Better Decision-Making Enabled by Metalog Distributions: Acquiring and Resolving 1,456 Residential Mortgages From 16 Failed Banks In the Wake of the Financial Crisis
SDP Free Webinar
18 September, 2019 | 8:00 am PT / 11:00 am ET
Speaker: Tom Keelin, Chairman of Millennial Capital, LLC & Founder and Managing Partner of Keelin Reeds Partners
Moderator: Carl Spetzler, CEO of firm Strategic Decisions Group
During the 2007-8 financial crisis, many US banks failed. The FDIC acquired their assets, including troubled residential mortgages, and in many cases repackaged them into pools and sold them at public auction. My partners and I faced a major decision as to how much money to bid for such a pool. Use of traditional decision-analysis approaches would have led to a poor bidding decision. A good bidding decision was enabled by use of the metalog distributions.
After acquiring the pool, we faced many decisions about how to best achieve decision quality for exiting each of 1,456 residential mortgages. Facilitated by “exit buddy” models, we considered alternatives such as loan modifications, principal forgiveness, “cash for keys”, and foreclosure based on analyses tailored to individual borrower circumstances. Crucial to our considerations where values associated with helping people stay in their homes while at the same time providing a return for investors. Major learnings from these stressful times will be highlighted.
Tom Keelin, Millenial Capital, LLC & Keelin Reeds Partners
Tom Keelin has combined a career in decision analysis practice with innovations to advance the field. As Chairman of Millennial Capital, LLC, he has served as general partner for multiple successful real estate funds. He leads strategic decision-making for acquisitions, operations, dispositions, and portfolio management – using decision-analysis modeling and simulation. Tom is also a founder and Managing Partner of Keelin Reeds Partners, a consulting firm that has helped over a hundred venture-funded and mid-market life sciences companies with strategy and business development. In both roles, he recognized the need for better continuous-uncertainty representations to support decision-making. Addressing this need, Tom invented the metalog distributions, recently published in the DA Journal.
Previously, Tom was Worldwide Managing Director of the Strategic Decision Group, head of its London office, and founder of its life sciences practice. Tom supervised the client work for and co-authored the Harvard Business Review article "How SmithKline Beecham Makes Better Resource Allocation Decisions” (Mar-Apr ’98). Through that work, he and his colleagues invented the portfolio-management standard which subsequently was adopted widely across life-sciences industry. Earlier, with Decision Focus, Inc, Tom developed the Over/Under Capacity Planning model, which was recognized as one of EPRI’s top ten all-time contributions to the US electric power industry.
Tom is a Fellow of the Society of Decision Professionals and a founder and director of the Decision Education Foundation. Tom holds three degrees from Stanford University: BA in Economics and MS and PhD in Engineering-Economic Systems.
Carl Spetzler, Strategic Decisions Group
Carl Spetzler, a decision professional, has 40+ years of experience helping top management create innovative new strategies that deal with the complexities of uncertainty and risk over long time horizons. He is the CEO of management consulting firm Strategic Decisions Group and a Fellow and Past President of the Society of Decision Professionals. The author of Decision Quality: Value Creation from Better Business Decisions, he frequently leads senior executive retreats, briefings, and courses on decision making and risk management. His widely recognized for his contributions to the fields of decision science and decision quality.