The Emperor's New Clothes

Level1Analytics Receives Prestigious Mortgage Technology Award
March 18, 2014, 5:26 pm
Filed under: Uncategorized

Ft. Lauderdale, FL – Level1Analytics ™ delivers “great advances to the mortgage industry.” So says Mortgage Banking Magazine in awarding Level1Analytics a 2014 Tech All Star Award  for its L1-MSR product, the first cloud-based Mortgage Servicing Rights Valuation software. L1-MSR provides an economic and transparent way to value and stress-test mortgage loan and mortgage servicing portfolios without the need for specialized staff, costly hardware, and difficult-to-learn-and maintain software. The company’s do-it-yourself valuation tool allows owners, managers and regulators of mortgage servicing portfolios to better understand these complex assets.

“Working with our technology partner, Intraprise Solutions, we created an easy-to-use tool that can be used by banks, mortgage banks, credit unions and others to provide them with accurate mortgage valuation data,” said Dr. Thomas J. Healy, Ph.D., president of Level1Analytics. “The recent mortgage crisis brought to light how difficult it is to value mortgage assets. We help financial institutions better understand the assets they are evaluating.”

“There is a tremendous amount of data out there, but small to mid-sized banks traditionally have a harder time harvesting that information,” said Intraprise Solutions’ CEO, Ralph Arcaro. “Working closely with Level1Analytics, we were able to leverage cloud-based computing technology and provide users with access to sophisticated analytics, previously only available to much larger institutions.”
Completely scalable, LI-MSR is used by institutions with servicing portfolios ranging from 120 loans to over 1 million loans. The software is updated monthly to reflect the latest prepay speeds and assumptions. Users can rely on these market-tested variables or use their own. By simply uploading loan level portfolio characteristics into Level1Analytics’ secure platform, what used to take days or a team of analysts to accomplish is completed in a matter of minutes.
L1-MSR is licensed to individual institutions on a monthly basis and provides the power to make informed MSR management and investment decisions using the most complete stratification, valuation and accounting software available.
About Level1Analytics™
Level1Analytics, headquartered in Fort Lauderdale, Florida is a joint venture between the Sextant Group and Intraprise Solutions. Level1Analytics provides financial modeling software to the mortgage lending industry. The company develops cloud-based software technology that allows financial institutions to value their mortgage portfolios and mortgage based assets in an easy, accurate, defensible, economical and transparent way. For more information go to

About Intraprise Solutions
Intraprise Solutions rapidly designs and implements transformative, specifically tailored information technology applications for leading companies in the financial services, insurance and technology markets. Helping clients of all sizes reach their peak performance with sophisticated analytics, leveraging cloud and grid platforms, and “big data” processing principles, Intraprise Solutions delivers on the promise of real, powerful data. Located in Yardley, PA, Intraprise Solutions can be found at

Mortgage Delinquencies
December 31, 2013, 10:46 am
Filed under: Uncategorized

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5/15/2013 Prepay Speeds
May 15, 2013, 12:45 pm
Filed under: Uncategorized

Prepay speeds continue their downward migration after having, what seems to be, a temporary blip up as of 4/30. This seems consistent with a slight increase in mortgage rates since April month-end.

2013_0315 SIFMA

12/31/2012 MSR Values
March 25, 2013, 5:40 pm
Filed under: Uncategorized


Servicing values appear to have turned the corner. After bottoming out in the third quarter of 2012 with an average price of 61bps, year-end 10K results show an increase, on average, of six basis points to 67bps. This is consistent with what we are seeing with our own client valuations. Prepay speeds have begun to drop as rates strengthen and the population of loans that can be refinanced dwindles.

National Mortgage News article on Model Validation

We recently wrote an article on Model Validation for National Mortgage News. You can find it here:

12/15/2012 SIFMA Prepay Speeds
December 18, 2012, 10:26 am
Filed under: Mortgage Servicing Rights, MSRs, Prepay Speeds

December 15th prepay speeds have been uploaded to the L1A valuation site. Speeds seem to have leveled off for the current coupon 30s. The 15 speeds have ameliorated somewhat (see graph below). Let’s hope this trend continues into year-end.

15 year conforming PSA

15 year conforming PSA

9/30/2012 MSR Values
December 5, 2012, 4:17 pm
Filed under: Mortgage Servicing Rights, MSRs, Valuation Tools

The third quarter MSR values for several of the larger servicing companies have been published in each of their respective 10Qs.  The results are summarized below:


As you can see, MSR values have continued there inexorable slide, but at a slowing rate. The weighted average value was 109 basis points as of year-end 2009, it dropped to 99bps at year-end 2010, 68 at 12/31/2011, and now it has declined to 61 basis points. The good news is that 61 is only 3 bps lower than it was in June. Maybe we are approaching, or have hit, bottom.