caliber home loans accelerates implementation with cloud

CALIBER HOME LOANS ACCELERATES

IMPLEMENTATION WITH CLOUD

IBM WORLD OF WATSON 2016

Cynthia Hager, Vice President of Operations Support, Caliber Home LoansSteuart Bruce, Principal of Banking & Financial Services, Pyramid Solutions

DISCLAIMER• IBM’s statements regarding its plans, directions, and intent are subject to change or

withdrawal without notice at IBM’s sole discretion. • Information regarding potential future products is intended to outline our general product

direction and it should not be relied on in making a purchasing decision. • The information mentioned regarding potential future products is not a commitment,

promise, or legal obligation to deliver any material, code or functionality. Information about potential future products may not be incorporated into any contract.

• The development, release, and timing of any future features or functionality described for our products remains at our sole discretion.

Performance is based on measurements and projections using standard IBM benchmarks in a controlled environment. The actual throughput or performance that any user will experience will vary depending upon many factors, including considerations such as the amount of multiprogramming in the user’s job stream, the I/O configuration, the storage configuration, and the workload processed. Therefore, no assurance can be given that an individual user will achieve results similar to those stated here.

HOUSEKEEPING

I. Submit questions:i. Write on notecard ii. Tweet at @PyramidECM or

PYRAMIDSOLinciii. Network with Cynthia or Steuart

after this presentationiv. Attend our fireside chat at booth

#623 at 3:30pm

WHO ARE WE?

STEUART BRUCEPrincipal, Banking & Financial ServicesPyramid Solutions

CYNTHIA HAGERVice President, Operations SupportCaliber Home Loans

AGENDAI. Who is Caliber Home Loans?II. What prompted us to think

differently?III. How did this initiative start?IV. How did we execute our joint

initiative?V. What benefits do we expect?VI. What did we learn?

if you’ve ever had a mortgage and received a notification that your payments or servicing was going to transfer to a different organization than the one that financed you.

WHO IS CALIBER HOME LOANS?

Raise your hand

CHL HISTORY*THE HIGHLIGHTS

DEC2009 NOV2012 DEC2012 FEB2013

OCT2013

LoneStarpurchasesCITGroupHomeLendingassetsandrenamesservicingplatformVericrestFinancial,Inc.

2008–2009CaliberappointedasservicerforLoneStar’sfirstresidentialloansecuritization(VOLT2009)

FannieMae&GinnieMaeservicerapprovalreceived

AUG2013

CompletedfirstFreddieMacMSRacquisition

CompletedfirstFannieMaeMSRacquisition

*MergedVericrestwithCaliberFundingtobecomeafull-serviceloanoriginatorandservicerrenamedCaliberHomeLoans,Inc.

CompletedfirstGinnieMaeMSRacquisition

2008 2009 2012 2013

BeganCorrespondentLendingReceivedFannieMaesellerapprovalandbeganissuingsecuritizations

Hired290retailsalespersonneland24retailbranchesfromMetLifeBankReceivedFreddieMacsellerapprovalandbeganissuingsecuritizationsReceivedGinnieMaeapproval

*InitialcloseofCobaltacquisitioncompleted

NOV2014 JAN2015

CobaltMSRacquisitioncompleted

*LoneStaracquiredtheoperatingassetsofBearStearnsResidentialMortgageCorp.andrebrandedtheentityCaliberFunding,Inc.

JUN2015

*AcquiredbranchesinAtlantaareafromAcademy

OCT2015

CaliberacquiredbranchesinvariousregionsfromStonegate

JUN2016

*AcquiredmajorityofbranchesfromFirstPriorityFinancial(NorthernCalifornia)

SAN DIEGO333 Servicing FTEDefault Servicing§ Loss Mitigation§ Loan Modification§ Short Sale & Deed-in-Lieu§ Bankruptcy § Foreclosure

DALLAS Executive Office425 Servicing FTECorporate and Servicing Functions§ Finance & Treasury§ Legal & Compliance§ Human Resources§ Investor Relations§ Business Development§ Technology§ Quality Control§ Internal Audit§ Investor Reporting§ Vendor Management§ Servicing Risk Oversight

§ Transaction Management§ Capital Markets§ Asset Performance§ Single Point of Contact§ Escrow Administration§ Property Valuations§ REO§ Reporting & Analytics§ Program Management Office§ Learning & Development§ Claims

SERVICING OPERATIONSSERVICING SITES OVERVIEW

* Data as of September 28, 2016

• Three operational sites provide nationwide servicing coverage and maintain capacity for growth

• 1,234 Servicing FTE* with 1,102 FTE over three U.S. sites plus 121 offshore FTE and 11 remote FTE

• All customer-facing servicing functions take place in U.S.

• Near term capacity to board $25B

OKLAHOMA CITY344 Servicing FTEPerforming/Early Collections§ Customer Service§ Collections§ Cash Operations§ ARMS§ Collateral Management§ Pre-Foreclosure

RECENT TRANSACTIONS2016 ACTIVITY

BOARDING SCHEDULED Q4 2016

INVESTOR ACQUISITIONS UPB LOANS BOARDING TIMELINE

Private 6 $1.99 Billion 13,503 Oct 2016 - Dec 2016

BOARDED as of Q3 2016

INVESTOR ACQUISITIONS UPB LOANS BOARDING TIMELINE

Private 22 $4.06 Billion 25,423 Jan 2016 – Sep 2016

FNMA 1 $76.8 Million 280 Sep 2016

Total 23 $4.14 Billion 25,703 Jan 2016 – Sep 2016

WHY ARE WE HERE?STARE AND COMPARE

WHY ARE WE HERE?BUSINESS CHALLENGES.

DATA INTEGRITY

DIFFICULTY STAFFING

From a long-term audit perspective, how do we ensure that documents

support data?

Labor-intensive roles and the inconsistent manner

of bulk and flow purchases make it hard to staff the right number of

people.

ERROR-PRONE PROCESSES

Stare-and-compare method allows for an interpretive review of

policies which results in inconsistency

and error.

1. Remove people from the easy parts.2. Increase speed and scalability.3. Improve visibility of processes, seller

performance and loans.4. Consistently meet compliances.5. Position organization for growth.

HOW DID WE START?ENGAGE BUSINESS PARTNERS1. Paradatec – Existing partner for capture, classification and extraction2. Pyramid Solutions – Industry leader in mortgage workflow and passed detailed POC test

FOCUS ON KEY BUSINESS GOALS

Fiserv

10,000 FT VIEW

IBM Case Manager on CloudRules/UI

Paradatec

Documents

Users

USER EXPERIENCE

Ref 1: Primary Borrower NameRef 2: Secondary Borrower NameRef 3: Property AddressRef 4: Property CityRef 5: Property StateRef 6: Property ZipRef 7: Original Note DateRef 8: Original BalanceRef 9: Original Interest RateRef 10: First Payment Due DateRef 11: Original Amort Term

MANAGER

JUNIOR REVIEWER

Business Rules

Loan Documents

Loan Data

REVIEWER

Missing Data

PROCESSOR (EXCEPTIONS)

REMEDIATING EXCEPTION

REMEDIATING EXCEPTIONMULTIPLE DOCS

COLLABORATION

MANAGER VIEW ENTIRE LOAN

SEARCHING AND GROUPING

ENTIRE LOAN

WHAT DO WE EXPECT?Anticipated results and benefits.

Increased percentage of

audits with same staff.

Reduced head count.

Increased quality of audits.

LESSONS LEARNED

WHAT WORKED WHAT DIDN’T WORK

• Working with proven partners• Partnering internally – SMEs active

throughout project• Understanding your process and

goals – document policy rules beforehand

• Testing with predefined data –discovered new values in fields which caused rework

TAKEAWAYS• Simplified cloud• More efficient processes• Effectiveness of agile methodology• Collaboration with SMEs• Don’t forget to test and validate early in the process• Consult your peers• Significant uplift from business rules and automation

If we can’t get to your question…• Write it on the notecard • Tweet at PyramidECM • Contact the presenters• Attend our fireside chat at

booth #623 at 3:30 pm

STEUART BRUCE

Steuart Bruce@[email protected](248) 705-2756

CYNTHIA HAGER

Cynthia Hager

WE’D LOVE TO ANSWER YOUR QUESTIONS

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BOOTH PRESENTATIONS•Making the Most of Captured Information•Utilizing Predictive Modeling to Meet Business SLAs• 5 Considerations Before Deploying a Cloud Solution• Six Reasons Why You Need to Extend Guidewire•An Under-the-Hood Look at Pyramid eXpeditorMon.-Wed. | Booth #623, Cognitive Concourse