Servicing Optimization - Improving Performance in Highly Regulated Times

Servicing OptimizationAUTOMATICALLY DETERMINE HIGH-VALUE SERVICING ACTIONS

UNRIVALED CAPABILITIES – UNMATCHED RESULTS

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Who is Claren• Founded: 2013 by team of veteran IT, Analytics, and Mortgage Industry professionals

• Vision: Provide a state-of-the-art risk management, valuation, and analysis platform to the mortgage industry to improve performance results and transparency

• Operations: Atlanta, GA (with sales and analytics presence in New York and Philadelphia)

• Products & Services: Cloud-based Risk Management platform includes:

MSR Valuation – Provides an intrinsic valuation of purchase mortgage servicing rights (MSR)

Refinance Recapture – Provides an intrinsic valuation of soliciting an MSR portfolio for refinance

Loan Valuation – Provides an intrinsic valuation of residential whole loans

Servicing Optimization – Determines the optimal servicing action on NPLs based on NPV

2WWW.CLARENFINANCIAL.COM - COPYRIGHT 2015

“By far, the most comprehensive valuation and analysis models and tools I’ve ever used.”- Claren Client, since 2014

Product Spotlight: Servicing Optimization• Automatically determines the optimal servicing action based on the highest NPV amount

• Performs over 100 “what-if” scenarios and rank-orders results based on highest NPV and

associated revenue gain (instead of the agency homeowner retention waterfall approach)

• Uses our comprehensive Performance and Cash Flow models to determine the intrinsic

value of each possible servicing action

• Identifies risk exposure - Prepayment, Default, Loss, Foreclosure, REO, and Short Sale

• Easy-to-use yet powerfully flexible user interface and reporting engine

• Allows complete flexibility on import file format, field mappings, list translations, pool

preferences (i.e., discount rate, advancing schedule, etc.), and property, area, and

economic indicators and assumptions


• Loan-level forecast of the probability of being in a given future status (Current, 30dpd, 60dpd, 90+dpd, FC, REO, and more)

• 594 Individual Sets of Coefficients across Multiple Collateral Types

• Based on 43M loan records and 2.6B payment records from 1997 forward

• Back-tested and fully validated models

• Utilizes Machine Learning to adjust to changing market factors

Performance Modeling


• Non-Agency Prime • Agency – Low risk

• Alt-A • Agency – Med risk

• Subprime • Agency – High risk / HARP


The Servicing Optimization Process

• Easily compare the financial impact of performing various servicing actions on a per-loan basis

• Maximize portfolio value and performance by executing servicing actions that have the highest NPV

• Maximize operational efficiency by focusing on loans that have the biggest impact on NPV

• Measure actual vs. forecasted servicing action performance and portfolio valuation

Improve Performance and Results!


Results Output – Pool Summary


MSR and Refi

Recapture

Valuations and

Multiples

Pool-specific

Balances,

Counts, and

Ratios

Loan Valuation

Info (Amount

and Percent)

Your

Pool-specific

Preferences

Results Output – Delinquency Summary


Cash-flows,

Valuations, and CDR

and CPR Forecasts,

by Delinquency

Status

Current Balances by

Delinquency Status

Results Output – Net Gain by Action Rank


Provides rank-order

of prioritized

servicing actions

Shows the amount

and percent gained

by taking prioritized

actions

Results Output – Top Servicing Actions


Highest value

servicing actions, by

category.

Forecasted gain

amount, based on

performing

recommended

servicing action

Results Output – Servicing Actions


Forecasted gain

by servicing

action category

• Supercharge your portfolio performance and ROI by performing optimal servicing actions based on the highest value to YOUR organization

• Put the power of world-class analytics and a superbly designed user experience and reporting engine to work for YOUR mortgage assets – today!

• Utilize YOUR experience, risk and market assumptions, and operational incomes/costs to quickly “dial-in” actionable results based on YOUR operation

• Work how and where YOU want to – anytime, all the time

• Review, analyze, and share results through comprehensive reporting and data extract capabilities

In Conclusion


Interested in Learning More?


Please call us at 650-265-7627

OR

e-mail us at [email protected]

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Servicing Optimization - Improving Performance in Highly Regulated Times