Loan payment performance analytics and monitoring
Scienna Performance Metrics (“SPM”) is a set of data analysis tools and reports that offers lending institutions, investors and servicers much greater understanding of their delinquent loan portfolios. Most servicing and asset management systems yield little insight into the payment habits of delinquent customers, and thus little aid in managing them.
SPM can provide significant benefits to an investor or servicer in the areas of collection, workout and bankruptcy management:
- Intuitive and easy-to-read loan-level analysis gives portfolio managers instant, in-depth insight into a borrower’s past payment performance.
- SPM presents performance measures not commonly found in servicing systems. These metrics may offer much stronger statistical relationships with future performance - and higher predictive power - than those commonly used to prioritize delinquent loans for collections and workout efforts. Thus, using SPM’s results within a collections management system could significantly boost productivity and effectiveness.
- These metrics allow investors and servicers to objectively quantify, track, model and ultimately valuate critical aspects of performance that were previously understood only intuitively or qualitatively, if at all.
- In the current market conditions, delinquent loans are being “modified” in large numbers to lower interest rates and payments. During modification, loans are typically brought current, and payment history details are often wiped clean. SPM can identify this “hidden delinquency” that can result in significant errors in valuation.
- Multi-level performance class definition and analysis (e.g. “Sub-performing/Recovering”)
- These loan-level statistics can be easily “rolled up” across various portfolio segments and time periods for management reporting and graphing. In this way, management can track portfolio performance and collections effectiveness over time, by portfolio segment, by servicer/collector, etc. These objective benchmarks can easily be used to create staff performance goals and incentive programs.
- The toolset works with virtually any servicing system, and can serve as a lingua franca for performance analysis across various servicing and asset management platforms.
- Reports can be furnished in Excel, PDF or any format desired. Similarly, output data can be furnished in any preferred format for use within asset management systems and pricing models.
- The basic reports are highly flexible - so much so that they may be hooked up quickly and used to great advantage in due diligence and valuation modeling for potential portfolio acquisitions or sales.
While Scienna Performance Metrics utilizes a servicing system’s transactional data as the basis for its computations, the software itself is largely servicing system independent. Thus, it works with virtually any loan management system and can be deployed relatively quickly. SPM is quite flexible, effectively handling odd due dates, non-monthly payment frequencies, and uncommon amortization schemes. SPM’s data input requirements are surprisingly small. In fact, much of the important loan-level analysis can be carried out using only a few fields of transactional data.
A full suite of performance analytics reporting is available, each successive tier requiring additional input data:
- Expanded report formats featuring gross receipts by receipt type and time period; additional metrics
- Performance summary by time period (roll-ups), by pool, servicer, geographic area, etc.
- Performance trend analysis and graphs
- Mortgage portfolio analysis: Comprehensive, concise and creative reporting and insight
- Loan file review services