CHALLENGE: A distressed asset investor is evaluating whether and what to bid on a portfolio of mortgage whole loans many of which are non-performing. To complete its bid, the investor’s is (i) concerned that performing loans will default, (ii) identifying each loan’s exit strategy and (iii) estimating each loans liquation value.

SOLUTION: After careful analysis of the investor’s strategy and servicing platform, Digital Risk developed a customized due diligence program specifically tailored to (i) determining the borrower’s ability and willingness to pay on a go forward basis, (ii) identifying exit strategy at the loan level (i.e., borrower’s qualification for refinance, loan modifications ) and (iii) as well as estimating the collateral’s expected performance over the next 24 months. Digital Risk analysts traveled to the seller’s servicing location to execute the customized due diligence program. Utilizing Digital Risk’s web based platform, Digital Risk analyst were able to provide updated key pricing data such as CLTV, LTV, DTI, pay history, etc. to the investor. Further, Digital Risk Collateral Advisory Services Team analyzed each loan’s underlying collateral value and prepared 24 month outlooks. Finally, Digital Risk Data Analysts ensure that the servicing transfer would occur seamlessly.

RESULTS: The Investor was able to accelerate the pre-pay speed of the portfolio, reduce re-defaults on modifications and liquidate collateral at a gain generating IRR well above the funds threshold earning the general partners a significant performance bonus.

SOLUTION: Quality Management

ANALYTICAL TOOLS: Portfolio Review, Delta, WIH, IE

EXPERT SERVICES: Due Diligence, Fraud Detection, Collateral Advisory Services, Regulatory Compliance