Top institutional investors leverage data to increase their portfolio performance. To help drill down on portfolio performance, MonJa designed a solution for investors to view different underwriting trends in their portfolio. For example, investors can see how average characteristics of their loans compare to average characteristics of the platform’s originations within each grade bucket. Whether investors are actively selecting loans or purchasing through a forward flow agreement, it is important to monitor what goes in the portfolio in a granular level.
To provide a sample case, some clients use Monja to help them discover why their portfolio was experiencing higher defaults. The graphs below help clients discover how their portfolio compare with the platform’s overall origination. Notice that for the past five vintages, the DTI ratio for Grade C and D loans in the portfolio are higher than the platform average.
Similarly, the average income for the borrowers in the portfolio are also significantly lower than the average income of the platform across 2014Q4- 2015Q5. Although investors take all the necessary precautions before purchasing the loans, investors should also monitor their portfolio closely post-purchase to make sure that they are not investing in sub-par loans.