Advanced Analytics

A New Risk Management Paradigm for the Mortgage Industry

The mortgage industry regulatory paradigm has dramatically shifted – and continues to shift – in response to the financial crisis.  We see three key issues driving this new regulatory paradigm:

  1. Know your data better than the regulators.  The only way to “keep up” with data driven regulators is through data driven enterprise business intelligence.
  2. Know how regulators are using your data.  What are regulators doing with the data the collect from you and others?  They’re benchmarking respondents to identify absolute and relative performance trends requiring immediate and/or ongoing supervisory attention.
  3. Leverage compliance spending.  Tighter integration of regulatory compliance and operations activities increases enterprise leverage and that increases revenues, decreases costs, minimizes the burden of regulatory examinations, and mitigates fines and penalties.

These issues are driving risk management models that incorporate collaborative advanced analytics leveraging dynamic user-enabled business intelligence solutions.  Mortage TrueView is the only integrated enterprise compliance risk management solution that allows mortgage originators and servicers to get ahead of the curve.  And that’s a nice place to be in an era of greater risk and data-driven regulators.

Attribute

Traditional Compliance Paradigm

Advanced Analytics Paradigm

Quantitative Metrics

  • Did I do something I shouldn’t have?
  • Am I doing something I should?

Qualitative Metrics

  • Were the specified process performed?
  • Was the specified order followed?

Established/Static Rule Set

  • SEC, FINRA, etc.
  • Internal Revenue Code

Developing/Dynamic Rule Sets

  • Dodd-Frank
  • CFPB

Entity/Enterprise Risk Management

  • Absolute performance

Market Risk Management

  • Relative performance

Passive

  • Event Driven (i.e., What/When)

Active

  • Enterprise Driven (i.e., Who/Why)

Integration

  • Return on Investment
  • Risk measurement
  • Process Improvement

 

 

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