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E-bRM has developed an automated program to evaluate the accuracy of loan status claims made by sellers of Mortgaging Servicing Rights MSR by banks to other banks, hedge funds, private equity. We find hidden value in these purchases by uncovering servicing defects, allowing the buyers to have their purchase price adjusted.
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MSR – Buyers Edge
Meeting the challenges of protecting your investors and shareholders while preserving the value
of the assets you purchased
E-bRM Services delivers success by focusing on the individual loan level details to provide a comprehensive automated MSR legal profile that articulates attributes and data that can immediately impact your mortgage default portfolio.
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MSR-Buyers Edge Current Practice
Creditor filings in the United States Bankruptcy Court can frequently initiate a timely and costly event because of all the steps. They include:
• 94 Districts – most require electronic filing – each has its own web portal for access to filing system (ECF)
• Different deployment of core system (CM/ECF) in each District, so different input requirements
• To achieve transparency, creditors are now required to file “routine” loan transaction data with BK Court
• Most creditors/servicers do not have the data necessary to satisfy document preparation requirements or to satisfy ECF filing input requirements
• Creditors must either use automated solutions or retain humans to interface between data points
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MSR-Buyers Edge “Retrieve all payments made by the borrower”
One illustrative sample of a basic task in mortgage default servicing is, “Retrieve all payments made by the borrower”. The answer involves the following considerations:
Funds that were escrowed - Were they applied correctly to taxes and property insurance?
What was the split between principal and interest? Were payments applied first to principal and interest or
to penalties? Were all the rate changes applied and correctly initiated? Were there other fees and penalties and were they
calculated correctly? Was the servicing purchased? Are all the records on one
system? Were there advances made? Did they influence timing of
the other payments?
MSR-Buyers Edge Solution Components
Data Gathering Tools National Prospector
Assembles and analyze from unfriendly sources
Folio Assembles and re-present/format from friendly sources
Data Distribution Tools Data Administrator
Distribution based on set standards Data Accelerator
Distribution based on rules-based processing
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MSR-Buyers Edge Service & Application Flow Chart
Data Gathering
• Obtain Client Data• Identify/Analyze Gap - Application: Data Accelerator• Acquire necessary data - Application: National Prospector
& Folio
Workflow
• Prepare filing media - Application: Data Accelerator• Prepare filing workflow - Application: Data Administrator
Distributio
n
• File with BK court and retrieve confirmation data/image - Application: Data Administrator• Return data/image to client - Application: Data
Administrator
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MSR-Buyers Edge How to Begin
Steps Include:
– Identify Client’s MSR distressed mortgage portfolio requirements– Stratify Mortgage distressed vs. non distressed population– Identify all available data sources – Determine Gaps between available MSR stored data and required data– Gather all required data from the appropriate court system records.– Gather all required data from appropriate sources outside the courts.– Segment and stratify MSR data– Set up a mortgage remittance desk – Distribute data results (deliverables) to the Client.– Review final results and share findings with Client.
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MSR-Buyers Edge Summary
Mortgage Servicing Market
The mortgage servicing market is currently transaction intensive with large volumes of “Specialty Servicing” (Running in the 100’s of billions in the last couple of years) trading ownership. For many reasons obvious to the buyer or the seller opportunities loom large.
Can both the buyers and sellers be right? I am not sure, but I do believe the complexity of the mortgage market is evolving quickly in the Mortgage Servicing Sector precipitated by the economy of the last five years and the intervention of the courts and the regulators to try and correct perceived credit default driven mortgage abuses. The results have been an unprecedented flurry of regulation and court orders that are comprehensive in nature and difficult and costly to operationalize over a short period of time.
E-bRM focuses on the most opaque and labor intensive portion the mortgage default market through the use of a comprehensive set of automation tools that are; vetted, accurate, and fast. Because tradition mortgage default procedures are labor intensive and slow, results can be incomplete, and expensive. E-bRM believes there are potential benefits to buyers and seller of an automated diagnostic MSR mortgage evaluation service. Particularly, if you are a seller and have to provide reps and warranty’s for your mortgage product or if you are a buyer and need to execute a remediation warranty or put back through your remittance desk.
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MSR-Buyers Edge Contact Information
E-bRM
Is a professional services, risk management and project management, licensed software solutions for mortgage industry.
E-bRM group is positioned to work with clients to identify all your legal mortgage default data needs, implement projects to gather, organize, analyze and distribute information . . . and to execute portfolio restructuring and loan-level solutions as each client’s requirements dictate.
For more information or a live demo, contact:
Richard Ellis PMP PRM CSM PMI-ACP
www.e-brm.com
914-643-6111
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