The potential crisis has everyone concerned, but there is also opportunity at junctures like this in the market.

Perry Rahbar, Founder and Chief Executive Officer of dv01, shares his insights on services that are most valuable during uncertain times. Additionally, Rahbar discusses how the mortgage crisis led him to found a unique fintech data operation.

Join us as we discuss:

• How dv01 was born out of the mortgage crisis
• dv01’s position as a data hub integrating with originators, banks and investors
• The economic outlook and how this will impact demand for credit
• Opportunities in solar and auto loans

How dv01 Was Born Out of The Mortgage Crisis

Rahbar worked as a trader at Bear Stearns when the 2008  financial crisis hit. As most of the traders exited the scene, Rahbar stayed on to try and help his boss figure out how much exposure the company had to mortgages. 

Rahbar remembers thinking that for a Fortune 100 company and tier one investment bank, figuring out the exposure to mortgages should be readily available. What’s the total number we own? This should have been information that was easy to access. 

But it wasn’t.

All the systems were spitting out different numbers, and ultimately everything had to be reconciled in a spreadsheet. 

No one was looking at loan level data. But the problem wasn’t unique to Bear Stearns.

Afterwards, Rahbar moved to JP Morgan, where they were trading bonds and selling mortgage-backed securities in the billions. He remembers pulling up information on Bloomberg and seeing a high percentage of delinquents, but that’s all the information that they had. 

It was tough to know what those loans looked like, and the lack of transparency created hesitancy, lowering bids. It created negative price vacuums.

Rahbar saw an opportunity to build a new infrastructure for these markets. He started with the fintech lenders, and then eventually scaled it to non-fintech originators.  

dvo1’s Position as a Data Hub Integrating with Originators, banks and Investors

dvo1 standardizes loan-level data and provides a fully integrated analytics tool. Acting as a data hub in the middle of the market, it integrates with all originators, banks and investors, bringing clarity to lending markets. 

It focuses on consumer loans including student loans, refis, autos and mortgages. It does all the data reporting and analytics, covering all market data. 

dv01 is able to generate data daily, giving a more detailed understanding of what’s happening in the broader market. It makes it easier to answer questions like, How are we performing compared to the broader market? Are we better or worse off than everyone else? 

When people understand what is actually happening, good or bad, they can adjust accordingly, notes Rahbar. It's when people are blindsided or just way out of touch with reality in a negative way where it can wreak havoc in the markets.

A big focus for dv01 is enhancing transparency within securitization. That means that all the data flows in, and dv01 cleanses, normalizes and validates the data. The company has built all the tools for both reporting and analytics that anyone in the ecosystem would need on top of that data.

The Economic Outlook and how this will Impact Demand for Credit

There's a lot of uncertainty and it's tough to know what's really driving what, particularly in consumer loans. 

“If we get into this system where, you know, higher inflation and savings start to come down, there might be more demand for credit,” Perry explained.

Because we've been in a period where everyone was so flushed with cash, it's been a low period of demand for credit. It is possible that originators will see an uptick in a demand for credit as a result. 

Opportunities in Solar and Auto Loans

dv01 has barely scratched the surface of penetrating the consumer markets, still only having, of all consumer unsecured, maybe 70 percent of securitizations. 

On its platform, there are a few big issuers that are not necessarily considered fintechs, which aren't on the platform yet. Solar is another one that's up and coming, and autos is another industry where Rahbar sees opportunity.

There's still so much data in these markets that is still out there that's not on the dv01 platform. Rahbar is driven by the recognition that when all parties play, the platform becomes more valuable.