Predicting Likelihood of Loan Default and Rendering Suitable Loan Workouts
WillCap goes beyond traditional loss indicators, such as debt-to-income and combined loan-to-value ratios, to uncover the causes of mortgage default. Using powerful analytic models, WillCap evaluates borrower debt-servicing behavior to predict the likelihood of default and formulate loan workouts that are most likely to succeed.
When It Comes To Mortgage Default Solutions - One Size Does Not Fit All
Most government programs and internal bank processes focus on a “one size fits all” strategy. For example, under the Making Home Affordable (MHA) program, distressed assets that pass eligibility criteria move through a standard loan modification process to determine a borrower's qualifications for assistance.
WillCap takes a different approach by recognizing that borrowers have different desires and motivations given property and local real estate market performance. And different approaches to borrowing mean different approaches to resolving real estate and mortgage issues. As a result, WillCap recommends solutions that align with your borrowers’ motivations and desires to reduce risk and prevent additional loss.
Estimate and Predict Future Borrower Behavior
A cornerstone of WillCap’s success is its ability to segment the borrower population and respective properties into meaningful groups that have similar debt-servicing behaviors and attributes. Metrics such as willingness to pay, capacity to pay and distress are used to understand and predict future borrower behavior. Through rich analysis of consumer credit data and the effects of property characteristics on borrowers’ decisions, WillCap is able to effectively estimate and predict future behavior.
- Willingness to pay: How much resolve, effort and skill borrowers apply to servicing debts.
- Capacity to pay: How much cash borrowers put into servicing debt. Because of competing demands for borrower cash, capacity is not the same as income or debt-to-income ratio.
- Distress: Represents the severe delinquency confronting borrowers and includes credit relationships beyond mortgages.
By taking a holistic approach, WillCap provides a repeatable, consistent methodology for identifying, managing, and resolving distressed assets.
