GMAC Mortgage, an Elkins, Pa.-based subsidiary of General Motors Corp., has selected a system from Risk Management Technologies here for its mortgage servicing and origination business.
GMAC Mortgage, the nation's seventh-largest mortgage servicer, with a $45.5 billion portfolio, will use the system, called Radar RiskManager, to value and provide forecasts for the more than 450,000 mortgages that it sells or holds in portfolio.
In addition, Risk Management said it would work with GMAC Mortgage to manage risk related to its home equity business and off-balance-sheet hedging.
Risk Management said that financial institutions now offer an array of financial products and assume greater risk to attract an expanded customer base. In this environment of complex securities and mortgages, the company said, risk management has grown increasingly important.
It said RiskManager would be able to determine the impact of credit loss, default, or prepayment on streams of income through improved cash flow modeling capabilities; to identify potential customers from groups of perspective mortgage holders; and to forecast cash flows and perform valuations of securitized notes under a variety of different economic conditions.
"Once we are able to produce such highly detailed information, we can do a much more efficient job of pricing, funding, and hedging our business," said Mike O'Brien, president of GMAC Mortgage. "Radar gives us the ability to perform all of these tasks, and to analyze in almost any manner - from portfolio or legal entity views down to detail approaching the transaction level."