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At its annual conference April 16-18 in Austin, Texas, the company will be holding a special session dedicated to discussing solutions to the special challenges mortgage lenders face, including: the rising tide of non-prime loan defaults, the fall in housing prices, and the rise in mortgage fraud. To register: http://www.austinlogistics.com/news/conference_mortgage.php

Bridging the Gap between Risk and Collections

Two of the key areas in which lenders can alleviate losses due to volatile market conditions are in risk and collections. ActionSelect bridges the gap between these two organizations. The solution provides the ability to manage risk from early in the mortgage credit lifecycle through to collections, to help lenders reduce their back-end losses. Moreover, ActionSelect slashes operational time and cost of implementing risk strategies, giving lenders a more efficient, effective way to preempt losses.

The importance of such an approach was outlined in a recent Deloitte article, “Unleashing the Power: Driving Profits through Risk-Based Mortgage Collections,” which noted “… that it is more important now than ever before to understand how to create a more efficient and effective collections operations.” This includes developing “a risk-based collections organization” that, among other things, “incorporates the latest predictive modeling tools and techniques ….”

ActionSelect for Risk and Collections Optimization shortens strategy design-to-deployment time using Action Analytics, Optimization and Simulation. Using ActionSelect, mortgage lenders can determine the best treatment for each account to achieve maximum impact, taking into consideration not only the account profile, but business objectives and resource constraints. It predicts the risk of default or delinquency plus profitability across many different treatment options, and then finds the best strategy to maximize ROI for a given business objective.

For example, in seeking to avoid defaults because of rising ARM rates, lenders will use ActionSelect to: identify those accounts at risk of non-payment; test out different forbearance strategies that involve offering different rates or payment plans; predict the likelihood of payment for each new offer; run those against profitability goals; and then predict and deploy the best strategy.

“Traditional approaches to managing risk are no longer enough,” said Daniel Duncan, CEO, Austin Logistics. “The business-as-usual approach of segmentation and behavior scoring does not deliver the optimal risk-reward trade-off for every mortgage account. ActionSelect not only provides the flexibility to proactively deploy new strategies that map to changing risk levels of individual accounts, but it also enables companies to consider the impact of pre-collection efforts on customer experience, collection expense and total profitability.”