A new service from CoreLogic incorporates servicer stop advance data into its private-label residential mortgage-backed securities dataset.
The data are submitted by RMBS trustees at the loan level, which gives investors the ability to more accurately predict future cash flows and defaults than aggregate RMBS data.
MBS pooling and servicing agreements require mortgage servicers to advance funds to cover certain costs like principal, interest and escrow to maintain an MBS cash flow when borrowers becomes delinquent on their mortgages. The PSAs also dictate when a servicer can stop making those advances, generally at a point when the servicer can no longer expect to recover the funds. It’s when that stop advance is triggered that MBS investors begin to incur losses.
The new data include information about when the servicer stopped advancing payments, as well as what types of payments were stopped.
CoreLogic said the new data it’s providing go back as far as 2009 and enables risk modelers to better understand the future performance of investments. The stop advance data is being offered in conjunction with existing nonagency RMBS data and supplemental loan modification information.
“The challenge has always been about finding adequate information at the loan level. With these latest enhancements, we provide another level of granularity and transparency to assist our clients with their decision-making,” said Ben Graboske, senior vice president of the data and analytics segment of CoreLogic’s real estate and financial services division, in a statement.
