Digital transformation for a mortgage hedge fund driving sharper bid pricing and better due diligence

Case Synopsis

RockTop Partners (RockTop) acquires real estate pools which contain a title, document or compliance issue which impacts the marketability of that asset. Rocktop bids for these assets at a market driven discount and works through a proprietary legal platform to cure the defects and create a pool of assets that can produce an appropriate risk based return. RockTop expertise is in doing a legal curative, property value and cash flow analysis to minimize the potential investment risk.

About the Client

RockTop Partners (RockTop) primary objective is to deploy capital for pools of real estate assets that contain a title, document or compliance issue which impacts the marketability of that asset to the current owner. RockTop utilizes an asset based due diligence review which encompasses the legal curative strategy, property value and cash flow analysis data points needed to secure the assets with an appropriate equity position to protect and potential investment risk.

The Challenges

The objective of RockTop is to acquire real estate pool which comes with thousands of scanned collateral documents which tell the story about the constituent properties, its lien and title status, default details, assignments and other key variables which determine the risk profile of the property.  For taking a price position for bidding for a Deal, the risk profile needs to be determined.

To create the risk profile of these properties, the relevant data has to be culled out from the collateral documents for each property. Zivanta Analytics has been retained by RockTop Partners to sift through thousands of collateral documents and key in the key indicators. Zivanta Analytics is also building an analytics engine which will use the keyed data to build the risk contours of each individual property in a deal.

The Approach

Once a deal is selected  to be bid by RockTop partners, the entire collateral set is transferred  by RockTop Partners to a secure Amazon Server maintained by Zivanta Analytics.

The Zivanta analysts who are trained to look into the real estate collaterals sort the documents and look at the completeness for building the collateral datasets. Accordingly the digitization strategy for a given deal is decided.  The collaterals which can be machine read is sent to the technical data scraping team who write code to machine read the data. The remaining collaterals which cannot be machine read is sent to the data associates who key in the data for each property from each collateral using either voice or key board based data entry.

As the data is being entered, the data quality team concurrently checks the  data for quality using proprietary checking  tools and analytics.

The cleaned data is then processed by the Zivanta proprietary analytics engine to create a risk profile for each property.  The data can be queried by RockTopPartners experts through a custom interface developed by Zivanta Analytics. A dashboard to help analyze the risk profile is under development.

Entire operations are done in house by the Zivanta Analytics team at its own secure premises. All the entered data is kept in Zivanta secure servers. Zivanta Analytics has signed a non disclosure agreement pertaining to data security.

The Outcome

RockTop Partners gets quality data on tight deadlines at very economic costs. The risk profile created using the data from the collateral documents helps make an informed decision regarding the  bid price for acquiring a deal.  Once a Deal is acquired, the  experts  at RockTop Partners  use the dataset to identify and mitigate the risk associated with each individual property  thereby making the property marketable at prevailing  market rates.