The Right Team With the Right Tools
CoreLogic Advisory Services teams offer task-focused consulting solutions that target current challenges in the recovering mortgage-finance marketplace – quickly, intelligently, effectively. Our people combine securities-trading-desk levels of expertise with on-the-ground experience in mortgage origination and servicing. The tools we use feature the industry-leading authority of CoreLogic data and analytics – which can target any challenge you face with amazing precision.
We bring true end-to-end expertise to your project – developing custom insights into the challenges you face, working closely with you to identify key issues, helping formulate ongoing strategies and operations, and implementing any necessary workflow solutions.
Whole Loan Trading
Our securities experts augment your whole loan files with dynamic public record and proprietary data, current property valuations, and fact-based stochastic predictive modeling. These additional data points help identify and gauge the extent of loan-level risks to whole loan investments.
We replace ambiguous risk estimates with detailed, dynamic, verifiable pool- and loan-level evaluations. Augmenting your whole loan files with public record and proprietary data, current property valuations, and stochastic predictive modeling results, we pinpoint the impact of loan-level risks—credit, collateral, compliance, buyback—on your planned investment returns.
Using categories and processes customized to support your products and transactions, our Whole Loan Trading experts aggregate your portfolio’s credit, compliance, collateral, and fraud risks at the granular level, reporting detailed results and decision-making guidance.
Distressed Whole Loans
Many whole loan investors now specialize in distressed properties, non-performing loans, and residential REOs. Success here requires the same kind of granular portfolio insights our experts reliably produce—helping you understand the added underlying distressed life-of-loan risks.
Taking the Mystery Out of SFR Rental Investing
Our Advisory Services experts can help you explore SFR-to-Rental investment opportunities by analyzing SFR asset portfolios to determine current and future property values, potential average rents, local capitalization rates and market trends, and likely future cash flows projections. Our assessments focus on three broad categories:
- Portfolio SFR Valuations/Rents
We upgrade and update the portfolio’s SFR property and tax data, then evaluate AVM and BPO assessments (with BPO Check assessing BPO accuracy) to determine the portfolio’s overall property valuation. We estimate each property’s most likely monthly rent using our new Rent Valuation Model—which draws upon multiple relevant data sources—then aggregate the results to determine the portfolio’s likely monthly return.
- SFR-to-Rental Market Strategies
Especially valuable for new market entrants (but often equally so for veteran investors), our Advisory Services experts analyze the current and future marketplace to determine the most potentially profitable and low-risk SFR-to-Rental investment strategy. Our efforts may include cap rate analyses, rental cash flow projections, and trend analyses of current and likely future market pricing, vacancies, housing stocks, delinquencies, and negative equity percentages.
- SFR Portfolio Operational Solutions
Our Advisory Services teams help you design and implement a portfolio management plan to ensure the maximum potential ROI performance over time—SFR tenant record-based solutions that can significantly reduce the risk of residents not paying or otherwise honoring their leases. We draw upon extensive tenant rental databases, including landlord-tenant records, tenant legal records, tenant payment performance records, criminal records, and wanted fugitive and terrorist lists.
Capital Reserve Stress Tests
Information / Guidance for Preparation and Response
Bank holding companies’ capital-reserve sufficiencies must now be reviewed annually, a high-risk exercise with potentially expensive consequences. CoreLogic Advisory Services has developed rigorous pre-/post-test solutions to help you deal with these challenges, regardless of the governing entity—Federal Reserve, OCC, NCUA, etc.
Our solutions address the RMBS, ABS, MBS, residential mortgage, and home equity components of the stress tests. We can employ both our own and third-party models—or supply the data needed for you to test and/or create your own model.
The end products of our efforts will vary depending on your needs, but results of typical stress pre-testing will include:
- The rankings of projected delinquencies and defaults for different vintages
- Comparisons and scorecard of bank-origination vintages to historically “good” vintages
- The vintages with high CLTVs that will react most negatively to adverse scenarios
- Portfolio data and analytics to manage allowances and loan-loss reserves
Once the actual tests are completed, we can help you assess the results and implement compliance with directed improvements to your risk policies and best practices.
Lien Identification and Equity Analysis
Uncovering the True Value of Portfolio Mortgages
Our comprehensive look at the outstanding liens on a portfolio’s collateral identifies all active voluntary mortgage liens and supplies such current lien data as the servicer, status, balance, lien hierarchy, and accuracy-confidence scores.
To maximize accuracy, we draw information from multiple sources:
- Client-contributed data
- Public record data
- Anonymized borrower credit data
- Bankruptcy data
- Foreclosure information
By combining data from the various resources, we can also include:
- Updated equity analyses
- Additional AVM values
- CLTV values
- Potential default activity
- Bankruptcy details
- Foreclosure details
- Tax data (year, status, amount, etc.)
- Involuntary lien data
Getting the Value of MSRs Right
Buying and selling mortgage servicing rights (MSRs) is fraught with risk—MSR profit margins can be thin. Incorrect valuation of a single mortgage can ruin the profits of an entire MSR deal.
Our MSR Valuation services put the full force of CoreLogic data and analytics at your fingertips. Our team works with you to analyze, model, and evaluate all the mortgages covered by the proposed MSR agreement—then produces a report that includes:
- Collateral Projections
Results of multiple simulations, projections of collateral CPR (pre-payments), 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 (at CBSA and state levels) and interest rates, showing likely future market influences on collateral valuations
- Model Transitions and Value Distributions
Graphs 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, loan-level servicing costs, PITI advances, advance reimbursements, float paid on advances, projections of future servicing net cash flows, and much more.
These data can give you a precise sense of the accuracy of the MSR valuation prior to making a commitment. With today’s thin MSR margins, overpaying can be worse than losing the bid.
Understanding Potential Lien Exposures
Banks and other institutions holding residential mortgage loans secured by junior liens are subject to the new Allowance for Loan & Lease Losses (ALLL) regulations covering expected credit losses. To comply, affected institutions must understand not only the existing junior property liens but any other liens associated with them.
Our ALLL Compliance team analyzes the lien status of all properties in your portfolio, evaluates your junior-lien credit exposure, and works with you to design an ALLL compliance strategy. 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 liens (includes senior lien amount verification, credit performance, etc.)
- Determines CLTVs and current property values
- Validates the status and property type of each junior and senior lien
- Continues to deliver periodic refreshes and updates to the original report on a quarterly or semi-annual basis as requested.
In addition to creating a template for your ongoing ALLL compliance, our results improve your accuracy in calculating the financial impact of compliance—helping set appropriate loss reserves.
Basel III Portfolio Analysis
Comprehensive Third-Party Review of Your Exposure
Our Basel III Portfolio Analysis services provide turnkey analytics to assess your portfolio’s current LTVs, its overall risk, and its current MSR valuation. The Basel III team delivers results in the following categories, which together support successful adherence to the new guidelines:
- Portfolio Valuation and Assessment Data
Aggregates current property valuations (estimated by CoreLogic AVMs) and LTVs to determine assignment to Category 1 or Category 2 residential mortgage risk categories—and suggested capital reserves to comply with updated reserve requirements
- Portfolio Risk 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
Includes projections of future servicing fee income—loan-level servicing costs, ancillary income, PITI advances, advance reimbursements, float paid on advances—totaling up the net cash flows and providing a net present value (NPV) at multiple discount rates
- Custom Compliance Strategy
Ongoing Basel III compliance strategy developed for you by industry experts with specific experience valuing mortgages and related assets, including non-standard mortgage vehicles, mortgage servicing rights (MSRs), and portfolio risk assessments
Although you undoubtedly have established internal methodologies for assessing mortgage risk and valuing MSRs, bank regulators increasingly require verification from a third-party perspective. The cost of a negative regulatory compliance assessment can be much greater than investing in a trustworthy “outside” Advisory Services view of your mortgage-related portfolio.