Andrew Davidson & Co., Inc. Held 19th Annual Conference
at the TimesCenter in New York City
June 20, 2011—Andrew Davidson & Co., Inc. recently held our 19th Annual Conference, “Remodeling the Housing Finance System: Origination, Servicing, Securitization, Investment” at TheTimesCenter on June 9th, 2011.
There were 222 attendees, representing 115 companies, as well as exhibit booths and representatives from our vendor/partners including FactSet, Lewtan, MIAC, Polypaths, CoreLogic, Bloomberg, Intex, Markit, RiskMetrics/MSCI, Murex and LoanHD.
Here are some of the key takeaways of our discussions of the most pressing issues in housing finance reform.
- As a loan transitions from origination to servicing to securitization to investment, each market participant makes decisions that affect all of the other participants. Reliable comprehensive data along with solid analytical frameworks that link all phases of the loan cycle are essential to an effective housing finance system.
- To rebuild the housing finance system, AD&Co believes that the 30-year fixed rate mortgage should be preserved, the origination process should be strengthened with disciplined underwriting, and a senior-subordinate structure be used with an explicit government guarantee on the senior bond.
- Analytical measures of credit risk should be used in conjunction with traditional ratings to provide a more dynamic view of credit risk.
Attendees participated in a poll during the lunch break. For a summary of the poll and results, click here .
Guest Speakers
It was also our honor and privilege to receive the personal insights of our guest Ralph Daloisio, Managing Director, Natixis and Chairman of the Board of the American Securitization Forum (ASF). His presentation was not only thoughtful, but also entertaining.
To summarize in our words, Ralph Daloisio suggested that in order for the housing finance system to recover and move forward, home prices need to stabilize so that buyers can re-enter the market in a significant and confident way. Market participants need reliable, detailed and updated estimates of property values, borrower credit-worthiness and debt-to-income ratios. Servicers need to communicate more effectively with investors and function in a sensible and law-abiding manner. Finally, representations and warranties provided by lenders need to provide investors with enforceable remedies and a mechanism for detecting breaches.
(Please note that Ralph Daloisio’s comments represented his personal views and do not necessarily represent those of Natixis or the ASF.)
We’d also like to thank all the guest panelists and speakers. David Navarre, VP, Wells Fargo, Michael Driscoll, PhD, Managing Director of AIG, Thomas Parrent, Chief Risk Officer at Genworth, Edward L. Toy, Director, Capital Markets Bureau, NAIC, Larry Cordell, Special Advisor, Federal Reserve Bank of Philadelphia, and Robert Dunsky, Principal Financial Engineer, Federal Finance Agency. Conference presentation slideshows are now posted on our website.
Product Announcements
In the morning, AD&Co’s Will Searle introduced CreditProfile™, our not-yet-released credit risk measures product; it provides a high resolution, timely view of credit risk and will be available soon through www.ad-co.com. Conference participants also had a chance to demo the product at our booth.
We also announced a new validation tool for AD&Co’s LoanDynamics™ Model (LDM) including interactive LDM performance reports, available through the AD&Co website and validation reports (actual vs. forecasted) and model comparison reports (version vs. version) in pdf format. In addition, RiskProfiler™ is now available in a scalable, multi-processor, client-server solution that enables multiple clients to share a cluster of servers.
For more information on these and other AD&Co products, please contact rob@ad-co.com or visit www.ad-co.com.
