Capital Assets Weekly Comments


Pipeline Modeling for Risk Managers

In last week’s FTN Financial Capital Assets Corporation’s (“Capital Assets’”) Comments, Jerry Hubbard reviewed MYRA — our Mortgage Yield Recovery Analysis. As Jerry pointed out, MYRA is a means to pro forma future loan production under different rate and volume scenarios. (See link to Comments.) It is imperative to have the best understanding of future profitability of your loan portfolio and lending strategy. Every depository that utilizes our modeling capabilities knows the benefit of incorporating our reports for balance sheet management. The same approach is necessary for pipeline management — hedging loans originated for immediate sale in the secondary market. You need to have a model!

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