MILWAUKEE, Wis. QuantyPhi, a CUSO that provides balance sheet optimization solutions, has released a new white paper, Mortgage Servicing Rights Valuation with an ALM Focus.
“MSR, a fundamental component of modern lending practices, empowers loan originators to streamline operations while retaining valuable revenue streams,” the company said. “In this backdrop, QuantyPhi introduces an advanced valuation model tailored to the unique needs of credit unions. This innovative framework ensures meticulous reporting of MSR assets on credit unions’ call reports, accounting for the intricate interplay between changing interest rates, prepayment speeds, and income dynamics.”
According to QuantyPhi, at the core of its offering lies a sophisticated valuation model “meticulously crafted to provide comprehensive insights across diverse interest rate scenarios.”
Leveraging years of expertise in balance sheet optimization, QuantyPhi said its model enables credit unions to proactively assess MSR valuations, empowering informed decision-making in strategic planning and forecasting endeavors.
‘Not a Checkbox’
“Accurate MSR valuation is not merely a compliance checkbox; it’s a strategic imperative,” Adam Stone, president of QuantyPhi, said in a statement. “Especially in the face of market rate fluctuations, credit unions must equip themselves with robust valuation tools to navigate prepayment expectations effectively.”
QuantyPhi said that to substantiate the value of its MSR model and underscore the tangible benefits of adopting an ALM-centric approach, a detailed case study was conducted.
‘Real-World Portfolios’
“Drawing from real-world credit union portfolios and spanning multiple years of market rate fluctuations, the case study illuminates the transformative potential of integrating advanced MSR valuation capabilities into broader risk management strategies,” QuantyPhi said.
“As a trusted partner for credit unions’ balance sheet risk management, we are committed to fostering financial resilience and agility,” Stone added in a statement. “Our mission is to empower credit unions to navigate the complexities of MSR valuation with confidence, driving better strategies and enhancing long-term sustainability.”
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