Debt Restructuring/Loan Modification Case Study: Licensing JWL to a U.S G-SIB

Client’s Challenge

  • The client, the mortgage servicing division of a major U.S. bank holding company, needed to meet regulatory requirements set forth by the FHFA in the Home Affordable Refinance Program (HARP).
  • The client was in need of whole loan analytics tool to forecast the risk associated with the loan modification program for their residential mortgage servicing portfolio of $50+ billion.
  • The desired tool needed to be sufficiently flexible to handle loan valuation at multiple levels of granularity, as well as be adaptable to the existing process.

Our Solution

  • Five Bridges worked with management on the client side to establish the new business needs that arose from HARP.
  • The client needed a way to identify the cash flows and performance history of loans that HARP applicants were attempting to restructure. JWL’s analytics gave the client’s loan servicing team the ability to forecast cash flows and losses as well as verify loan performance history at both the individual loan and pool levels.
  • The client licensed JWL for its mortgage servicing team to access cash flow and performance analytics on its loan modification applicants in real time.

Outcome

  • By leveraging JWL’s whole loan analytics, the client was able to identify qualified HARP applicants, thus streamlining their loan modification program.
  • Our solutions helped cut the client’s costs associated with HARP and increase the efficiency of their loan mod operations in the face of regulatory pressure from the FHFA.