MIAC’s Solutions take Industry Leading Role on SEC SAB No. 109
On
November 7, 2007, The Securities and Exchange Commission released a
staff accounting bulletin that revises and rescinds some of SAB No. 105
and makes the rules consistent with Statement of Financial Accounting
Standards No. 156, "Accounting for Servicing of Financial Assets," and
SFAS 159, "The Fair Value Option for Financial Assets and Financial
Liabilities."
Staff Accounting
Bulletin No. 109, "Written Loan Commitments Recorded at Fair Value
Through Earnings," corrects portions of SAB No. 105, "Application of
Accounting Principles to Loan Commitments."
SAB 109 revises the SEC staff's views on incorporating expected net
future cash flows related to loan servicing activities in the fair
value measurement of a written loan commitment. As with SFAS 156,
however, SAB 109 retains the view that not all expected net future cash
flows, i.e. those related to internally developed intangible assets in
the fair value measurement of a written loan commitment, are included
in the measurement of fair value of the loan commitment.
MIAC Analytics™ provides
a fully integrated solution of the most widely accepted MSR fair value
price discovery tools with the flexible and powerful secondary risk
solution – MarketShield™.
MIAC Analytics utilizes the same industry leading Libor Market Model
interest rate model, the same prepayment models, the same derivative
pricing solutions, and the same risk measures such as Key Rate
Durations on the loan commitments, their respective hedges, and all the
balance sheet assets and hedges in a single, integrated risk management
solution. MIAC’s WinOAS™ is the most widely accepted and fully validated MSR cash flow model and
MIAC is the mortgage industry’s largest independent, third-party MSR
pricing firm.
MIAC Principal, Bob
Husted, notes that the risk management solutions of mortgage pipelines
are increasingly integrated with their balance sheet risk management
solutions. “As mortgage companies implement FAS 159 and elect to
mark-to-market their closed loans, many are utilizing their balance
sheet MSRs as hedges for their closed loans OR they are electing to
utilize the MTM closed loans as hedges for their balance sheet
MSRs. Only those firms who have truly integrated risk
management solutions will be able to compete successfully in the
future.”
Since 1989, the Mortgage Industry Advisory Corporation
(“MIAC”) has provided industry leading software, pricing, and hedging
solutions to the mortgage industry.
www.MIACAnalytics.com
80 Maiden Lane
14th Floor, Suite 1401
New York, NY 10038
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