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DS News Webcast: Tuesday 1/20/2015

New York-based credit rater Kroll Bond Rating Agency has updated its residential mortgage default and loss model, incorporating a new methodology that projects loan-by-loan default, loss, and prepayment on residential loans in order to track non-agency residential mortgage-backed securities.The new methodology uses revisions that reflect additional data analysis and evolving origination trends, and is an update to KBRA's RMBS model methodology originally released three years ago in January 2012.

Substantive revisions were made to the model in three areas: Reduced default expectations for purchase loans, revised timeline and expenses for liquidated loans, and penalty for high debt-to-income ratio loans. The methodology report includes data such as calculation for loss severity, expected loss for defaulted loans, rationale and definition for levels of default, and loss stress associated with each rating category. The report documents the elements as well as the predictive power of the default and prepayment model.

Mortgage servicer Altisource Portfolio Solutions is cutting more than 800 jobs both overseas and at home in the wake of what was a bumpy year for the company. The move was announced in a conference call with investors on Friday that saw Altisource management working to reassure shareholders who have seen their stock drop more than 80 percent in the last year. In the call, CFO Michelle Esterman said the layoffs reflect the company's need to realign its expenses as Ocwen Financial Corp.—Altisource's biggest customer since it spun off in 2009—faces roadblocks to its own growth.

About Author: Jordan Funderburk

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