Irvine, Calif.-based CoreLogic is now offering an Allowance for Loan and Lease Losses (ALLL) solution and a mortgage servicing rights (MSR) evaluation solution. According to the company, both tools are designed to help banks, credit unions and other regulated institutions comply with recent regulations that have been put in place in preparation for the implementation of Basel III.
Under the proposed Basel III guidelines, banks will only be able to apply a portion of the value associated with MSRs toward the common equity component used to meet capital requirements. As a result of this change, many large banks are now reassessing their servicing strategies and their investments in MSRs. The new solution is designed to help both holders and buyers of MSRs better understand the risk and value of their MSR portfolios, the company says.
Also, the upcoming Basel III guidelines inspired the new ALLL regulations issued by federal regulators earlier this year. These regulations require banks and other regulated institutions to take a more comprehensive view of junior liens, such as closed-end seconds and home equity lines of credit, that back distressed first liens.Â
‘Banks and capital market participants are increasingly looking for help in developing and integrating new systems that will aid in assuring ongoing compliance with new and anticipated rules,’ says Brett Benson, vice president of CoreLogic. ‘Our two new solutions will help banks meet higher, ongoing requirements to continually evaluate the performance and value of second liens and MSRs, respectively.’