As highlighted in Leverage Optimizer Overview and Process, there are three main steps in onboarding a vehicle with our Leverage Optimizer Tool. While the interface allows for a user to onboard fully self sufficiently, dv01 is happy to help with the onboarding:


  1. Runs and Data Configuration
    1. Access different runs (scenarios) and create an optimization.
    2. Linking and configuring the datasets that dv01 has ingested as well as mapping the fields needed for each dataset.
  2. Building Capital Markets Vehicles
    1. Naming a vehicle and defining its configuration.
    2. Defining eligibility restrictions, advance rates, excess concentrations, aggregations, and leverage reduction amounts (reserve accounts).
  3. Run Optimization and Reports
    1. Run the optimization after the vehicles are built.
    2. View the output via our front end and download the excel report highlighting the loan tape, vehicle specific output, and the total output across vehicles.


In this section, we will run through what you need when building facilities or vehicles.  This includes:

  • Naming a vehicle and configuration
  • Data Profile
  • Defining eligibility restrictions, advance rates, excess concentrations
  • Building reporting aggregates and leverage reduction amounts
  • Multiple Vehicles


Naming a Vehicle and Configuration


Whether it is a facility, securitization sale, forward flow or whole loan buyer, you can model these vehicles in the Leverage Optimizer in the Edit and Runs Page. We will start with the basic configuration:

  • We can name a facility or vehicle however you want.
  • Define the advance rate limit in dollar form and/or percentage.
  • Toggle frozen to indicate that loans will not be added or removed, or tested for eligibility or excess concentration.
  • Use Platform Name as it appears in the dataset table that the facility pertains too (i.e. XYZ Lender).
  • Designate an Account Name and it will be immovable.
  • Filter can be used if you want to use a particular dataset if you have multiple in the Data Configuration.



Data Profile


This allows to understand the fields in the underlying data, so we can understand what fields we have access to when building out each vehicle.


Eligibility Restrictions


These are the hard knockouts from an underwriting perspective. In other words, the characteristics we define will dictate the type of loans shown in this vehicle.


We have the ability to name the first column, while the second column follows SQL syntax. The application has auto-complete functionality and users can move in the tables using their keyboard.


Users can amend, move, remove, copy and insert rows by right clicking on the table or simply add a row selecting the green button. An example of this and creating an eligibility rule not allowing any Original FICO < 600 or Not Null can be seen below.


Advanced Rate


We can be granular on the exact advance rates based on different criteria. Users will have three columns to fill out including:

  • Name - can be customized to any nomenclature.
  • Test - the SQL expression used to define the loan characteristics for the advance rate.
  • Value - decimal format of what the advance rate will be.

Depending on the vehicle and criteria, advance rates can differ and be above or below 1 showcasing a premium or discount. An advance rate can also equal 1. An example of a facility is below by defining an advanced rate of 75% for loans that have Original LTV between 40% and 55%.


Excess Concentrations


Users can create the exact excess concentrations that their vehicle needs to abide by. There are five columns including:

  • Name - can be customized to any nomenclature.
  • Field - either a field from the data table (i.e. loan_rate_gross) or a SQL expression (loan_term_orig > 360). Popular SQL expressions include:
    • asset_state IN (asset_state1, asset_state2 ....) used for state concentration within certain states.        
    • coalesce(fico_orig, 300) used for ficos with null values will have a value of 300.
    • loan_term_orig > 360 used for original loan terms greater than 360 months.
  • Condition - referring whether the concentration limit is a minimum or maximum.
  • Limit - the numeric limit to use for the excess concentration test.
  • Aggregation - can input wa (weighted average), sa (simple average), count or sum.
  • Tag Only (optional) - tag if the loan passed or failed this test, but tagged excess concentrations will not impact the run.
  • Denominator Filter (optional) - filter the excess concentration by a specific subset of the population.


The example below shows how a user can implement a floor on a vehicle as an excess concentration test but have it tagged so it does not affect the run. It will show as passing or breached when we download the export in the next article.


Reporting Aggregates


Users can create reporting aggregates that will show on the report. This is helpful if there are metrics that they want to capture, whether it is required or not for their vehicle. This could give insight on how potential amendments may fair in the current vehicle. There are four columns including:

  • Name - can be customized to any nomenclature.
  • Field - either a field from the data table (i.e. loan_rate_gross) or a SQL expression (loan_term_orig > 360). Popular SQL expressions include:
    • asset_state IN (asset_state1, asset_state2 ....) used for state concentration within certain states.        
    • coalesce(fico_orig, 300) used for ficos with null values will have a value of 300.
    • loan_term_orig > 360 used for original loan terms greater than 360 months.
  • Aggregation - can input wa (weighted average), sa (simple average), count or sum.
  • Denominator Filter (optional) - filter the excess concentration by a specific subset of the population.


Leverage Reduction Amount


Most leverage reduction amounts like a reserve account is based off a percentage of unpaid principal balance. This amount will be used to subtracted from the advance amount. You can define additional terms in the LRA Aggregates table that can be referred to in the Leverage Reduction Amount table as shown below.



Multiple Vehicles


Before we run our optimization, we can customize how the vehicles are shown. We can:

  • Duplicate or copy vehicles to our clipboard.
  • Move around vehicles in the order we prefer.
  • Delete vehicles from the optimization.
  • Hit redo using the CTRL Z shortcut