Challenges in Pricing Whole Loan Transactions

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Challenges in Pricing Whole Loan Transactions

• A Granular Approach to Market Solutions
• Brendan J. Keane
• Advisory and Valuation Services
• First American CoreLogic

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Challenges in Pricing Whole Loan Transactions

• REGARDLESS OF VANTAGE POINT, THERE IS TREMENDOUS
  NEED FOR ORGANIC GRANULAR ANALYSIS
• BACK TO BASICS?
• ITS MORE THAN THAT, IT IS ABOUT BEING SMART AND
  DILIGENT
• LOAN
• BORROWER
• PROPERTY

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Risk Management Solutions Built on Discipline
Industrys Most Robust Databases
True LTV
Loan Safe
True LTV
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RELEVANCE AMONG ALL MARKET PARTICIPANTS

• BANKS AND ORIGINATORS
• VALUATION TOWARD RETENTION OR EXIT STRATEGY
• SERVICING OPERATIONS
• ASSET MANAGEMENT DECISION TREE
• INVESTORS AND FUND/PROGRAM MANAGERS
• PERFORMANCE METRICS
• SAME AS IT EVER WAS, SAME AS IT EVER WAS
• THE NEW, OLD CLIENT THE VOICE AND WEIGHT OF
  GOVERNMENT

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Stratification ? Shedding Credit Risk ? Loss Mit

• Today, it is all about the CREDIT RISK and how
  best to arb it
• Stratification and proactive portfolio management
  will be keys to success and in some cases
  survival.

Proactively and Systematically manage your
residual credit exposures
Stratify and weigh options for ALL of your credit
risks
Refinance as many as you can modify where you
can and eliminate highest risk borrowers
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WHO NEEDS A HAND? NOT ENOUGH FINGERS TO COUNT
ALL OF THE PRODUCT NEEDS

• DATA RELEVANCE AMONG ALL MARKET PARTICIPANTS
• BANKS AND ORIGINATORS VALUATION TOWARD RETENTION
  OR EXIT STRATEGY
• DUE DILIGENCE
• BORROWER CREDIT SUITE
• LOAN PRICING ANALYTICS AND RISK MODELLING
• HOME PRICING TRENDS
• TRUE LTV-IMPACT OF JUNIOR LIENS
• FRAUD SCORING
• AVMS
• SERVICING OPERATIONS ASSET MANAGEMENT DECISION
  TREE
• MODIFICATION PROGRAM COMPLIANCE
• DUE DILIIGENCE
• NPVS, TIME LINES
• BORROWER BASED METRICS
• PROPERTY
• NEIGHBORHOOD
• INVESTORS PERFORMANCE METRICS (CAPITAL RAISING
  AND RETURN)

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Negative EquityNumber of Mortgages Where
Mortgage Debt is Higher than the Home Value
Source First American CoreLogic