More Effective Solution Relies on Predictive Modeling Tools
Ft. Lauderdale, FL (March 29, 2011) – A bruising, two-year housing downturn has dramatically changed the way investors look at mortgage-backed assets and how they will view them from here on. Speaking at the Mortgage Bankers Association’s National Fraud Issues Conference 20011 today, Digital Risk President Alex Santos described the new investor landscape, explaining that traditionally “risk models reflected the time when they were built.”
As a result, the market chaos that began in 2008 had not been foreseen and investors were ill-served by risk models blind-sided by the meltdown. “What wasn’t done was a scenario-based forecasting with analysis of the problems of default and loss severity to come.”
The current solution, according to Santos, whose firm offers such service in a platform called Master Risk Management™, relies on predictive modeling tools to analyze loan level default, severity, prepayment and fraud with pool and structured aggregation.
“The MRM Solution synergistically combines best-of-breed components combined with custom built solutions for clients,” he said, delineating the unique investor-focused, three-step approach:
- Recommend a remediation strategy by deal, tranche or loan;
- Collaborate with the client and its advisors on remediation strategies;
- Enforce the MBS certificate holders’ rights.
