LPS Applied Analytics’ prepayment and default models evaluate behavioral models combined with several projected paths of interest rates and housing prices. With this, LPS Applied Analytics can deliver prepayment, default, loss severity and modification projections for fixed, adjustable, prime and subprime mortgages, home equity loans and home equity lines of credit, manufactured housing and others.
LPS offers defalut, loss severity and modification scores for servicers.
Default and Loss Severity Scores
LPS' scores identify nearly twice as many "bad" loans as does FICO scores. The scores, based off of behavioral models combined with several projected paths of interest rates and housing prices help:
- Identify loans with the highest risk of delinquency and default.
- Measure loan-level loss exposure and set appropriate loss reserves.
- Prioritize loss mitigation efforts through risk-based call list selection and collector assignment.
- Increase loss mitigation effectiveness of tools such as repayment plans and loan modifications
- Optimize current and future staffing levels
Modification Recommendations
LPS Applied Analytics' research shows that payment reduction is the key ingredient to successful loan modificatins. Payment reduction can be achieved in one or a combination of the following:
- Reduce interest rate
- Extend term
- Forgive principal
Borrower sensitivity to payment-reducing factors varies depending on many loan, borrower and property characteristics, along with hous price impact. Frequently, the best modificaiton is a cmbination of factors. LPS Applied Analytics' OptiMod provides a decisive recommendation based on years of experience modeling default risk for non-agency securities.
Contact us at lpsAAsales@lpsvcs.com or 866.964.8343 to find out more about how we can add the power of data analytics to your portfolio.