Conduits / Issuers generally aggregate loans for securitization by buying loans from “correspondents” and effectively re-selling the loans as mortgage backed securities (a process known as securitization). Despite the appearance of a simple buy and sale transaction, Conduits / Issuers are subject to a variety of risks, most notably the risk of loan level repurchases or bond level repurchases. Digital Risk has developed a comprehensive solution for conduits and issuers. First, operational reviews are conducted to detect systemic counterparty risk. Next, Analytical Tools – RiskIQ™, Severity, IE and Expert Services – Forensic Analysis, Collateral Advisory Services, Regulatory Compliance Review, Fraud Detection and Prevention are utilized at the loan level to detect and prevent problematic loans out of the portfolio. Then, any inbound repurchase requests are defended. Finally, if inbound repurchase request are not able to be defended, a Loss Management solution is activated to recover from the correspondent who sold the conduit the loan in the first place.
CONDUITS and ISSUERS
