New CECL solution by LoanScoreCard utilizes AD&Co's credit and prepayment model
LoanScorecard, a provider of non-agency automated underwriting systems, recently announced it launched a solution designed to provide loan-level analyses for current expected credit loss provisioning reserves.
The solution, SimpleCECL, is issued by the Financial Accounting Standards Board as the new “expected loss” accounting model for estimating the allowance for loan and lease losses, the company said in a press release.
Through LoanScorecard’s technology, SimpleCECL will utilize Andrew Davidson & Co’scredit and prepayment model, providing cost-effective loan loss calculations for financial institutions.
“As soon as a loan closes, before the borrower even makes their first payment, financial institutions must set aside loan loss reserves, but manually calculating that number is challenging, especially for banks and credit unions with limited resources,” Loan Scorecard Executive Director Ben Wu said.
“Even the most CECL-ready organizations have yet to solve this impact on the balance sheet. Without provisioning at the time of origination, a bank is out of compliance and reserves are inaccurate,” Wu continued. “SimpleCECL solves this challenge, providing an accessible solution for all banks and credit unions with an automatic calculation for loan loss reserves to ensure CECL compliance”
SimpleCECL will replace the current “incurred loss” model and goes into effect in 2020 for SEC-filing institutions and 2021 for all other financial institutions.
Earlier this year, the company partnered with Deephaven Mortgage to launch IDENTI-FI AUS, which simplifies the origination and qualification processes for Non-QMs. You can read more about the solution here.