Recent data has shown both a potential stabilization in parts of the housing market and a containment of delinquency levels in subprime collateral performance.  Although data showing these correctional traits is extremely recent and limited with high potential for reversal, initial thoughts and analysis should be logged to understand what might be taking shape.  In the last issue of MIAC Perspectives, we discussed the importance of unleveraged money getting invested in mortgage assets and freeing up bank balance sheet needed to establish new lending programs.  MIAC has seen an increasing demand for bond valuation work from hedge fund investors and feel that this is a positive trend which will continue.  An unmistakable trend on the whole loan valuations front is the demand for revision of procedure, both in modeling inputs and software used.  Recent MIAC projects have included client education on asset benchmarking, yield based pricing, vector creation and loss timing delay as well as system integration options for detailed analysis and thorough reporting.  The increasing level of focus on improved mortgage risk management techniques and procedures will help steer mortgage market participants away from repeating the current subprime woes.   

      The direction of home values is clearly the most important factor in mortgage credit analysis.  Market optimists will read positively into any hesitation from the negative trending data as seen in commentary headlines from the May statistics. 
I wrote the essay “ Real Estate Indices, Finally the Bottom? - recent data points to CA leading us to recovery” which provides useful insight to the important trends that are needed to pave the way to house price stability.

      In our software solutions focus, Vice President, Lisa Malie has written the article, “MIAC Analytics’ DataRaptor® – the robust mortgage data management tool that meets the need for accuracy and transparency”.  Lisa has been an integral part of the development and testing of DataRaptor as well as a favorite resource for help and understanding among MIAC clients.  In this article, Lisa speaks the language of mortgage data management professionals identifying the software needs and the solutions provided by DataRaptor in today’s changing environment.

      Senior Vice President of Capital Markets Group, Artem Lysenko wrote the article, “ Mortgage Collateral Behavior Update – A focus on voluntary and involuntary prepayment research and application”.  This article is designed to give readers background on how MIAC analysts are identifying and utilizing collateral performance trends to create model input vectors.

      Continuing with a discussion on MIAC software solutions, the perspectives crew sits down with Sachit R. Kumar, Managing Director of the Capital Markets Group in, “MIAC Obtains Exclusive License to DecisionServ” to discuss the recent addition of the popular MSR portfolio management tool to the MIAC software suite.

      Senior Vice President, Capital Markets Group, Robert Lee, updates our readers on developments in the MSR market with MIAC’s MSR Market Perspective.  Mr Lee discusses the recent slowdown in MSR trade activity and the resulting increased frequency of modeled valuations and servicer assumptions.

Perspectives Editor,