Background

A major Commercial Mortgage Backed Securities player called us in to handle an issue that’s pretty common among banks. They had a lot of underwriters and vendors who were using a lot of different cash flow models. The result was a patchwork of processes that was leading to errors, confusion and incompatible results. With no standardized way to underwrite loans, it was nearly impossible to pull information together into one data tape so that they could securitize loans.

Challenge

Our client asked us to scrutinize the processes that their underwriters had been using and build a brand new model that took all of their needs into account. Not an easy task. Furthermore, they didn’t want to buy a “store bought” solution. They wanted us to develop a proprietary underwriting platform for them with five separate models for different asset types so they could use the same model for sizing, underwriting, loan review and the closing process. That way, they could pull whatever data they needed out of the model and it would be all standardized so they could easily aggregate it into one data tape.

What we did

Townhouse came in and created one great, big cohesive underwriting platform that enabled all our clients’ underwriters and vendors to use the same standard. Now there’s structure to the model and their valuations are auditable for the first time in a long time. We created white paper instruction manuals to keep all the underwriters on the same page, too.

How it worked

The underwriting platform we created has eliminated the errors and inconsistencies that their prior patchwork of models was producing. As a result of the integrated platform, valuations for different asset classes and the work of all the underwriters on the team can be easily combined. We made securitization easier and vastly more accurate. That’s saved our client innumerable man-hours and potentially made them millions by more accurately informing loan size and terms. The project was such a success that we’ve been asked to provide ongoing training and support for their loan origination platform.

Highlighted Services
  • Customized Cash Flow Modeling
  • Process Management and Implementation
  • Development of Proprietary Technology
  • Commercial Underwriting and Securitization Advisory Services