Mortgage Capital Trading has integrated LoanDynamics Model (LDM) from Andrew Davidson & Co. (AD&Co) into its mortgage servicing rights (MSR) valuation software.
LDM is a well-respected prepayment model for residential mortgages that will complement MCT’s proprietary prepayment model in MSRlive!, MCT says in a release.
This integration allows MSR portfolio managers to leverage and compare both models, increasing confidence in the precision of their valuations and scenario testing.
“MCT’s MSRlive! platform is one of the most extensively adopted and customizable MSR valuation models in the industry,” says Bill Shirreffs, senior director, head of MSR services and sales operations at MCT. “We’re proud to work with AD&Co to add their internationally recognized LDM prepayment model alongside the customization and flexibility clients appreciate about our proprietary model.”
Because the MSR may be sold or retained independently of residential mortgage loans, MSR valuation and portfolio management is a critical function for U.S. mortgage lenders, MCT says in its release. Central to the value of any MSR is a forecast of its prepayment speed, which is dependent on a wide array of assumptions and heavily influenced by macroeconomic developments.
MCT and AD&Co are both highly regarded providers of this prepayment modeling, and through their new alliance, they combine the best of both models for the benefit of capital markets professionals.
“AD&Co’s flagship LoanDynamics Model is a perfect complement to MCT’s MSRlive!,” says Michelle Stepien Breier, business development manager at AD&Co. “AD&Co’s industry leading prepayment and credit models, coupled with MCT’s MSRlive!, provide a best-of-breed joint solution to MSR portfolio managers.”
Photo: Agence Olloweb
