Icon Advisory Group, Ltd. - Volume Analysis

Volume Analysis - Overview

For years, mortgage lenders were limited to traditional volume and market share sources that were too dated to have much relevance for assessing performance of their mortgage origination efforts. These sources essentially provided a “look in the rear-view mirror” of what happened 90 or 120 days prior but offered minimal value to support current decision making. Furthermore, the data available lacked the granularity to be actionable.

In 2004, Icon Advisory Group worked with leading mortgage lenders to identify and define the information that lenders truly needed to help them effectively compete and manage their origination efforts. In 2005, Icon released its LenderShare^TM service that was quickly embraced by the industry as the only source for near real time volume, relative share, and risk analytics. Today, Icon remains the only source for the industry that delivers comprehensive coverage of all three major channels (Retail, Wholesale, and Correspondent) representing approximately 70% of originations.

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(Click for Larger Image) If you have responsibility for the performance of your company’s origination efforts, whether from a production, secondary, risk management, or product management standpoint, you need LenderShare^TM to help you understand your performance.

Volume Analysis - Analytics

While LenderShare^TM analytics are tailored to meet the specific needs of each of the respective channels, the sources of value are similar. To help you understand how LenderShare^TM may add value, sample content from a few reports are provided as illustrations.

As an example, you may know that your volume was up 3% last week and you are up 5% for the month. To evaluate whether that performance is good or bad, you really need to know how your peer group of lenders performed over the same period. If the peer group was up 5% last week and 11% for the month, you now have a very different take on your performance. Analytical views from LenderShare^TM, and reports such as the heat map shown below, can provide insights into your performance overall, at a state level, and on a more granular level by geography with performance by Metropolitan Statistical Area, county, and city.

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Beyond looking at overall performance by geography, LenderShare^TM enables you to look at performance by product group, product and even by note rate.

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With the LenderShare^TM Online Analytics Suite, you have control over the analysis. Reports provide a user the flexibility to select and apply one or more criteria (e.g., credit score, LTV, purpose, property type) to filter the data within a report. As well, the user is in control of the time period for which data is being analyzed (i.e., reporting week or calendar month, quarter, or year). LenderShare’s^TM rich, multi-year, on-line data history across channels enables a user to truly understand longer term trending including issues such as channel shift and purchase/refinance market transitions.

In addition to insights on volume and share, LenderShare^TM also enables a lender to profile their pipeline and funded originations on multiple risk characteristics to understand their composition relative to the peer group. A lender can quickly determine which products and in which geographies they may be being adversely selected and take the proper actions to ensure that those risks are being properly priced and managed.

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These are but a few brief examples of the many reports available through the LenderShare Analytics Suite^TM. For a demo of the broader set of capabilities, please contact us.

Volume Analysis - How It Works

Lenders participating in Icon’s LenderShare^TM service submit their origination data to Icon on a weekly basis. Every Monday each lender submits a file containing their origination volume (i.e., apps, locks, fundings) for the week that just ended (Monday through Sunday). Icon performs multiple data quality control checks to help ensure the quality of the data prior to the data going into the database.

Once the data passes Icon’s quality control processes, the data is loaded and aggregated by channel. The aggregated data is then loaded into a reporting cube that is used to populate lender specific analytical views and reports that are made available to each lender on Tuesdays of each week.

Lender’s are then able to access the on-line reporting available through the secure LenderShare^TM web portal and also access download files to gain the insights needed to support decision making.

Volume Analysis - Lendershare Value Add

Real time feedback at an actionable level to:

Benchmark weekly results vs peer group
Assess effectiveness of sales/origination resources by geography
Assess impact of pricing/promo tactics
Identify MSAs with untapped growth potential
Identify products (and “sweet spots”) with untapped potential
Identify adverse selection – more than fair share of risky originations
Assess and adjust LLPAs based on relative penetration
Test price elasticity by product and geography
Determine relative success in transitioning between refi/purchase
Monitor channel shift on a relative basis
Support resource allocation decisions

Volume Analysis - Why Icon

Leading national and regional lenders rely on Icon’s LenderShare^TM volume, relative share and risk analytics. They count on Icon’s reputation for accuracy, dedication to serving clients, technical/data expertise, and track record for delivering innovation to the industry. Lenders know they can count on Icon Advisory Group.

Icon’s LenderShare^TM also has many distinguishing characteristics that make it the ideal solution for assessing their performance:

Originations Focused - provides insights on effectiveness of generating and capturing business on a relative basis
Timely - results available each Tuesday for the previous week (Monday – Sunday)
Comparative - highlights performance on a relative basis
Comprehensive - covering Retail, Correspondent, and Wholesale First Mortgage volume (accounting for over 70% of all originations) and Retail Home Equity volume
Specific and Actionable - ability to view data at a product and geography specific level (i.e., state, county, MSA, city) provides insights that help identify specific actions
Transaction Based - “bottom up” aggregation of transaction level data avoids mistakes common to “top down” survey approaches
Robust - full set of loan and risk characteristics (e.g., LTV, CLTV, FICO) and data slicers enables more comprehensive analysis of competitive performance and benchmarking
Blind - full set of participating lenders is known by channel but no data is specifically attributed by lender
Turnkey - comprehensive set of reports available on-line provides immediate value
Low Maintenance - once the data extract is in place, minimal effort is needed to maintain the data flow
Security - SAS 70 Type II certified data center to protect your data

Volume Analysis - The Buzz