AD&Co. News - Dec '07

The Road to Recovery
by Rob Landauer

2007 will not soon be forgotten by mortgage market participants. It has been a trying year for originators, investors, dealers, rating agencies and the firms that support them. Those of us old enough to be employed in the mortgage industry in the 1990’s need to assure our younger brothers and sisters in the business that brighter days are ahead. History has shown time and time again that markets never trend in one direction and troughs are inevitable. We are a resilient and creative industry which will rebound in 2008 and beyond. It is our hope that pending legislation, various industry initiatives and a more rigorous analytical approach will lead to a saner and productive market.

AD&Co. is working hard to ensure we provide the models and analytical tools that our clients need to effectively navigate the road to recovery. We are constantly analyzing the performance of our prepayment, LoanDynamics™ and valuation models to ensure they capture the most recent performance of agency, non-agency prime and sub-prime loans. Declining home price appreciation, slowing housing turnover, availability of credit, and a looming recession all impact the rate at which borrowers will prepay, become delinquent or default. Rest assured that our modelers and support team are constantly analyzing the impact these factors will have on model performance and that we are available to discuss our findings and ideas with you at any time.

For now, the AD&Co. family would like to take this opportunity to wish our clients and friends a very happy, safe and healthy holiday season and prosperous 2008. We greatly appreciate the trust you place in our products, services and personnel and look forward to working with you in the New Year and beyond.