Deep Mortgage Knowledge               


Whole Loan Capital, LLC

Buying Whole Loans - Risk Lurking

Loan Risk Lurking


In 2005, every major Rating Agency had teams of PhDs, quants and data analysts combing over every new RMBS to determine ratings. All of them got it wrong.


“It’s hard to predict the weather if you’ve never gotten wet”


So how do you know the loans you're buying are good?  You can have Clayton or AMC underwrite them, pull fraud reports, review appraisals, and still miss some sizable landmines. 


That’s why we're rolling out a service to review loan risk on behalf of institutional investors.  The risk assessment is loan level, not macro.  


The loan risk starts with a comprehensive data review to spot high risk elements inside pools, high risk originators, correlated party involvement, recurring product "pushing" and other potential issues that could come back to haunt you down the road.  An experienced eye can spot things others miss.


We can find issues, for example, by considering things like:

  • LO, 
  • NMLS data, 
  • Lender, 
  • Channel, 
  • Production selection veracity, 
  • Loan pricing,
  • Loan “themes”
  • Vendor selection,
  • Data integrity, and
  • countess other traits that surface in different pools.

Our experience level will enable us to find the red flags others missed.


If there are issues uncovered from the review, you can engage us or other third parties for in-depth file review, comprehensive fraud checks, or anything else that might be needed.  Lender visits can be extremely helpful as well. That's your choice.  We'll show you where the problems are to be found. 


Reviews can be done one-off, monthly, quarterly, or semi-annually, as you see fit.  


The purpose of this service is to see if originators are telling you the truth.  From experience I can tell you there are always bad apples in loan production.  A few bad loans resulting from "fast" originators will not only hurt returns, they'll distract you from running your business, and bring scrutiny from CIOs, CEOs, regulators, or investors.  It's better to avoid these problems. 


Reviews can be done pre or post-purchase.


We are:

  • Completely independent from all originators – we don’t do any work for lenders,
  • Not governed by legalistic "posterior covering",
  • Experienced like no others at finding these problems – have looked at thousands of pools and portfolios,
  • Fast and very inexpensive on a relative basis.


Please let me know if you would like to see a proposal or have a conversation.    


Keep your eyes open!





About Us

Whole Loan Capital, headed by David Akre, provides clients with broad experience and capabilities in mortgage finance.  

David Akre’s experience includes over thirty years in mortgage capital markets, portfolio & REIT management, lending & operations:

•  Started and ran conduit / securitization programs at three different mortgage REITs: New York Mortgage Trust (NYMT), Five Oaks and Thornburg Mortgage,

•  Co-founded and ran the only public mortgage REIT of its peers[1] to survive the meltdown

•  Had better credit track record than all major banks & Wall Street conduits[2]


Together with other experienced mortgage professionals, WLC can provide you with a very competent, principled, and astute focus on:

•  Portfolio credit risk,

•  Counterparty risk,

•  Ecosystem risk,

•  Loan sales or acquisitions,

•  Portfolio restructuring,

•  Mortgage Servicing Rights purchases,

•  Capital markets (securitization) transactions.

[1] IPOs ‘02 to ‘04

[2] Akre’s NYMT 2005 prime hybrid ARM securitization losses were 31% of industry average.  The program was discontinued in Q1 2006 under Mr. Akre's initiative.


Disclaimer - This overview is for informational purposes and is not an offer to sell or a solicitation of an offer to buy any securities.

  • The occupanc
Contact Information:

dakre @ wholeloans.com