The mortgage company is one of the largest private mortgage banking companies, servicing over $25 billion in loans. It is a subsidiary of a financial services holding company with diversified operations, including mortgage lending, mortgage servicing, retail banking, internet banking, and other finance-related operations.

The mortgage company’s goal was to improve the process by which they acquire portfolios of loans, which is the input to their servicing operations. Currently, portfolio acquisition is a paper-driven process which presents difficulties in tracking, prioritizing, and sharing information about the acquisition pipeline, directly impacting servicing operations and profitability. Manual effort is required to track the status of incoming deals, reducing the ability to manage and share information about the acquisition pipeline. This manual effort takes time and energy away from the analyst’s primary task of research and valuation, impacting the ability to properly value loan portfolios. In addition, it was not easy to understand the appropriate prioritization of analysis efforts among the available deals to successfully acquire the right mix of portfolio types. Finally, lack of pipeline visibility affected the entire servicing organization as there are handoffs from acquisitions to legal to servicing operations. At each stage, there are projects and staffing levels that must be adjusted to handle newly acquired deals.

The mortgage company participated in CTE’s renowned Cambridge Executive Workshop (CEW), an intensive three-week program where corporate executives and staff collaborate to identify new ideas and move them to deployment. During the workshop, they set goals to improve the portfolio acquisition process by enabling analysts to optimize portfolio analysis efforts and provide a way to manage the acquisition pipeline; improvements intended to reduce costs and create growth and profitability opportunities. At the completion of the CEW, they had a business solution that included a prototype application, a supporting business case that fit market opportunities and needs, and an execution plan.

The portfolio acquisition solution designed by CTE provides the means to control the portfolio acquisition process. On-line workflow and status tracking will provide analyst’s access to deal information. Business rules will filter incoming deals to find ones that fit business development goals and prioritize analysis efforts based on deal parameters, expanding the number of deals that can be analyzed. This will allow analysts to examine more deals so that they can focus on the ones that are the most valuable to the mortgage company and to apply more time modeling the deals. Visibility of the pipeline will improve the transition of the portfolios from acquisitions to legal to servicing operations, which will reduce errors and improve project management and staffing decisions. For both the mortgage company and the holding company, this system will provide a detailed picture of the acquisition pipeline throughout the organization, improving not just acquisitions management, but operational planning and overall corporate planning and risk assessment.

The solution relies on software from CTE’s Collaboration Software Suite as the foundation for the flexible framework to solve its multiple technology and business challenges. To provide the means for the solution to filter and analyze information after it is collected, our solution will use the CTE Scoring Engine, an event-driven, workflow-based correlation and trend analysis system that supports dynamic analysis rules. The CTE Sharp Statement Center, an XML-based data extraction application that lets organizations transform paper invoices, pay stubs, work orders, and the like into dynamic, personalized, interactive statements, will be the basis for information dissemination and decisions. It will be used to present online reports, replacing stacks of paper reports and binders.