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Local start up, Collateral Intelligence, plans to shake things up on Wall Street
Collateral Intelligence is sitting on a veritable toxic gold mine.
Its primary market is the institutions holding the $ trillion+ (yeah trillion with a “t”) of dicey real estate loans. These include Freddie, Fannie, Bank of America, Citibank and many others (such as our own Central Pacific Bank). These bad loans are the liabilities that banks and other institutions would love to shed…if only those holding them could determine what they were worth.
Collateral Intelligence, based in Kaimuki (and with Mainland offices outside of Boston and in Orange County, CA) is getting traction because it has the tools to fairly value those toxic loans.
Valuing those loans is a huge deal. Without knowing what they are worth, no one will touch them.
If you’re an investor, you’re not going to buy a basket of these loans without knowing their value—or at least having more than an educated guess. Conversely, if you’re holding them you won’t want to sell the assets at ten cents on the dollar if the are worth a quarter.
The software isn’t just valuable to banks. Let’s say you own a home with a loan that you can’t afford to service and you ask a bank to modify it—to give you a second chance. If your home is in a neighborhood that will really appreciate in the next few years, perhaps the lender would be more willing to gamble on modifying the loan.
That’s where Collateral Intelligence’s analytic products can really add value.
With CI's data, compiled from multiple listing services, public records and other sources, in a few nanoseconds a bank could compute what the present value of the home is and what it will most likely be worth five years from now. If you can compute net present value and accurately prognosticate future value, you're in a great position to manage your risk.
Imagine having the tools that can dissect a billion dollars worth of loans?
Hedge funds or even individual could scoop up the good stuff and make out like a bandit. On the other hand, if you're an institution holding the debt and you have CI on your side, you're not going to be take to the cleaners.
Collateral Intelligence is the brainchild of Mike Sklarz and Boston-based Mark Sennott. Mike is a serial entrepreneur whose last Hawaii-based company was acquired by Fortune 500 real estate services company, Fidelity National Financial.
A numbers guy par excellence (as well as a competitive tennis player) Mike labored for years He got his start with Prudential Locations where he worked behind the scenes, analyzing the state market and writing a regular newsletter that was prized local real estate cognocenti. With interests ranging from math to oceanography, he's also served on the Hawaii Council on Revenues.
Collateral Intelligence, his latest venture, has a crack team of eight programmers and data analysts. Slowly they are getting national attention with coverage in Business Week, Bloomberg, Reuters and other outlets in the financial trade press.
Mike reckons he’s got the best real estate metrics in the industry. He reckons it won’t be long until Wall Street makes that realization too.
Rob Kay is a media relations professional who works with Collateral Intelligence, Cardax Pharmaceuticals and tw telecom. He can be reached at rkay@pactechcom.com or 732 0631. Oh yeah, he’s a techhui member too!
Its primary market is the institutions holding the $ trillion+ (yeah trillion with a “t”) of dicey real estate loans. These include Freddie, Fannie, Bank of America, Citibank and many others (such as our own Central Pacific Bank). These bad loans are the liabilities that banks and other institutions would love to shed…if only those holding them could determine what they were worth.
Collateral Intelligence, based in Kaimuki (and with Mainland offices outside of Boston and in Orange County, CA) is getting traction because it has the tools to fairly value those toxic loans.
Valuing those loans is a huge deal. Without knowing what they are worth, no one will touch them.
If you’re an investor, you’re not going to buy a basket of these loans without knowing their value—or at least having more than an educated guess. Conversely, if you’re holding them you won’t want to sell the assets at ten cents on the dollar if the are worth a quarter.
The software isn’t just valuable to banks. Let’s say you own a home with a loan that you can’t afford to service and you ask a bank to modify it—to give you a second chance. If your home is in a neighborhood that will really appreciate in the next few years, perhaps the lender would be more willing to gamble on modifying the loan.
That’s where Collateral Intelligence’s analytic products can really add value.
With CI's data, compiled from multiple listing services, public records and other sources, in a few nanoseconds a bank could compute what the present value of the home is and what it will most likely be worth five years from now. If you can compute net present value and accurately prognosticate future value, you're in a great position to manage your risk.
Imagine having the tools that can dissect a billion dollars worth of loans?
Hedge funds or even individual could scoop up the good stuff and make out like a bandit. On the other hand, if you're an institution holding the debt and you have CI on your side, you're not going to be take to the cleaners.
Collateral Intelligence is the brainchild of Mike Sklarz and Boston-based Mark Sennott. Mike is a serial entrepreneur whose last Hawaii-based company was acquired by Fortune 500 real estate services company, Fidelity National Financial.
A numbers guy par excellence (as well as a competitive tennis player) Mike labored for years He got his start with Prudential Locations where he worked behind the scenes, analyzing the state market and writing a regular newsletter that was prized local real estate cognocenti. With interests ranging from math to oceanography, he's also served on the Hawaii Council on Revenues.
Collateral Intelligence, his latest venture, has a crack team of eight programmers and data analysts. Slowly they are getting national attention with coverage in Business Week, Bloomberg, Reuters and other outlets in the financial trade press.
Mike reckons he’s got the best real estate metrics in the industry. He reckons it won’t be long until Wall Street makes that realization too.
Rob Kay is a media relations professional who works with Collateral Intelligence, Cardax Pharmaceuticals and tw telecom. He can be reached at rkay@pactechcom.com or 732 0631. Oh yeah, he’s a techhui member too!
Add a Comment
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Comment by Robert F. Kay on April 16, 2009 at 9:37am - Mike is a real polymath. He's a completely out of the box thinker too. Open to any ideas. Brilliant guy.
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Comment by Joe Segal on April 16, 2009 at 9:33am - I have met Dr. Sklarz, he is quite the visionary. Such a cool guy, he actually used to be an oceanographer who studied tsunamis! That was like 20 years ago though
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