We are delighted to announce the release of RiskSpan’s series of Private Credit Primers aimed at providing investors with essential knowledge about the diverse and growing landscape of the loan types that private credit investors are buying. These primers offer at-a-glance insights into the mechanics, performance expectations, and unique features of various asset classes, enabling investors to make informed decisions in this dynamic market.
The first three primers in the series are available now: They focus on Residential Transition Loans (RTLs), Personal Loans, and HELOCs — loan types that are becoming increasingly popular in the private credit space.
Residential Transition Loans (RTLs) (full primer here)
RTLs are short-term loans designed to help borrowers bridge financial gaps during transitional periods in residential real estate. Often used for construction, bridge, and relocation purposes, RTLs typically have terms ranging from 6 to 36 months and feature higher interest rates than traditional long-term financing. These loans play a crucial role for both homeowners and real estate investors, especially in markets where property values fluctuate or where short-term liquidity is needed.
- Important Features: RTLs often involve draw functionality, allowing borrowers to access funds incrementally as projects progress. Another key aspect is the use of the “As-Repaired” Value (ARV) to calculate Loan-to-Value (LTV) ratios, based on the projected value of the property after repairs.
- Performance Considerations: While RTLs have performed well during periods of stable or rising home prices, the primer cautions that these loans are more vulnerable during economic downturns or periods of home price decline.
Personal Loans (full primer here)
Personal loans can be secured or unsecured and are used for a variety of purposes, including debt consolidation, medical expenses, and large purchases. They are repaid in fixed monthly installments over a predetermined period.
- Important Features: The primer highlights key modeling considerations for personal loans, such as static default/prepayment assumptions, which rely on historical data to predict future loan performance based on factors like loan age and borrower profiles.
- Performance Expectations: As of 2024, the delinquency rate for personal loans stands at around 3.38%, with average interest rates hovering around 12.42%, though they can vary widely depending on market conditions and borrower credit quality.
HELOCs (full primer here)
The complexity of modeling HELOCs stems from their sharing characteristics of both a mortgage and a credit card. Reliable assumptions about borrower behavior both during the draw period (when balances can move in either direction at any time) and during the post-draw, repayment-only period are crucial to forecasting correct cash flows.
- Important Features: Understanding regional variations and borrower characteristics can provide deeper insights into HELOC performance, helping to refine risk models and lending strategies.
- Performance Expectations: The delinquency rate for HELOCs can vary based on factors such as economic conditions, borrower credit quality, and market trends. However, historically, the delinquency rate for HELOCs tends to be lower than for unsecured loans or credit cards.
What to Expect from the Series
Each primer in the series will not only break down the mechanics of the loan type but also provide performance insights and modeling considerations. With the ongoing volatility in the financial markets, these primers will explore how various asset classes perform under different economic conditions, such as rising interest rates, declining home prices, or increasing unemployment.
By offering practical, data-driven insights, the Private Credit Primer series will serve as an invaluable resource for private credit investors who are looking to deepen their understanding of these asset classes and navigate potential risks effectively.
Stay tuned for more primers in this series, as we continues to expand RiskSpan’s library of resources for private credit investors!
Presenters
Senior Quantitative Analyst, Rithm Capital
CEO, RiskSpan
CTO, RiskSpan
Wednesday, May 29th, 2024
1:00 ET
Hear from a distinguished panel including RiskSpan and Snowflake customers as they describe how Data Share has transformed their approach to mortgage investment. Specific topics to include:
- High-speed data processing using Snowflake for easy delivery of risk analytics and diligence data
- How Snowflake’s Data Sharing facilitates data access across and between organizations while maximizing computational performance and flexibility
- How Snowflake protects client data
- The unique value of a central hub for all mortgage industry data and never having to FTP a file again
Click Here to book a time to connect
RiskSpan is delighted to be sponsoring SFVegas 2024!
Connect with our team there to learn how we can help you move off your legacy systems, streamline workflows and transform your data.
Click Here to book a time to connect
Don’t miss these RiskSpan presenters at SFVegas 2024
Housing Policy:
What’s Ahead
Mon, Feb 26th, 1:00 PM
Wed, Feb 28th, 9:15 AM
Big Data & Machine Learning: Impacts on Origination
Wed, Feb 28th, 11:05 AM
Can’t make the panels?
Click here to make an appointment to connect. Or just stop by Booth 13 in the exhibit hall!
(Register for Day 3)
Register to watch: www.risktech100.com
Presenters
Alex Fishbein
Director, TD Securities
Divas Sanwal
Raj Dosaj
Chief Revenue Officer, RiskSpan
Recorded: Thursday, June 22
Accurately modeling the lock-in effect on housing turnover presents some unique challenges.
Join TD’s Alex Fishbein and RiskSpan’s Divas Sanwal as they discuss various approaches available to modelers for tackling these challenges.
[pardot-form height=”900″ id=”13338″ title=”Webinar: Prepayment Modeling: Today’s Housing Turnover Conundrum”]
Presenters
President, AC Cutts and Associates and Chief Economist, NACM
Senior Managing Director and Head of Climate Analytics, RiskSpan
Managing Director and Head of Modeling, RiskSpan
Recorded: Wednesday, March 29th
An informative webinar on the nation’s current “out-of-whack” housing supply and what it means for mortgage investors, homeowners, prospective homebuyers, and renters alike!
Housing economists Amy Crews Cutts and Michael Neal join RiskSpan credit and prepayment modelers Janet Jozwik and Divas Sanwal as they explore the factors that contribute to the current housing supply imbalance, including the cost of building, the impact of permits and zoning, and the emergence of the “missing middle.” They discuss how high interest rates and rental prices are incentivizing owners who relocate to hold old on to their old properties and become landlords. They also examine the impact of ADUs, zoning issues, and the availability of renovation financing.
Mortgage loan and security investors will learn about what housing supply means for prepay speeds. The panelists will consider the role of financing in addressing housing supply issues, including the market for low-balance loans and unconventional options like contracts for deed and lease-to-own arrangements.
The panel discusses the evolving housing needs of the population, including the desire to age in place, the challenges posed by multigenerational living arrangements, and the viability of several proposed solutions, including the potential for converting unused commercial properties into housing.
[pardot-form height=”900″ id=”12262″ title=”Webinar: An Investor’s Guide to America’s Housing Supply Crisis”]
Recorded: Wednesday, January 25th | 2:00 p.m. EST
As the Covid-19 pandemic began taking hold three years ago, very few people foresaw the dramatic impact it would have on household mobility. And yet within a year, millions of people had resettled – some temporarily, some permanently – to locations untethered to where their jobs were. Notwithstanding a gradual return to some offices, a tight labor market has enabled the increased mobility initially brought about by Covid to persist.
Will these mobility trends persist as other pandemic-era practices continue to recede? What role will climate change play in mobility as an increasing number of areas grapple with questions of insurability and other challenges tied to climate risk.
Housing economist Amy Crews Cutts, Freddie Mac chief economist and head of housing research Sam Khater, and RiskSpan head of modeling Divas Sanwal and head of climate analytics Janet Jozwik explore how these otherwise unrelated macro factors — Covid and climate – are combining to impact household mobility in the coming years.
[pardot-form height=”620″ id=”11785″ title=”Webinar: New Mobility Trends: The Impacts of Covid & Climate”]
Presenters
President, AC Cutts and Associates and Chief Economist, NACM
VP, Chief Economist, and Head of Freddie Mac’s Economic Housing and Research Division
Senior Managing Director and Head of Climate Analytics, RiskSpan
Managing Director and Head of Modeling, RiskSpan
ARLINGTON, Va., December 6, 2022 –RiskSpan’s Edge Platform, the only single solution to include data management, models, and analytics on fully scalable, cloud-native architecture, wins “Risk as a Service” category for a third consecutive year in Chartis Research’s vaunted RiskTech100® ranking of the world’s 100 top risk technology companies.
RiskSpan was also called out as a most significant mover, climbing 6 places in the overall ranking and improving its position for the fourth year in a row.
“RiskSpan’s strong innovation in data management helped drive its six-place rise in the rankings this year,’ said Sid Dash, Research Director at Chartis. ‘The company has won the RaaS award for three consecutive years, reflecting its tech-centric and pragmatic approach in a key area of the risk management space.”
Licensed by some of the largest asset managers, broker/dealers, hedge funds, mortgage REITs and insurance companies in the U.S., the Edge Platform is a fully managed risk solution across all asset classes with specialization in residential mortgage and structured products.
“This year’s award reflects the Edge Platform’s unique ability to help users find alpha, execute transactions with ease, and effectively manage portfolio risks,” noted Bernadette Kogler, RiskSpan’s co-founder and CEO. It is satisfying to be recognized for our continued efforts to help clients transform their business with modern workflows and operations to optimize productivity, cost, and resilience.”
About RiskSpan, Inc.
RiskSpan offers cloud-native SaaS analytics for on-demand market risk, credit risk, pricing and trading. With our data science experts and technologists, we are the leader in data as a service and end-to-end solutions for loan-level data management and analytics.
Our mission is to be the most trusted and comprehensive source of data and analytics for loans and structured finance investments.
Rethink loan and structured finance data. Rethink your analytics. Learn more at www.riskspan.com.
About Chartis Research:
Chartis Research is the leading provider of research and analysis on the global market for risk technology. It is part of Infopro Digital, which owns market-leading brands such as Risk and WatersTechnology. Chartis’ goal is to support enterprises as they drive business performance through improved risk management, corporate governance and compliance, and to help clients make informed technology and business decisions by providing in-depth analysis and actionable advice on virtually all aspects of risk technology.
Media contact: Timothy Willis
Recorded: Thursday, September 29th | 3:30 p.m. EDT
The panel discusses the likely impact of recent, and potential future, market events on GNMA MBS. Topics for discussion will include:
- How will the forthcoming, more stringent originator/servicer financial eligibility requirements affect origination volumes, buyouts, and performance?
- Who will fill the vacuum left by Wells Fargo?
- What role will falling prices play in delinquency and buyout rates?
- What will be the impact of potential Fed MBS sales.
Presenters
[pardot-form height="550" id="10741" title="Webinar: Bumpy Road Ahead for GNMA]
Managing Director, MBS/ABS Strategist, Hilltop Securities
Senior Managing Director, RiskSpan
Agency MBS Analyst, DoubleLine Group LP
Wednesday, August 24th | 1:00 p.m. EDT
Live Demo of RiskSpan’s award-winning Edge Platform. Learn more and ask questions at our bi-weekly, 45-minute demo.
Historical Performance Tool: Slice and dice historical loan performance in the Agency and PLRMBS universe to find outperforming cohorts.
Predictive Loan-Level Pricing and Risk Analytics: Produce loan-level pricing and risk on loans, MSRs, and structured products in minutes – with behavioral models applied at the loan-level, and other assumptions applied conveniently to inform bids and hedging.
Loan Data Management: Let RiskSpan’s data scientists consolidate and enhance your data across origination and servicing platforms, make it analytics-ready, and maintain if for ongoing trend analysis.
[pardot-form height=”675″ id=”10479″ title=”Live Demo of RiskSpan’s Award-Winning Edge Platform — 3″]
About RiskSpan:
RiskSpan offers cloud-native SaaS analytics for on-demand market risk, credit risk, pricing and trading. With our data science experts and technologists, we are the leader in data as a service and end-to-end solutions for loan-level data management and analytics.
Our mission is to be the most trusted and comprehensive source of data and analytics for loans and structured finance investments.
Rethink loan and structured finance data. Rethink your analytics. Learn more at www.riskspan.com.
Presenters
Director, RiskSpan
Sales Executive, RiskSpan