Services / RegRisk IntelligenceRegRisk Intelligence
The mortgage industry is predicated on the effective management of various risk. These risks include credit risk, collateral risk and interest rate risk. Leading mortgage institutions have outperformed the competition by smartly leveraging technology to expertly manage these risks in a market whose compressed timeframe requires near instantaneous decision-making. Specifically, the leading mortgage institutions ably manage credit, collateral and interest rate risk through the innovative use of underwriting engines, automated valuation models and hedging technologies, respectively.
The mortgage industry’s reliance on the basic principals of risk management and technological innovation are much less dramatic and effective in dealing with regulatory compliance risks.
Mavent’s Reg/Risk Intelligence practice utilizes ACEs to help institutions evaluate the efficacy of their internal controls and to develop regulatory risk management strategies that result in a sustainable competitive advantage. In other words, Reg/Risk Intelligence provides institutions with insight and advice that enable them to operate more profitably without incurring additional—and in fact, often mitigating—regulatory risk exposure.
Typical engagements include:
Charter/License Optimization
What is the effect of changing charters or licenses? Mavent will analyze a statistically relevant sample—e.g. one month’s production—against the institutions current charter/license authority and alternative charter/license authorities to determine the impact on loan programs and overall profitability. For existing and hypothetical charters, Mavent’s analysis will include appropriate interest rate exportation from the institution’s home state and preemption where appropriate. Clients are provided both a summary portfolio analysis and loan-by-loan finding.
New Law Impact Analysis
How will a new law, regulation or potential judgment impact business? What steps might the institution take to minimize negative consequences or take advantage of resultant opportunities? Mavent will analyze a statistically relevant sample—e.g. one month’s production—against both existing regulatory requirements and impending or hypothetical changes to law. For instance, suppose that a new law imposes a fees threshold test, or that a court case might subject the institution to a law it was previously exempt from. Mavent will compare the regulatory exposure that would result from the new versus existing law. Clients are provided both a summary portfolio analysis and loan-by-loan finding.
Internal Controls Diagnostic
How effective are an institution's existing controls? How compliant are an institution's existing lending or purchasing practices? Mavent will analyze a statistically relevant sample—e.g. one month’s production—against a client-defined ACE, customized to fit its clients’ unique regulatory interpretations and risk tolerance, to evaluate a representative sample of loans for compliance with applicable laws. Mavent will identify areas or patterns of potential regulatory risk exposure and work with the client to develop and implement remedial policies and programs.