Welcome to The S-Curve
Now you will be able to receive the latest announcements, product updates, and our insights on the mortgage market in real time.
The name of the blog, the S-Curve, is a reflection of our logo and the central feature of our prepayment model. S-curves are seen in nature in many phenomenon, from population growth to prepayment and default models. Our first S-curve, in the early 1990s, used the arctangent function, then piece-wise linear functions, and evolved over time to be more complex and vary by FICO, loan size and LTV. This evolution encapsulates both the timeless nature of fundamental relationships and constant innovation to describe them better over time.
We hope you find the information useful and we look forward to your feedback.
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Overcoming a Legacy of Bias in the Housing Industry: The Discussion ContinuesThoughtsIn our January 19th blog entitled, A More Equitable Lending System Will Not Be Created by Accident, we described the efforts it will take to overcome not just bias in lending today, but the systemic factors that have limited access to credit in the past and have created an unjust system.
We have received much positive feedback on this blog and our earlier blog: In the Mortgage Industry, Who Qualifies as a ‘Good’ Homeowner? However, just as a more equitable lending system will not be created by accident, or even using seemly neutral analytical techniques, a more equitable lending system will not be created by a single individual or organization. Therefore, we believe it is important to highlight recently released research and analysis that can help advance a more equitable lending system.
First, Bankrate published a piece describing some of the sources of the racial wealth gap and several ways that people of color are Combating The Racial Wealth Gap: 9 Money Moves For Individuals of Color”. While many of the recommendations are applicable to anyone looking to engage with the financial system, they are especially important in communities that have not had full access to the financial system.
Second, the politics and sports analytics website, FiveThirtyEight, published a detailed study of the extensive residual impact of redlining, more than 50 years after the practice was banned, The Lasting Impact of Redlining. The study presents a disturbing portrait of how the legacy of redlining has remained imbedded in the structure of homeownership in America.
Finally, bringing many of these threads together, the National Fair Housing Alliance has released a framework for developing and accessing analytical systems used for making credit determinations. Their framework is consistent with the model development and risk management guidelines of the banking regulators and focuses on what steps are necessary during the Purpose, Process and Monitoring phases of model development and implementation.
The confluence of these and other studies and reports on improving access and fairness in the housing finance system are a welcome sign of potential progress, but are just the beginning of what will need to sustained effort to overcome a legacy of bias.
The S-Curve Archives
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ThoughtsRecently, aggregators have crossed market borders by issuing residential mortgage-backed securities (RMBS) backed by owner-occupied (OO), GSE-eligible conforming loans. Additionally, conforming mortgage loans have drawn investment interest from insurance companies fronted by aggregators and evaluated by third-party firms. These developments constitute historically rare disintermediations of the nearly monopsonist purchases of conforming loans by the GSEs.
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PodcastJoin Rob Landauer in a conversation with Abe Martin as they discuss his recent Pipeline article, "Modeling the Balance Behavior of HELOC Borrowers." In this episode, they highlight key points from the article as he shares insights into the draw component of HELOCs and provide an update on the beta rele
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News
We’re excited to announce a major addition to the Andrew Davidson & Co., Inc. (AD&Co) team. Industry leaders Kelli Sayres and Gene Park, known for building and scaling leading fixed-income analytics platforms, have joined AD&Co’s Business Development team.
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ThoughtsBuilding on our earlier research on expanded consumer attributes, AD&Co continues to explore how credit data contributes to modeling delinquency and prepayment risk, which are key drivers of mortgage servicing rights cash flows and valuation.
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EventsAndrew Davidson recently joined NFM Lending’s Greg Sher on the One On One podcast to discuss our recent white paper, “The Impact of Moving Away From the Tri-Merge Standard.”
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EventsAD&Co recently sponsored and attended SFVegas 2026 and Optimal Blue Summit 2026. This post shares the AD&Co team's unique perspectives and key takeaways from attending both conferences.
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NewsAD&Co US Mortgage High Yield Indices
The Federal Reserve Economic Data (FRED) portal, housed by the Federal Reserve Bank of St. Louis, has been publishing AD&Co’s CRT indices since 2019. These series posted under the overall name of “US Mortgage High-Yield” include total return rates and credit and option-adjusted spreads (crOAS) – a projected return’s spread over Treasury (in the past, Libor). These series are available going back to 2014-end and tiered by CRT initial supports.
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ThoughtsIn July 2025, the US Federal Housing Finance Agency (FHFA) announced that the government-sponsored entities (the Enterprises or GSEs), Fannie Mae and Freddie Mac, would permit lenders to choose between Classic FICO and VantageScore 4.0 credit score models for loans sold to the GSEs. FHFA also stated in a social media post that the tri-merge standard would be maintained for mortgage underwriting. Nevertheless, some mortgage industry stakeholders recommend moving away from the tri-merge standard for GSE mortgages in favor of a single or bi-merge report standard.
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News
As housing faces more climate threats that result in more losses, the insurance program that it sits on is teetering on the brink of collapse. Yet, the home insurance market has three distinct stakeholders that have competing priorities, and today, there is no motivation for a collaborative solution.
Understanding how to strengthen and protect the current structure requires looking at the cost burdens along with the risk for each of those parties.
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ThoughtsThere has been a flurry of activity in the mortgage markets since the 2018 passage of the Economic Growth, Regulatory Relief, and Consumer Protection Act. This act requires the Federal Housing Finance Agency (FHFA, now known as US Federal Housing) to validate and modernize the credit score models used in the housing finance system. It should be noted that so far, the discourse has been around mortgages sold to the Enterprises (Fannie Mae and Freddie Mac). Ginnie Mae has not provided any guidance on their plans to start using new credit score models.