Ongoing Asset Management for Insurance Company

One of the government-sponsored enterprises (GSE) has a loan purchase program (“aggregation” program) in which it buys whole loans, usually one at a time, from its multifamily/commercial loan correspondents.  Each loan must meet the GSE’s underwriting guidelines.  The correspondent represents to the GSE that the loan meets the guidelines and the GSE re-underwrites each loan for compliance with its guidelines.  On behalf of a large insurance company, Boston Portfolio Advisors then re-underwrites each loan and inspects each property for compliance.  The loans are placed into a special risk sharing pool in which the insurance company assumes the loan credit risk first loss exposure via a Mortgage Collateral Replacement Insurance policy.  This cycle repeats on a monthly basis ongoing.

Boston Portfolio Advisor’s role is to manage the risk exposure, provide surveillance, direct workouts and other as necessary. BPA’s responsibilities in this project are as follows:

Product Development and Product Management

  • Risk methodology
  • Risk pricing methodology
  • Risk pricing modeling
  • Underwriting guidelines and parameters

Operating procedures (for all operations external to the insurance company)

  • Development of operating procedures
  • Documenting of operating procedures
  • Implementation of operating procedures

Operations

  • Management of loan portfolio operations
  • Management of risk portfolio
  • Supervision of counter-parties such as the GSE
  • Verification of all premium calculations

Risk Selection / Due Diligence

  • Loan re-underwriting
  • Property inspections
  • Seller and servicer evaluation
  • Data accuracy audit
  • Projection of default frequency, default timing, loss severity, and losses
  • Exception handling

Deal Management

  • Deal structuring
  • Closing support

Post-Closing Surveillance

  • Servicer surveillance and oversight
  • Loan credit and property performance tracking
  • Portfolio tracking and reporting
  • Risk tracking and reporting
  • Premium recalculation and reporting

Claims Support

  • Loss mitigation
  • Claims processing support

Special projects and analyses as requested by the insurance company

 

Note: Actual client names have been removed due to confidentiality issues.