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ยป VISIT US ONLINE @ DSNEWS.COM 15 homeownership over time. Our automated underwriting engine (AUS) analyzes hundreds of different data points about a loan, a borrower, and the property to help us form our risk assessment for that loan. We then monitor the risk associated with all the loans we purchased, not just the Home Possible ones. While analyzing these loans, we constantly ask questions like, "Are we seeing any challenges or concerns?" and "Do we need to change any of our policies or change our underwriting tool to address those concerns?" Loan performance over time is telling. But it can take time for things to develop. So, we need to monitor very closely and act as quickly as we can. Sometimes, a borrower's ability to keep a home is challenged despite their best efforts. Which is when we try to help them with different options that can be considered to find a potential solution. In the grand scheme of things, we're walking the walk when it comes to making "home" possible. Consistent with our mission, we are providing liquidity, stability, and affordability. at comes not only from getting people into homes but making sure that they can sustain their homeownership. What should lenders and servicers be thinking about to stay on top of new risks? e single-family risk management team is always working with lenders and servicers to adapt to the changing environment. e best way is to always have a pulse of new risks by ensuring you have a strong risk culture in your organization. Lenders need a culture where employees are encouraged to speak up, and where they express concerns. In the long run, sustainability of a loan that they're underwriting depends on these concerns raised early enough. So, if they don't think something's going to be a good loan, it should be okay for them to say, "we shouldn't do this." A lender's employees also need to be able to point out where they see weaknesses in controls and feel empowered to identify new trends on their own. Loans that have trouble embedded in them, are going to flow to companies that have the weakest risk and control environment. So, having a strong culture will help make sure that lenders and servicers don't end up being that weakest spot. What does a typical day look like for the risk management team at Freddie Mac? We have a diverse team of nearly 500 employees in my department, with a wide range of responsibilities. We're all using our expertise to help our clients responsibly grow their business. is ensures we don't have a typical day at office. Some of the things that we do every day include analyzing the deliveries of new loans, performing quality checks on those loans, writing and revising credit policies based on the trends that we're seeing in the marketplace or where we think the market is going. We have teams fully dedicated to innovation and new risk management capabilities to be able to bring value to our clients. We also have counterparty of risk experts who evaluate the financial health of our sellers servicers. And lastly, we also have data scientists and modelers who bring smart lending down to a science. "We're leveraging technology to ensure we're making smart risk decisions and helping bring value to our clients. Technology is a critical component of innovation, but in the end, it's part of an overall approach about how we think of problems and how we change the status quo as we try to reimagine the mortgage experience." THE LEADER IN DEFAULT SERVICING NEWS Help shape the next issue of DS News. Drop us a line at Editor@DSNews.com.