Loan Level Data Report Dan Feshbach

Report
Hub for Student Loan Data
Competitive Advantage
in Sharing Data with Investors
May, 2013
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be made available, in whole of in part, without the prior written consent of MeasureOne LLC
1
Outline of the Presentation

Introduction to MeasureOne and myself
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What is the Dig Deal with Providing Investors with Loan
Level Data
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What are the trends
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A Case Study

Q and A
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be made available, in whole of in part, without the prior written consent of MeasureOne LLC
2
What are MeasureOne’s to Qualifications?

Led by Founder and CEO Dan Feshbach
– Created the LoanPerformance database and invented data sharing
in the mortgage space
– Grew from 5 charter members contributing 1 million loans to every
major lender in mortgage, tracking 50 million payments a month
 20+ years of experience in building industry wide
databases:
– Operating a neutral third party data hub
– Handling sensitive data
– Managing questions, issues, and feedback regarding data
content and interpretation
– Providing data to investors, dealers, rating agencies and
regulators
The information provided in this document is strictly private and confidential. This document may not
be made available, in whole of in part, without the prior written consent of MeasureOne LLC
3
Experienced Team of Student Loan Data and Capital
Markets Professionals
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Dan Feshbach
Dana Arvidson
CEO
Director Capital Markets and Products
25+ years experience building cooperative
business information databases
Founder and former CEO, LoanPerformance, the
leading source of loan level information on
mortgage loan performance
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8 year tenure at First Marblehead
Head of equity and debt investor relations
Met with hundreds of PSLABS investors
Deep knowledge of investor data and analytics
requirements
Rushali Parikh
Andrea Murad
Director of Data and Analytics
Student Loan Ratings Expert
Worked on Student Loan ABS originations at
Deutsche Bank in New York
Involved in new client pitches, rating process,
preparing offering documents, structuring
cashflows, addressing investor concerns
Collateral analysis of loans underlying student
loan deals
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Former Senior Director at Fitch Ratings
Over 10 years experience in student loan ratings
Developed criteria for new FFELP and Private
student loan issuances
Rated hundreds of deals
Authored articles and special reports for Fitch
Ratings
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be made available, in whole of in part, without the prior written consent of MeasureOne LLC
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What We Do - Platform for analyzing student loan
Securities and Whole Loans
Turnkey Collateral and Bond Analytics Capabilities
Data and Metric Standardization
Investor and Rating Agency support and communication
services
Transaction support - facilitate analysis of the sale of
securities and whole loans: Dashboards; Bond Analytics;
Data Room; Support Services
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be made available, in whole of in part, without the prior written consent of MeasureOne LLC
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The Trends in Loan Level Data Disclosure
Investor Driven
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Experience during the
mortgage meltdown
Investor drive to
independently analyze
security performance in
house
Rating agency missteps
/ failure
Regulatory Driven
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Competition Driven
Reg AB started it

OCC and Federal
Reserve Loan Level
Databases
Competition with
mortgage and other
complex asset classes
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Business requirements
– most companies even
the biggest are data
poor in something

Mortgage, Credit Card,
Small Business, Auto
data cooperatives
Reg AB ii is coming
Fannie and Freddie
Loan Level Releases on
government guaranteed
Opportunity to take a
leadership position
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be made available, in whole of in part, without the prior written consent of MeasureOne LLC
6
Student Loans: More Complex Credit and Cashflow
Risk than Mortgage

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Long weighted-average life
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Investors express universal frustration with no central,
standardized data repository
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Limits investor base size impact new issuance and trading
Borrowers with little-to-no credit history
Dizzying set of factors affect the timing and absolute level
of cash flows – Borrower benefits, loss mitigation
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be made available, in whole of in part, without the prior written consent of MeasureOne LLC
7
What are your data assets?
Unstructured Data
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Web and mobile customer
interactions
Structured Data
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– Email
Lender/Issuer
– Loan Level
• Application –
– Chat
– Denied
– Approved
– Text

Call Center interactions
– IVR
– Call center notes
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Social media Data
–
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• Underwriting files
• Servicing
CRM Marketing Data
Enhanced Data
– Credit Bureau Data, Utilities
data
– Employment Data
There are also Data Assets that you have access to
The information provided in this document is strictly private and confidential. This document may not
be made available, in whole of in part, without the prior written consent of MeasureOne LLC
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Who cares about Student Loan Performance
Data?
Lending
Community
Investment Banks
Investors
Loan Buyers
Banks,
Credit Union
Lenders
Issuers
Investment
Banking
Rating
Agencies
Bond Insurers
Servicers
Collectors
Credit Community
Education
Sector
Syndicate
Desk
Risk
Management
Sales and
Trading
Warehouse
Lending
Secondary
Trading
Whole Loan
Trading
Government
Students
Departments
of
Education
Consumer
Finance
Protection B
Colleges and
Universities
Congress,
Legislatures
Federal
Reserve,
OCC, FDIC,
The information provided in this document is strictly private and confidential. This document may not
be made available, in whole of in part, without the prior written consent of MeasureOne LLC
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Core Issues Limiting Investor Participation in the
Market
Inconsistently Calculated
Metrics and Content
Accessibility
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Data scattered across 40+
websites
 Limited research coverage
 Lack of up to date rep lines
 Lack of loan level data to analyze
performance
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Key metrics including Net WAC,
CPR, and CDR often
unavailable
Calculated differently by each
issuer
The time cost of access of the limited data available keeps
investors from wanting to get up to speed on the asset class
The information provided in this document is strictly private and confidential. This document may not
be made available, in whole of in part, without the prior written consent of MeasureOne LLC
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What Loan Level Data Do Investors Care About?
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Performance Information
̶ Delinquency (30,60,90 …Days past Due)
̶ Default
̶ Claim and Loss
̶ Prepayment (Consolidation Driven,
Borrower Driven, Default Driven)
̶ Payment Plan Utilization (IBR, Graduated
Repayment…)
̶ Deferment/Forbearance/Deferment
Utilization (Total, time in status, Number of
Uses…)
̶ In-school/Grace/drop out Status (Total,
Time Remaining)
̶ Collections (Amount Collected , aging…)
̶ Recoveries
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Geographic Information
Product Information
̶ Product type (consolidation)
̶ Loan Program (PLUS, Subsidized
Stafford, Unsubsidized Stafford…
School Information
̶ Major (Business Science Liberal arts,
Health Science
̶ In school/Grace/Drop-out Status)
̶ Reported Year in School
̶ School Type (For profit, Public,
Private, 2 yr, 4 yr)
Credit Information
̶ #,$ student loans
̶ #, $ credit card, auto, mortgage and
other debt
̶ Credit Score
The information provided in this document is strictly private and confidential. This document may not
be made available, in whole of in part, without the prior written consent of MeasureOne LLC
11
Case Study – Private Student Loan Portfolio Sale
MeasureOne’s Role
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Hired by the seller to be
deal data manager
Deal Data Manager
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Provided secure data room for
documents related to the deal
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Reporting and Analysis Platform
to enable investors to enable
investors to quantify and project
performance and create rep
lines
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Loan Level Files for investors
who wanted to build models or
conduct analysis in house
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24 - 7 Support
Number of data users
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5 Dealers
25 investors
50 + licenses to access
the MeasureOne”s
Analysis Platform
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be made available, in whole of in part, without the prior written consent of MeasureOne LLC
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Student Loan Analysis Platform – Predefined
Dashboards: Investors Get Up to Speed Quickly
Overview of the Portfolio with Easy Drill Down
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be made available, in whole of in part, without the prior written consent of MeasureOne LLC
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Turnkey analytics: roll rate analysis with one click
The information provided in this document is strictly private and confidential. This document may not
be made available, in whole of in part, without the prior written consent of MeasureOne LLC
14
Example of an investor email data request
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be made available, in whole of in part, without the prior written consent of MeasureOne LLC
15
What Data did Investors Request: Some Examples
 Roll rates
– 1M, 3M, 6M Roll rates, loan count and balance moving between
statuses and between delinquency buckets
 Detailed statistics re modifications, forebearance,
deferrment, and loan modifications
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Payment Modification Grant Rate
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Detailed Prepayments break outs
– Scheduled payment, Negative Amortization, Consolidation,
Borrower Prepayment, Borrower Curtailment
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Flexible repline creation
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be made available, in whole of in part, without the prior written consent of MeasureOne LLC
16
Issues Lenders and Issuers have in Sharing Loan
Level Data
Are lenders giving up competitive advantage by enabling
lenders to create origination scores?
What about consumer protections to privacy?
Do investors have the ability to process the data?
Will data access increase investor questions and thus
investors relations costs?
The information provided in this document is strictly private and confidential. This document may not
be made available, in whole of in part, without the prior written consent of MeasureOne LLC
17
You can control your data
Array of tools
to limit
distribution
and use as
appropriate
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Customized content for different
verticals: Investors, Rating Agencies,
Prospective Lender Customers…
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Complete control over nature,
frequency, fields of data released
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Contractual: NDAs, Limitations on
Use, Matching to External
Limitations or Prohibition …
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Technical: Download/Export
Limitations, Logging, Field/Pool
Level Filters
The information provided in this document is strictly private and confidential. This document may not
be made available, in whole of in part, without the prior written consent of MeasureOne LLC
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What is in it for issuers and lenders?
More buyers for your bonds and at better spreads
Increase the groups competitiveness in the new
private loan market – Every one is data poor in
something
Improve servicing performance
Reports and information to support with the policy
process and discussions with DOE, Congress and
State legislatures
Simplify your IR function by referring investors to
MeasureOne platform
Be prepared for Reg AB II
The information provided in this document is strictly private and confidential. This document may not
be made available, in whole of in part, without the prior written consent of MeasureOne LLC
19
Data Transparency is Coming
Embrace it for Competitive Advantage
Dan Feshbach
Dan@measureone.com
415-971-1977
The information provided in this document is strictly private and confidential. This document may not
be made available, in whole of in part, without the prior written consent of MeasureOne LLC
20

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