Kristin Moyer

Contrasted to credit card issuers and consumer lenders, mortgage servicers are being less aggressive with the use of predictive analytics, optimization and behavior modeling.  For one thing, mortgage servicers have fewer levers to use and less data to leverage in reducing loss compared to issuers of revolving credit.  The cost of servicing has also gone [...]

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Mortgage servicers have been slow to adopt loan portfolio management (a technology that supports pattern-based strategy) and continue to suffer heavy losses.  Contrasted to this, credit card issuers have been aggressive with adopting loan portfolio management to seek, model and adapt.
For example, credit card issuers are reducing limits on consumers whose risk profile is changing, [...]

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Gartner has been writing about Pattern-Based Strategies for some time now.  It’s an existing body of research, here are some examples (for paying customers):

“Introducing Pattern-Based Strategy“
“Balance Investment in Four Categories to Support Pattern-Based Strategy”
“Five Eras of IT Business Value Add: From Automation to Pattern-Based Strategy”
“CEOs and Chief Strategy Officers: Balance Investments With Pattern-Based [...]

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In addition to dealing with delinquency and supporting other risk management capabilities, loan portfolio management can also be used to rebuild portfolio profitability and growth in the face of volatile conditions and regulatory change.
Regulatory change, falling balances, record delinquencies and general recessionary stress require a new approach to credit cards.  Loan portfolio management can help [...]

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We’ve previously posted on use cases for loan portfolio management.  We know extend this list.  Loan portfolio management can reduce credit loss in the following ways:

Distressed portfolio management – ability to determine the optimal treatment strategy:

Loan modification
Short [...]

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One thing loan portfolio management can do is to identify borrowers in distress.  This is very important for revolving lines of credit, as it enables lenders to take action on credit lines before problems go deeper.  But what about non-revolving credit, like mortgage for example?  Does identifying borrowers in distress really help?  Yes, but “why” [...]

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Loan portfolio management in the US residential mortgage industry has hit a speed bump.  The Home Affordable Modification Plan (HAMP) uses a rule-based formula for driving the terms of a modified loan to 38% debt-to-income (DTI) ratio, with the Treasury matching further reductions in payment to 31% DTI for the borrower.  This leaves no room for intelligent [...]

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While GDP is returning to growth in many countries and some economists and government agencies are declaring “recovery,” tell that to the banking industry. Significantly more losses are set to occur in the banking and investment services industry (sources IMF, McKinsey and others), particularly in the area of residential mortgage, commercial real estate, credit cards [...]

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Loan portfolio management is an emerging technology solution that provides analytics, modeling and optimization – ideally (though not yet) across lending instruments (mortgage, HELOC, syndicated loan).  Loan portfolio management leverages not only borrower attributes, but also macro-economic factors such as real estate attributes by geography, unemployment data, projected interest rates and other factors.  Loan portfolio management executes analyses at both the portfolio [...]

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