LPS Applied Analytics Provides Must-Have Risk Management Data and Analytics Tools

Kyle Lundstedt, Managing Director, LPS Applied Analytics

Access to data and analytical models is a must to provide the level of transparency the current mortgage market demands. Whether operating in the origination, servicing or the secondary marketing space, mortgage industry professionals need to employ tools that facilitate better decision making, reducing risk and restoring confidence.

Mortgage industry professionals are generally aware of the data and analytics that have typically been used in their business segment. For example, servicers/investors are more likely to tap loan-level data and analytics to monitor portfolio performance, but may not be employing property data and analytical modeling that can help identify risk with high LTV loans. Conversely, originators utilize property data and analytical modeling quite frequently, but may not realize how default and prepayment propensity analytics derived from loan-level data could benefit them.

These data usage differences often result from the mortgage industry’s siloed nature. Traditionally, originators partner with one type of provider to obtain the information they need and servicers/investors reach out to a different type of provider for their needs. Neither business segment is fully aware of all the information that is available to them nor the tremendous potential benefits associated with the data.

Realizing the need to provide the industry with a comprehensive centralized resource for data and analytics, Lender Processing Services, Inc. (LPS), which recently spun off from Fidelity National Information Services, has been brimming with activity, expanding its industry-leading data to include loan-level details and forming a new division.

LPS recently acquired McDash Analytics, and now owns the industry’s largest loan-level database of mortgage assets for the purpose of benchmarking and analysis. As a result, LPS can provide access to loan-level data for more than 39 million active first and second mortgage loans, including portfolios serviced by nine of the top 10 mortgage servicers in the nation.

The data now available through LPS represents approximately two-thirds of the mortgage market and spans the entire credit spectrum of agency, non-agency and portfolio products. With access to LPS’ complete loan-level data, mortgage industry professionals have a dramatically improved level of analytic flexibility.

“Providing analytic transparency on mortgage asset behavior is a critical factor to restoring confidence in the mortgage market. McDash is well known for its industry knowledge and comprehensive, high-quality data and services,” said Ted Jadlos, former chief executive officer of McDash Analytics. “Recently, the company was called upon by the Office of the Comptroller of Currency (OCC) and a mortgage industry non-profit agency to provide data collection, purification and reporting services related to the industry’s loss mitigation efforts. These efforts are critical in gaining a clearer understanding of the turmoil in the mortgage market, and determining the path to market stabilization and improvement. By joining forces with the LPS organization, the mortgage industry will be able to better leverage the assets of both organizations for high performance analytics and comprehensive data.”

After finalizing the McDash acquisition, LPS made the strategic decision to consolidate all of its data and analytic assets to form a new division, LPS Applied Analytics. This new division combines the data and analytics of the recently acquired McDash with those of the public records, property valuation and analytics businesses that already exist within LPS. Through the integration of these offerings, LPS is now able to provide access to more decision-making solutions than any other single source, including comprehensive analytics and modeling for prepayment, default, delinquency, loss, property valuation and fraud.

“McDash’s solutions complement our existing analytic forecasting capabilities and will enable us to serve our clients on a more comprehensive level,” said Greg Whitworth, president of LPS’ Applied Analytics division. “We have been primarily focused on combining McDash’s offerings with our existing solutions to form a seamless, all-inclusive data and analytics resource. LPS has been successful in bringing together the loan and property-level data and analytics needed to provide mortgage originators, servicers and investors with a more complete, accurate picture of their portfolios.”

In today’s uncertain market, mortgage professionals, regardless of their role in the industry, need to have a clear understanding of the current and projected risks they face. To most effectively do so, they must be aware of all the tools they have at their disposal. By combining the most sophisticated risk management data and analytics offerings, LPS Applied Analytics’ goal is to simplify that process and provide quick access to the information when, where and how it is needed.