MasterServ Financial invited by LoanLogics to join LoanHD AppQ Network

May 15, 2014 –  LoanLogics has launched the LoanHD AppQ Network, that provides lenders with service ordering and delivery interfaces to third-party providers through the LoanHD platform. LoanHD is a single-source solution designed to provide enterprise-level loan quality management and to monitor risk.

“The LoanLogics LoanHD AppQ Network was developed to ensure that lenders and service providers can more easily leverage an ecosystem of services through the LoanHD platform,” said Brian K. Fitzpatrick, president and CEO of LoanLogics. “We want to provide clients access to additional service applications that create efficiency, reduce error and enable them to enhance their loan quality management practices to drive to a zero defect rate.”

The LoanHD AppQ Network enables lenders and servicers to efficiently order services at any time. LoanLogics has made ordering services straightforward and integrated. At the same time, it provides clients with a broad choice of service providers.
“We serve clients from small to large with varying degrees of complexity and needs. After surveying our clients, we designed a network to offer a variety of services that directly address the needs of our clients,” said Terese Campbell, LoanLogics SVP of product management. “Our goal is to continue to expand the network as our clients’ needs evolve, while maintaining streamlined vendor management.”

The Consumer Financial Protection Bureau’s regulations and heightened scrutiny has caused most lenders to place a greater emphasis on quality control management practices and analytics designed to reduce defects and drive actionable intelligence.
As a result, quality control expectations are higher than ever. To drive down defects, lenders need to improve quality management practices and the analytics that drives actionable intelligence. An enterprise-level platform that also provides access to an ecosystem of providers is the next generation of loan quality management that can help lenders address this need.
Current members of the LoanHD AppQ Network include TransUnion, Andrew Davidson & Co., Veros, Platinum Data Solutions, ComplianceEase, DataQuick, IXI Services. Service providers working with LoanLogics to expand the network include Milliman, MasterServ, and others to be announced in the near future.

Loan Scoring

Loan selection for pre-closing quality assurance audits is often accomplished through adverse sampling. Many organizations have a set formula to segment high risk characteristics, but those techniques do nothing to address loans that fall outside of those parameters, but in fact have high risk. That is why LoanLogics has partnered with Milliman, one of the largest independent actuarial consulting firms in the world, and MasterServ Financial, Inc., specializing in portfolio management and performance technology and solutions, to offer Default, Repurchase and Appraisal Loan Quality Scores.

The LoanHD® scoring and sampling engine allows lenders to efficiently select and score loans for audit:

  • Review loans in production to identify risky loans before they close and avoid loan suspension.
  • Score closed loans before selling to an investor to identify possible issues that might result in repurchase requests.
  • Identify loans in any stage for targeted or discretionary review.
  • Run all production through scoring to generate reports to evaluate month to month trends in production.

Milliman’s Mortgage Default Score can help analyze and monitor the credit quality of new production, allocate servicing resources, develop underwriting guidelines and pricing, just to name a few of its uses. It is developed from a dynamic econometric model that combines three important components of mortgage risk: Borrower, Underwriting, and Economic.

Milliman’s Repurchase Score used in pre- or post-funding targeted quality control reviews can help estimate lifetime repurchase risk from either Fannie Mae or Freddie Mac at origination. The probability of repurchase for a given mortgage is estimated conditional on default and on non-default.

MasterServ’s Appraisal Quality Score helps evaluate vendor performance, keep closings on track and reduce repurchase risk. It is compiled from five appraisal quality index factors:

  • Completeness Score
  • Precision Score
  • Valuation Score
  • Collateral Score
  • Comparables Score

The score can be used to target loans with a lower score for full review pre-close or for discretionary sampling post-close. The score is also a useful indicator of quality for due diligence and pre-funding quality control.

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