Mortgage Consumer Lending Services Overview

8/22/2019 Mortgage Consumer Lending Services Overview

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National Mortgage &

Consumer Lending

Services (MCL)

kpmg.com


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The mortgage and consumer lending industry has experienced unprecedented changes. Financial services and housing are the nations

most challenged economic sectors, and the industry is under the scrutiny of regulators, lenders, consumers and the public media. New

reforms, regulations and agencies, such as the Consumer Financial Protection Bureau, have been established to help manage ongoing

industry risk. This dynamic environment directly impacts a mortgage and consumer lending organizations financial, operational and

regulatory requirements, so organizations must manage related risks.

How KPMG Can HelpOur experience covers the operational and financial pillars of the Mortgage and Consumer Lending industry and is complemented by ourFS Regulatory, FS Performance and Technology, and Forensics Assistance practices.

The Loan Li fe Cycle & The Four Pillars

Loan Origination & Secondary

Marketing Operations & Finance

Loan & Portfolio

Servicing OperationsPortfo lio/Finance & Account ing Post Loan Sale

REGULATION/COMPLIANCE/AUDIT

PERFORMANCE AND TECHNOLOGY

FORENSICS ASSISTANCE

Pre-qualification

Processing

Underwriting/Scorecards

Appraisals

Pre-closing

Closing

Funding

Post-closing

Pipeline Management/Best Execution

Shipping & Delivery

Quality Control

Rate Locks & Hedging

Loan File Set-Up/On-boarding

Payment Processing

Tax & Insurance EscrowManagement

Investor Reporting

Custodial Accounting & DocManagement

Delinquency Management

Loss Mitigation

Third Party Vendor Management

Cross-sell Maximization

Portfolio Retention

Customer Service (Inbound andOutbound)

Quality Control

Modeling & Model Validation

Capital Markets

Securitization/Whole LoanSales/Portfolio

Loan, Portfolio, and ABS/MBSValuations

Liquidity

Accounting Advisory

ALLL

ALM

Capital Requirements

Servicing Assets

Risks related to Warehouses, SP Vs,and Correspondences

Hedging

Regulation AB readiness andconsulting

CDO/CLO Note Valuation Reports

CDO/CLO, REMICs, PFICs, CFCs,Partnerships, Grantor Trust, NIMS,Mortgage REITs

Waterfall Payment Verification

Market Discount and Original IssueDiscount Tax Calculations

Representation & WarrantyAssessments

Efficient Tax Structuring Tax Loan Modification Calculations

REMIC Schedule Q/Excess Inclusionand PFIC / 5471 gathering andreporting

Bad debt deduction support

Integrated computation reportingplatform


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What We Do: Representative Service Offerings

Operations and Processes

Operational assessments

Process improvement services

Business process flow mapping

Underwriting Assistance (AutomatedPrograms,QC, Scorecard Development, Compliance)

Anal yti cs & Cred it Risk Managem ent

Behavioral and cash flow model validationand development

Loan loss reserve forecasting processreviews andFAS 5 model validation

Migration analyses for roll ratedetermination and collections operationsefficiencies

Credit data mining and modeling

Evaluation of credit data mart design andutilization

Credit analytics gap assessments, processreviews and roadmaps

Valuation Services

Residential and commercial mortgage andasset-backed Securities valuations

Assistance with estimating loan lossesassociated with distressed mortgages

Reasonableness reviews of managementsvaluation model and assumptions

Mergers and acquisition due diligence andadvisory

Consumer Whole Loan Pools

Servicing Assets

Servicing Operations

Loan Boarding

Document Management

Vendor Management

Investor Reporting Quality Control

Management and Regulatory Reporting

Performance Management

Dashboards

Costing Analysis

Business Intelligence

Benchmarking/Gap Analysis

Consumer Compliance

Regulatory examination/litigationpreparedness and/or assistance

Compliance management program andgovernance reviews

Fair lending assessments and ongoingmonitoring

Third party vendor management reviewsfor consumer compliance

Acc oun tin g, Tax and Other Ass urance

Services

Structured products cash flow modeling

RMBS, ABS, and CMBS Agreed-Upon-Proceduresand Transaction Services

Other-than-temporary impairment analysis,modeling and policy reviews

ASC 860, ASC 810, ASC 310-20 reviewand project management

Benchmark studies, market surveys, andtrend analyses

Interest Rate Risk

Asset-liability management (ALM) modeling

Mortgage pipeline and hedging modeling

Model validation for ALM & mortgage

pipeline management Risk Management Consulting

Liquidity Strategies

Technology Services

Risk, compliance and financial packageimplementation

Contact center technologies and processredesign

Testing (unit, system and UAT, stress)

Implementation planning and rollout,including training

Model Development

Lease Accounting Model

Effective Yield Model

FDIC Loss Share Tracking and ReportingModel

Tax Reporting Modules

Servicing Rights Valuation Modeling

Basel III Modeling

CDO and CLO

PFIC and CFC Tax Reporting

QEF and other investor tax compliance

Effective Date Procedures, Payment DateProcedures, and Monthly ReportProcedures

Transaction Services

Default Management

Gap analyses of meeting Treasury, GSE,and regulatory requirements

Transactional testing for loss mit (incl. loanmods) and foreclosures; credit/compliance

policies and procedural violations

Fraud detection and prevention reviewanalyses

HAMP/HARP

Post Loan Sale

Payment Verification

Regulation AB readiness and consulting

Securitization Vehicle Tax Compliance andReporting

Market Discount and Original Issue

Discount Tax Calculations Significant Loan Modification Calculations

and Model/System Solutions (Tax)

Representation and Warranty Exposures

Program/Project Management

Large-scale program initiatives

Small to mid scale project initiatives

Program/project reporting facilitation

Staff augmentation in the field by subjectmatter professionals


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The KPMG Advantage

The National Mortgage and Consumer LendingPractice is:

A group whose offerings span operational needs

such as business process improvement and re-design, compliance assistance with newregulations, and financial analysis at the portfolioand loan level.

A National Subject Matter Professional Group withapproximately 200 fully dedicated professionalsfocused on the complex and ever-changingfinancial, operational, and regulatory needs of the

mortgage and consumer lending industry.

Our approach allows us to provide comprehensiveservices by drawing on the resources of ourfinancial, accounting and tax services to thesecuritization industry. Our experienced StructuredFinance professionals leverage their skills andsophisticated technology to help identify, analyzeand resolve a range of financial, liquidity andregulatory challenges, including managing credit,interest rate, balance sheet and other risks, andpreparing for strategic activities such as assetacquisition and liquidation, and mergers andacquisitions.

We provide broader advisory services, as well asexternal and internal audit subject matter assistanceto the majority of Financial Institutions, GovernmentAgencies, and Specialty Finance Companies. Forexample:

Five of the top 10 global institutions

Five of the top 8 US banks

Four of the top 10 Fortune 1000 commercial banks

Seventy percent of the top 15 Mortgage andConsumer Lending Companies

In addition to mortgage lending companies andgovernment sponsored entities, we serve the followingconsumer lending asset classes:

Credit Cards/Unsecured Debt

Auto/Equipment Leasing

Student Lending

Non-bank Retail/Utilities


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MCL Contacts

Mark TwerdokU.S. Credit Risk Services [email protected]

Viktor [email protected]

Kimberly Davis-RiffePartner703-286-6850

[email protected]

Pedro [email protected]

John HermlePartner703-286-8125

[email protected]

Shelley Lee [email protected]

David PangPartner703-286-8293

[email protected]

Ant hony Sepc [email protected]

Tina [email protected]

Douglas [email protected]


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Mortgage Consumer Lending Services Overview