A New Approach to Mortgage-Industry Consulting
CoreLogic Advisory Services offer task-focused consulting solutions that target current challenges and opportunities in the mortgage marketplace.
Our teams bring true end-to-end expertise to your project. They develop custom insights into your needs, work closely with you to identify the key issues, help formulate ongoing strategies and operations, and implement necessary workflow solutions.
Our tools feature the unmatched authority of CoreLogic data and analytics, which can target any challenge you face with amazing precision.
The CoreLogic Difference
Our consultants have background to quickly identify your specific needs and tailor a solution rather than follow a generic roadmap.
We assist you end to end, using industry-leading CoreLogic data and tools to address your specific challenges, no matter how unprecedented.
Our engagements target actual solutions earlier in the process, leaving time to review our results, assess their implications and implement workflow enhancements.
Advisory Services Resources
Home Equity Lending Landscape
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Life of Trade Workflow
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Our Consulting Services
HOA Super Lien Check
Regulation X Compliance
Our approach to Regulation X and other compliance consulting engagements combines:
- Lender/servicing industry-specific regulatory expertise.
- Industry-leading mortgage, property, and ownership data.
- Trustworthy mortgage portfolio analysis and performance modeling.
Our regulatory practice offers flexible, client-customized, cost-effective consulting project designs, fully responsive consulting project relationships, a variety of focused reports at a wide range of price points, and consistently fast project turn-times.
Mortgage Servicing Rights Valuation
Buying and selling mortgage servicing rights (MSRs) is a multibillion-dollar industry, with MSRs heavily traded among mortgage servicers. But MSR profit margins may be extremely thin.
Incorrect valuation of a single mortgage in a pool can sink all the profits from its MSR deal. Although your company may have an existing valuation process in place, without CoreLogic data and analytics you may not be able to assess the accuracy of an MSR valuation correctly.
Mortgage Servicing Rights Valuation puts the full force of CoreLogic data and analytics at your fingertips. Our team works with you to analyze, model and evaluate all the mortgages in the pool covered by your proposed MSR agreement—then produces a Portfolio Analysis of Mortgage Servicing Rights Report that includes:
The result of multiple simulations, data and graphs showing projected collateral CPR (Prepayments), CDR (Defaults), Severities (Loss-Given-Defaults), Cumulative Losses, Cumulative Loss Percentages, and Cumulative 60+ Days Delinquent Percentages.
Home Prices and Interest Rates
Sample model inputs for future home prices (CBSA & state levels) and interest rates showing likely future market influences on a collateral property’s valuation.
Model Transitions & Value Distributions
Ten-year graph showing likely future transitions in collateral loan status (Current, 30 Days DQ, 60 DQ, 90+ DQ, Foreclosure, Short Sale, REO).
Mortgage Servicing Rights Analysis
Comprehensive analysis of MSR’s valuation includes:
- Projections of future servicing fee income, ancillary income (late fees, etc.), loan-level servicing cost, PITI advances, advance reimbursement, float paid on advances.
- Projections of future servicing net cashflow, cumulative servicing net cashflow, cashflow net present value (NPV) at multiple discount rates, and net present value divided by unpaid balance (UPB) at multiple discount rates.
- Servicing cashflow net present value divided by portfolio UPB, servicing multiples.
These data can give you a precise sense of the accuracy of an MSR valuation prior to making a bid. With MSR margins as thin as they are, overpaying may be worse than losing a bid.
ALLL Regulations Compliance
Banks and other regulated institutions holding residential mortgage loans secured by junior liens are subject to new Allowance for Loan & Lease Losses (ALLL) regulations covering the calculation of expected credit losses. To comply with the new rules, affected institutions must understand not only existing junior liens on properties but any other liens associated with them.
Our Advisory Services team analyzes the lien status of the properties in your portfolio, designs a strategy to guide your ALLL compliance, and deploys CoreLogic data and analytics to evaluate your junior-lien credit exposure. We then deliver a comprehensive report that:
- Examines senior liens on the same properties as junior liens – even when you no longer own/service senior lien (includes senior lien amount verification, credit performance, etc.)
- Determines how collectibility may be influenced by CLTV and current property value.
- Validates the status and property type of each junior and senior lien.
The Advisory team can continue to deliver periodic refreshes and updates to the original report quarterly or semiannually.
In addition to giving you a template for ongoing ALLL compliance, our results improve your accuracy in calculating the financial impact of compliance and setting appropriate loss reserves.
REO-to-Rental Portfolio Analytics
One-third of the U.S. population now rents – over 89 million renters in all. With bottomed-out home prices, discounted REO sales, increasing SFR rents, and a current REO inventory of 400,000 to 500,000 properties (plus another 1.6 million in the shadows), investors are increasingly tempted by portfolios of single-family residential rental properties.
Since this new market is awash in variables, however, valuation is a significant challenge. Our REO-to-Rental Portfolio Analytics give you the reliable information you need to assess REO rental opportunities and judge your likely success if you decide to take part. We do this by combining data and analytics from many CoreLogic sources into a single comprehensive view of potential current and future REO-to-rental portfolio returns.
- Evaluate properties by coupling optimized GeoAVM® valuations with CoreLogic HPI® and HPI Forecasts data to determine current prices and where they are projected to be headed.
- Project potential rental cash flows by matching targeted REO properties to comparable rental properties in the neighborhood (or zip code or state).
- Assess the influence of context on an investment using the zip code-level influencer data (total REO count, 90+ delinquencies, negative-equity percentages) of MarketTrends.
Our Advisory Services team delivers an evaluation of the rental potential of REO properties in the provided portfolio that includes:
- Property valuation analytics.
- Two-year zip code-level home-price forecasts.
- Local market statistics (NODs, 90+ delinquencies, REO counts, negative equities).
- Local market rental statistics (average rents, vacancy rates, market saturation).
- Mortgage performance trends per roll-rate analysis.
- Property rental analytics with cash flow estimates.
In the future, the Advisory team can update this data monthly, quarterly, or annually.
Basel III Portfolio Analysis
The Basel III guidelines include a heavy focus on residential mortgages and related balance sheet assets, emphasizing capital reserve requirements for specific loan types and mortgage servicing rights valuations.
Our Basel III Portfolio Analysis services provide turnkey analytics to assess your portfolio’s current LTVs, its overall risk and its current MSR valuation. Our MSR model lets you include your own interest rate, market forecast and delinquency assumptions.
Our Advisory Services team delivers results in four categories that together support a comprehensive strategy for successful adherence to the new guidelines:
Portfolio Valuation and Assessment Data
- Current property valuations as determined by CoreLogic AVMs.
- Current property LTVs for assignment to Category 1 and Category 2 residential mortgage risk categories when they are finalized – and suggested capital reserves compliant with Basel III capital reserve requirements.
Portfolio Risk Report
This report summarizes bank portfolio risk by geography, origination date, and additional criteria that support comprehensive risk analysis of the portfolio.
Mortgage Servicing Rights (MSR) Analysis
- Projections of future servicing fee income, ancillary income (late fees, etc.), loan-level servicing costs, PITI advances, advance reimbursements, float paid on advances.
- Projections of future servicing net cashflow, cumulative servicing net cashflow, cashflow net present value (NPV) at multiple discount rates, and NPV divided by unpaid balance (UPB) at multiple discount rates.
- Projected servicing cashflow NPV divided by portfolio UPB and servicing multiples.
Custom Compliance Strategy
This strategy is developed by industry-expert advisory consultants with specific experience valuing mortgages and related assets – including nonstandard mortgage vehicles, mortgage servicing rights (MSRs) and portfolio risk assessment.
Most banks have established internal methodologies for assessing mortgage risk and valuing MSRs, but bank regulators increasingly request verification from a third-party perspective. The potential costs of a negative regulator compliance assessment can be much greater than investing in a comprehensive “outside” view of your mortgage-related portfolio.