.blog #page { padding-top: 24px; }

What’s really at stake with your institution’s CECL data?

What’s really at stake with your institution’s CECL data?

Since the Current Expected Credit Loss (CECL) standards were finalized in June 2016, one major area of concern among bank and credit union CECL teams and their CFOs has been that the new set of loan loss calculations will require extremely granular and high-quality data.

What drives trade success for whole loans in the secondary market?

What drives trade success for whole loans in the secondary market?

There is a transparent market for newly originated residential mortgages conforming to the guidelines set by Fannie Mae, Freddie Mac, Ginnie Mae and loan aggregators. There is also a very active but much less transparent secondary market for loans that didn’t meet those guidelines and for seasoned loans that are performing, re-performing or non-performing.

Community banks face rise of liquidity risk, FDIC warns

Community banks face rise of liquidity risk, FDIC warns

In 2017, the FDIC released a paper, Community Bank Liquidity Risk: Trends and Observations from Recent Examinations, which outlines key challenges facing community banks and attempts to raise awareness on liquidity issues facing banks. Now, in 2018, a growing number of banks face funding gaps, creating a renewed interest in the FDIC’s paper.

A decade after the crisis, we are still learning key lessons about liquidity risk

A decade after the crisis, we are still learning key lessons about liquidity risk

“Wow, I can’t believe I can say that the financial crisis was a decade ago,” said Chris Mills, Managing Director of Model Validation Services for MountainView, a Situs company, during Wednesday’s liquidity risk webinar. “It doesn’t feel like a decade.”

How will Hurricane Florence impact MSR values?

How will Hurricane Florence impact MSR values?

Hurricane Florence caused between $38 billion and $50 billion in damage and economic losses, according to an article in The Wall Street Journal on Sept. 21. Within this estimate is damage to an estimated 391,000 homes with mortgages, including an estimated 283,000 homes in 18 North Carolina counties that FEMA has declared disaster areas, according to a Sept. 25 article by the Mortgage Bankers Association.

Liquidity model validation: A critical component of liquidity risk management

Liquidity model validation: A critical component of liquidity risk management

So many decisions and transactions affect liquidity, which is why financial institutions are taking extra steps to implement a robust liquidity risk-management strategy that will help identify, monitor, measure and control the institution’s day-to-day liquidity management and ensure they are adequately prepared for unforeseen liquidity demands.

What did 100 banks say in a CECL implementation progress survey?

What did 100 banks say in a CECL implementation progress survey?

Selecting a forecasting methodology is at the core of banks’ loss-estimation process for the Current Expected Credit Loss (CECL) standard and a telling overall snapshot of banks’ CECL implementation progress to date. Among 100 banks surveyed nationwide, 39% have already selected their forecasting methodology, according to a new white paper by MountainView Financial Solutions, a Situs company.

Are banks and credit unions too comfortable with their liquidity positions?

Are banks and credit unions too comfortable with their liquidity positions?

Amid very positive economic conditions nationwide, many financial institutions have excess cash and liquidity. At the same time, while economists can only speculate when we might start to see signs of the next recession, banking regulator expectations about liquidity risk management are at an all-time high.

Five factors affecting credit union deposits

Five factors affecting credit union deposits

In today’s economic environment, financial institutions of all shapes and sizes need to think long-term about their balance sheet and business decisions. Credit Unions, in particular, are unique in that a large percentage of funding comes from member shares, money markets and Certificates of Deposit. Since deposits are a main source of funding, Credit Unions need to keep in mind the following five factors affecting deposit performance:

The CECL paradox and its impact on financial comparability

The CECL paradox and its impact on financial comparability

The Financial Accounting Standards Board (FASB) did not prescribe a specific approach when it required the Current Expect Credit Loss (CECL) standard, leaving it up to financial institutions to determine the best path forward. Since Allowance for Loan and Lease Losses (ALLL) is no longer an apples-to-apples comparison, how will this impact a financial institution’s ability to compare itself to its peers?

What financial modelers can learn from MoviePass when implementing CECL

What financial modelers can learn from MoviePass when implementing CECL

If you have followed the news about MoviePass and its recent financial downfall, you may have read about declining stock prices and angry customers, and made a mental note about what not to do in business. However, there is one critical but less obvious lesson to learn from the MoviePass pandemonium – and it is one that just might keep your financial institution from going down the wrong CECL road.

5 overlooked risks to watch in financial services

5 overlooked risks to watch in financial services

Yes, we all know cyber security is the top risk facing banks and companies across all industries. However, as financial industry leaders scramble to address cyber risk and security, other banking risk could easily fall under the radar. When assessing business risk in the coming quarter and heading into 2019, keep these sneaky culprits in mind:

MSR portfolio hedging continues to produce positive results

MSR portfolio hedging continues to produce positive results

Risk management activities for 14 of the largest holders of residential mortgage servicing rights (MSR) produced an average net gain in asset value of 0.4% during the second quarter of 2018, according to the MSR Industry Report released last week by MountainView Financial Solutions, a Situs company. The largest gain among the 14 companies was 4.5%, and the largest loss was 6.8%.

What five key activities should credit unions be doing today in their CECL projects?

What five key activities should credit unions be doing today in their CECL projects?

If credit unions want to stay on track for implementing the Current Expected Credit Loss (CECL) standard, they need to have already completed several milestone tasks and to complete several more by the end of the year. Credit unions also need to be sure they have allocated sufficient time to complete the tasks that need to be finished between 2019 and 2022.

Frequent valuations can be essential for pre-recession risk management of CMBS B-pieces

Frequent valuations can be essential for pre-recession risk management of CMBS B-pieces

Rising values for commercial real estate (CRE) have supported prices for commercial mortgage-backed securities (CMBS) for years. But with increasing talk about a cyclical peak in property values, or even a recession within the next couple of years, CMBS investors as a whole and B-piece investors in particular are starting to think about how they can prepare for the possibility of price declines.

CECL methodology will become part of bank M&A due diligence by mid-2019

CECL methodology will become part of bank M&A due diligence by mid-2019

After many quiet years, merger and acquisition (M&A) activity at banks has been on the rise in 2018, and several favorable trends will likely sustain the momentum through the remainder of the year. By the middle of 2019, as banks evaluate acquisition opportunities, they likely will add a new component to their customary due diligence: an exploration and understanding of the target company’s Current Expected Credit Loss (CECL) methodology.

What you missed in our August MSR webinar

What you missed in our August MSR webinar

Escrow custodial account earnings have a significant impact on mortgage servicing right (MSR) asset values, and – in contradiction to what many holders of the asset might think – mortgages of borrowers with low credit scores aren’t prepaying slower than loans to borrowers with higher credit scores.