Mortgage Banking Business Intelligence and MIS Solution

1. Mortgage BankingBusiness Intelligence and MIS Solution

2. Outline • Introduction - Who we are

3. Introduction – Who we are • Orbit Systems is a Columbus, OH based Business Intelligence company • Business domain expertise in Financial Services, Healthcare and Retail • Dedicated practice with trained & certified BI professionals including Data Warehouse architects, ETL/Report developers & SME • Strategic partnerships – IBM, Oracle, Informatica • Cater to Fortune 500 clients Our recent experience of successful business intelligence implementation at Chase Home Finance gives us a strong foothold in the MBBI domain. We have the domain knowledge as well as the technical expertise to make it happen. We know the reporting needs of a Mortgage company, what is needed by their management to make business decisions in this fast changing environment.

4. Introduction – What we do • We implement custom tailored Business Intelligence solution • Not just technical solution. We bring business knowledge • We implement BI solution that bridges the gap between management and daily operations & provides single point of access for reporting • A solution for everyone in the organization (Right tools for the right user): • Executives - Our analytics helps business decision-makers analyze reliable, timely information on day to day business activities • Power Users - Analysts focus on analysis not on data gathering. • Operations • We build Workflow management tools to: • Drive operational efficiencies • Save cost by additional visibility on expense • Accelerated time-to-results with Orbit’s domain knowledge of the mortgage industry combined with technical expertise

5. Introduction – How do we do IT • Custom tailored solution catered to client needs • GAP Analysis => Recommend Solution => Phased implementation • Get down to business => Iterative Approach (Spiral)

6. Introduction – Approach

7. Mortgage Banking • People are feeling the pain • Rates are all time low • Higher focus of cost savings • Changing business landscape => drives better understand the business • Focus on “Do more with less”; Higher productivity and efficiency • Government initiatives & regulations & audit scrutiny • Mergers and acquisitions • Bankruptcy and fear in the environment • Risk : Credit risk : consumer and bank • Mortgage and servicing valuation • Loss Reserves calculations, • Capacity Models – Staffing (ABC models)

8. Mortgage Banking • Loss Mitigation and mortgage modification • MHA – Making house affordable, • TMQ - Trial Modification Qualifier • Collections (inbound and outbound) tracking • Call Center metrics • mortgage companies have data scattered—in different forms and systems • The combination of compliance requirements, a competitive business environment, the sub-prime credit crunch and the need for stronger management will drive retail banks' investment in business intelligence software. • Furthermore, ever-increasing regulatory pressures on financial services companies make it all the more important for banks to have risk management, fraud prevention, and anti-money laundering systems in place. • The need for comprehensive Business Intelligence in Mortgage industry is now needed more than ever. The dynamic nature of mortgage business requires timely access to accurate information which is consistent throughout the organization. • Interest rate changes: Affects call volume, payoffs and loan originations. • Federal Initiatives: Affects on mortgage modifications, and delinquent loans.

9. Business Intelligence • Drive Business Performance • Higher Business value • Cost savings / analysis • 36 percent of managers state that they have the right information available to them to run their business • without the right analysis, reporting tools and simplified access • integrates the mortgage company’s own data and provides a unified business intelligence • Provide data collection mechanisms • standardized reports that deliver insight • Visibility into business operations • bridges gaps between management and operational • Multi-tiered reporting in one solution • Data integrity and consistency of reports and metrics • Focus on BI Architecture , not data warehouse (technical) architecture

10. Business Intelligence - MIS • Better risk analysis based on: • LTV geographic location • Property Valuations • Credit Ratings • Performance based incentive • Loan Analysis by Channel – Broker vs. Self • Gain insights quickly—View your key business drivers from a single source through the Cognos ReportNet dashboard. • it tracks and monitors operational risk, and provides a more sophisticated and consolidated picture of risk exposure across all LOBs • To secure the reports they need, these managers often • have to work extensively with their IT departments, sacrificing • both time and opportunity. • • Interest rate movements. • • Pipeline volumes. • • Processing efficiency. • • Performance by region and broker. • • Customer satisfaction.

11. Success Stories - Challenge • Numerous data silos throughout business areas • Data scattered in multiple forms – MS Access, excel, emails. • Data consistency (or lack thereof) – Everyone had different number to report, human error • Low Customer Satisfaction due to lack of accountability • Lower customer loyalty due to lack of data access in customer relations group • Higher customer escalated complaints • Low self service channel utilization (e.g. IVR, Web) • Higher workforce attrition resulting in lower productivity and efficiency • Access to consistent information for rating agencies and PMSR valuations • Unmanageable T & E expenses • No financial oversight on the staffing process • No financial accountability on operational manager • Misalignment / distributed BI environment

12. Success Stories - Challenge • Lack of intelligence on customer contacts • Lack of analytics on collector / banker / call center behavior

13. Success Stories - Solution • Facilitated merger activity • Consistent reporting for call centers across • Drove accurate headcount forecasting by Product and Channel • Visibility into staffing process resulting in lower headcount expense • Reduced repeat caller volume • Provided mechanism to allocate expenses across business units based on drivers • Drive better data capture via business process improvements • Created workflow management systems (CSTS, ERT, ERG) • Web based report delivery system • Report usage tracking – • ALL YOUR REPORTS: ONE INTERFACE • support financial analysis, customer intelligence systems and more formalized performance and risk management, have all collectively become an important organizational imperative. • This has resulted in a focus on establishing efficient sales channels, improving the quality of customer service and maintaining high levels of customer retention. A front-office focus means that distribution channels and customer relationships - cross/up-selling and the ability to search for new potential growth segments - are becoming increasingly critical to a bank's success. This requires an improved and more complete understanding of the consumers of banking services, and the ability to act on that information.

14. Success Stories - Solution

15. Mortgage BI - Implementation • Consolidation of data into single repository • Data cleansing • data integration, metadata management, and data store infrastructure will be vital to create this comprehensive view

16. BI Architecture

17. BI Architecture

18. BI Solution – Analytical Reporting • OLAP Cubes • Call Center Metrics • Portfolio Tracking • Financial (P&L and Balance Sheet) • Headcount • Default Portfolio Tracking • Bankruptcy & Foreclosure • Collections • Loss Mitigation / Losses – Payment to Vendors • Business View for Power Users

19. BI Solution – Operational Reporting • Daily Delinquency Trends • Pipeline reports by products • Daily Waterfall • Volume and UPB trends by lien an LTV • Daily Potential Delinquency Reports (POTS) • Daily REO aging report • Good Bank / Bad Bank Reporting • Escrow Administration • Hazard insurance reporting • Performance Reviews (PMAC Scores) • Portfolio Trends (Different Portfolio, Loan Type cuts) • Delinquency (Outstanding, 1-29, 30+ buckets) • Roll Rates (30-59, 60-89, etc…) • Loss Analysis - Loss Composition, Writedowns, Loss Severity, Short Sale / Settlements • Inventories – Foreclosures, Bankruptcy, REO • Loss Mitigation – Modifications, Forbearance, Reinstated, Deed in Lieu, Short Payoff

20. BI Solution – Analytical Reporting • Non-performing assets as a percentage of receivables • Net charge-offs as a percentage of average receivables • Reserves as a percentage of receivables • Provisions and net charge-offs • Aging of advances • Financial quantification of default pipeline • Reserve level analysis based on historical loss data and comparisons to risk pipeline • Occupancy status • Fraud Prevention – Check verification, dormant accounts, • Cross Sell management, incentives, tracking, compensation • Owned vs. non-owned portfolio analysis

21. BI Solution –Executive Reporting • Business Reviews • Site Scorecards, • Historical Trends, comparisons • MBA & Rating Agency Reviews • JDPower Metrics • Product Profitability • Real Time Unified Dashboard • Attrition Reporting • P & E and KPI • Merger / Integration

22. Introduction – Approach Phase1:KickoffWorkshop:Theworkshopwillinitiatetheengagement.Theonedaywork-shopwillinvolveahighlevelunderstandingoftheclient’sstrategy,expectations,validationoftheagendaandappointmentoftheclient’scontacts(projectparticipants)forinterviews. Phase2:StudyandResearch:InphasetwoPolariswillperformacomprehensiveinventoryassessmentstudy,understandtheclient’sbusinessplans,productgapsandtechnologyrequirementscross10days. Phase3:AnalysisandBlueprintDevelopment:InphasethreePolariswillanalyzetheinformationgatheredtocomeupwithrecommendationsfortheclient,theoverallblue-printforthedeploymentoftheproduct,effortforthegapsandprioritization(4days–overlapwithPhase2) Phase4:FinalPresentation:ThePolaristeamwillpresentitsanalysisandfindingsanddiscussthesamewiththeclientandincorporatetheirfeedback.Thiswillbeatwoworkingdayprocess.