Pricing & Valuation Case Study: Large Nonbank Mortgage Aggregator Licenses Javelin Whole Loans (JWL) Platform for Pricing and Valuation Analysis

Client’s Challenge

  • A large nonbank mortgage aggregator wanted to improve the granularity and accuracy of its pricing used for its QMeligible correspondent lending activities.
  • The current process was labor intensive and did not capture as many loan level risk attributes as it could.
  • They were in need of a single platform that had the capability to perform valuations at loan– and portfolio levels quickly and accurately.

Our Solution

  • The Five Bridges analytics staff worked with the company’s pricing team to integrate JWL into the existing pricing and valuation process.
  • Required data fields for processing loans through JWL were identified and JWL key outputs to the loan pricing process were exported to the company’s existing pricing system.
  • JWL’s suite of statistical default and prepayment models provided broad coverage of this national lender’s mortgage footprint.
  • Leveraging JWL’s flexible report generator, the company could create standard and customized pricing reports for the Pricing Committee.

Outcome

  • By leveraging JWL the company was able to improve the accuracy of its pricing which translated into improved gainonsale as well as deeper penetration among smaller correspondent lenders.
  • The successful implementation of JWL for this company’s QMeligible business led it to use JWL to explore development of nonQM products that it could bring to market.