Investors Focus On Loan Level Risk Analytics

The national goal to revitalize the secondary market is generating highly automated solutions designed to screen risk and loan-level performance from loan closing and all the way through securitization.

"There is no question that lenders bringing better loans to the secondary market - loans that the secondary market can count on to perform - is critical to the recovery of the mortgage banking industry," says CEO of Motivity Solutions, Tyler Sherman, whose company recently entered into a strategic partnership with Capital Markets Cooperative, Ponte Vedra Beach, FL, a firm that provides secondary market expertise designed to improve secondary market execution.

The partnership's goal is to help increase CMC member profitability through a higher level of loan level data insight.

It is the type of business intelligence investors need before they enter the secondary market.

A while paper put together by the Association of Mortgage Investors for Congress and regulators about ways to revitalize private sector demand for mortgage asset-backed securities listed providing loan-level information investors, rating agencies and regulators can use to evaluate collateral both at pool underwriting and over the life of a securitization as their number one request.

The association of institutional investors and asset managers' set of "guiding principles" based on lessons learned over the last three years also includes requiring an after securitization "cooling off" period that gives investors time to review and analyze loan-level information.

Movation, the business management platform of Motivity Solutions allows users to bring together data from existing systems and than use system business intelligence and analytics to improve their overall business processing efficiency.

"Movation helps accomplish this by creating a unified data source and by applying powerful analytics through robust business intelligence," Sherman said. "This provides our clients and CMC members with higher quality, real-time data that is in sync between their existing internal and third party systems, which ultimately improves their execution decisions."

Chief strategy officer for Motivity Solutions Gabe Minton, a pioneer on increasing loan data quality since 2001 while leading MISMO for the Mortgage Bankers Association, finds loan quality is a great example of how technology is helping lenders.

"Through Movation, you can track what information on a loan has been changed, who or what changed it, when it was changed, and who ultimately approved the change."

The tool rates data, "which is only part of the vital information available to lenders and secondary executives, so the loan can be objectively analyzed based on its core data set and manufacture history," he said.

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