  Residential may fail to satisfy the REIT requirements in the future. If the U.S. Internal Revenue Service (“IRS”) determines that Residential does not qualify as a REIT or if it qualifies as a REIT and subsequently loses its REIT qualification, either circumstance may adversely affect Residential’s ability to make incentive fee payments to us.

If Residential is deemed to be an investment company under the Investment Company Act, it would have significant adverse consequences to us.

Residential does not intend or expect to be an investment company under the Investment Company Act of 1940 (the “Investment Company Act”), since it will not engage primarily or hold itself out as being engaged primarily in the business of investing, reinvesting or trading in securities.  Rather, Residential will be primarily engaged in the business of purchasing or otherwise acquiring real estate and mortgages on real estate, specifically single-family rental assets and sub-performing and non-performing loans.

To the extent that the Securities and Exchange Commission (the “SEC”) determines that Residential is in fact an investment company, Residential intends to rely on the exception from the Investment Company Act set forth in Section 3(c)(5)(C) of the Investment Company Act, which excludes from the definition of investment company

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“[a]ny person who is not engaged in the business of issuing redeemable securities, face-amount certificates of the installment type or periodic payment plan certificates, and who is primarily engaged in one or more of the following businesses: . . . (C) purchasing or otherwise acquiring mortgages and other liens on and interests in real estate.”  The SEC has historically taken the position that an issuer may rely on the exception provided by Section 3(c)(5)(C) as long as at least 55% of its assets consist of “qualifying interests,” such as mortgage loans which are secured by real estate and other liens on and interests in real estate, and an additional 25% consists of real estate-type interests.  The SEC has also historically indicated that up to 20% of an issuer’s total assets may be invested in miscellaneous investments.  Other than Residential’s investment in NewSource, Residential believes that all of its assets will fall within the definition of “qualifying assets.”  Additionally, Residential does not currently expect to issue redeemable securities, face-amount certificates of the installment type or periodic payment plan certificates, as those terms are defined by the Investment Company Act.  Consequently, Residential believes that it will not be required to register under the Investment Company Act.

If Residential is deemed to be an investment company and its investment in NewSource accounts for more than 20% of its assets, it could be required to dispose of its NewSource investment (or a portion thereof) in order to qualify for the 3(c)(5)(C) exception.  We expect that Residential’s investment in NewSource will constitute less than 20% of its assets shortly after the Separation Date.  Consequently, we do not believe that Residential’s investment in NewSource will impact its ability to continue to rely on the Section 3(c)(5)(C) exemption.

In August 2011, the SEC issued a concept release which indicated that the SEC is reviewing whether certain mortgage related pools which rely (like Residential) on the exception from registration under Section 3(c)(5)(C), should continue to be allowed to rely on such exception from registration.  Since Residential’s primary investment strategy is to directly invest in REO Properties and mortgages secured by real estate, Residential does not believe that the SEC’s review will have a material impact on its status as a non-investment company business or its ability to continue to rely on the Section 3(c)(5)(C) exception; however, Residential cannot provide any assurance that the outcome of the SEC’s review will not require Residential to register under the Investment Company Act.  If Residential is determined to be an investment company or it fails to qualify for this exception from registration as an investment company, or the SEC determines that companies that engage in businesses similar to Residential’s are no longer able to rely on this exception, Residential may be required to register as an investment company under the Investment Company Act.

Registration under the Investment Company Act would require Residential to comply with a variety of substantive requirements that impose, among other things:

If Residential were required to register as an investment company but failed to do so, it would be prohibited from engaging in its business, and criminal and civil actions could be brought against it.

Registration with the SEC as an investment company would be costly, would subject Residential to a host of complex regulations and would divert attention from the conduct of Residential’s business. In addition, if Residential purchases or sells any real estate assets to avoid becoming an investment company under the Investment Company Act, it could materially adversely affect its net asset value, the amount of funds available for investment and its ability to pay distributions to Residential’s shareholders.  Any such occurrences would adversely impact our revenues from incentive fees paid by Residential.

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The reduced disclosure requirements applicable to us as an “emerging growth company” or a “smaller reporting company” may make our common stock less attractive to investors.

We are an “emerging growth company” as defined in the Jumpstart Our Business Startups Act of 2012 (the “JOBS Act”), and we may avail ourselves of certain exemptions from various reporting requirements of public companies that are not “emerging growth companies,” including, but not limited to, an exemption from complying with the auditor attestation requirements of Section 404 of the Sarbanes-Oxley Act of 2002 and, like smaller reporting companies, reduced disclosure obligations regarding executive compensation in our periodic reports and proxy statements, and exemptions from the requirement of holding a nonbinding advisory vote on executive compensation and stockholder approval of any golden parachute payments not previously approved. We may remain an “emerging growth company” for up to five full fiscal years following our initial public offering. We would cease to be an emerging growth company, and, therefore, become ineligible to rely on the above exemptions, if we have more than $1 billion in annual revenue in a fiscal year, if we issue more than $1 billion of non-convertible debt over a three-year period, or on the date that we become a “large accelerated filer” as defined in Rule 12b-2 under the Securities Exchange Act of 1934, which would occur if the market value of our common stock that is held by non-affiliates exceeds $700 million as of the last business day of our most recently completed second fiscal quarter.  We cannot predict if investors will find our common stock less attractive because we may rely on these exemptions.

Additionally, we are a “smaller reporting company” as defined in Rule 12b-2 of the Exchange Act.  As a smaller reporting company we prepare and file SEC forms similar to other SEC reporting companies; however the information disclosed may differ and be less comprehensive. For example, smaller reporting companies are not required to make risk factor disclosures in Item 1A of Form 10-K.

If some investors find our common stock less attractive as a result of the exemptions available to us as a smaller reporting company or an emerging growth company, there may be a less active trading market for our common stock (assuming a market ever develops) and our stock price may be more volatile than that of an otherwise comparable company that does not avail itself of the same or similar exemptions.

Our success depends on our senior management team, and if we are not able to retain them, it could have a material adverse effect on us.

We are highly dependent upon the continued services and experience of our senior management team. We will depend on the services of members of our senior management team to, among other things, continue the development and implementation of our growth strategies and maintain and develop our client relationships.  In the event that, for any reason, we are unable to retain our key personnel, it may be difficult for us to secure suitable replacements on acceptable terms.  This would adversely impact the development and implementation of our growth strategies.

The continuing unpredictability of the credit markets may restrict our access to capital and may make it difficult or impossible for us to obtain any required additional financing.

The domestic and international credit markets continue to be unpredictable. In the event that we need additional capital for our business, we may have a difficult time obtaining it and/or the terms upon which we can obtain it would have an adverse impact on our financial performance.

Our business could be significantly impacted if we suffer failure or disruptions of our information systems.

We will rely heavily on communications, data processing and other information processing systems to conduct our business and support our day-to-day activities, most services of which are provided through Altisource. Thus, our business requires the continued operation of Altisource’s sophisticated information technology systems and network infrastructure.  These systems are vulnerable to interruption by fire, loss, system malfunction and other events, which are beyond our control.  Systems interruptions could reduce our ability to provide our Services and could have an adverse effect on our operations and financial performance.

Failure of Altisource to effectively perform its obligations under various agreements with Residential and us, including the Altisource Master Services Agreement, could have an adverse effect on Residential’s and our business and performance.

Both Residential and we will engage Altisource to provide services subsequent to the Separation.  We believe that this relationship will provide Residential with significant competitive advantages. If for any reason Altisource is unable to perform the services described under these agreements at the level and/or the cost that the Company anticipates, alternate service providers may not be readily available on acceptable terms or at all, which could adversely affect Residential’s and our operating results as well as our ability to execute our business plan.

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In addition, Residential will be required to pay Altisource for the services it provides pursuant to the Altisource Master Services Agreement.  If Residential fails to pay Altisource or otherwise defaults under the Altisource Master Services Agreement, Altisource may cease to act under the Altisource Master Services Agreement which would adversely affect Residential’s operating results, thereby decreasing our revenues from incentive fees paid by Residential and adversely affecting our ability to execute our business plan.

Any diminishment in Altisource’s performance under, or termination of, the Altisource Master Services Agreement or any of Altisource’s other agreements with Residential or us would negatively impact, or potentially eliminate, the competitive advantage provided by such agreements.

Failure of Ocwen to effectively perform its servicing obligations under the Ocwen Servicing Agreement could have an adverse effect on Residential’s and our business and performance.

Residential will be contractually obligated to service the residential mortgage loans that it ultimately acquires.  Residential will not have any employees, servicing platform, licenses or technical resources necessary to service its acquired loans.  Consequently, Residential will engage Ocwen to service the loans it acquires.  We believe that this relationship will provide Residential with significant competitive advantages. If for any reason Ocwen is unable to service the acquired loans at the level and/or the cost that the Company anticipates, an alternate servicer may not be readily available on acceptable terms or at all, which could adversely affect Residential’s operating results, thereby decreasing our revenues from incentive fees paid by Residential.

In addition, under the Ocwen Servicing Agreement, Residential will be required to pay Ocwen fees for servicing Residential’s acquired mortgage loans.  If Residential fails to pay Ocwen or otherwise defaults under the Ocwen Servicing Agreement, Ocwen may cease to act as the servicer under the Ocwen Servicing Agreement which would adversely affect Residential’s operating results, thereby decreasing our revenues from incentive fees paid by Residential.

Any diminishment in Ocwen’s performance under, or termination of, the Ocwen Servicing Agreement would negatively impact, or potentially eliminate, the competitive advantage provided by such agreement.

Failure to obtain or retain the tax benefits provided by the United States Virgin Islands would adversely affect our financial performance.

AAMC is headquartered in Frederiksted, St. Croix, in the United States Virgin Islands.  The United States Virgin Islands has an economic development program that provides EDC Benefits to certain qualified businesses in Frederiksted.  We applied for the EDC Benefits from the EDC and received approval of our application by the Governor of the United States Virgin Islands on August 10, 2012.  It is possible that we may not be able to retain our qualifications for the EDC Benefits, or that changes in U.S. federal, state, local, territorial or United States Virgin Islands taxation statutes or applicable regulations may cause a reduction in or an elimination of the EDC Benefits, all of which could result in a significant increase to our tax expense, and therefore adversely affect our financial performance.

RISKS RELATED TO THE ACQUISITION AND OWNERSHIP OF REAL ESTATE AND REAL ESTATE RELATED ASSETS

Residential’s supply of REO Properties may be reduced by uncertainty in the lending industry and governmental sector.

Residential’s business model is dependent on the acquisition of a steady supply of REO Properties. The number of REO Properties may be reduced by uncertainty in the lending industry and the governmental sector. Lenders may choose to delay foreclosure proceedings, renegotiate interest rates or refinance mortgages for holders who face foreclosure. In recent years, the federal government has instituted a number of programs aimed at assisting at-risk mortgage holders and reducing the number of properties going into foreclosure. In the future, the federal government could institute additional programs to provide financial relief and assistance to mortgage holders at risk of foreclosure. Decisions by lenders and government programs that reduce the number of REO Properties could adversely affect Residential’s business opportunities and impact its overall financial performance, thereby impacting our revenues from incentive fees paid by Residential.

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Residential’s supply of REO Properties and financial performance may be impacted by federal, state and/or local action to increase timelines associated with foreclosure proceedings and/or the imposition of a moratorium on foreclosure proceedings or initial foreclosure filings.

The number of REO Properties available and/or obtained by Residential may be reduced by federal, state and/or local action to increase timelines associated with foreclosure proceedings and/or the imposition of a moratorium on foreclosure proceedings or initial foreclosure filings.  As in recent years, federal, state and/or local governing bodies or agencies may pass laws, regulations or take other legislative action that may delay or stop existing foreclosure proceedings and/or the commencement of foreclosure actions.  Any such actions would reduce the number of REO Properties available and/or obtained by Residential and therefore could adversely affect Residential’s business opportunities.  Any such actions would also increase the carrying cost of non-performing loans that Residential expects to become REO and impact its overall financial performance.  These occurrences could adversely impact our revenues from incentive fees paid by Residential.

Residential’s supply of sub-performing and non-performing loans may decline over time as a result of higher credit standards for new loans and/or general economic improvement.

Residential’s business model is also dependent on the acquisition of a steady supply of sub-performing and non-performing mortgage loans.  As a result of the economic crisis in 2008, there is currently a large supply of sub-performing and non-performing loans available for Residential to acquire.  However, in response to the economic crisis, the origination of jumbo, subprime, Alt-A and second lien mortgage loans has dramatically declined.  In addition, lenders have increased their standards of credit-worthiness in originating new loans.  For these reasons along with the general economic improvement in the economy, the supply of sub-performing and non-performing residential mortgage loans that Residential may acquire may decline over time and could adversely affect its business opportunities and result in a reduction of Residential’s operating income, thereby decreasing our revenues from incentive fees paid by Residential.

Competition in identifying and acquiring REO Properties and sub-performing and non-performing loans in a timely manner may adversely affect Residential’s financial results.

Residential will face competition from various companies for investment opportunities in REO Properties and sub-performing and non-performing loans, including REITs, pension funds, insurance companies, hedge funds, other investment funds and companies, partnerships and developers. Some third party competitors have substantially greater financial resources than Residential and may be able to accept more risk than Residential. Competition from these companies may reduce the number of suitable REO Properties and sub-performing and non-performing loan investment opportunities offered to Residential or may increase the bargaining power of asset owners seeking to sell. If such events occur, Residential’s financial performance may be adversely impacted and therefore have adverse consequences to us.

Residential’s operating results will depend on the availability of, and our ability to quickly identify, assist in acquiring and managing, appropriate REO Properties and sub-performing and non-performing loan investment opportunities. It may take considerable time for us to identify and for Residential to acquire appropriate REO Properties and sub-performing and non-performing loan investments. Given the existing competition, complexity of the market, and requisite time needed to make such investments, no assurance can be given that we will be successful in identifying, underwriting and then advising Residential on acquiring investments that satisfy Residential’s return objectives. Furthermore, there is no assurance that such investments, once acquired, will perform as intended.

Continued disruptions in the credit markets may adversely impact Residential’s business opportunities and financial results.

Disruptions and dislocations in the credit markets have materially impacted the cost and availability of debt to finance real estate acquisitions. This lack of available credit could result in a further reduction of suitable investment opportunities and create a competitive advantage for other companies that have greater financial resources than Residential. In addition, as the economy recovers, the number of companies and the amount of funds competing for suitable investments may increase. If Residential acquires single-family rental assets or REO Properties and other

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investments at higher prices or by using less than ideal capital structures, its returns will be lower and the value of its assets may not appreciate or may decrease significantly below the amount it paid for such assets. If such events occur, our revenues from incentive fees may be significantly affected.

Changes in global economic and capital markets conditions, including periods of generally deteriorating real estate industry fundamentals, may significantly impact Residential’s financial performance and therefore have adverse consequences to us.

Residential will be, and therefore we will be, subject to risks generally incident to the ownership of real estate and real estate related assets, including decreases in residential property values, changes in global, national, regional or local economic, demographic and real estate market conditions, as well as other factors particular to the locations of our investments. A prolonged recession, such as the one experienced over the past few years, and a prolonged recovery period could adversely impact Residential’s business as a result of, among other items, increased tenant defaults under Residential’s leases, lower demand for residential rentals, as well as a potential oversupply of residential rental units, each of which could lead to increased concessions or reduced rental rates to maintain occupancies. These conditions could also adversely impact the financial condition of the tenants that occupy Residential’s single-family rental assets and, as a result, their ability to pay rent to Residential, thereby decreasing our revenue from incentive fees paid by Residential.

In addition, we intend to invest in the voting common stock of NewSource, a title insurance company and reinsurance company.  The demand for title insurance-related services depends in large part on the volume of real estate transactions. The volume of these transactions historically has been influenced by such factors as mortgage interest rates, availability of financing and the overall state of the economy. When market conditions cause real estate activity to decline, the title insurance industry tends to experience decreased revenues and earnings. Thus, a decline of activity in the real estate market could adversely impact both Residential’s business and the value of our investment in NewSource.

Unfavorable changes in market and economic conditions could adversely affect occupancy, rental rates, operating expenses and the overall market value of Residential’s assets.

Local conditions will significantly affect occupancy, rental rates and the operating performance of Residential’s single-family rental assets. The risks that may adversely affect conditions in those markets include, amongst others, the following:

·                   economic conditions that could cause an increase in Residential’s operating expenses, such as increases in property taxes, utilities and routine maintenance.

Any such occurrence or similar occurrence may adversely affect Residential’s financial condition and results of operations, thereby adversely affecting our revenues from incentive fees.

Changes in applicable laws, or noncompliance with applicable laws, could adversely affect Residential’s operations or expose Residential to liability.

As an owner of real estate, Residential will be required to comply with numerous federal, state and local laws and regulations, some of which may conflict with one another or be subject to limited judicial or regulatory interpretations. These laws and regulations may include zoning laws, building codes, landlord-tenant laws and other laws generally applicable to business operations. Noncompliance with laws or regulations could expose Residential to liability.

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Lower revenue growth or significant unanticipated expenditures may result from Residential’s need to comply with changes in (i) laws imposing remediation requirements and the potential liability for environmental conditions existing on properties or the restrictions on discharges or other conditions, (ii) rent control or rent stabilization laws or other residential landlord-tenant laws, or (iii) other governmental rules and regulations or enforcement policies affecting the rehabilitation, use and operation of Residential’s single-family rental assets, including changes to building codes and fire and life-safety codes. The occurrence of either of both of such events may adversely affect Residential’s financial condition and results of operations, thereby adversely affecting our revenues from incentive fees.

In addition, we expect NewSource, the title insurance and reinsurance company in which we intend to invest, to register as a Class 3A Bermuda insurance company and be subject to regulation and supervision in Bermuda by the Bermuda Monetary Authority. Changes in Bermuda insurance statutes, regulations and policies could result in restrictions on NewSource’s ability to pursue its business plans, issue reinsurance policies, distribute funds and execute its investment strategy.  In addition, NewSource may become subject to regulation and supervision by insurance authorities in any other jurisdictions in which it operates. Failure to comply with or to obtain appropriate authorizations and/or exemptions under any applicable laws could result in restrictions on NewSource’s ability to do business or certain activities that are regulated in one or more of the jurisdictions in which it operates and could subject NewSource to fines and other sanctions, which could have a material adverse effect on NewSource’s business and adversely impact the value of our investment in NewSource.

Short-term leases will expose Residential to the effects of declining market rents.

Substantially all of Residential’s leases will be for a term of two years or less. Because these leases will generally permit the residents to leave at the end of the lease term without penalty, Residential’s rental revenues will be impacted by declines in market rents more quickly than if its leases were for longer terms.  The effects of declining market rents may adversely affect Residential’s financial condition and results of operations, thereby adversely affecting our revenues from incentive fees.

Competition could limit Residential’s ability to lease single-family rental assets or increase or maintain rents.

Residential’s single-family rental assets will compete with other housing alternatives to attract residents, including rental apartments, condominiums and other single-family homes available for rent, as well as new and existing condominiums and single-family homes for sale. Competitive residential housing in a particular area could adversely affect Residential’s ability to lease its single-family rental assets and to increase or maintain rental rates.  This may adversely affect Residential’s financial condition and results of operations, thereby adversely affecting our revenues from incentive fees.

Difficulties in selling single-family rental assets could limit Residential’s flexibility.

Federal tax laws may limit Residential’s ability to earn a gain on the sale of a single-family rental asset or group of rental assets if Residential is found to have held or acquired the single-family rental asset or group of assets with the intent to resell, and this limitation may affect Residential’s ability to sell single-family rental assets without adversely affecting returns to its shareholders. In addition, real estate can at times be difficult to sell quickly at prices Residential finds acceptable. These potential difficulties in selling real estate in Residential’s markets may limit its ability to change or reduce the single-family rental assets in its portfolio promptly in response to changes in economic or other conditions.  Any of the above-described occurrences may adversely affect Residential’s financial condition and results of operations, thereby adversely affecting our revenues from incentive fees.

A significant uninsured property or liability loss could have a material adverse effect on Residential’s financial condition and results of operations.

Residential will carry commercial general liability insurance and property insurance with respect to its single-family rental assets on terms it considers commercially reasonable. There are, however, certain types of losses (such as losses arising from acts of war) that are not insured, in full or in part, because they are either uninsurable or the

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cost of insurance makes it economically impractical. If an uninsured property loss or a property loss in excess of insured limits were to occur, Residential could lose its capital invested in a single-family rental asset or group of assets as well as the anticipated future revenues from such asset or group of assets. Residential would also continue to be obligated to repay any mortgage indebtedness or other obligations related to the asset or group of assets, if any. If an uninsured liability to a third party were to occur, Residential would incur the cost of defense and settlement with, or court ordered damages to, that third party. A significant uninsured property or liability loss could materially and adversely affect Residential’s business and its financial condition and results of operations, thereby adversely affecting our revenues from incentive fees.

A significant number of Residential’s single-family rental assets will be part of home owners’ associations (“HOAs”).  Residential and its tenants will be subject to the rules and regulations of such HOAs which may be arbitrary or restrictive, and violations of such rules may subject Residential to additional fees and penalties and litigation with such HOAs which may be costly.

A significant number of Residential’s single-family rental assets will be subject to HOAs, which are private entities that regulate the activities of and levy assessments on properties in a residential subdivision. Some of the HOAs that will govern Residential’s single-family assets may enact onerous or arbitrary rules that restrict Residential’s ability to renovate, market or lease its single-family rental assets or require Residential to renovate or maintain such assets at standards or costs that are in excess of Residential’s planned operating budgets. Such rules may include requirements for landscaping, limitations on signage promoting a property for lease or sale, or the use of specific construction materials to be used in renovations. Some HOAs also impose limits on the number of property owners who may rent their homes, which if met or exceeded, may cause Residential to incur additional costs to sell the affected single family rental asset and opportunity costs of lost rental income. Furthermore, many HOAs impose restrictions on the conduct of occupants of homes and the use of common areas, and Residential may have tenants who violate these HOA rules for which Residential may be liable as the property owner. Additionally, the boards of directors of the HOAs that will govern Residential’s single-family rental assets may not make important disclosures or may block Residential’s access to HOA records, initiate litigation, restrict Residential’s ability to sell, impose assessments or arbitrarily change the HOA rules. Residential may be unaware of or unable to review or comply with certain HOA rules before acquiring a single-family rental asset, and any such excessively restrictive or arbitrary regulations may cause Residential to sell such asset, prevent Residential from renting such asset or otherwise reduce Residential’s cash flow from such asset.  Any of the above-described occurrences may adversely affect Residential’s financial condition and results of operations, thereby adversely affecting our revenues from incentive fees.

Residential may incur costs due to class actions and/or tenant rights and consumer demands or litigation.

There are numerous tenants’ rights and consumer rights organizations throughout the country.  As Residential grows in scale, it may attract attention from some of these organizations and become a target of legal demands or litigation. Many such consumer organizations have become more active and better funded in connection with mortgage foreclosure-related issues and the increased market for single-family rentals arising from displaced home ownership.  Some of these organizations may shift their litigation, lobbying, fundraising and grass roots organizing activities to focus on landlord-tenant issues. While Residential intends to conduct its business lawfully and in compliance with applicable landlord-tenant and consumer laws, such organizations might work in conjunction with trial and pro bono lawyers in one state or multiple states to attempt to bring claims against Residential on a class action basis for damages or injunctive relief. Residential cannot anticipate what form such legal actions might take, or what remedies they may seek. Additionally, these organizations may lobby local county and municipal attorneys or state attorneys general to pursue enforcement or litigation against Residential, or may lobby state and local legislatures to pass new laws and regulations to constrain Residential’s business operations. If they are successful in any such endeavors, they could directly limit and constrain Residential’s business operations and impose on Residential significant litigation expenses, including settlements to avoid continued litigation or judgments for damages or injunctions. Any of the above-described occurrences may adversely affect Residential’s financial condition and results of operations, thereby adversely affecting our revenues from incentive fees.

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Residential will likely be involved in a variety of litigation.

Residential anticipates involvement in a wide range of court actions in the ordinary course of its business. These actions may include eviction proceedings and other landlord-tenant disputes, challenges to title and ownership rights (including actions brought by prior owners alleging wrongful foreclosure by their lender or servicer) and issues with local housing officials arising from the condition or maintenance of a single-family rental asset. While Residential intends to vigorously defend any claim, no assurance can be given that Residential will not be subject to material losses related to such litigation.  Such losses may adversely affect Residential’s financial condition and results of operations, thereby adversely affecting our revenues from incentive fees.

Residential may incur costs due to environmental contamination or non-compliance.

Under various federal, state and local environmental and public health laws, regulations and ordinances, Residential may be required, regardless of knowledge or responsibility, to investigate and remediate the effects of hazardous or toxic substances or petroleum product releases at its single-family rental assets (including in some cases natural substances such as methane and radon gas) and may be held liable under these laws or common law to a governmental entity or to third parties for property, personal injury or natural resources damages and for investigation and remediation costs incurred as a result of the contamination. These damages and costs may be substantial and may exceed any insurance coverage Residential has for such events. The presence of such substances, or the failure to properly remediate the contamination, may adversely affect Residential’s ability to borrow against, sell or rent the affected single-family rental asset. In addition, some environmental laws create or allow a government agency to impose a lien on the contaminated site in favor of the government for damages and costs it incurs as a result of the contamination.  Any of the above-described occurrences may adversely affect Residential’s financial condition and results of operations, thereby adversely affecting our revenues from incentive fees.

The interest rate environment impacts Residential’s financial results.

Residential intends to focus primarily on investing in, financing, managing and renting single-family rental assets.  Some of these assets will generally decline in value if long-term interest rates increase, while lower interest rates will generally result in an increase in value.  Declines in the value of Residential’s single family rental assets and sub-performing and non-performing loans may ultimately reduce earnings or result in losses to Residential or cause some or all of its assets to become illiquid, thereby decreasing our revenues from incentive fees paid by Residential.

Residential’s operating results will depend in part on the difference between the operating income from its assets, credit losses, and financing costs.  Increases in these rates will tend to decrease Residential’s net income and the value of its assets, thereby decreasing our revenues from incentive fees paid by Residential.

Residential’s financial condition and results of operations may be adversely affected by inflation or deflation.

Increased inflation could have an adverse impact on interest rates, property management expenses and general and administrative expenses, as these costs could increase at a rate higher than Residential’s rental and other revenue. Conversely, deflation could lead to downward pressure on rents and other sources of income.  Accordingly, a change in inflation or deflation could adversely affect either or both of Residential’s financial condition and results of operations, thereby adversely affecting our revenues from incentive fees.

Residential’s real properties will be subject to property and other taxes that may increase over time.

Residential will be responsible for the property taxes for its single-family rental assets and REO Properties which may increase as tax rates change and as properties are reassessed by taxing authorities.  If Residential fails to pay any such taxes, the applicable taxing authorities may place a lien on the property, and the property may be subject to a tax sale.  Any such occurrence may adversely affect Residential’s financial condition and results of operations, thereby adversely affecting our revenues from incentive fees.

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RISKS RELATED TO THE SEPARATION

We have never operated on a stand-alone basis, and our transition to a stand-alone company may adversely affect our ability to conduct business.

We will need to establish certain facilities, systems, infrastructure and personnel after the Separation. We will incur capital and other costs associated with developing and implementing our own support functions in these areas.  Additionally, after the Separation, we may be unable to obtain goods, services and technologies at prices or on terms as favorable to us as those obtained by Altisource prior to the Separation.  This transition may constrain or otherwise adversely affect our ability to conduct business.

Our accounting and other management systems and resources may not be adequately prepared to meet the financial reporting and other requirements to which we will be subject following the Separation.

As a result of the Separation, we will be directly subject to reporting and other obligations under the Exchange Act.  The Exchange Act requires that we file annual, quarterly and current reports with respect to our business and financial condition. Under the Sarbanes-Oxley Act of 2002 (the “Sarbanes-Oxley Act”), we are required to maintain effective disclosure controls and procedures. To comply with these requirements, we may need to implement additional financial and management controls, reporting systems and procedures and hire additional accounting and finance staff. We expect to incur annual expenses for the purpose of addressing these requirements, and these expenses may be significant. If we are unable to implement additional controls, reporting systems, information technology systems and procedures in a timely and effective fashion, our ability to comply with our financial reporting requirements and other rules that apply to reporting companies under the Exchange Act could be impaired. Any failure to achieve and maintain effective internal controls could have a material adverse effect on our financial condition, results of operations or cash flows.

In the future, we may also be required to comply with Section 404 of the Sarbanes-Oxley Act which will require annual management assessments of the effectiveness of our internal controls over financial reporting and a report by our independent registered public accounting firm addressing these assessments. These reporting and other obligations may place significant demands on our management, administrative and operational resources, including accounting systems and resources.

RISKS RELATED TO THE TAX CONSEQUENCES OF THE SEPARATION

Since the Distribution will be taxable, the IRS, the Luxembourg taxing authority and/or the United States Virgin Islands Bureau of Internal Revenue may disagree with our valuation of the common stock which could result in a higher tax cost to both Altisource and its shareholders.

The Distribution will be taxable to Altisource shareholders based on the fair market value of the shares of our common stock that are received.  In addition, for Altisource, the Separation will be a realization event, which could cause Altisource to have to recognize capital gains on our common stock, which would have to be included in its tax base and would be subject to 28.8% Luxembourg corporate income and municipal business tax. Because we are a development stage company, we do not expect the value of the shares of our common stock received by Altisource shareholders to be significantly higher than the book value of the Company.  However, the IRS, the Luxembourg taxing authority and/or the United States Virgin Islands Bureau of Internal Revenue could disagree with our valuation of the shares of our common stock received by you which could result in a higher tax cost for both your receipt of the shares of common stock and for Altisource.

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RISKS RELATED TO OUR COMMON STOCK

The market price and trading volume of our common stock may be volatile and may be affected by market conditions beyond our control.

Prior to the Separation, our common stock had no trading market. We expect our common stock to be quoted on OTCQX and expect trading in our common stock to commence on a “when-issued” basis on or about [    ], 2012.

Neither we nor Altisource can assure you as to the trading prices of our common stock after the Separation. Unless and until our common stock is fully distributed and an orderly market develops, the prices at which our common stock trades may fluctuate significantly. In addition, the combined trading prices of Altisource common stock and our common stock after the Separation may, in the aggregate, be less than, equal to or greater than the trading prices of Altisource common stock prior to the Separation. The market price of our common stock may fluctuate in response to many things, including but not limited to:

The market prices of securities of asset management service providers have experienced fluctuations that often have been unrelated or disproportionate to the operating results of these companies. These market fluctuations could result in extreme volatility in the price of our shares of common stock.

Furthermore, our small size and different investment characteristics, including our headquarters based in the United States Virgin Islands, may not appeal to the current investor base of Altisource that may seek to dispose of large amounts of our common stock following the Separation. There is no assurance that there will be sufficient buying interest to offset those sales, and, accordingly, the price of our common stock could be depressed and/or experience periods of high volatility.

An active trading market for our common stock may never develop.

We have applied to have our common stock quoted on OTCQX.  However, an active trading market for our common stock may not develop, and if an active trading market does develop, it may not be sustained. Accordingly, your ability to sell our common stock when desired, or the prices that may be obtained for such common stock, will depend on the existence and liquidity of an active trading market of our common stock.

Our common stock may be subject to significant restriction on resale due to federal penny stock restrictions.

The SEC has adopted rules that regulate broker or dealer practices in connection with transactions in penny stocks. Penny stocks generally are equity securities with a price of less than $5.00 (other than securities registered on certain national securities exchanges or quoted on the NASDAQ system, provided that current price and volume information with respect to transactions in such securities is provided by the exchange system). The penny stock rules require a broker or dealer, prior to a transaction in a penny stock not otherwise exempt from the rules, to deliver a standardized risk disclosure document prepared by the SEC that provides information about penny stocks and the nature and level of risks in the penny stock market. The broker or dealer also must provide the customer with bid and offer quotations for the penny stock, the compensation of the broker or dealer, and its salesperson in the transaction, and monthly account statements showing the market value of each penny stock held in the customer’s account. The penny stock rules also require that prior to a transaction in a penny stock not otherwise exempt from such rules, the broker or dealer must make a special written determination that a penny stock is a suitable investment for the purchaser and receive the purchaser’s written agreement to the transaction. These disclosure requirements

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may have the effect of reducing the level of trading activity in any secondary market for our common stock that becomes subject to the penny stock rules, and accordingly, shareholders of our common stock may find it difficult or impossible to sell their securities.

The continuing unpredictability of the credit markets may restrict our liquidity and may make it difficult or impossible for us to obtain additional financing.

The domestic and international credit markets continue to experience significant unpredictability. Currently, the primary source of our capital will be the cash on hand subsequent to our Separation from Altisource.  In the future, we may need to utilize various secondary sources of liquidity by accessing the capital markets to issue debt or equity securities or engaging in collateralized or other borrowings from third party banks.

If we issue debt or obtain bank loans, the financing will likely be governed by certain provisions that may restrict our operating flexibility. Additionally, an issuance of equity securities or convertible or exchangeable securities may have rights, preferences and privileges more favorable than those of our common stock. Furthermore, we and, indirectly, our shareholders, will bear the cost of issuing and servicing such securities. Because our decision to issue securities through accessing the capital markets or entering into credit agreements will depend on market conditions and other factors beyond our control, we cannot predict or estimate our future capital structure.  Our shareholders bear the risk of changes to our future capital structure which may not be cost effective and may have a dilutive impact on our shareholders.

The value we attribute to the Altisource and AAMC common stock for the purpose of determining the revised exercise price of the Altisource stock options and the exercise price of the new AAMC stock options might not be equivalent to the market price of the Altisource and AAMC common stock following the Separation.

In connection with the Separation, all holders of Altisource stock options will receive: (1) a new AAMC stock option to acquire the number of shares of AAMC common stock equal to the product of (a) the number of Altisource stock options held on the Separation Date and (b) the distribution ratio of 1 share of AAMC common stock for every 10 shares of Altisource common stock; and (2) an adjusted Altisource option, replacing the original Altisource option, for the same number of shares of Altisource common stock with a reduced exercise price per stock option. We will determine the exercise price of the new stock option and the adjusted Altisource option in a manner so that the intrinsic value of the stock option to its holder will be the same as of the Separation Date.  However, fluctuations in the market price of the Altisource and AAMC common stock may cause this ratio to vary greatly following the Separation. In addition, although the intrinsic value will be the same, the fair value of the option may be different due to potential changes in the expected stock price volatility, option life and other factors we use to determine fair value using the Black-Scholes and binomial options pricing models.

RISKS RELATED TO CONFLICTS OF INTEREST

We could have conflicts with Altisource, Ocwen, Home Loan Servicing Solutions, Ltd. (“HLSS”) and Residential, and the Chairman of our Board of Directors could have conflicts of interest due to his relationship with Altisource, Ocwen, HLSS and Residential, which may be resolved in a manner adverse to us.

Conflicts may arise between Altisource and us as a result of our ongoing agreements, the agreements we have negotiated on behalf of Residential with Altisource and the nature of each of our respective businesses. Altisource will provide Residential with residential property management, leasing and construction management services for single-family rental assets acquired by Residential. In addition, we will become a party to a variety of agreements with Altisource in connection with the Separation, and we may enter into further agreements with Altisource after the Separation. Certain of our directors may be subject to conflicts of interest with respect to such agreements and other matters due to their relationships with Altisource.

Conflicts may arise between Ocwen and us as a result of our ongoing agreements and the nature of our respective businesses.  Ocwen will perform substantially all of the mortgage loan servicing functions relating to

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Residential’s acquisition and ownership of mortgage loans. Certain of our directors may be subject to conflicts of interest with respect to such agreements and other matters due to their concurrent roles as directors of Ocwen.

The Chairman of our Board of Directors is the Chairman of the Board of Directors of Altisource, Ocwen, HLSS, and Residential. As a result, he will have obligations to us as well as to Altisource, Ocwen, HLSS and Residential and may have conflicts of interest with respect to matters potentially or actually involving or affecting us and Altisource, Ocwen, HLSS or Residential, as the case may be.

Our Chairman currently owns a substantial amount of Altisource, Ocwen and HLSS common stock and Altisource and Ocwen stock options, and, subsequent to the Separation, will own a substantial amount of our common stock and Residential’s common stock. In addition, certain of our directors also may own Altisource and/or Ocwen common stock and stock options due to similar relationships with Altisource and Ocwen. Such ownership could create or appear to create potential conflicts of interest when the Chairman of our Board of Directors and our directors are faced with decisions that involve us, Altisource, Ocwen, HLSS, Residential or any of their respective subsidiaries.

Altisource, Ocwen, and HLSS are not limited in their ability to compete with us.  We will seek to manage these potential conflicts through dispute resolution and other provisions of our agreements with them and through oversight by independent members of our Board of Directors. However, there can be no assurance that such measures will be effective, that we will be able to resolve all conflicts with Altisource, Ocwen, and HLSS or that the resolution of any such conflicts will be no less favorable to us than if we were dealing with third parties.

Our directors have the right to engage or invest in the same or similar businesses as ours.

Certain of our directors have other investments and business activities in addition to their interest in AAMC. Under the provisions of our Articles of Incorporation, our directors have no duty to abstain from exercising the right to engage or invest in the same or similar businesses as ours or employ or otherwise engage any of our directors.  If any of our directors who are also directors, officers or employees of Altisource, Ocwen, Residential, HLSS or any other company acquires knowledge of a corporate opportunity or is offered a corporate opportunity outside of his capacity as one of our directors, then our by-laws provide that such a director will be permitted to pursue that corporate opportunity independently of us, so long as the director has acted in good faith.  Our by-laws provide that, to the fullest extent permitted by law, such a director will deemed to have satisfied his fiduciary duties to us and will not liable to us for pursuing such a corporate opportunity independently of us.  This may create actual or potential conflicts of interest between us and certain of our directors and result in less than favorable treatment of us and our shareholders. As of this date, none of our directors is directly involved as a director, officer or employee of a business that competes with us, but there can be no assurance that will remain unchanged in the future.

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FORWARD-LOOKING STATEMENTS

This information statement contains forward-looking statements that relate to, among other things, our future financial and operating results. In many cases, you can identify forward-looking statements by terminology such as “may,” “will,” “should,” “expect,” “intend,” “plan,” “anticipate,” “believe,” “estimate,” “predict,” “potential” or “continue,” or the negative of these terms, and other comparable terminology.  Any forward-looking statements contained in this information statement are based upon our historical performance and on current plan estimates and expectations.  The inclusion of this forward-looking information should not be regarded as a representation by us or any other person that the future plans, estimates or expectations contemplated by us will be enacted.

Forward-looking statements are not guarantees of future performance and involve a number of assumptions, risks and uncertainties that could cause actual results to differ materially. Important factors that could cause actual results to differ materially from those suggested by the forward-looking statements include, but are not limited to, the risks discussed in “Risk Factors,” “The Separation,” and “Management’s Discussion and Analysis of Financial Condition and Results of Operations” and the following:

·                   risks associated with operating as an independent, stand-alone public company and loss of certain benefits associated with being owned as part of a larger company;

·                   availability of adequate and timely sources of capital needed to finance our business;

Further information on the risks specific to our business are detailed within this information statement. Forward-looking statements speak only as of the date they are made and should not be relied upon. We undertake no obligation to update or revise forward-looking statements.

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THE SEPARATION

Introduction

On April 26, 2012, Altisource announced its intention to spin-off AAMC, a development stage company specializing in providing asset management and corporate governance services into a stand-alone public company for the reasons discussed below.  After considering many factors, management and the Board of Directors of Altisource concluded that the most effective way to maximize the success and operational efficiencies of both companies was to spin off AAMC as a separate public company.

Subsequent to final approval by the Altisource Board of Directors and regulatory approval, Altisource will distribute its ownership interest in AAMC to its existing shareholders as of the Record Date.  Altisource’s shareholders will receive 1 share of AAMC common stock for every 10 shares of Altisource common stock they hold on the Record Date, as described below.  We expect the Distribution to be effected on or about [    ], 2012 to holders of outstanding Altisource common stock as of 5:00 p.m. Eastern Time on [    ], 2012, the Record Date.  Altisource shareholders will not be required to pay any cash or other consideration or to surrender or exchange their shares of Altisource common stock to receive shares of AAMC common stock.

Concurrently with the Separation of AAMC, Altisource is also pursuing a separation of Residential pursuant to a similar spin-off transaction to be completed on or about the same date as ours.  Residential intends to acquire and own single-family rental assets.  Residential intends to elect and qualify to be treated as a REIT for U.S. federal income tax purposes.  Residential will enter into the Residential Asset Management Agreement pursuant to which AAMC will provide the Services in exchange for incentive fees and the reimbursement of certain overhead and operating expenses.

Additionally, we intend to invest in the voting common stock of NewSource.  In conjunction with our investment in NewSource, we will provide our Services to NewSource pursuant to the NewSource Asset Management Agreement.  Residential intends to simultaneously invest in the non-voting preferred stock of NewSource.  Residential and AAMC will be the only owners of NewSource.  NewSource will retain Altisource under a long-term Title Insurance Services Agreement to provide a wide range of technical underwriting services that will allow NewSource to evaluate title risk in a timely and cost effective manner.  Altisource will receive a performance fee of 90% of NewSource’s annual net income after NewSource pays Residential a 12% preferred dividend (the “Performance Fee”).

Business Reasons for the Separation

The Company will specialize in providing asset management and corporate governance services to its clients and will be focused on developing scalable investment strategies and vehicles for its clients by leveraging the expertise of its management team. By contrast, Altisource does not engage in the business of asset management and corporate governance services.  Altisource is a provider of services focused on high value, technology-enabled, knowledge-based functions principally related to real estate and mortgage portfolio management, asset recovery and customer relationship management.

Altisource’s Board of Directors determined that separating our business from Altisource is in the best interests of Altisource shareholders. In arriving at its decision, the Board of Directors considered, among other factors, the different business models and that the Separation will allow Altisource and AAMC to focus on their core businesses and be better positioned to respond to initiatives and market challenges.

The Number of AAMC’s Shares of Common Stock Shareholders of Altisource Will Receive

The Separation will be made on the basis of 1 share of AAMC common stock for every 10 shares of Altisource common stock. As such, for every 10 shares of Altisource common stock that you own as of 5:00 p.m. Eastern Time on [    ], 2012, the Record Date, you will receive 1 share of our common stock on the Separation Date. Based on the number of Altisource shares outstanding on the Record Date and the Separation Ratio, approximately 2,336,300 shares of AAMC common stock will be distributed to Altisource shareholders. As a result of the Separation, 100% of the outstanding AAMC common stock will be distributed to Altisource shareholders on a pro rata basis.

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When and How You Will Receive AAMC Common Stock

Altisource will use a book entry system to distribute shares of AAMC common stock.  No physical stock certificates will be issued for AAMC common stock.  Following the Separation, each record holder of Altisource common stock on the Record Date will receive from the transfer agent a statement of the amount of shares of AAMC common stock credited to his or her account.  If you were not a record holder of Altisource common stock on the Record Date because your shares are held on your behalf by your broker or other nominee, your shares of AAMC common stock should be credited to your broker or other nominee on or about [    ], 2012.

No action is required by you in order to receive AAMC shares in the Separation, and you do not have to surrender or exchange your shares of Altisource common stock or pay cash or any other consideration to receive your shares of AAMC common stock.  The number of shares of Altisource common stock that you currently own will not change as a result of the Separation.

We anticipate that on or about [    ], 2012, Altisource will deliver to our transfer agent all of the shares of our common stock to be distributed. On that day, the transfer agent will credit the accounts of registered holders of Altisource common stock entitled to the Distribution. For those holders of Altisource common stock who hold their shares through a broker, bank or other nominee, the transfer agent will credit the shares of our common stock to the accounts of those nominees who are registered shareholders, and they in turn will credit their customers’ accounts with our common stock. We anticipate that brokers, banks and other nominees will generally credit their customers’ accounts with our common stock on the same day that their accounts are credited which is expected to be the Separation Date.

Restricted Shares

Some individuals hold shares of Altisource common stock that is subject to forfeiture and restrictions on transfer.  These shares generally were granted under the Altisource 2009 Equity Incentive Plan and vest over a period of time.  Any AAMC shares issued in the Separation in respect of restricted shares of Altisource common stock will be subject to the same restrictions as the Altisource shares and will vest at the same time that the Altisource shares vest.

Treatment of Fractional Shares

The transfer agent will not deliver any fractional shares of AAMC common stock in connection with the delivery of AAMC shares pursuant to the Separation. Instead, we intend for the transfer agent to aggregate all fractional shares and sell them on behalf of those shareholders who otherwise would be entitled to receive a fractional share. These sales will occur as soon as practicable after the Separation Date. Those shareholders will then receive a cash payment in an amount equal to their pro rata share of the total proceeds of those sales. Any applicable expenses, including brokerage fees, will be paid by us.

We expect that all fractional shares held in street name will be aggregated and sold by brokers or other nominees according to their standard procedures, and that the brokers or other nominees may request the transfer agent to sell the fractional shares on their behalf. You should contact your broker or other nominee for additional details.  Neither Altisource, AAMC nor our transfer agent will guarantee any minimum sale price for the fractional shares of our common stock or pay any interest on the proceeds from the sale of fractional shares. The receipt of cash in lieu of fractional shares will be generally taxable to the recipient shareholders. See “The Separation—Certain U.S. Federal Income Tax Consequences of the Separation.”

Listing and Trading of the Shares of AAMC Common Stock

The following information may be helpful in discussions with your broker or other nominee.  AAMC has applied to have its common stock quoted on OTCQX.  You should consult and discuss with your own financial advisors, such as your broker or tax advisor, regarding the retention, sale or purchase of, or other transactions involving shares of, Altisource common stock or AAMC common stock. Altisource and AAMC do not make recommendations on the retention, sale or purchase of, or other transactions involving shares of Altisource common stock or shares of AAMC common stock. If you do decide to sell any shares, you should make sure your broker or other nominee understands whether you want to sell your shares of Altisource common stock, your shares of AAMC common stock or both.

“When-issued” trading of the shares of AAMC common stock is expected to begin on or about [    ], 2012. In the context of a spin-off, when-issued trading refers to securities transactions made on or before the Separation Date and made conditionally because the securities of the distributed entity have not yet been distributed. When-issued trades generally settle within three trading days after the Separation Date. On the first trading day following the Separation Date, all when-issued trading, if any, will end, and “regular-way” trading in shares of AAMC common stock will

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begin. Regular-way trading refers to trading after the security has been distributed and typically involves a trade that settles on the third full trading day following the date of the transaction. If the Separation does not occur, all when-issued trading will be null and void.

On or about [    ], 2012, Altisource’s common stock will begin to trade in two markets on the NASDAQ Global Select Market: a “regular way” market and an “ex-distribution” market. Between the Record Date and consummation of the Separation, shares of Altisource common stock that are sold on the regular way market will include an entitlement to receive shares of AAMC common stock distributable in the Separation. Conversely, shares sold in the ex-distribution market will not include an entitlement to receive shares of AAMC common stock distributable in the Separation, as the entitlement will remain with the original shareholder. Therefore, if you own shares of Altisource common stock on the Record Date and thereafter sell those shares in the regular way market on or prior to the Separation Date, you will also be selling the shares of AAMC common stock that would have been distributed to you with respect to the shares of Altisource common stock you sell. If you own shares of Altisource common stock on the Record Date and thereafter sell those shares in the ex-distribution market on or prior to the Separation Date, you will still receive the shares of AAMC common stock in the Separation. On the first trading day following the Separation Date, all shares of Altisource common stock will trade without any entitlement to receive shares of AAMC common stock.

Shares of AAMC common stock distributed to Altisource shareholders will be freely transferable except for such shares that are distributed to persons who are “affiliates” under the Securities Act of 1933, as amended (the “Securities Act”). Individuals or entities may be deemed to be AAMC affiliates if they control, are controlled by, or are under common control with, AAMC; such persons may include certain of our directors, officers and significant shareholders. In addition, individuals who are affiliates of Altisource on the Separation Date may be deemed to be affiliates of AAMC.  Persons who are affiliates of AAMC will be permitted to sell their shares of AAMC common stock only pursuant to an effective registration statement under the Securities Act, an exemption from the registration requirements of the Securities Act or pursuant to Rule 144 under the Securities Act. In general, under Rule 144, an affiliate who receives shares of AAMC common stock in the Separation may, after a holding period of six months, sell, within any three-month period, a number of shares that does not exceed the greater of:

·                   one percent (1%) of the then-outstanding shares of common stock and

·                   the average weekly trading volume of the shares of AAMC common stock during the four calendar weeks preceding the date on which the notice of the sale is filed with the SEC.

Sales under Rule 144 are also subject to provisions relating to notice, manner of sale and the availability of current public information about us.

There can be no assurance as to whether the shares of our common stock will be actively traded or as to the prices at which the shares of our common stock will trade. Until the shares of Altisource common stock are fully distributed and an orderly regular-way market develops, the prices at which shares trade may fluctuate significantly and may be lower than the price that may be expected for a fully distributed issue. Prices for shares of our common stock in the marketplace will be influenced by many factors. For a detailed discussion of these and other risks, please refer to “Risk Factors.”

Following the Separation, Altisource common stock will continue to be listed and traded on the NASDAQ Global Select Market under the symbol “ASPS.” As a result of the Separation, the trading price of Altisource common stock immediately following the Separation may be lower than the trading price of Altisource common stock immediately prior to the Separation. Further, the combined trading prices of Altisource common stock, Residential and our common stock after the Separation may be less than the trading prices of Altisource common stock immediately prior to the Separation.

Although Altisource is currently a publicly-traded company, there can be no assurance as to the prices at which the Altisource common stock will trade following the Separation. The nature of the trading market and prices for Altisource common stock after the Separation will be influenced by many factors.  Altisource shareholders and potential investors may consider, among other things that Altisource has contributed cash to AAMC and Residential and distributed all of the ownership in these newly created entities to its shareholders.  AAMC and Residential will pursue business opportunities separately from Altisource following the Separation.  As a result, these factors and

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others may delay or hinder the return to an orderly trading market in the Altisource common stock following the Separation. For a detailed discussion of these and other risks, please refer to “Risk Factors.”

Treatment of Outstanding Altisource Stock Options

Altisource stock options currently outstanding under Altisource’s 2009 Equity Incentive Plan and other equity incentive plans will be adjusted.  The exercise price will be reduced to reflect the value of the shares of AAMC common stock distributed to Altisource shareholders, and holders of outstanding Altisource options will be granted an option, to purchase shares of AAMC common stock reflecting the shares of Altisource common stock subject to the Altisource options.

Interests of certain Altisource Officers and Directors in the Separation

To the extent that Altisource officers and directors hold shares of Altisource common stock, they will receive shares of AAMC common stock in the Separation on the same terms as other Altisource shareholders.

William C. Erbey is the Chairman of each of the Board of Directors of Altisource, AAMC and Residential.  He currently owns 27.71% of Altisource and will own the same percentage of each company as he holds of Altisource immediately following the Separation.  See “Risk Factors,” “Relationship Between Altisource and Us Following the Separation” and “Certain Relationships and Related Transactions.”

THE FOLLOWING SUMMARY OF TAX CONSIDERATIONS IS FOR GENERAL INFORMATION PURPOSES ONLY, AND IT IS NOT INTENDED TO BE, AND IT SHOULD NOT BE CONSTRUED TO BE, LEGAL OR TAX ADVICE TO ANY PARTICULAR SHAREHOLDER.

ALTISOURCE SHAREHOLDERS SHOULD CONSULT THEIR OWN TAX ADVISORS CONCERNING THE U.S. FEDERAL, STATE, LOCAL, TERRITORIAL AND FOREIGN TAX CONSEQUENCES OF THE SEPARATION TO THEM IN LIGHT OF THEIR PARTICULAR CIRCUMSTANCES.

Certain U.S. Federal Income Tax Consequences of the Separation

The following is a summary of the material U.S. federal income tax consequences of the Separation. This summary is based on the U.S. Treasury Regulations, the Code, regulations promulgated under the Code and judicial and administrative interpretations of the U.S. Treasury Regulations and the Code.  This summary is based on the rules, regulations and interpretations in effect on the date of this summary and is subject to change (possibly on a retroactive basis).

This summary does not address tax consequences for any shareholder other than a U.S. shareholder. A U.S. shareholder, for U.S. federal income tax purposes, is defined as a beneficial owner of Altisource common stock that is one of the following:

·                   an individual who is a citizen or a resident of the U.S.;

·                   a corporation, or other entity taxable as a corporation for U.S. federal income tax purposes, created or organized under the laws of the U.S. or any state thereof or the District of Columbia;

·                   an estate, the income of which is subject to U.S. federal income taxation regardless of its source or

·                   a trust, if (i) a court within the U.S. is able to exercise primary jurisdiction over its administration and one or more U.S. persons have the authority to control all of its substantial decisions, or (ii) it has a valid election in effect under applicable U.S. Treasury Regulations to be treated as a U.S. person.

Further, this summary does not discuss all of the tax considerations that may be relevant to U.S. shareholders in light of their particular circumstances and does not address the tax consequences applicable to certain persons subject to special provisions of the U.S. federal income tax law including:

·                   insurance companies;

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·                   shareholders who hold shares as part of a hedging, integrated, conversion or constructive sale transaction or a straddle;

·                   shareholders who hold their shares as a synthetic security, integrated investment or other risk-reduction transaction;

In addition, this summary is limited to shareholders that hold their shares of Altisource common stock as a capital asset. Finally, this summary does not address any estate, gift or other non-income tax consequences or any state, local, territorial or foreign tax consequences.

The Distribution is a taxable distribution for U.S. federal income tax purposes.  Shareholders who receive shares of AAMC common stock with respect to their shares of Altisource common stock will be treated as receiving a taxable distribution equal to the fair market value of the shares of AAMC common stock received.  This amount will be treated as a dividend to the extent of Altisource’s current and accumulated earnings and profits, calculated pursuant to U.S. federal tax law.  To the extent this amount is in excess of the recipient’s ratable portion of Altisource’s current and accumulated earnings and profits, it will be treated as a return of capital (to the extent of the recipient’s tax basis in such Altisource shares) and then as a capital gain.

State, Local and Other Tax Considerations

We and our shareholders may be subject to state, local or foreign taxation in various jurisdictions, including those in which we or they transact business, own property or reside. The state, local or foreign tax treatment of us and our shareholders may not conform to the U.S. federal income tax treatment discussed above. Any foreign taxes incurred by us would not pass through to shareholders as a credit against their U.S. federal income tax liability. Prospective shareholders should consult their tax advisors regarding the application and effect of state, local and foreign income and other tax laws on an investment in our common stock.

Certain U.S. Federal Withholding Tax Consequences of the Separation

The Distribution of the common stock of AAMC by Altisource to its shareholders will be made in a manner such that no U.S. federal withholding tax will be due.

Certain Luxembourg Tax Consequences of the Separation

The following is a summary of the material Luxembourg income tax consequences of the Separation. This summary is based on the laws of the Grand-Duchy of Luxembourg, including the Income Tax Act of December 4, 1967, as amended, and the Municipal Business Tax Act of December 1, 1936, as amended, to which we jointly refer as the “Luxembourg tax law,” existing and proposed regulations promulgated thereunder, and published judicial decisions and administrative pronouncements, each as in effect on the date of this information statement or with a known future effective date.

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This discussion does not generally address any aspects of Luxembourg taxation other than income tax, corporate income tax, municipal business tax and withholding tax. This discussion is not a complete analysis or listing of all of the possible tax consequences of the Distribution and does not address all tax considerations that may be relevant to you. Special rules that are not discussed in the general descriptions below may also apply to you.

For purposes of this discussion, a “Luxembourg shareholder” is any beneficial owner of Altisource shares that for Luxembourg income tax purposes is:

·                   an individual resident of Luxembourg under article 2 of the Luxembourg Income Tax Act, as amended, or

·                   a corporation or other entity taxable as a corporation that is organized under the laws of Luxembourg under article 159 of the Luxembourg Income Tax Act, as amended.

A “non-Luxembourg shareholder” is any beneficial owner of Altisource common stock that is not a Luxembourg shareholder. For purposes of this summary, “holder” means either a Luxembourg shareholder or a non-Luxembourg shareholder or both, as the context may require.

A non-Luxembourg shareholder will not be subject to Luxembourg income taxes on the Distribution received from Altisource unless the shares of common stock are attributable to a permanent establishment or a fixed place of business maintained in Luxembourg by such non-Luxembourg shareholder.

A Luxembourg shareholder, who is a resident individual, will be subject to Luxembourg income taxes on dividend income and similar distributions in respect of shares in Altisource. Luxembourg income tax will be levied on 50% of the gross amount of the Distribution, under certain conditions, at progressive rates.

A Luxembourg shareholder that is a resident corporation may benefit from the Luxembourg participation exemption with respect to the receipt of the Distribution if certain conditions are met. If the conditions with respect to the Luxembourg participation exemption are not met, the aforementioned 50% tax exemption may also apply to the receipt of the Distribution by a Luxembourg resident corporation.

The Distribution of the common stock of AAMC by Altisource to its shareholders will be made in a manner that no Luxembourg withholding tax will be due.

As Altisource is a Luxembourg société anonyme, Altisource will be subject to tax by the Luxembourg taxing authority to the extent the value of the AAMC common stock exceeds the book value of AAMC.  The excess will be included in Altisource’s tax base and would be subject to 28.8% Luxembourg corporate income and municipal business tax. Because AAMC is a development stage company, it is not expected that the value of the shares of AAMC common stock received by Altisource shareholders will be significantly higher than their book value. Therefore, any Luxembourg income tax liability arising at the level of Altisource as a result of the Separation is not expected to be material.

This summary is based on the laws and regulations in effect in the Grand-Duchy of Luxembourg on the date hereof, all of which are subject to change, possibly with retroactive effect.

Taxation of AAMC Under the United States Virgin Islands and U.S. Tax Laws Subsequent to the Separation

The following is a summary of the tax laws of the United States Virgin Islands as they apply to AAMC (which is a corporation taxable under United States Virgin Islands laws) and shareholders of AAMC. The following is intended as an overview of the principal United States Virgin Islands tax consequences of the holding and the disposal of AAMC common stock and should be treated with appropriate caution. This summary does not purport to be a complete analysis of all material tax considerations that may be relevant to a shareholder or prospective shareholder of AAMC common stock. This summary also does not take into account the specific circumstances of particular shareholders (and in particular shareholders who may reside in the United States Virgin Islands) and is not intended as a substitute for professional tax advice that takes into account the particular circumstances relevant to a specific shareholder.

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This summary is based on the laws and regulations in effect in the United States Virgin Islands on the date hereof, all of which are subject to change, possibly with retroactive effect.

Corporate Income Tax

The U.S. Internal Revenue Code of 1986 applies in the United States Virgin Islands as the United States Virgin Islands tax code through use of a substitution scheme known as the “mirror” system.  Pursuant to the mirror system, the words “United States Virgin Islands” are substituted for the words “United States” wherever they appear in the Code.  Income taxes imposed under this system are payable to the United States Virgin Islands Bureau of Internal Revenue rather than to the IRS.  Under the Code as applicable in the United States Virgin Islands, AAMC will be taxable in the United States Virgin Islands on its worldwide income.  As stated previously, we received approval of our application for EDC Benefits from the Governor of the United States Virgin Islands on August 10, 2012.  As a result, our eligible income will be subject to income tax at an effective rate of 3.85%, and we will be exempt from (i) the United States Virgin Islands gross receipts tax which would otherwise be imposed at the rate of 5%, (ii) taxes on AAMC’s real property and (iii) certain territorial excise taxes.

United States Virgin Islands Income Tax on Dividends and Similar Distributions

Non-United States Virgin Islands Resident individual U.S. shareholders will not be subject to United States Virgin Islands withholding or income tax on dividends and/or similar distributions.  Non-Resident United States Virgin Islands corporate U.S. shareholders will not be subject to United States Virgin Islands withholding pursuant to Treasury Regulation § 1.881-5(g) or income tax on dividends and/or similar distributions.  United States Virgin Islands residents should consult their tax advisors on the tax treatment of ownership of our shares.

United States Virgin Islands Capital Gains Tax Upon Disposal of Shares

Non-United States Virgin Islands Resident individuals and corporations that are U.S. shareholders generally will not be subject to United States Virgin Islands capital gains tax upon disposal of the shares of AAMC common stock.  United States Virgin Islands residents should consult their tax advisors on the tax treatment of ownership of our shares.

Stamp Duties in Relation to the Transfer of Shares

Although the United States Virgin Islands does impose a stamp tax on certain transfers, the stamp tax is not applied on the transfer of the shares of AAMC common stock.

United States Virgin Islands Withholding Tax on Distributions

U.S. shareholders will not be subject to United States Virgin Islands withholding tax on distributions from AAMC.  Corporate U.S. shareholders are exempt from withholding pursuant to Treasury Regulation § 1.881-5(g)(2) as applicable in the United States Virgin Islands.  U.S. shareholders who are U.S. citizens (or green card holders) are also not subject to United States Virgin Islands withholding tax because they are not foreign persons for purposes of the Code, as applicable in the United States Virgin Islands.  Finally, all other U.S. shareholders will not be subject to United States Virgin Islands withholding tax so long as the shareholders’ beneficial owners are U.S. citizens.

Certain Ongoing U.S. Federal Income Tax Matters Subsequent to the Separation

In general, U.S. federal income tax applies to a United States Virgin Islands corporation’s net taxable income that is effectively connected with the conduct of a U.S. trade or business.  In addition, the U.S. branch profits tax will apply to a foreign corporation’s earnings and profits from such a business, with some adjustments, deemed repatriated out of the U.S.  The U.S. may tax the business profits earned by a United States Virgin Islands corporation if those are attributable to business activities conducted in the U.S.

There are no definitive standards provided by the Code for Treasury Regulations or court decisions as to those activities that constitute business activities conducted in the U.S.  As the determination is essentially factual in nature, the IRS may contend successfully that AAMC conducts business in the U.S.  Any such business activities

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will be subject to the federal income taxation.  Taxes paid to the U.S. should be creditable against AAMC’s United States Virgin Islands income tax liability.

Regulatory Approval

Apart from the registration under U.S. federal securities laws of the AAMC common stock that will be issued in the Separation, we do not believe that any other material governmental or regulatory filings or approvals will be necessary to consummate the Separation.

No Appraisal Rights

Under Luxembourg Law, Altisource shareholders will not have appraisal rights in connection with the Separation.

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RELATIONSHIP BETWEEN ALTISOURCE AND US FOLLOWING THE SEPARATION

For purposes of governing certain of the ongoing relationships between Altisource and us after the Separation, and to provide for an orderly transition to the status of two independent companies, we have entered or will enter into the agreements with Altisource described in this section. The forms of agreements summarized in this section are, or will be, included as exhibits to the registration statement on Form 10 that we have filed with the SEC, and the following summaries are qualified in their entirety by reference to the agreements, as filed. See “Where You Can Find More Information” on page 72.

Separation Agreement

On the Separation Date, we will enter into a Separation Agreement with Altisource, which will provide for, among other things, the principal corporate transactions required to effect the Separation and certain other agreements related to the continuing relationship between Altisource and us after the Separation.

We are a development stage company recently created by Altisource.  The Separation Agreement with Altisource identifies assets and liabilities that will be transferred to us in connection with the Separation, provided that certain conditions precedent to the transfer are met, such as the effectiveness of our registration statement on Form 10 and the receipt of necessary governmental approvals.  The assets that will be transferred to us are comprised primarily of cash, property and equipment.  There are no other significant liabilities that will be transferred to us at Separation.

Under the Separation Agreement, and effective as of the Separation Date, we will assume, and will agree to indemnify Altisource against, all liabilities, litigation and claims, including related insurance costs, arising out of our business, and Altisource will retain, and will agree to indemnify us against, all liabilities, litigation and claims, including related insurance costs arising out of Altisource’s businesses. The foregoing obligations will not entitle an indemnified party to recovery to the extent any such liability is covered by proceeds received by such party from any third party insurance policy.

The Separation Agreement will also provide that both parties will be granted access to certain records and information in the possession of the other and will require the retention by each of Altisource and us, for a period of six years following the Separation Date, of all such information in its possession.

Support Services Agreement

On the Separation Date, we will enter into a Support Services Agreement with Altisource. Under the Support Services Agreement, Altisource may provide services to us in such areas as human resources, vendor management operations, corporate services, risk management and six sigma, quality assurance, consumer psychology, treasury, finance and accounting, legal, tax, compliance and other support services where we may need assistance and support following the Separation (collectively, the “Support Services”). The Support Services Agreement will provide generally that Altisource will undertake to provide the Support Services in a manner generally consistent with the manner and level of care with which such service, if any, was performed or provided prior to the Separation. The Support Services Agreement will extend for two years after the Separation but may be terminated earlier under certain circumstances including a default.  “Fully-allocated cost” means, with respect to the provision of a “Service”, the all-in cost of providing such Service, including direct charges and allocable amounts reflecting compensation and benefits, technology expenses, occupancy and equipment expense and third-party payments (but not taxes incurred in connection therewith).  Altisource will be required to submit statements of account on a monthly basis with respect to all amounts payable by us, setting out the Support Services provided and the amount billed as a result of providing such Support Services. We believe that the terms and conditions of the Support Services Agreement are no less favorable to us than those available from unrelated parties for a comparable arrangement.

The total fees incurred by us under this agreement will be dependent upon our business activity and the level of services required in connection therewith.  While market conditions will drive our business activity, we do not anticipate incurring fees under this agreement in excess of $200,000 in the first year of our operations.

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Tax Matters Agreement

On the Separation Date, we will enter into a Tax Matters Agreement with Altisource which sets out each party’s rights and obligations with respect to deficiencies and refunds, if any, of Luxembourg, U.S. federal, state, local or other foreign taxes for periods before and after the Separation and related matters such as the filing of tax returns and the conduct of IRS and other audits. In general, under this agreement, we will be responsible for taxes attributable to our business incurred after the Separation, and Altisource will be responsible for taxes attributable to our business incurred prior to the Separation.

Trademark License Agreement

On the Separation Date, we will enter into a Trademark License Agreement with Altisource.  Under this agreement, Altisource will grant us a non-exclusive, non-transferable, non-sublicensable, royalty free license to use the name “Altisource.”  The agreement has no specified term and may be terminated by either party upon 30 days written notice, with or without cause.  In the event that this agreement is terminated, all rights and licenses granted thereunder, including, but not limited to, the right to use “Altisource” in our name will terminate.

Technology Products and Services Agreemen t

On the Separation Date, we will enter into a Technology Products and Services Agreement with Altisource, pursuant to which Altisource will provide us with certain technology products services in accordance with the performance standards identified in the agreement or respective statement of work.

On the Separation Date, we will enter into a Technology Products and Services Agreement with Altisource.  Under this agreement, Altisource will provide us with the use of certain technology systems and services. The Technology Products and Services Agreement will provide generally that Altisource will undertake to provide the technology systems and services in a manner generally consistent with the manner and level of care with which such technology systems and services, if any, were performed or provided prior to the Separation. The Technology Products and Services Agreement will extend for 15 years after the Separation but may be terminated earlier under certain circumstances including a default. We expect that all services provided pursuant to the Technology Products and Services Agreement will be based on the fully-allocated cost of providing the service. We believe that the terms and conditions of the Technology Products and Services Agreement are no less favorable to us than those available from unrelated parties for a comparable arrangement.

The total fees incurred by us under this agreement will be dependent upon our business activity and the level of services required in connection therewith.  While market conditions will drive our business activity, we do not anticipate incurring fees under this agreement in excess of $50,000 in the first year of our operations.

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DIVIDEND POLICY

We have no current plans to pay dividends.  All decisions regarding the declaration and payment of dividends will be at the discretion of our Board of Directors and will be evaluated from time to time in light of our financial condition, earnings, growth prospects, funding requirements, financing arrangements, applicable law and other factors our Board of Directors deems relevant.

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CAPITALIZATION

The following table describes our cash and cash equivalents and capitalization as of September 30, 2012, on an actual, pro forma and as-adjusted basis to give effect to the Separation, the Residential Asset Management Agreement and our contemplated investment in the voting common stock of NewSource.  The information presented below should be read in conjunction with “Management’s Discussion and Analysis of Financial Condition and Results of Operations,” “Business” and our “Financial Statements” and the related notes included elsewhere in this information statement.