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University
Financial Associates was founded in 1990 by two renowned professors of finance to
bring state-of-the-art analytical techniques to lenders. The principals bring over fifty
years of experience in mathematical modeling and data analysis to financial problem
solving. Our data, analysis and modeling can help your business make better lending and
investing decisions. |
Lending a Hand to Less-Risky
Reward
Consistency. Predictability. A sound
reckoning of potential gains and losses. The power to know not just where and, maybe, when
but also how good, how bad, how much.
Until recently, in many ways, forecasting
the nation’s economic climate with respect to business and consumer lending and
investment could be as tricky as forecasting the weather. Even the more sophisticated
financial models were better at looking back than forward, were more qualitative than
quantitative in scope, and had a hard time gauging the impact of local business
conditions. The latter can include such "site specific" factors as home starts,
home mortgage debt, repayment rates on all types of loans, business startups and defaults,
labor supply and wages, intrinsic industry fortunes, and public policy with respect to
taxation and regulatory enforcement.
The situation can get even stickier with
nonprime lending, the higher risk and reward type of lending that has increasingly
provided the glue and rocket fuel for our economy-getting more people into more homes;
getting more businesses going by lending startup equity or expansion credit and capital to
innovative business ventures. Furthermore, the residuals derived from such loans carry a
much higher "mistake" potential than traditional bank lending, often as great as
30 percent to 40 percent of exposure. This is the New Hope and New Ideas lending that does
carry New Risks.
A way out of this conundrum is being
supplied by Ann Arbor, Michigan-based University Financial Associates LLC (UFA),
developers of ForeScore™, revolutionary loan portfolio analysis software, and the
UFA Nonprime Mortgage Reporttm. Once again, Midwest brains and techno-age brawn are
proving to be on the cutting edge of a high-tech industry; in this case, not global
vehicle design and engineering, but financial services.
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