Putting Your Loan Portfolio under the Scanner to Unveil Overlooked Insights

The human excellence has many different facets to it, and yet none define the whole thing better than our ability to grow on a consistent basis. This progressive approach, on our part, has already got the world to hit upon some huge milestones, with technology appearing as a major member of the stated group. The reason why technology enjoys such an esteemed stature among people is, by and large, predicated upon its skill-set, which guided us towards a reality that nobody could have ever imagined otherwise. Nevertheless, if we look up close for a second, it will become clear how the whole runner was also very much inspired from the way we applied those skills across a real world environment. The latter component was, in fact, what gave the creation a spectrum-wide presence, and consequentially, kickstarted a tech revolution. Of course, this revolution then went on to scale up the human experience through some outright unique avenues, but even after achieving such a monumental feat, technology will somehow continue to produce the right goods. The same has grown increasingly evident in recent times, and assuming one new fintech-themed development shakes out just like we envision, it will only make that trend bigger and better moving forward.

LoanStreet Inc., a leading technology provider for loan trading, reporting, analysis and servicing, has officially announced an extension of its Performance Analytics suite. You see, up until now, the stated suite has remained limited to analyzing loan participations, but from here onwards, we can expect the same to easily study an institution’s entire loan portfolio. Talk about the product’s latest version on a slightly deeper level, it will begin by offering data visualizations that can conceive present loan performance insights quickly enough for busy CFOs and lending officers. The idea here is to let these people identify critical longer-term trends typically lost amid the monthly noise. Next up, we must get into suite’s presentation-ready reports. You see, with just a few clicks, the user should be able to configure and generate pool-level, asset-level, and portfolio-level performance reports. Another major detail about this suite is how it is well-equipped to inform you on average lifetime of a return. You see, its scenario analysis engine can seamlessly forecast future cashflows for a pool or vintage of loans before calculating the internal rate of return, which also happens to be the best figure available for an average lifetime rate of return. All a user must do is enter in a range of possible prepayment and charge-off rates to receive a corresponding range of likely returns for a particular loan vintage, loan product, or asset class. Then, we have the prospect of monthly return rates. This particular capability can go a long distance when the agenda is to track monthly ratio of income versus the holding cost of loans. Making its conclusions aptly reliable is how the feature takes into account costs attached with origination at a discount, dealer reserves, administrative expenses, servicing, or any other item. A similar month-oriented functionality is also available to let you choose between CPR and ABS for the purpose of analyzing prepayment rates. To compliment that, LoanStreet has further enabled you to view the latest CDR or cumulative charge-off rates.

“Following the launch of Performance Analytics for loan participations, we learned clients wanted the ability to see those same performance analytics applied to their entire loan book, including return, prepayment, and charge-off rates, printable performance reports, and CECL reserve calculations,” said Ian Lampl, co-founder and CEO of LoanStreet Inc. “In response to client demand, we have invested deeply in extending the scope of our analytics suite, which can now analyze the performance of a client’s entire loan book, including loans directly originated or acquired in whole from third parties like fintech lenders.”

Hold on, there are still a couple of bits left to unpack. For instance, we still haven’t discussed how you can make convenient adjustments to CECL reserves, adjustments which are markedly informed by LoanStreet’s Performance Analytics metrics that document loan prepayment, charge-off, and delinquency. Finally, the last bit of highlight we have comes in the form of a CECL module. This module bears the responsibility to provide you monthly-updated calculations of your CECL reserves, and it does so without asking for any extra onboarding procedures.

Founded in 2013, LoanStreet has risen up by being the first fully-integrated, online platform which streamlines the process of sharing, managing, and analyzing loans for credit unions, banks, and direct lenders. In practice, the company would achieve this feat through standardized agreements, a centralized market access for all parties, and powerful reporting tools that conceive automated and consolidated monthly reporting so to reduce administrative burden and operational costs for your institution, while simultaneously ensuring complete accuracy and regulatory compliance.

“Many credit unions do not meaningfully track the performance or return rates of their participations, and they are often very surprised by what our analytics suite reveals. Supposedly bad deals are forecast to deliver returns significantly above the risk-free rate, while supposedly good deals struggle to surpass the risk-free rate,” said Doug Callahan, Vice President of Data and Analytics at LoanStreet Inc. “As we extend our performance analytics beyond participations to organic loans and wholly-owned indirect loans, I predict that credit unions will be amazed by what they see.”