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Specialty Portfolio

01 Project Overview

The largest financial institutions originate and service some of the most complex real estate transactions in the world. In doing so, they are required to run each of these loans through the rigors of CCAR stress testing. To properly model any loan there needs to be a significant amount of historical data in order to accurately calibrate the model. For the riskier asset classes and more complex real estate projects the regulations call for up to 10 years of historical quarterly data that is property specific.

 

Our client had a portfolio of 800 specialty assets spread across the globe that required a full audit of their historical quarterly data. Given the size of these individual transactions, this portfolio had the direct attention of both the board and regulators so flawless execution was paramount.

02 The Solution

The SOG team of commercial credit experts manually aggregated quarterly historical data for approximately 800 loan files spanning over 10 years.  Given the complexity of these transactions, any property specific data point could change at any time during the previous 10 years.  As a result, each of the 200+ CCAR data elements were required to be examined individually, one quarter at a time. Each data element needed to be validated against the most current documentation that would have been available at the end of the quarter in question. Our team instituted multiple quality control reviews and participated in a client-led audit process to ensure the highest level of data accuracy.

03 The Results

After 14 months of diligently reviewing each quarter’s information for the 800 loan files, the project was successfully completed. The client-let audit calculated our final accuracy rate at 99.9% and they were pleased to bring their new data to the regulators for approval, resulting in the portfolio being removed from their CCAR data exception report.