The ForeScore™ Suite
The ForeScore™ Suite is a powerful set of tools that make it possible for lenders to dramatically increase profits while carefully controlling risks and costs. Using the ForeScore™ system allows lenders to:
- Increase the proportion of profitable loans and confidently buy deeper
- Gain a competitive advantage over companies that use traditional risk-assessment tools
- Identify the appropriate interest rate and loan terms that make deals profitable
- Automate processes and reduce costs
- Understand and control macroeconomic risks like unemployment and interest rates
- Understand and manage local economic risks that affect the borrower and the collateral
- Risk-price loans to increase volume and profits
- Design products that increase volume and profits
- Understand prepayment risks and design strategies for customer retention
- Address regulatory auditing needs including value at risk
Underlying the ForeScore™ system is a unique approach to loan analysis that evaluates not only borrower credit but also the product structure, the collateral, and the local economic conditions. The approach is illustrated below.
This comprehensive approach considers all four elements of loan value and greatly increases a lender's ability to recover profitable loans from the pool of applicants. Loan volume can be increased even while holding the expected defaults constant. Large "swap sets" are uncovered that dramatically increase profits.
The ForeScore™ Components
The ForeScore™ Risk Analyzer
The ForeScore™ Risk Analyzer is the most accurate way to set loss reserves and pool performance expectations. This powerful tool helps manage economic risks proactively. The ForeScore™ Risk Analyzer takes loan information and combines it with the regional economic data and state-of-the-art analysis provided by UFA. The performance of each loan or pool of loans is simulated under a realistic range of economic conditions. The outputs from the analysis are the expected static pool cumulative losses for the pool as well as annual loss expectations under the specified economic conditions. The value at risk can be determined by simulation methods over likely states of the world.
This tool is invaluable for securitizers who can use it to generate pool "curves" and pool performance projections. When coupled with a bond model, retained tranches like IO strips or residuals can be valued under a variety of economic scenarios. Risk analyzer is now available for both auto and mortgage loans.
For more information on how the ForeScore™ tools can help your organization, please contact:
University Financial Associates LLC
Email: info@ufanet.com
Phone: (734) 995-7271
The ForeScore™ Loan Analyzer
The ForeScore™ Loan Analyzer is UFA’s decisioning tool. The Loan Analyzer receives loan data from a lender’s origination system and processes the loan information with UFA’s economics data and analysis. ForeScore can return either an automated decision to the origination system or a detailed risk analysis of the prospective loan for evaluation by an underwriter. The analysis returned includes expected defaults, prepayments and expected static pool losses as well as an analysis of the borrower, the collateral, the product structure and the economic prospects for the specific location. Only ForeScore provides you such insightful analysis and deep understanding of your loan applications.
Most important, however, is the ValueScore™, which measures the profitability of each loan based on monthly cash flows and costs. The ValueScore allows the underwriter to not only accept and reject loans but also restructure marginal loans for profitability. Now available for both auto and mortgage loans.
For more information on how the ForeScore tools can help your organization, please contact:
University Financial Associates LLC
Email: info@ufanet.com
Phone: (734) 995-7271
The ForeScore™ Portfolio Analyzer
The ForeScore™ Portfolio Analyzer is designed to assist lenders with profitability analysis, benchmarking, product pricing, product design and marketing. ForeScore Portfolio Analyzer is a powerful and versatile operations management tool that makes analysis of a loan portfolio simple, fast and easy. Loans can be grouped by segment (e.g., by pricing cell, by location, by originator, by manager, etc.) and analyzed in detail. The expected performance of each group can be calculated and compared. For example, a lender might find that loans from one originator or channel are more profitable than another. Strategies can then be devised to improve poor performers and reward the best performers. Now available for both auto and mortgage loans.
For more information on how the ForeScore tools can help your organization, please contact:
University Financial Associates LLC
Email: info@ufanet.com
Phone: (734) 995-7271
Strategy
UFA can help you increase revenues, reduce costs and control risks with our:
Our expertise benefits lenders through better:
The following UFA projects illustrate applications of UFA’s analysis: