Whole Loans
Rewriting the Rules
Market Rebuild
Rebuilding the non-agency securitization marketplace has proven to be so difficult because its collapse was triggered by a deep-seated failure—a breakdown of trust between buyers and sellers. The market’s faith in highly-rated, poorly-understood financial rockets was suddenly replaced by the frightening realization that what was supposed to keep going up—was coming down fast.
From that moment on, the old rules no longer applied.
Public or Private?
Restoring investor trust requires new rules—rules that can either be imposed by new government regulations or defined and championed by the industry itself. Since “securitizations gone wild” still get most of the ink, whole loan trading is at risk of being undermined by the same opaque and confusing hazards that helped destroy the non-agency RMBS market—jeopardizing the recovery of investor trust from the start.
New Diligence for Whole Loans rewrites the rules by replacing cloudy, ambiguous portfolio risk estimates with detailed, dynamic, verifiable pool- and loan-level risk evaluations.
How It Works
New Diligence for Whole Loans applies rigorous due diligence to your portfolio, augmenting your loan files with dynamic public record and proprietary data, cutting-edge valuations, and stochastic predictive modeling. This quickly uncovers loan-level portfolio risks—credit, collateral, compliance or buyback—that affect your returns, no matter what your perspective:
- Value investor seeking portfolio stability, with no “surprises”
- Seller looking for an accurate pre-bid evaluation
- Broker eliciting buyer interest based on valid portfolio strengths
- Any party to whole loan trades built on confidence and reliability
- Securitization stakeholder—investor, rating agency, trustee, regulator—whose participation hinges on whole loan transparency
New Diligence for Whole Loans focuses on correcting two ubiquitous but critical factors likely to undermine the accuracy of portfolio risk evaluations in the still-evolving market:
- Risk visibility—the lack of granular understanding
- Changing-rules risk—the patchwork policy and contractual responses
Risk Visibility
New Diligence whole loan experts utilize multi-layered analytics and modeling tools to assess multiple risks simultaneously—property attributes, borrower behaviors, document deficiencies, and others—drawing upon high-quality data from industry-leading CoreLogic property, mortgage, borrower, tax, real estate, and market-trend databases.
Using customized terms and workflows fitted to your specific products and transactions, they then consolidate your portfolio’s credit, compliance, collateral, and fraud risks—and produce transparent explanatory results with clear decision-making guidance.
Changing-Rules Risk
With the rules governing the marketplace—and individual trades—in a state of flux, a trade’s contractual complexities may have unseen but significant consequences.
When such complexities can affect current value or future performance, our New Diligence experts control for this uncertainty by modeling the multivariate potential effects on a given evaluation or trade. Weighted for real-world likelihood and automated for urgency, these projections give you a significant competitive advantage in the marketplace.
Trading Distressed Whole Loans
As the volume of underwater mortgages and foreclosures grows, many traders are now specializing in distressed properties, non-performing loans, and residential REOs.
More than any other, this market requires the kind of rigorous due diligence only New Diligence for Whole Loans can reliably provide. To operate successfully in a market like this, traders need to understand loan-level detail in its full array of unique life-of-loan and changing-rules risks.
Overcoming Market Uncertainty
New Diligence for Whole Loans rebuilds confidence in the trading process through our industry-leading data, high-speed analytics, and cost-effective expertise—so you can make quick, smart business decisions that succeed even in a still-uncertain environment.
