Loan Loss Severity Risk Management

Loan loss severity risk reduction doesn’t have to be an abstract discussion – there are counter-measures that you can deploy for a single asset or an entire portfolio that can help eliminate your exposure to an asset failure.   Watch this brief video for more information on this topic then continue reading.

The INVIZEN Real-Time Status (or “RTS”) Asset Care Protection Program has been specifically designed to deal with the core issue of loss severity risk reduction by utilizing INVIZEN’s proprietary technology to provide advance warning (up to 24 months) of market events that may lead to a serious asset value impairment.

Do we have your attention now?

The INVIZEN RTS program is the world’s first true end-to-end solution designed to address CRE investment and loan loss risk at all stages of the life cycle from concept all the way through to acquisition/disposition with continuous monitoring and reporting on changing conditions that either create opportunity or changing conditions that may lead to an impairment of the asset’s value.

Loss Severity Risk Elimination
The RTS Process for CRE Loan & Investment Loss Prevention

To accomplish this incredible feat the RTS system is built upon the premise of an underwriting approach that exceeds the spirit of Section 941 of the Dodd-Frank Wall Street Reform Act in terms of underwriting standards for capacity, credit, default risk and collateral underwriting reviews.  This approach is a systemic step-by-step program based upon the following:

  • First, the nature of the overall MARKET OPPORTUNITY the site and local market area may support should be addressed.  INVIZEN offers a proprietary program that undertakes multiple intended-use scenarios – all simultaneously – to determine if there may be a different intended-use for the property than that which is being proposed or currently addressed that may offer a more profitable market opportunity, all other things being equal.  The results are ranked in terms of the forecasted IRR of the investment capital required to sustain the resulting transaction, with the resulting site value being determined in relation to its value to the given opportunity.  The INVIZEN Real-Time Analytics (“RTA”) report represents a quantum leap forward in both time, cost savings and a more robust scope of analysis than can be found with the traditional CRE appraisal approach; then
  • The intended-use asset class selected by the client is subjected to a full market and financial feasibility analysis that also runs in real-time called the INVIZEN Real-Time Analytics Feasibility (“RTAF”) report.  The RTAF provides a full market analysis and then the key conclusions and empirical assumptions used in the production of the market analysis are tested in a pro forma financial feasibility analysis to determine if a reasonable basis may in fact exist for their incorporation into the market feasibility analysis.  The results provide the capacity underwriting analysis with the cornerstone information necessary to sustain the entirety of the underwriting process; then
  • The next step is the actual underwriting process itself – and once again – INVIZEN is able to offer a real-time underwriting solution that creates a comprehensive underwriting analysis and review of the key metrics within the context of capacity, collateral, credit and default risk underwriting guidelines established by the CRE Finance Council and in excess of the goals of Section 941 of Dodd-Frank Wall Street Reform Act.  The INVIZEN Real-Time Underwriting (“RTU”) system provides incredible savings of time, capital and risk by dramatically reducing the turnaround time that would otherwise be required with current legacy systems; then
  • The final step is the crown jewel in the INVIZEN system – the Real-Time Status (“RTS”) Asset Care Protection Program.  RTS takes everything to a whole new level by providing post-funding monitoring and forecasting to provide real-time, proactive investment/loan support over the entire term of the investment holding period.  Due to the speed and proprietary technology of the INVIZEN system, the RTS is able to fulfill the desire of investors and lenders who would like to enjoy the peace-of-mind that would come with knowing their investment was being re-underwritten each and every month of the holding period to prevent a bankruptcy petition from being a likely outcome.

Only INVIZEN can offer you these benefits and this level of service support.  Find out more by taking to INVIZEN today at 832.663.9634.

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