Loss Mitigation
Noncompliance with mortgage-related consumer protection law is widespread and its materiality is signifcant (click here to learn more). Standard in most loan purchase agreements is a seller representation and warranty ("R&W") that a loan complies with all applicable laws. The compliance violations indentified by Mavent in many cases constitute a breach of this R&W. This represents a significant contingent (or actual) liability for the seller. It also represents an opportunity for the purchaser to be made whole by forcing the seller to repurchase the loan, in accordance with the R&W. Mavent provides several solutions addressing compliance-related loss-mitigation:
Loss Mitigation Programs
Mavent works with lenders, investors and servicers to develop a compliance-related loss mitigation program that identifies regulatory and other compliance exceptions that constitute seller representation and warranty breaches, enabling the client to force and rebut repurchases.
Investigative and Forensic Audit Services
Mavent provides investigative and forensic audit services to institutions facing complex and challenging regulatory risks. Mavent’s automated solutions enable cost-effective and prompt forensic audit results. These services include
loss mitigation analysis to identify regulatory and other compliance exceptions that constitute seller representation and warranty breaches, enabling investors to force repurchases.
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information.
Automated Compliance Engine (ACE)
Mavent develops and maintains ACE's that review
existing loan data against Mavent's
baseline
compliance rules, as modified by a client's own
regulatory interpretations and
internal compliance policies.
Clients can select from Mavent's
baseline
reviews (all of which are maintained current by Mavent and its outside
counsel network) which compliance reviews to perform. Applicable substantive law
will be applied based on the
originating lender's
license or charter authority, enabling clients to better identify and understand potential liabilities. Mavent
ACE's can be
deployed in
several ways, based upon a client's workflow and data availability
constraints.
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information.
Counterparty Due Diligence
Mavent supports
investors in reviewing new and existing counterparties to ensure that sellers
have adequate controls in place to originate compliant loans.
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information.
Pool Due Diligence
Mavent provides a
comprehensive regulatory compliance risk assessment of a seller's pool or
portfolio. Mavent utilizes the investor's ACE to ensure the analysis meets the
investor's regulatory interpretations and risk tolerances. The analysis can be
made based on the seller's license or charter auhtority and/or the investor's.
The result is a precise and consistent analysis of a larger sample of loans at a
cost that is impossible for traditional, labor-intensive diligence firms to
replicate.
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information.
Solutions for Loss Mitigation