Mortgage fintech leader RiskSpan has added a mortgage servicing rights (MSR) application to its on-demand analytics Edge Platform. The application expands RiskSpan’s loan-level mortgage analytics to MSRs, an asset class whose cash flows have previously been challenging to forecast at the loan level.
Unlike conventional MSR tools that assume large numbers of loans bucketed into “rep lines” will perform identically, the Edge Platform’s granular approach makes it possible to forecast MSR portfolio net cash flows and run valuation and scenario analyses with unprecedented precision.
RiskSpan’s MSR platform integrates RiskSpan’s proprietary prepayment and credit models to calculate option-adjusted risk metrics while also incorporating the full range of client-configurable input parameters (costs and recapture assumptions, for example) necessary to fully characterize the cash flows arising from servicing. Further, its integrated data warehouse solution enables easy access to time-series loan and collateral performance.
“Our cloud-native platform has enabled us to achieve something that has long eluded our industry – on-demand, loan-level cash flow forecasting,” observes RiskSpan CEO Bernadette Kogler. “This has been an absolute game changer for our clients.” Loan-level projections enable MSR investors to re-combine and re-aggregate loan-level cash flow results on the fly, opening the door to a host of additional, scenario-based analytics – including climate risk and responsible ESG analysis. The flexibility afforded by RiskSpan’s parallel computing framework allows for complex net cash flow calculations on hundreds of thousands of individual mortgage loans simultaneously.