Rebuilding the non-agency securitization marketplace has been so difficult because its collapse was triggered by a fundamental 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 go up—forever—was coming down fast.
From that moment on, the old rules no longer applied.
Restoring investor trust requires new rules—rules either imposed by government or defined by the industry itself. Although figuring out new rules of securitization gets most of the attention, the whole loan market that has largely replaced it is itself at risk of being undermined by opaque and confusing risk-assessment rules not unlike those that helped bring down the securities market—jeopardizing investor trust in the whole loan market as well.
New Diligence for whole loans rewrites the current risk-assessment rules by replacing cloudy, ambiguous risk estimates with detailed, dynamic, verifiable pool- and loan-level evaluations.
New Diligence for whole loans augments your loan files with dynamic public record and proprietary data, current property valuations, and stochastic predictive modeling. These additional data points help identify and gauge the extent of loan-level risks—credit, collateral, compliance, buyback—to the potential investment returns for whole loan market participants:
New Diligence for whole loans neutralizes two ubiquitous but critical factors undermining portfolio risk-evaluation accuracy in the current market: granular risk visibility and changing-rules risk.
New Diligence whole loan experts utilize multi-layered analytics and modeling tools to assess multiple portfolio risks simultaneously—property attributes, borrower behaviors, document deficiencies, and others—drawing on dynamic data from industry-leading CoreLogic property, mortgage, borrower, tax, real estate, and market-trend databases.
Using categories and workflows customized to your specific products and transactions, they consolidate your portfolio’s credit, compliance, collateral, and fraud risks at the granular level—then produce clear explanatory results complete with decision-making guidance.
With the rules governing the whole loan marketplace—and individual trades—in a state of flux, a trade’s contractual complexities often have unseen but significant consequences.
When such complexities can affect current value or future performance, our New Diligence experts control for the uncertainty by modeling multivariate potential effects on a given evaluation or trade. Weighted for real-world likelihood—and automated for urgency—these projections can provide you with significant leverage in the marketplace.
Many whole loan traders now specialize in distressed properties, non-performing loans, and residential REOs. Success in this market requires a degree of granular loan-level portfolio insight that only New Diligence can reliably provide. To operate profitably—and competitively—traders must understand the underlying life-of-loan risks for each loan in a transaction.
New Diligence was developed to deal with consequences of the housing collapse and financial meltdown. Its capabilities exploit CoreLogic data and analytics to deal with market distress—and its distressed components—by making it easy to get and act on the best-available information.
Having such information at your fingertips can give you an overwhelming advantage.
Give us a call at (415) 536-3500 and find out what Whole Loan Trading can do for you today. Or fill out and submit the form below and we’ll get back to you.
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