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.
-
Policy Perspectives - Housing Market Dynamics and Mortgage RiskThoughtsOur latest Policy Perspective written by Richard Cooperstein offers an analysis of the U.S. housing and mortgage finance markets, focusing on key trends and forward-looking risks. While housing markets are not fully efficient, they do respond to economic imbalances which create opportunities and vulnerabilities. This article explores how demographic shifts, credit access, interest rates, and climate risks shape both housing demand and supply.
Key findings include:
- Weak demand fundamentals, especially among new homeowners
- Easing supply shortages and slowing price growth
- Elevated risk of broader housing price declines amid rising recession concerns
- Notable exposure of higher-coupon mortgages and servicing rights to interest rate and credit risks
Cooperstein also assess the resilience of mortgage-related assets under current and projected conditions.
Click here to read now!
The S-Curve Archives
-
ThoughtsWe’re excited to announce two new Quantitative Perspectives that provide in-depth insights into current market trends and advanced valuation techniques. These papers offer valuable information for mortgage market participants and those involved in credit risk transfer transactions.
-
EventsAndrew Davidson & Co. Inc. (AD&Co) proudly sponsored the Information Management Network (IMN)’s 10th Annual Mortgage Servicing Rights (MSR) Forum, held November 21 - 22, 2024 at the New York Marriott at Brooklyn Bridge.
-
PodcastTune in to Michelle Stepien Breier's interview with Alex Levin & Matteo Caracciolo-King as they discuss their latest Pipeline article “AD&Co Updates its Home Price Index Model.” The interview highlights key points from the article as they share recent updates to the HPI3 model.
-
ThoughtsWith the increasing volumes of Synthetic Risk Transfer (SRT) and Credit Risk Transfer (CRT) along with the discussion of BASEL III, we thought it would be useful to re-issue our comment letter to FHFA on the capital treatment of Credit Risk Transfer.
-
PodcastRecently, senior credit modeler, Daniel Swanson had the pleasure of speaking with Rob Kessel from the Panoramic Capital Academy podcast titled, “Modeler’s Perspective on Prepayment Modeling.” This podcast is
-
ThoughtsThe earliest paper we found examining the impact of climate risks on house prices was from 2017, which found a relationship between elevation/sea level rise and house price differences.[1]
We built our climate-conditioned HPA model in 2022 based on the idea that an increase in insurance costs would impact house prices (something we had not studied yet) in the same way that an increase of the same size in mortgage rates would impact house prices (something that we were quite familiar with).
-
NewsAndrew Davidson & Co., Inc (AD&Co) is pleased to announce a new alliance with Mortgage Capital Trading, Inc. (MCT), a leading provider of mortgage capital market solutions.
-
EventsAt Andrew Davidson & Co., Inc. (AD&Co), our dedication to Diversity, Equity, and Inclusion (DEI) has been a cornerstone of our values. We established our DEI Committee in 2020, following the tragic murder of George Floyd. Despite the evolving landscape, including the recent U.S. Supreme Court decision impacting affirmative action in higher education, we remain steadfast in our commitment to fostering an inclusive environment that strengthens both our employees and the company.
-
PodcastTune in to Eknath Belbase's interview with Michelle Stepien Breier & Richard Cooperstein as they discuss their latest Pipeline article “Improving Mortgage Data: A Data Exchange for the Mortgage Ecosystem.”
-
EventsAt the recent AmeriCatalyst ‘Going to Extremes’ Climate, Housing and Finance Leadership Summit, I presented a session on how risks related to weather-related losses impact the housing finance system.